CHAPTER ONE

INTRODUCTION

1.1    Background of the Study

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Over the past few decades in Nigeria, there has been an increase in the use of sales promotion tools by marketers in attempt to achieve, and maximize their marketing objectives. Whatever the product, sales promotion has found its usefulness in one direction or the other. This is especially so with the continuous development of marketing practices such that marketing managers have taken to the use of every available strategy aimed at achieving set objectives.

As Jones (1991: 61) notes, the use of sales promotions have grown in importance to becoming the most popular tool in the marketer’s kit in America and world over. Also, Lancaster and Massingham (1993: 219) observe that the total amount spent on sales promotions in consumer markets in the UK outstrips the spending on media advertising. This point is further magnified by Czinkota et al (1997: 455) as they explain that due to the cost and clutter of media advertising, better targeting capabilities and easier tracking of its effectiveness, sales promotions budget has over taken advertising budget in both the US and Europe.

The adoption of sales promotion strategies in marketing practice dates back to the origin of marketing itself. Notwithstanding the evolutionary process bringing about a shift from selling concept to the emphasis on marketing concept philosophy, sale promotion continues to take a prominent position in

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the overall promotion mix of many marketing organizations. It is however important to observe that, the growth of sales promotion was initially fast tracked by the selling concept which emphasised selling, selling, and selling!

In Nigeria, the growth of sales promotion activities has been steady over the recent past. This may not be unconnected with the increased competition in advertising and other elements of promotional mix bringing about some form of resistance of the market. As at present, the noticeable upsurge in the use of sales promotion tools cuts across virtually all sectors of the economy whether products or services, telecommunications, beverages, travels/aviation, hospitality, manufacturing, etc. This buttresses the potency of sales promotion as a viable element of the overall marketing communication mix, and hence the need for this study.

1.2    Statement of the Problem

As noted in the background of this study, there has been an increase in the use of sales promotion by many marketing organisations in Nigeria. Whatever the product or service of the industry, various sales promotion activities are constantly being developed with the aim of achieving set marketing objectives. Of specific interest to the researcher is the deluge of sales promotion activities which are apparently lined up and continuously used by telecommunication marketers.

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By design, the traditional rationale of sales promotion as a Pavlovian strategy to enlist customers’ patronage seems to have changed as the frequency of sales promotion activities does not suggest its use mainly as a bait to induce trial purchases or patronage (Spillard, 1975:8).

Since the commencement of the global system of mobile telecommunication (GSM) services in Nigeria, operators have taken to the use of one form of sales promotion or the other with a view to either attract new subscribers or retain existing ones. However, as good as this seems, the problem observable is the turn over. The implication of this is that subscribers’ loyalty may now hang on the bait of sales promotion rather than benefit/value derivable from the use of the product.

In addition, frequency of sales promotion leaves much to be desired as the consumers (subscribers) most times doubt the efficacy and credibility of some sales promotion. This could make sales promotion counterproductive. Simonson et al (1994: 23) observe that marketers employ various means to enhance the attractiveness of their offerings and increase sales as the case with telecommunication operators in Nigeria. However, the short and long term effect of these tactics on brand evaluation and overall marketing objective needs to be examined as it is often assumed generally that sales

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promotions activities only help short term sales. In other words, subscribers who find the offerings of a promoted product appealing are more likely to patronize it while the purchase probability of others not attracted by the offering does not change. However, in particular cases where there is an avalanche of promotions and offerings there may be exceptions to the generalization that sales promotion leads to increase in sales. This is due largely to the fact that such development leads to complexities and can further boomerang and bring about an insignificant change in expected sales

In most cases it is quite observable that when subscribers are uncertain about their preferences among highly competing alternatives as in the telecommunication market, they may avoid products whose promotions are perceived as providing little or no value or unneeded features.

In view of the above, it has become necessary to carry out an examination of the impact of sales promotion on marketing of telecommunication services using Globacom Nig. Ltd. in Enugu as a case study.

1.3    Objectives of the Study

To make this research relevant and purposeful, a clearly defined and unique set of objectives which it seeks to achieve is outlined as follows:

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(a)        To assess the impact of sales promotion on the marketing of telecommunication services.

(b)        To examine if sales promotion actually provides an edge in a highly competitive telecommunication market.

(c)        To analyze the effect of sales promotion on consumers (subscribers) loyalty.

(d)        To determine whether sales promotion activities enhance telecommunication services acceptability

(e)   To find out if sales promotion enhances the value of telecommunication services.

(f)         To find out the limitations of sales promotion as a telecommunication services marketing tool.

1.4    Research Questions

This study is set out to address the following basic questions:

(1)        What is the impact of sales promotion on the marketing of telecommunication services?

(2)        Do sales promotion activities create an edge in a highly competitive telecommunication market?

(3)