Product Branding as a Tool for Increasing Consumer Loyalty in the Telecommunication Industry in Nigeria.
ABSTRACT
Prior to the advent of GSM in 2001, phone penetration was low to the verge of negligible. Nitel had the monopoly. But all that changed with the GSM revolution brought by the licensing of Econet (now Airtel), Mtel, MTN and the later entry of Glo and Etisalat into the industry. At first, all that was needed for marketing success was availability. Because the demand for phone was far more than the supply, these companies were on a roll, snapping subscribers after subscribers from phone starved Nigerians. That has since changed.
With the fierce competition and the saturated market already, telecom operators must work hard to reduce cost, win new customers and most importantly retain the existing ones. This study is based on product branding as a tool for increasing consumer loyalty in the Nigeria telecommunication industry. The main objective is to determine the relationship between product branding and consumer loyalty in the Nigeria telecommunication industry.
Primary data used for this work which was sourced through questionnaire administered to customers of the four major telecommunication companies in Nigeria (MTN, Airtel, Globacom and Etisalat) residing in Enugu metropolis. The population of the study was 812,708, but the sample size was 400 which were determined with the use of the yamane’s equation. Out of the 400 administered, only 392 were returned.
A descriptive statistic technique was also adopted for the study and the statistical tool for the test of the formulated hypothesis was chi square formulae, with the aid of the SPSS software. The study revealed that Product branding and features has a significant effect on product choice and customer patronage and also that Product diversification and innovation has a significant effect on consumer choice and patronage.
TABLE OF CONTENTS
Title Page ……………………………………………………………………………. i
Approval Page ……………………………………………………………………… ii
Certification Page …………………………………………………………………. iii
Dedication ………………………………………………………………………….. iv
Acknowledgements ………………………………………………………………. v
Abstract …………………………………………………………………………….. vi
Table of Contents ………………………………………………………………… vii
List of Tables …………………………………………………………………….. xi
List of Figures …………………………………………………………………… xii
CHAPTER ONE
1.0 Introduction ……………………………………………………………… 1
1.1 Background of the Study ……………………………………………… 1
1.2 Statement of the Problem ……………………………………………… 4
1.3 Objectives of the Study ………………………………………………… 6
1.4 Research Questions …………………………………………………….. 6
1.5 Research Hypotheses …………………………………………………… 7
1.6 Significance of the Study ………………………………………………. 8
1.7 Scope of the Study ………………………………………………………. 8
1.8 Limitation of the Study …………………………………………………. 9
1.9 Definition of Terms ………………………………………………………. 9
References …………………………………………………………………………… 11
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Introduction ………………………………………………………………… 12
2.2 Definition and Meaning of Product …………………………………… 12
2.2.1 Product Levels ……………………………………………………………… 13
2.2.2 Product Classifications …………………………………………………… 15
2.2.3 Product Differentiation and Design ……………………………………. 16
2.2.4 Product Life Cycle ………………………………………………………….. 17
2.3 Product Branding and its Importance …………………………………. 18
2.3.1 Kinds of Branding ………………………………………………………….. 24
2.3.2 Base (Primary) Brand ……………………………………………………… 26
2.3.3 Brand Extensions ………………………………………………………….. 26
2.3.4 Importance of Branding …………………………………………………… 26
2.4 Role of the Brand …………………………………………………………… 29
2.4.1 Benefits of the Brand ………………………………………………………. 31
2.5 Consumer Loyalty …………………………………………………………… 32
2.5.1 Brand Loyalty ………………………………………………………………… 36
2.5.2 Segmentation Based on Customer Loyalty ……………………………. 38
2.5.3 Factors Affecting Customer Loyalty …………………………………….. 42
2.5.4 Consequences of Customer’s Loyalty …………………………………… 44
2.6 Concept of Consumer’s Behaviour and Marketing Strategy ………. 45
2.6.1 Model of Consumer Behaviour …………………………………………… 47
2.6.2 Factors Influencing Consumer Behaviour …………………………….. 47
2.6.3 Types of Buying Behaviours ……………………………………………….56
2.6.4 Buyer Decision Process ……………………………………………………. 59
2.6.5 The Buyer Decision Process for New Products ……………………….. 64
2.6.6 Marketing Strategy …………………………………………………………..65
2.7 The Nigerian Telecommunication ……………………………………….. 66
2.7.1 The Revolutionary Years ……………………………………………………67
2.8 GSM Operators in Nigeria ………………………………………………….68
2.9 Understanding the Mobile Phone Market Drivers …………………….75
2.9.1 Usage Benefit versus Technical Performance ………………………… 76
2.9.2 Generalization of Mobile Phone and Market Segmentation ………. 78
2.9.3 Different Marketing Messages ……………………………………………. 80
2.10 Telecommunication and Economic Development ……………………. 81
2.10.1 Other Countries’ Experience ……………………………………………..82
2.10.2 Economic Impacts of Telecommunication Growth in Nigeria …… 85
References ……………………………………………………………………………. 88
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction ………………………………………………………………… 95
3.2 Research Design …………………………………………………………… 95
3.3 Sources of Data ……………………………………………………………. 96
3.4 Pilot Survey …………………………………………………………………. 96
3.5 Population of Study ……………………………………………………….. 96
3.6 Sample Size Determination ………………………………………………. 98
3.7 Sampling Techniques ………………………………………………………. 99
3.8 Instrument of Data Collection ……………………………………………. 99
3.9 Validity and Reliability of Study …………………………………………. 100
3.10 Techniques of Data Presentation and Analysis ………………………. 101
Reference ……………………………………………………………………………… 102
Appendix 1 ……………………………………………………………………………. 103
Appendix 11 ………………………………………………………………………….. 107
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction ………………………………………………………………….. 108
4.2 Demography of the Respondents ………………………………………… 108
4.3 Hypothesis Testing …………………………………………………………..113
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATIONS AND
CONCLUSION
5.1 Summary of Findings ………………………………………………………. 119
5.2 Conclusions ……………………………………………………………………119
5.3 Recommendations ……………………………………………………………120
Bibliography ………………………………………………………………………….. 121
INTRODUCTION
The Nigerian Telecommunication industry has experienced exponential growth in the last ten years, going from active subscriber lines of 400,000 and teledensity of 0.04% to active subscriber lines of over 90 million and teledensity of 64.88% as of July 2011(Juwah, 2011). The Country telecom market has been described as one of the fastest growing telecommunication markets in the world.
The driving factor is government’s robust policy which fully liberalized the sector about a decade ago when the story of progress and development in the sector really started to unfold. The industry is experiencing stiff competition and it is the duty of every player in the industry to develop a good marketing strategic plan that will enable it win a good portion of the market. The current situation in the market shows that it is already saturated.
Most potential customers already have a telephone line or two, unlike the initial stage of the deregulation of the industry. It is not enough to get customers in the industry, but also converting them to loyal customers. The real competition here now is not mainly on getting new customers but retaining the existing ones. If any company must survive in the industry, it must shift it marketing strategy from just winning new customers to retaining existing ones.
Recent years have shown a growing interest in customer loyalty. The globalization of competition, saturation of markets, and development of information technology have enhanced customer awareness and created a situation where long-term success is no longer achieved through optimized product price and qualities. Instead, companies build their success on a longterm customer relationship.
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StudentsandScholarship Team.
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