The Role of Sales Promotion on the Profitability of Telecommunication Companies in Cameroon. Case Study MTN Cameroon
Chapter One
Objective of the study
The objective of the study is to investigate the role of sales promotion on the profitability of telecommunication companies in Cameroon. The specific objectives are;
- To find out the factors which promotes or impairs the effectiveness of sales promotion
- To find out the role of sale promotion on profitability of MTN in Cameroon
- To find out the effect of sale promotion on sale volume in MTN, Cameroon
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Concept of sale promotion
Sales promotion-is defined as a key ingredient in marketing campaigns, consist of a collection of incentives tools mostly short term, designed to stimulate quicker or greater purchase of particular products or service by consumers or the trade, (Kotler and Keller 2011). Sales promotion is defined as a direct inducement that offers extra value or incentive for the product to the sales force, distributors, or the ultimate consumer with the primary objective of creating “immediate” sales. The definition dwells much on extra inducement beyond basic offer, acceleration tool and target different parties . The American Marketing Association (A.M.A 2010) defines sales promotions as “media and non media marketing pressures applied for a predetermined time frame to different target audience, thus consumers ,retailers and wholesalers in order to stimulate trial, increase consumer demand and improve product viability, (American Marketing Association (2010). Crosier and Bureau (1990), cited in Pick and Broderick (2005), sales promotion is a highly elastic term, embracing a host of marketing tactics. The scholars proposed a fundamental distinction between economic incentive sales promotions, such as free samples, premium offers, money-of deals and communication initiatives sales promotion such as product literature. Crosier and Bureau definition is hinged on the economic incentive element of sales promotion, but it neglects the communication initiative dimension which is a part of the work involved in merchandising and point of sale. The definition seems to be of the opinion that sales promotion is something undertaken by manufactures and service providers to encourage the trade and consumer s, but it excludes reference to huge amounts of sales promotion conducted by the trade itself
Oyedepo et al (2012) postulate that sales promotion is an uninterrupted incentive that offers an extra value or incentive for the product to the salesforce, distributor, or the final consumer with main objective of creating an immediate sale. Aham (2008) notion on sales promotion is hinged on that, sales promotion was developed as the response by manufactures marketers, and marketing tactics similar to find a short term solution to the problems of surplus stock of goods which can be presented in variables manufacturer’s storerooms but are not needed by customers and business
Shimp (2000) defines sales promotion as a marketing communications activities used to encourage the trade and or end customers to purchase or take other relevant action by affecting the perceived value of the product being promoted or to otherwise motivate action to be taken. Shimp`s definition proposes a broader perspective to sales promotion, it permits incentivized and non-incentivized sales promotion and the opportunity for sales promotions to be undertaken by anybody.
The key elements that a number of scholars agree upon with regard to sales promotion are ,involvement of an inducement to provide an incentive to buy, incentive is a corner stone in a promotional program, attempts to add value to the product or service by appealing to value and saving of money on the same quantity of a product or same service package, and sales promotion act as an acceleration device intended to drive up sales volume within a predetermined time frame, targeted at a diverse audience with different types and of incentives.
“Sales promotion comprises a range of tactical marketing
techniques designedwithin a strategicmarketing framework to add value to a product or service in
order to achieve specific sales and marketing objective.”
Sales promotion is a technique which has significant potential to improve short term sales and like direct response work; its effectiveness can be tightly measured. Although its strategic value is the subject of considerable debate, nevertheless, it is an important tool of marketing. There are few markets or products where it cannot be used and few brands to which it cannot be applied.
Purpose of sales promotion
Sales promotion tools vary in their specific objectives. A free sample stimulates consumer trial, while a free management advisory service cements a long-term relationship with a retailer. From the marketer’s perspective, sales promotion serves three essential roles it informs, persuades and reminds prospective and current customers and other selected audiences about a company and its products. The relative importance of those roles varies according to the circumstances faced by a firm. The most useful product or brand will be a failure if no one knows it is available! Because distribution channels are often long, a product may pass through many lands between a producer and consumers. Therefore, a producer must inform middlemen as well as the ultimate consumers or business users about the product. Wholesalers, in turn must inform retailers and retailers must inform consumers. As the number of potential customers grows and the geographic dimensions of a market expand, the problems and costs of informing the market increase
Another purpose of sales promotion is persuasion. The intense competition among different industries, puts tremendous pressure on the promotional programmes of sellers. In India, even a product designed to satisfy a basic physiological need requires strong persuasive promotion, because consumers have many alternatives to choose from. In the case of luxury product, for which sales depend on the ability to convince consumers that the products benefits exceed those of other luxuries, persuasion is even more important. Consumers also must be reminded about a product‟s availability and its potential to satisfy.
Chapter Three
Research methodology
Research Design
The research design adopted in this research work is the survey research design which involves the usage of self-designed questionnaire in the collection of data. Under the survey research design, primary data of this study will be collected from MTN in order to determine the role of sales promotion on the profitability of telecommunication companies in Cameron. The design was chosen because it enables the researcher to collect data without manipulation of any variables of interest in the study. The design also provides opportunity for equal chance of participation in the study for respondents.
Population of Study
The population of study is the census of all items or a subject that possess the characteristics or that have the knowledge of the phenomenon that is being studied (Asiaka, 1991). It also means the aggregate people from which the sample is to be drawn.
Population is sometimes referred to as the universe. The population of this research study will be Seventy-five (75) staffs of MTN in Yaoundé, Cameroon
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION
This chapter is about the analysis and presentation of data collected from the field through questionnaire. The analysis of the data with particular question immediately followed by the presentation of findings.
As mentioned in chapter three, 75 questionnaires were administered and 50 were retrieved and necessary analysis was carried out on them and presented as follows:
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the role of sales promotion on the profitability of telecommunication companies in Cameroon. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of the role of sales promotion on the profitability of telecommunication companies in Cameroon
Summary
This study was on the role of sales promotion on the profitability of telecommunication companies in Cameroon. Three objectives were raised which included: To find out the factors which promotes or impairs the effectiveness of sales promotion, to find out the role of sale promotion on profitability of MTN in Cameroon and to find out the effect of sale promotion on sale volume in MTN, Cameroon. The total population for the study is 75 staffs of MTN in Yaounde, Cameroon. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
Economic growth for Cameroon like in most other economies is a function of efficiency in the integration of macro-economic variables which telecommunication is a part. The impacts of the adoption of the telecommunication network are evident in the improved quality of life of both urban and rural dwellers. It is however important to note that the consumption of the services of the telecommunication industry does not show linearity in relationship with economic development in Cameroon, given the investment on sales promotion as platform for marketing of the service for profit. Following the above, it is important that vendors of telecommunication services in Cameroon should be involved in of marketing research as source of input for decision on market segmentation and targeting, as strategies for qualitative investment in sales promotion and for the achievement of increasing return to scale on investment rather than constant or decreasing returns.
Recommendation
Telecommunication services marketers should be sure to be honest and diligent in carrying out sales promotion campaigns. This is necessary because these issues impact on the credibility of the promotion exercise as well as the integrity of the operators. Promises made should be strictly kept while winnings/prizes should be promptly redeemed.
Sales promotions campaign should be thoroughly thought out and planned weighing its benefits and costs in both the short, medium and long term. This will reduce the probability of running into a hitch, in course of executing a promotion programme
Telecommunications marketers should always endeavour to clearly spell out the objectives of sales promotion campaign in order to facilitate direction and focus when executing the campaign. In addition, this should have direct bearing on the attainment of the marketing objectives of the organisation.
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