INTERACTIVE MEDIA SALES PROMOTION TYPOLOGIES AND TELECOMMUNICATION OPERATORS’ BRAND EQUITY AMONG CIVIL SERVANTS

 

CHAPTER ONE

 

INTRODUCTION

 

1.1       Background to the Study

The Nigerian telecommunications sector has developed into a cutthroat field as operators compete to woo and attract clients using various sales promotion techniques. Because of this, businesses frequently saturate customers with both financial and non-financial sales promotions via print, electronic, outdoor, or digital interactive media. Telecommunications companies employ sales promotion to raise customer awareness of their brands, get them to try them, and eventually persuade them to stick with them in order to gain or keep market share.

The relationship between a brand and its customers, as well as the brand manager’s adherence to the brand’s claims, are reviewed by society today in order to determine whether a choice or effort will be successful in generating consumer pleasure and, ultimately, brand loyalty. Businesses use their resources to boost sales as quickly as possible; as a result, sales promotion, a marketing communication tactic, entails manufacturers offering incentives alongside their goods, which provides consumers with sufficient justification to buy the good, service, or concept.

According to a 2012 World Bank report, 65.8% (149,818,906) of Nigeria’s 168.8 million+ residents are active users of licensed telecommunication carriers.

Nigerian Communications Commission (NCC, 2016) states that the country’s “telecommunications business is one of the largest in Africa with 151,017,244 GSM customers and is still increasing with one of the highest fixed line revenues and cumulative revenue of US$16 billion as at June, 2016.” (p. 2). The four main telecommunications providers in Nigeria are MTN, Globacom (Glo), Airtel, and Etisalat. These providers compete fiercely for clients by slashing prices and offering data packages that are specifically designed to fulfill the data requirements of different subscriber groups.

According to research, MTN has the greatest proportion of GSM users in Nigeria, accounting for around 39% of the market’s over 58 million (58,409,767) total subscribers. Glo on the other hand has more than 36 million (36,320,572) subscribers’ representing about 24% of the total market share; Airtel has the third position with a growing percentage numbering above 31 million (31,978,848) constituting 21% of the total market share, lastly, Etisalat has more than 22 million (22,469,896) subscribers, constituting 15% of the total market share of telecommunication operators in Nigeria (NCC, 2016; Oyeniyi, 2011; Samuel & Olatokun, 2014). At the inception of the operation of these telecommunication operators which represent the product category introductory stage, a single mobile line was sold for as much as forty thousand naira (N40, 000, equivalent to $108); however, with a strategy called ‘price war’ which entails reduction of tariff, a sim card sells for a maximum of N 100, while some offer it free to subscribers (Oyeniyi, 2011).

According to Oyeniyi (2011), the Nigerian telecommunications sector is gradually entering a phase of maturity that is marked by a decline in average profit and intense competition. Operators are forced to raise their brand value in order to attract users due to the proliferation of mobile phones and the fierce competition in the telecommunications sector. It has become commonplace to see telecommunications companies react to marketing campaigns launched by rivals by expanding upon the services they already provide. For instance, Etisalat Nigeria initially offered customers an incentive to buy a recharge ticket for N200 and receive an additional 15mb; in response, other operators now provide bonuses that range from 15% to 100% in addition to the voucher value and the megabyte for surfing.

The telecommunications industry is extremely competitive, and operators try to counteract rivals’ products by delivering customers greater value at lower prices in the most favorable conditions. Sales promotion seeks to influence buyers, including distributors, salespeople, and end users, to adopt the business strategies of these producers through temporary incentives. Telecommunications companies use online and offline platforms to send advertising messages to current and potential customers; Short Messaging Service (SMS) is one of the interactive platforms that is not Internet-based, while Facebook, Twitter, Instagram, and other platforms are Internet-based. Interactive media is what England and Finney (2011) characterize as: a structured digital computerized environment that enables users to interact with the data for appropriate purposes through the integration of digital media, including combinations of electronic text, graphics, moving images, and sound. The Internet, telecoms, and interactive digital television can all be considered parts of the digital environment (p. 3).

This shows that telecommunications companies have categorized their clients based on their mobile devices in an effort to market their airtime, data subscription, or other services. They do not require Internet access to receive promotional messages from telecommunications operators because their mobile device can function with the use of a registered SIM card, which is used by a category of subscribers who use feature phones. These phones perform essential functions like making and receiving calls, as well as returning them and sending SMS.

The other category of subscribers are described as smartphone users (Java, Android, Windows or IPhone) because they receive telecommunication operators’ promotional messages on some of the social media platforms such as Facebook. Generally, the essence of telecommunication operators’ sales promotion on the interactive media is to induce rapid sales by enhancing their product’s inherent value, which will in turn persuade consumers to purchase the product. Several objectives can drive a sales promotion activity such as increasing sales, introducing a new product, neutralising competitors’ marketing effort, breaking the seasonality of a product and others.

In line with the telecommunication operators’ utilisation of sales promotion for several functions, Yoo, Donthu and Lee (2000) assert that as long as the consumers are loyal to a brand, its equity will increase as brand equity is hinged on consumer’s attitude to a brand as against other brands in the same market category based on experience which is translated to consumers’ loyalty and their willingness to pay higher price for the brand. Brand equity refers to the value of a brand as well as the position it occupies in consumer’s mental judgment. Brand equity can also be likened to a valuable source of competitive returns for companies and is measured as a precursor of market performance indices such as market share, profitability, price premium, extension capability and so on. Companies strive to create, maintain and increase brand equity by deploying optimally designed marketing mix strategies. Brand equity is measured in terms of brand awareness, perceived product quality, brand association and brand loyalty. According to Bumm and Gon Kim (2005), brand awareness means the ability of a consumer to recognise and recall a brand in different situations. Literature has shown that consumers’ purchase intention and decisions are largely dependent on the extent to which they are aware of the product (Gustafson & Chabot, 2007; Hosseini, Abolfazli & Rahimi, 2007; Lagazian, 2007; Macdonald & Sharp, 2000; Rundle & Bennet, 2001).

To entice subscribers to use them, telecom providers rotate between financial and non-financial promotion offers. MTN once urged customers in the local market to recharge their mobile phones with a minimum of N 200 in order to enter a drawing for an airplane or to be eligible for a trip to the United Arab Emirates. These are all examples of how telecommunications companies use different types of sales promotion to entice customers to use their services.

According to Animashaun (2013), telecommunication operators’ choice of sales promotion typologies is thought to have an impact on the value of their brand. This is probably because consumers’ acceptance level of the sales promotion strategies utilised by telecommunication operators will determine consumers’ attitude and perception of the brands.  Owing to the development in the Information, Communication and Technology sector (ICT), there has been wide adoption of mobile technology by Nigerians both in the rural and urban areas (Samuel & Olatokun, 2014) which has led to the wide usage of the social media as well as Internet enabled devices, hence, telecommunication operators utilise the social media such as Facebook to disseminate promotional messages about their brands.

These telecommunications companies’ main services include airtime, data, and other value-added services that promote quick and simple communication. It is essential to investigate the impact that interactive media’s sales promotion typologies have on telecommunication operators’ brand equity among state civil servants in South-West Nigeria because telecommunication operators’ responses to one another’s sales promotion activities hint at the competition and price war that exists among them in Nigeria.

1.2  Statement of the Problem

Many organizations want to increase brand equity in the face of rival brands. In order to boost product sales and increase profit margins, brand owners who are working to grow and expand their brands use a variety of techniques such as product sampling, coupons, premiums, price off, sweepstakes, rebates, and discounts. These two broad types of sales promotion typologies are monetary and non-monetary.

The dispute over the sales promotion typologies to be employed in order to build brand awareness, guarantee positive brand association, reinforce the highest level of product quality, and maintain brand loyalty is becoming a significant concern for businesses. It will be crucial to identify the appropriate sales promotion typologies that will support brand equity in the face of increased competition.

Several experts in the field of brand equity (Bingqun, Kejia &Tingjui, 2016; Chandon, Wansink & Laurent, 2000; Keller, 2007; Luk & Yip, 2008; Yoo, Donthu & Lee, 2000) have discussed the effects of monetary and non-monetary typologies of sales promotion on brand equity; however, Fogel & Thornton, (2008) and Luk & Yip (2008) contend that monetary sales promotions portend.

This divide shows that though sales promotion may help to build brand awareness by creating recognition and recall, the nature and quality of the typologies adopted is of essence to be identified by this study with the potential of creating brand association, boost perceived brand quality and ultimately brand loyalty among telecommunication operators.

While telecommunication operators are building a strong brand that will help to reinforce their brands’ equity, the typology to be used is a crucial factor that should be considered critically; some years back, a telecommunication operator in Nigeria asked subscribers to recharge their mobile lines to win an airplane and this generated public criticism as it was believed that the promotional technique was not realistic. In addition, telecommunication operators’ utilisation of SMS and Facebook for disseminating promotional messages in recent time has generated reactions from subscribers, hence NCC’s move to mandate all GSM service providers to generate a code (2442, “Don’t Disturb Me”) which exempts subscribers from receiving bulk SMS from telecommunication operators; with this code, telecommunication operators are faced with the challenge of disseminating promotional messages to subscribers.

Without state civil officials, many businesses in South-West Nigeria would suffer. This is demonstrated by the recent inability of many South-West states to pay civil servants’ salaries on time and the detrimental impact this has had on the demand for goods and services. Hence, it is crucial that telecommunications companies take into account civil servants because they represent a significant market sector in South-West Nigeria that cannot be disregarded. Hence, this study looked at how telecommunication carriers’ brand equity among state employees in the South-West area of Nigeria was affected by interactive media sales promotion typologies.

1.3       Objective of the Study

The major goal of this study is to determine how telecommunication providers’ brand equity among state government workers in South-West Nigeria is impacted by interactive media sales promotion typologies. The precise goals were to:

1. Investigate the degree to which consumers are aware of the monetary sales promotion typology that telecommunications companies deploy on interactive media, as well as the non-monetary sales promotion typology.
2. To look at how well-known telecommunications companies are among consumers in interactive media;
3. Determine how well-known telecommunications carriers are to consumers using interactive media;
4. Find out how much brand association customers have with telecom companies on interactive media, as well as how much brand loyalty they have to these companies on these same platforms.

1.4 Research Questions

The following issues were covered in this study in order to contribute to the continuing discussion on how sales promotion typologies impact telecommunication providers’ brand equity:

1. How well-informed are consumers about the kind of financial sales promotions that telecommunications companies utilize through interactive media?
2. How well-informed are consumers about the types of non-financial sales promotions that telecommunications companies utilize on interactive media?
3. How well-known are telecommunications companies among consumers via interactive media?
3. What is the perceived brand quality of telecommunications providers among consumers of interactive media?
4. What degree of brand association do customers have with telecom companies via interactive media?
5. How devoted are people to particular telecommunications companies on interactive media?

1.5 Hypotheses

The hypotheses were tested at a significance level of 0.05.

Ho1:  Financial sales promotion typology has a big impact on how well-known telecommunications companies are in interactive media.
Ho2:  Financial sales promotion type substantially affects how well telecommunications carriers’ brands are viewed on interactive media.
Ho3:  Financial sales promotion typology greatly affects the way that telecommunications carriers’ brands are associated with interactive media.
Ho4:  Financial sales promotion type has a big impact on interactive media telecommunication carriers’ brand loyalty.
Ho5:  Brand awareness of telecom operators in interactive media is substantially influenced by non-financial sales promotion typology.
Ho6:  Non-financial sales promotion typology strongly affects how interactive media consumers assess the quality of telecommunications carriers’ brands.
Ho7:  On interactive media, non-financial sales promotion type has a big impact on how people perceive telecommunications companies’ brands.

Ho8 :  Non-monetary sales promotion typology significantly influences brand loyalty of telecommunication operators on interactive media.
Ho9:  Telecommunication operators’ interactive media sales promotion typologies significantly influence brand equity.

1.6  Significance of the Study

Sales promotion typologies are the short-term tools used by telecommunication service providers to ensure these objectives are widely used. Organizations are concerned about the perception that consumers hold about their products, services, and ideas, which leads them to integrate marketing communication tools to influence consumers’ attitude toward their brands and increase sales and patronage.

This study presented subscribers’ perception of monetary and non-monetary sales promotion typologies and the factors that influence such attitude. Among the major stakeholders that this work was of value to are the brand managers who are saddled with the responsibility of building favourable brand image in an highly competitive market as well as managing brand reputation. Through this study, stakeholders were exposed to the implication of each typology of sales promotion that may enhance a brand’s equity in the minds of the customers. A glance through the social media especially Facebook showed subscribers’ opinions about sales promotion activities done by telecommunication operators as well as the services being provided by these operators thus, findings from this study may help telecommunication service providers understand the sales promotion strategies that subscribers find more appealing as well as subscribers’ brand association with these operators.

It may redirect their focus to see the need to proactively react to consumers’ growing concern in order to ascertain the brand equity of their services. In order to attract the middle class and encourage them to buy their products, it was anticipated that this study would help telecommunication operators find the best ways to place their sales promotion activities as well as the appropriate sales promotion typologies to deploy. The researcher also anticipates that the results of this study will contribute to the ongoing discussion on the relationship between brand equity and sales promotion. As a result, data and empirical literature would be made available to academics, aiding future research in this area.

1.7  Scope of the Study

This study looked at how telecommunication carriers’ brand equity among state employees in Lagos and Ogun state, Nigeria, was impacted by interactive media sales promotion typologies. The basis for choosing the respondents was the presumption that the middle class’ size would increase the nation’s Gross Domestic Product (GDP). For a manufacturer, middle class employees are regarded as crucial participants in the product purchase cycle due to their purchasing power as they make up the majority of consumers.  Individuals who subscribe to either MTN, Globacom, Airtel or Etisalat were considered in this study from September 2016 to January 2017. Furthermore, this study focused solely on sales promotion programmes, activities and messages on interactive media used by telecommunication services specifically SMS and Facebook and not any other media because telecommunication service providers employ SMS to disseminate information about their sales promotion activities; Jobber (2007) asserts that in reaching out to customers, Short Messaging Services (SMS) is most effective buzz-phrase for Business to-Consumer (B2C) markets (p. 743). It is believed that more than 50% of the respondents are likely to be exposed to interactive media sales promotion messages; this is because SMS as an interactive medium does not require Internet access, which is balanced by Facebook which requires Internet access. This implies that recipients are likely to get sales promotion messages on Facebook or SMS (non-Internet based) (Internet based). The increased competition in the sector brought about by NCC regulation determined the choice of telecommunication service providers.

1.8  Operational Definition of Terms

The terms listed below can indicate different things depending on the situation. Yet, this study will employ them in accordance with the given definitions:

Sales promotion: This is a short-term strategy used by telecom companies to provide subscribers with benefits beyond those they are already paying for. For instance, “Load N200 and receive 50mb free”, “Purchase new sim and browse free for the first month”, “Load N2000 and get 3.5gb more”, and “Send in a code to ***** to activate caller tune free for two months”. All of these are sales promotion efforts by telecommunications companies.

Sales Promotion Typologies: This refers to any monetary or non-monetary value provided by a telecommunications provider with the goal of encouraging subscribers to purchase more airtime or data. The monetary sales promotion typology involves financial reward such as free airtime or opportunity to get real money back after a purchase or series of purchase is made while the non-monetary sales promotion typology entails non-financial reward or gifts given to subscribers to make them patronise the brand more or to appreciate it for earlier patronage.

Non-monetary Sales Promotion Typology: This refers to promotional offers used by telecommunication operators to induce subscribers to patronise them by adding to the product; for example, buy Etisalat airtime worth N200 and you will be given 200MB of data alongside the airtime purchased. This study used sweepstakes, Buy one, get one free’, premium and company gifts (free gifts) as non-monetary sales promotion typology utilised by telecommunication operators.

Types of Financial Sales Promotions: These are promotions that give customers a cash incentive in exchange for their business. This study classifies the monetary sales promotion typology employed by telecom carriers as discounts, coupons, and bonuses.

Interactive media: These are the channels through which subscribers can access, transmit, or receive marketing messages from telecommunications providers. SMS and Facebook will serve as the study’s representations of interactive media.

Influence: Based on the sales promotion typology that the consumers were exposed to, influence in this study was measured as a change in the consumers’ awareness of telecommunication services, associations with the services, product quality, and ultimately their loyalty to a particular telecommunication service provider.

Brand Equity: refers to subscribers’ familiarity with and perception of the telecommunication service providers as well as their products and services.  This will be measured by subscribers’ brand awareness, brand association, perceived brand quality and ultimately brand loyalty to telecommunication operators.

Brand Awareness:  refers to subscribers’ ability to identify and differentiate between a telecommunication service provider and the others. For example, if a subscriber is able to tell the MTN’s jingle, slogan of Globacom, Etisalat’s colour and Airtel’s sales promotion, then it is safe to say there is brand awareness. This will be measured in terms of brand recognition and recall.

Brand Association: In this study, brand association connotes subscribers’ perception of a brand’s attribute and benefit which will determine their attitude to the brand that is communicated in terms of positive, negative, or indifference to the brand. In this case, brand association can be likened to subscribers’ disposition to telecommunication service providers, which is based on their experience, observation or experience of others. Example is Airtel’s data bundle is the best because I receive bonus after every subscription; here, subscribers’ attitude to Airtel as a brand is positive.

Brand Perceived Quality: This refers to the value that consumers attach to a brand based on their association with the brand. In this, a brand’s perceived quality is determined by subscribers’ experience with telecommunication operators’ services. For instance, call quality, SMS, data bundles, Internet signal strength and other value-added services; all these will determine the value that subscribers attach to telecommunication operators’ brands.

Brand loyalty is the commitment of customers to use a certain telecommunications service provider notwithstanding the advantages or advantages that other service providers may be providing. Even when competing operators are providing more value at a lower price, a subscriber who only uses MTN by purchasing its airtime and subscribing to its data plan qualifies as a brand loyalist.

Telecommunication Operators: These are companies that have been granted a license by the Nigerian Communications Commission (NCC) to offer subscribers in Nigeria telecommunication access to data services and telephony. This study primarily concentrates on MTN, Airtel, Globacom, and Etisalat.

Subscribers: Those who use any of the telecom services offered by any or all of the licensed GSM operators in Nigeria covered in this study, such as MTN, Airtel, Etisalat, and Globacom, are referred to as subscribers. Typically, a subscriber can use multiple mobile lines for a variety of purposes.

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