ABSTRACT
Nigerian telecommunication
industry has evolved into a competitive sphere as operators endeavour to
entreat and win customers through monetary and non-monetary sales promotion
typologies. Telecommunication operators utilise sales promotion to create brand
awareness, encourage brand trial and ultimately persuade subscribers to be
brand loyals in order to increase brand equity. While
telecommunication operators are increasing brand equity on interactive media,
the appropriate sales promotion typology to be adopted remains a challenge. Scholars have debated usage of sales
promotion to increase brand equity. Therefore, this study examined interactive
media sales promotion typologies and telecommunication operators’ brand equity
among State civil servants in Lagos and Ogun states.
Survey research design was
adopted for the study. The population comprised 17,161 State civil servants in Lagos and Ogun states. The states were selected
using simple random sampling technique. Systematic sampling technique was
adopted to select the ministries. The Saunders, Lewis and Thornhill formula was
used to arrive at the sample size of 880 respondents. A validated questionnaire
was administered to the respondents. The Cronbach’s Alpha coefficient values
for the constructs were: monetary sales promotion (0.732),
non- monetary sales promotion (0.797), brand
awareness (0.797), perceived brand quality (0.754), brand association (0.796)
and brand loyalty (0.827); while 0.930 was
obtained for the total scale.A total of 880 copies of the questionnaire were
administered to the respondents with a response rate of 93.4%. Inferential statistics (simple linear and multiple
linear regression) were used to analyse the data.
Findings revealed
that monetary sales promotion typology significantly influenced
telecommunication operators’ brand awareness (R2=0.301, p<0.05),
perceived brand quality (R2=0.155,
p<0.05), brand association (R2=0.171,
p<0.05) and brand loyalty (R2=0.058,
p<0.05). Non-monetary sales promotion typology significantly
influenced telecommunication operators’ brand awareness (R2=0.304, p<0.05), perceived
brand quality (R2=0.218, p<0.05), brand
association (R2=0.237, p<0.05)
and brand loyalty (R2=0.163,
p<0.05).
The study concluded that monetary and non-monetary sales promotion typologies
were useful to enhancing telecommunication operators’ brand equity. The study
therefore recommended that telecommunication operators should strategically
combine monetary and non-monetary sales promotion typologies that would
positively increase subscribers’ perception of their brands, foster positive
relationship with subscribers to generate positive attitude and promote brand
loyalty.
CHAPTER ONE
INTRODUCTION
1.1 Background to the
Study
Nigerian
telecommunication industry has evolved into a competitive sphere as operators
endeavour to entreat and win customers through various sales promotion
strategies. Owing to this, it is a common phenomenon for organisations to
bombard consumers with both monetary and non-monetary forms of sales promotions
using either print, electronic, outdoor or digital interactive media.
Telecommunication operators use sales promotion to create brand awareness,
encourage brand trial and ultimately persuade consumers to be brand loyals with
the ultimate desire to increase or maintain market share. In the world today,
every single decision and effort of the organisation is evaluated by the
relationship existing between the brand and the customers as well as brand
managers commitment to the claims made by the brand, which leads to consumers’
satisfaction and ultimately end with brand loyalty. Companies deploy their
strength to promote sales in the shortest possible time; hence, sales
promotion, a marketing communication tool involves the manufacturers providing
incentives alongside their products which gives the consumers enough
justification to purchase the product, service or idea.
Going by World Bank record (2012), Nigeria with a
population of well over 168.8 million has 65.8% (149,818,906) active subscribers of licenced
telecommunication operators. According to
Nigerian Communications Commission (NCC, 2016), “Nigerian telecommunication
industry is one of the largest in Africa with 151,017,244 GSM users and is still growing
with one of the highest fixed line revenue and cumulative revenue of
US$16billion as at June, 2016” (p. 2). The major telecommunication operators in
Nigeria are MTN, Globacom (Glo), Airtel, Etisalat and they engage in fierce competition
through price slash, and data bundles tailored to meet the data needs of
various groups of subscribers in order to gain and retain customers as well as
increase their profit margin to broaden their market share.
Research has shown that MTN has the highest percentage
of GSM subscribers in Nigeria with a market size above 58 million (58,409,767) subscribers
making up about 39%. 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).
Oyeniyi (2011) explains that the Nigerian
telecommunication industry is gradually making entrance into its maturity
phase, characterised with reducing average profit and faced with fierce
competition. With the influx of mobile phones and stiff competition in the
telecommunication industry, operators are left with no other choice than to
increase their brand value so that subscribers can patronise them. It has
become rampant to see telecommunication operators respond to competitors’
marketing activities by adding more to what the initiator of the campaign is
offering. For instance, Etisalat Nigeria started with incentivising subscribers
to purchase a recharge voucher of N200
and get extra 15mb; other operators have responded by giving not just the
voucher value and the megabyte for browsing, they have bonuses, which range
from 15% to 100%.
The telecommunication landscape is highly competitive
as operators endeavour to neutralise competitors’ offering by suggesting higher
value at reduced cost to the clients under the most enabling environment. The
purpose of sales promotion is to persuade participants in the purchase process
such as vendors, salespeople and final consumers to key into these
manufacturers’ corporate strategies through short-term inducements. Telecommunication operators utilise
Internet and non-Internet based platforms to disseminate promotional messages
to real or prospective subscribers; the non-Internet interactive based
platforms include Short Message Service (SMS) while the Internet-based ones
include Facebook, Twitter, Instagram and others. England and Finney (2011) define
interactive media as:
The integration of digital media including
combinations of electronic text, graphics, moving images, and sound, into a
structured digital computerized environment that allows people to interact with
the data for appropriate purposes. The digital environment can include the
Internet, telecoms and interactive digital television (p. 3).
This suggests that telecommunication operators in
their bid to disseminate their promotional messages of either airtime, data
subscription or other services have categorised their customers by their mobile
devices. A category of subscribers use feature phones which perform key
functions of calling and returning calls as well as sending of SMS; therefore
they do not need Internet access to receive promotional messages from
telecommunication operators as their mobile device can function with the use of
a registered SIM card. 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).
Telecommunication operators alternate between monetary
and non-monetary promotion offer in order to persuade subscribers to patronise
them. In the local scene, MTN at some point encouraged subscribers to recharge
their mobile lines with a minimum of N
200 in order to win an airplane or to qualify for a trip to United Arab
Emirate. All these are ways in which telecommunication operators encourage
people to patronise them using various sales promotion typologies.
According to Animashaun (2013), the sales promotion
typologies adopted by telecommunication operators are assumed to portend an
influence on their brand’s equity. 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.
The major offerings of these telecommunication
operators are airtime, data and other value added services, which facilitate
rapid and easy communication. Telecommunication
operators’ response to one another’s sales promotion activities allude to the
competition and price war existing among them in Nigeria; as such, it is
imperative to examine the role that interactive media’s sales promotion typologies play on telecommunication
operators’ brand equity among state civil servants in South-West Nigeria.
1.2 Statement of the Problem
Increasing brand equity in the presence of competing
brands is the goal of many organisations. Brand owners striving to grow and
expand their brands adopt two broad types of sales promotion typologies namely
monetary and non-monetary with various techniques such as product sampling,
coupons, premiums, price off, sweepstakes, rebates and discounts in order to
accelerate the product sales and widen profit margin.
A growing concern among companies is the debate on the sales promotion
typologies to be used in order to create brand awareness, ensure positive brand
association, reinforce maximum product quality as well as sustain brand
loyalty. In the face of growing competition, it will be essential to determine
the right sales promotions typologies that will help build brand equity.
Several
authorities (Bingqun, Kejia &Tingjui, 2016; Chandon, Wansink & Laurent,2000; Keller, 2007; Luk
& Yip, 2008; Yoo, Donthu & Lee, 2000) in the field of brand equity have
debated the impact of monetary and non-monetary typologies of sales promotion
on brand equity; while Fogel & Thornton, (2008) and Luk & Yip (2008) argue that monetary sales promotions
portend a negative impact on brand equity because repeated occurrence of a
brand’s promotional effort could connote quality and value reduction to the consumers, other
scholars (Chandon, Wansink & Laurent, 2000; Keller, 2007) provide empirical justification to back up the claim that
non-monetary sales promotion positively influences brand equity. 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.
State civil servants form a major backbone of the economy in the
South-West Nigeria; without them many businesses will be negatively impacted;
this is exemplified in the recent inability of many South-West states to pay
civil servants’ salaries regularly and the spillover negative effect on the
demand for goods and services. Therefore, it is important for telecommunication
operators to consider civil servants as they make up an important market
segment that cannot be overlooked in South-West Nigeria. Hence, this study examined the influence
of interactive media sales promotion typologies on telecommunication operators’ brand equity among
state civil servants in South-West region of Nigeria.
1.3 Objective of the Study
The main
objective of this study is to ascertain the influence of interactive media sales promotion
typologies on telecommunication operators’ brand equity among state civil servants in South-West,
Nigeria. The specific objectives were to:
- explore consumers’ level of awareness of monetary
sales promotion typology used by telecommunication operators on
interactive media;
- find out consumers’ level of awareness of
non-monetary sales promotion typology used by telecommunication operators
on interactive media;
- investigate consumers’ level of brand awareness
of telecommunication operators on interactive media;
- ascertain consumers’ level of perceived brand
quality of telecommunication operators on interactive media;
- determine consumers’ level of brand association
of telecommunication operators on interactive media and
- examine consumers’ level of brand loyalty to
telecommunication operators on interactive media
1.4 Research Questions
To add to the ongoing debate on the extent
to which sales promotion typologies affect telecommunication operators’ brand
equity, the following questions were addressed in the course of this study:
- What are consumers’ level of awareness of monetary sales promotion
typology used by telecommunication operators
on interactive media?
- What are consumers’ level of awareness of non-monetary sales
promotion typology used by telecommunication operators
on interactive media?
- What is the level of consumers’ brand awareness of
telecommunication operators on interactive media?
- What is the level of consumers’ perceived brand quality of
telecommunication operators on
interactive media?
- What are consumers’ level of brand association of telecommunication
operators on interactive media?
- What are consumers’ level of brand loyalty to telecommunication operators on interactive media?
1.5 Hypotheses
The hypotheses were tested at 0.05 level
of significance.
Ho1 Monetary
sales promotion typology significantly influences brand awareness of
telecommunication operators on interactive media.
Ho2 Monetary sales promotion typology significantly
influences perceived brand quality of telecommunication operators on
interactive media.
Ho3 Monetary sales promotion typology significantly influences
brand association of telecommunication operators on interactive media.
Ho4 Monetary
sales promotion typology significantly influences brand loyalty of
telecommunication operators on interactive media.
Ho5 Non-monetary
sales promotion typology significantly influences brand awareness of telecommunication
operators on interactive media.
Ho6 Non-monetary
sales promotion typology significantly influences perceived brand quality of
telecommunication operators on interactive media.
Ho7 Non-monetary
sales promotion typology significantly influences brand association of
telecommunication operators on interactive media.
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
Organisations are concerned about the
perception that consumers hold about their products, services and ideas, hence
their integration of marketing communication tools to influence consumers’
attitude to their brands and increase sales and patronage; the short-term tools
used to ensure these objectives widely used by telecommunication service
providers are sales promotion typologies. 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. It wass expected that this study would be
of assistance to the telecommunication operators in helping to identify best
ways of positioning their sales promotion activities as well as the right sales
promotion typologies to use in order to get the attention of the middle class
and persuade them to patronise their brands. Also, the researcher hopes that
the outcome of this study would add to the existing debate on the association
existing between sales promotion and brand equity. As such, researchers would
be provided with empirical literature and data that will assist future studies
in this field.
1.7 Scope of the Study
This study examined the influence of interactive media sales promotion
typologies on telecommunication operators’ brand equity among state civil servants in Lagos and
Ogun state, Nigeria. The motive behind the respondents selected was the
assumption that the larger the middle class, the larger the country’s Gross
Domestic Product (GDP), and for a manufacturer, the middle class employees are
considered as important members in the product purchase cycle because of their
purchase power as they constitute the largest share of buyers. 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 suggests that subscribers are likely to be exposed to sales
promotion messages on SMS (non-Internet based) or Facebook (Internet based). The choice of telecommunication service providers was
dictated that by the increasing competition experience in the industry through
regulation of NCC.
1.8 Operational Definition of
Terms
The following concepts have other meanings
in different contexts. Nonetheless, this study will use them based on the
meanings provided:
Sales Promotion: This refers to telecommunication
operators’ short-term initiative to give subscribers extra value more than what
they are paying for. For instance, ‘Load
N200 and 50mb free’, ‘Buy new sim and browse free for the first month’,
‘Load N2000 and get 3.5gb extra’, ‘send in a code to ***** to activate caller
tune free for two months’. All these refers to telecommunication operators
sales promotion activities.
Sales Promotion
Typologies:
This means any telecommunication operator’s monetary or non-monetary value
intended to increase sales of airtime or data being offered to the subscribers. 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.
Monetary Sales Promotion
Typology: They are
promotions that provide financial benefit to consumers in order to increase
patronage. This study identifies discount, coupon and bonus as monetary sales
promotion typology used by telecommunication operators.
Interactive
media:
This refers to platforms where subscribers receive, send or access
telecommunication operators’ promotional messages. For the purpose of this
study, SMS and Facebook will represent interactive media.
Influence: In this study, influence was determined
by a change in consumer’s awareness of the telecommunication services,
association with the services, quality of product and ultimately their loyalty
to a specific telecommunication service provider based on the sales promotion
typology they have been exposed to.
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: This refers to subscribers’ allegiance
to patronise a specific telecommunication service provider regardless of the
value or benefit that other service providers are offering. If a subscriber
patronised only MTN by buying its airtime and subscribing to its data package
even when other operators are offering greater value at a reduced price, such a
person is a brand loyal.
Telecommunication
Operators:
These are communication service providers licenced by Nigerian Communications
Commission (NCC) to provide telecommunication access to data services and
telephony for subscribers in Nigeria. Primarily, this study focuses on MTN,
Airtel, Globacom and Etisalat.
Subscribers:
Subscribers are individuals who utilise any of the telecommunication services
provided by any or all of the licenced GSM operators in Nigeria listed in this
study, such as MTN, Airtel, Etisalat and Globacom. Usually, a subscriber may use more than one
of the mobile lines for specific functions.
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