CHAPTER ONE

INTRODUCTION

1.1     Background to the Study

In any organization whether profit or nonprofit oriented the main purpose of that organization are to achieve its objectives.  The objectives cannot be achieved in a vacuum without clearly setting strategies that the management could use in order to meet these objectives.  Since marketing is concerned with managing profitable customer relationships. The two fold goals of marketing are to attract new customer by promising superior value and to keep and as well as grow current customers by delivering satisfaction (Kolter & Armstrong, 2010) while marketing communication (promotion) as one of marketing mix elements that marketing expert rely upon to unleash relevance (Kelechi, Iwunze, Onyeike & Nwachukwu, 2014).  Sales promotion refers to the provision of incentives to consumers and the distribution channel members to stimulate demand for their product. Sales promotion is an important component of an organizations overall marketing strategy along with advertising, public relations and personal selling.  It is also a competitive weapon because it provides an extra incentive for the target audience to purchase or support one brand over the other.  It is particularly effective on spurning product trials and unplanned purchases. Also, sales promotion is a form of short-term incentive designed to generate immediate product purchases from the consumers. One could say, it is a promotional mix element that offer a consumer a product in addition to extra value (Kelechi, Iwunze, Onyeike & Nwachukwu, 2014).  This is to say that, if a company decides to adopt this tool as it long term strategy, its stands a high risk of incurring losses. Many organizators fail to realize that they cannot stay in businesses without marketing strategies.  This is true expect they are operating in a market that is monopolistic in nature.

          Telecommunication technology includes anything used to communicate information.  “The concept has been around since the early days of human history, when smoke signals and drums were used to inform a person or groups of people of events and situation”. The telecommunication firms used in this study are MTN, Etisalat, and Airtel because they are the dominant operators in Akwa Ibom state

          The researcher intends to measure the impact of sales promotion on the sales volume of the above firms in the telecommunication industry.

1.2     Statement of Problem

          Intense competition among the different service providers in Akwa Ibom State has led to the application of various marketing strategies such as sales promotion.  But despite of the importance that sales promotion has in enhancing the sales volume of an organization.  Some service providers have failed to utilize the sales promotion to their advantage especially in the telecommunication industry.  Again there has been little or no study done in this area in Akwa Ibom State.  So this work is carried out to see the impact of sales promotion on the telecommunication industry in Akwa Ibom State.

 

1.3     Objectives of Study

          The main objective of this study is to examine if there is any significant relationship between sales promotion and sales performance in telecommunication firms:

1.       To examine the relationship between price reduction and sales volume in telecommunication firms in Akwa Ibom State.

2.       To examine the relationship between coupons and sales volume in telecommunication firm in Akwa Ibom State

3.       To examine the relationship between sample and sales volume in telecommunication firms in Akwa Ibom State.

1.4     Research Questions

          The following research questions will guide this study:

Ø    To what extent does price reduction relates to the sales volume in telecommunication firms in Akwa Ibom State?

Ø    To what extent does coupons relates to the sales volume in telecommunication firm in Akwa Ibom State?

Ø    To what extent does sample relates to the sales volume in telecommunication firms in Akwa Ibom State?

1.5     Research Hypothesis

Ho1:   There is no significant relationship between price reduction and sales volume in telecommunication firms in Akwa Ibom State.

Ho2:   There is no significant relationship between coupons and sales volume in telecommunication firms in Akwa Ibom State.

Ho3:   There is no significant relationship between sample and sales volume in telecommunication firm in Akwa Ibom State.

1.6     Significance of Study

          This study will be useful to telecommunication firms in Akwa Ibom as they get to know the extent to which sales promotion could influence customer’s choice of network.  Also, it will help business owners in their choice of sales promotional tool to adopt. Thirdly, it helps the firm to properly utilize their resources, increase their profitability and growth. To this end, it aid telecommunication owners to  decide whether to continue to investing a good portion of their resources into sales promotion or to redirect these scarce resources into other areas that provide relatively substantial customer value..

          Therefore, this work will add to the little that exists which will serve as a relevant source of reference to future researchers of related topics.

1.7     Scope of the Study

          The scope of this study covers only Uyo Capital Metropolis in particular where consumers with various telecommunication network users resides. In addition, the researcher analysis was based only on three (3) telecommunication firms which are MTN, Etisalat and Airtel. These three (3) firms chosen because they have the highest numbers of customers. Finally, the tool of measuring sales performance was sales volume as it one of the dimensions of measuring sales performance.

1.8     Organisation of the Study

          The study is organized into five chapters. Chapter one contains background to the study, statement of the problems, objectives of the study, research question; significance of the study, definition of the terms used in the study. Chapter two contains review of related or relevant literature, while chapter three dealt extensively on the methods and procedures employed in carrying out the study. Chapter four dealt on data presentation, analysis and interpretation while chapter five consists of summary, conclusions and recommendations.

1.9     Definition of Terms

Sales Promotion: May be described or defined as the use of shorter incentives periodically to stimulate or encourage consumers to buy product.

Price Reduction: A price reduction allows customers to buy one product at a lower price for a specified period of time.

Coupon: It could be used as a way to attract new customers or to develop customer loyalty.

Personal Selling: The process of managerial commercial representation during a buying/seller interview situation. This is collegially referred to as face to face selling or known as buyer/seller interface.

Sales Performance: Sales performance can indicate the rate of customer loyalty to the business or specific employee.

Performance: Performance refers to the accomplishment of a given task measured against present known standards of accuracy and completeness.

Sales: The activity or business of selling products or services.

Growth: Growth is the process of improving some measures of an enterprises success.

Telecommunication: This is the exchange of information over significant distances by electronic means.

Free products: This is the act of giving something away in other to lure customers to ones place of business

Market Share:  Market share represents the percentage of an industry or market’s total shares that is earned by a particular company over a specified time period.  Market share is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period.

          Market share can be value or volume.  Sales value is based on the total shares of a company out of total segment sales.  While sales volumes refer to the actual member of units that a company sells out of total units sold in the market.

Brand Loyalty:  This is the tendency for some consumers to continue buying the same brand of goods rather than competing brands.

Sales Volume:  This is the quantity or number of products sold or services provided by a company in a particular period of time.

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