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The study examines the impact of sales promotion on customers’ loyalty, using MTN Asaba. The objectives of the study are to determine the impact of premium sales promotion on customer patronage, to examine the role of sales promotion through consumer contest on brand switching and to evaluate the effectiveness of sales promotion on customer loyalty. Data used for the study were collected through primary and secondary sources; questionnaire instrument was used to collect primary data while secondary data was collected through review of related materials, test books, internets, journals etc. The survey method was used in gathering information from the respondents. Simple random sampling was used to select a sample size of 100 out of which 80 was used. The data collected was analyzed with the use of Chi- square(x2) statistical tool. The findings revealed that there is a significant relationship between premium sales promotion and customer patronage,It was observed that sales promotion through consumer contest has a statistical relationship with brand switching and it was also observed that there is a positive relationship between sales promotion and customer loyalty. The study concludes that sales promotion is very effective in evaluating customer loyalty. It is also recommended that sales promotion activities should be monitored. In order to carry out the sales promotion activities effectively, MTN Nigeria Limited should lay more emphasis on sales promotion in a competitive situation.
1.1 BACKGROUND OF THE STUDY
Every firm aims to make profit. It is generally agreed that one of the keys to making profit is boosting sales. To boost sales, a substantial number of customers must choose one’s product over and above that of its competitors on a substantial number of occasions. One of the surest way of ensuring this happens is to cultivate brand loyalty to one’s product or service.
Brand loyal consumers are more likely to choose their preferred products and /or service over its competitors on a consistent basis. Considering the fact that consumers tend to be finicky with their choices, producers of rival brands tend to be uncompromising with product or service quality while being relentless with their marketing, wiggle room for product in a highly competitive environment is little or nonexistent and the margin of error is narrow. Brand loyal consumers tend to serve as a crucial even if sometimes unconscious support base for product and/or service is the fierce battle for patronage.
For any organization therefore broadening and deepening the base of brand loyal consumers is a key objective in fashioning out any marketing strategy for the brand. Indeed, brand loyalty has been proclaimed by some as the ultimate goal of marketing (Reicheld and Sasser, 1990).
Hence, this concern led to the study of sales promotion as it relates to customer loyalty. Sales promotion is inevitable for any type of organization that wants to stimulate sales.
According to the American Marketing Association (AMA) defines sales promotion as “media and non media marketing pressure applied for a predetermined, limited period of time in order to stimulate trial, increase consumer demand, or improve product quality”. But this definition does not capture all the elements of modern sales promotion.
Schoell and Guiltinan (1996) sees Sales promotion as any activity that offers an incentive for a limited period to induce a desired response for target customers, company sales people, or intermediaries.
Jobber (2004) simply captures sales promotion as a package of incentives to consumers or the trade that are designed to stimulate purchase. Sales promotion, a key ingredient in marketing campaigns, consists of a collection on incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers of the trade (Kotler and Keller, 2009). Sales promotion plays an important role in retaining old consumers and attracting new ones.
It has being established in literature that only consumers with repeat purchases are profitable (Nagar, 2009). This shows that sales promotion is vital and research must be done to explore it full potential fully. Against the background, this research work strives to broaden our understanding as it appears that sales promotion has to be integrated in order to gain customers’ loyalty in the Nigeria telecommunication industry. In Nigeria, the telecommunication sector is highly competitive and telecommunication operators attempt to appeal and win customers through various sales promotion strategies.
The Nigerian telecommunication industry is entering its maturity phase, with reducing average profit. With fierce competitive, telecommunication operators must work hard to reduce cost, win new customers and retain existing ones and increase profit to ensure sustainable development of their businesses.
1.2 STATEMENT OF THE PROBLEM.
Every supplier wants to create and retain a loyal customer who engages in continued profitable business with him. Customer loyalty is the measure of success of the supplier in retaining a long term relationship with the customer.
Marketers across the globe have to use sales promotional resources available to them efficiently and not to waste them under any circumstances.
Worldwide survey indicates that consumers globally are changing their behavior towards product and services. Hence competitors seem to develop any available sales promotional strategy to retain existing customers.
The challenges of sales promotion is that its activities are required to generate awareness about not only their presence but also accentuate the importance of the brand, constantly emphasizing on the brand, the purchase of which would bring a host of other benefits for customers who buy the brand.
The brand should be strong enough and should have enough qualities to motivate the consumers to buy it again once the sales promotional activities has succeeded in enabling the customer to buy the brand.
There is also a challenge of maintaining the market pressure of the brand. This happens through the constant emergence of new sales promotional activities for short time periods that main the freshness of the brand.
A sales promotion makes up one of the seven part of promotional mix. One of the benefits organization would derive from good sales promotion is that it can create up sell or cross sell opportunities for a business. Up sell or cross sell opportunities can result in word-of-mouth business from satisfies customer. This will generate more profit which can also be considered another benefit.
The sales promotion can also cause the company to focus on marketing and create creative tasks for the marketing team at the company.
1.3 OBJECTIVE OF THE STUDY
The General objective of the study is to determine the impact of sales promotion on customers’ loyalty in the Nigerian Telecommunication Industry. Other specific objectives are:-
1. To Determine the Impact of Premium Sales Promotion on Customer Patronage.
2. To Examine the Role of Sales Promotion through Consumer Contest on Brand Switching.
3. To Evaluate the Effectiveness of Sales Promotion on Customer Loyalty.
1.4 RESEARCH QUESTIONS
Given the objective of the study above, the following research questions are thus formulated to guide the study:
1. What impact does Premium Sales Promotion has on Consumer Patronage in the Telecommunication Industry.
2. How can Sales Promotion through Consumer Contest Impact on
Brand Switching in the Telecommunication Industry.
3. How does Sales Promotion Impact on Customer Loyalty in the Telecommunication Industry.
1.5 STATEMENT OF HYPOTHESES
The hypotheses formulated for this study are:
HO1: There is no Significant Relationship between Premium Sales Promotion and Consumer Patronage.
HO2: Sales promotion through Consumer Contest has no Statistically Significant Relationship with Brand Switching.
HO3: There is no positive Relationship between Sales Promotion and Customer Loyalty.
1.6 SIGNIFICANCE OF THE STUDY.
The result of this study will be of great importance to Executives of firms in the Telecommunication Industry who are looking for ways to gain an advantage over rival firms and sustain their firm’s competitiveness in the industry.
Furthermore, this study is relevant to consumers who by virtue of promotional activities patronizes firms and become loyal to them. They consider themselves as kings because they have several choices to make among alternative products and services.
The study will equally be of immense benefit to other researchers who may want to conduct further research on the areas of sales.
1.7 SCOPE OF THE STUDY
The study is carried out within Asaba Metropolis, Oshimili South Local Government Area of Delta State, Nigeria. The study focuses at the Mobile Telecommunication Network (MTN) Nigeria Limited, one of the top leading Telecommunication Industry in Nigeria.
The sampling objects used in the study are executives and customers/users of MTN in the Telecommunication industry. It is presumed that this group of people could provide more informed responses to the questions contained in the questionnaire relating to the title of the study.
1.8 LIMITATION OF THE STUDY
This study is limited by some factors. They includes:
SECRECY: Many people tend to dislike activities that appear to be probing them. They appear to have special liking for secrecy, thereby tend to avoid researchers.
ILLITERACY: A reasonable percentage of the population in developing countries like Nigeria cannot read and write and can hardly be useful for any meaningful research.
EXISTENCE OF BIAS: While filling the questionnaire, personal biases of the Respondents might affect the responses.
INADEQUATE FUNDING: Research activity can be a very expensive venture that often cost a lot of money. To this extent, finance constitutes a serious setback in this study.
TIME: Research work needs adequate time to be allotted to it but since most research work are done on limited time, proper information are not completely harnessed.
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