CHAPTER ONE

INTRODUCTION

Background to the study

Sales promotion is one of the important elements of the promotional mix for most promotional programs. Sales promotion activities as well as build brand equity among the consumers. As sales promotion do incur a substantial cost. It will be beneficial if the effectiveness of a sales promotion can be maximized through identifying the profitable segment in the market and target them with the appropriately designed promotion tool which meets their need.

The effectiveness of the right sales promotion tool for the right product on the right target market will directly impact sales performance.

Consumers are making purchase decision daily, which are often influenced by various factors; the product price is often the most significant consideration in any purchasing ( Nagle and Holden 2002) one of the common ways for marketers to complete is by making coupons offers ( a price-oriented promotional available to consumers ( Huff and Alden 1999).

The ever-increasing competition in the global market has prompted organisations to be determined and ensure the satisfaction of consumers’ needs and wants more efficiently and effectively than one’s competitors (Kotler, 1988) the Cameroon Telecom Industry is one area that has experienced increased competition in the last (8)    years.

In early 2000, the Government of Cameroon deregulated the telecom sectors and took an important step in embracing the potential of a competitive market to generate growth and innovation in the sector. The government of Cameroon since then has issued licenses to three different mobile operators operate in Cameroon. This reform was also to ensure that, information is made accessible to all and sundry, and not only to the rich in society as was the case before dust with landlines provided by Camtel.

The telecommunication industry in Cameroon currently has grown tremendously and currently has three telecom operator’s notables are MTN Cameroon, Orange Cameroon and Nextel Cameroon. In the telecom industry where competition is intense the criterion for success would much depend on creating awareness, persuasion and informing customers of the existence of offerings.

This increased competition in the industry has however resulted in several communication tools being employed by marketers to help them succeed in this era of competition. One of the commonly used communication tools by Cameroonians telecom providers is sales promotion.

Sales promotion in an initiative undertaken by organisations to promote and increase sales performance, usage or trial of a product or services (ADEREMI, 2003). Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product. It is an important component of an organization overall marketing strategy along with advertising, public relation and personal selling.

Sales promotion acts as a competitive weapon by providing an extra incentive for the target audience to purchase or support one brand over the other. It is particularly effective in spurring product trial and unplanned purchase (ADEREMI, 2003). This implies that sales promotion may be directed either at the end consumer or at selling intermediaries such as retailers or sales crews.

Most marketers believe that a given product or service use sales have an established perceived price or value, and they use sales promotion to change this price/value relationship by increasing the value and/or lowering the price compared with other components of the marketing mix (Odunlami and Ogunsidi, 2011).

In determining the relative importance to place sales promotion in the overall marketing mix, an organisation should consider it marketing budget, the stage of the product in the life cycle, the nature of competition in the market, the target of the promotion and the nature of the product (Odunlami and Ogunsidi, 2011).

Sales promotion can be an effective tool in a highly competitive market when the objective is to convince retailers to carry a new product or influence consumers to select it over those of competitors. More so, the sales promotion trend to work best when it is applied to items whose features can be judged at the point of purchase rather than more complex, expensive items that might require hands demonstration (Kotler and Keller, 2006).

Sale promotion includes communication activities that provide extra value or incentives to ultimate customers, wholesalers, retailers or other organisational customers. It also stimulates sales product trial (Kotler and Keller, 2006).

Sales performance is how do you tell if your sales team members are good at their jobs! If you’re selling enough to turn a profit, is that proof that your salespeople are tops or could they be bringing in more revenue! To have a good sales department you have to evaluate sales performance.

If your salespeople are not hitting the benchmarks you want, you will have to take steps to increase sales. (Fraser Sherman, 2009) (Buzfluent). Sales performance has a direct effect on the success of the firm and therefore must ensure that they carry the marketing mix well which includes sales promotion so that our goals for sales will be achieved.

Statement of the Problem

In service providers like the telecom operators needs to provide a promotional mix that will help you increase sales performance to ensure the company’s economic survival. In order to achieve this fact, they need to understand their service put in place to achieve sales performance so as to help evaluate their service they will use to carry out their sales promotion.

Objectives of the Study

Main Objective

The main objective of this research is to assess the effects of sales promotion on sales performance of the telecom industry. Case of MTN Buea branch

Specific Objectives

1)  To determine the effects of bonuses on company market share (subscribers’ growth)                               

2)  To establish the effects of price-discounts on sales volume

3) To provide recommendations to the management of telecommunication company on promotional strategies

Research Question                                                                                       

1. How does product price-discount contribute to the increase in the sale volume?
2. How Does subscription bonuses affect sales volume in the telecommunication company?
3. What are some of the ways the management of telecommunication company improve on his promotional strategies?