Marketing UNIVERSITY OF NIGERIA 2008 Webmaster NWANKWO_0.pdf · 1 obiora nwankwo pg/mba/2006/dl/1328 the impact of communication on marketing effectiveness (a case study of zain nigeria)

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OBIORA NWANKWO

PG/MBA/2006/DL/1328

THE IMPACT OF COMMUNICATION ON MARKETING

EFFECTIVENESS (A Case Study of Zain Nigeria)

Marketing

A THESIS SUBMITTED TO THE DEPARTMENT OF MARKETING, FACULTY OF

BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA ENUGU CAMPUS

Webmaster Digitally Signed by Webmaster’s Name

DN : CN = Webmaster’s name O= University of Nigeria, Nsukka

OU = Innovation Centre

2008

UNIVERSITY OF NIGERIA

2

THE IMPACT OF COMMUNICATION ON

MARKETING EFFECTIVENESS

(A Case Study of Zain Nigeria)

BY

OBIORA NWANKWO

PG/MBA/2006/DL/1328

Being a Research Project Submitted to the

Department of Marketing, Faculty of Business

Administration, University of Nigeria, Enugu Campus,

in Partial Fulfilment of the Requirements for the

Award of an MBA Degree in Marketing.

SUPERVISOR: PROF. J.O. ONAH

NOVEMBER, 2008

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CERTIFICATION PAGE

This is to certify that this project has been approved as meeting the

requirement for the award of Master of Business Administration (M.BA) Degree

in Marketing, Department of Marketing, University of Nigeria, Enugu Campus.

_____________________________ ________________________

Prof. J.O. Onah Dr. (Mrs.) G.E. Ugwuonah

(Supervisor) (Head of Department)

___________________________________

External Examiner

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DEDICATION

To Chinelo, Adaora and Oluoma, my lovely wife and daughters.

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ACKNOWLEDGEMENT

The quest for knowledge is a universal one and it is what sets man apart from

lower animals. The pursuit of this M.BA. Degree in Marketing was a big quest to

increase my knowledge for the benefit of my life, family, humanity, job and

employer.

This journey has not been an easy one. It came with its ups and downs; good

and bad but life, however, is measured on how tall we dream and how well

we achieve our dreams. Today, I have a good reason to be grateful to God

for the realisation of my dreams. May His name be praised for his kindness and

mercy and for giving me the required resources and intelligence.

I must also appreciate my wife Chinelo and daughters Adaora and Oluma

who suffered some level of deprivation during the period of this academic

programme.

With all sincerity, I also acknowledge the great input of my supervisor Prof. J.O.

Onah who is a great icon in marketing. It is a big pride for me to be

associated with him academically and this practically spurred me to give my

best. I am grateful for his patience and time.

Others include the Managing Director of Stallion Property & Development

Company Ltd, Nasir Usman who gave me the privilege to pursue this degree

because he believes in the importance of knowledge; my friends Sunday Azi,

Hyacinth and Justina Ude, Uche Okonkwo and many others who saw this

dream as their own and contributed one way or the other to the completion

of this work.

May God bless all of them abundantly.

Obiora Nwankwo (mnipr, arpa)

November, 2008

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ABSTRACT

The major essence of business is profit making. In this competitive world profit

making is made more difficult as more products are competing for the

consumer‟s attention. In view of this, companies have devised ways of

retaining their customers and winning new ones in the market place and they

have done this through marketing.

Marketing activities, however, would not realise their objectives and

potentials if the customers are not aware of them. Therefore, there is great

need to communicate marketing activities adequately. This communication

of marketing messages is what is known as marketing communication. It uses

such tools like advertising, public relations, direct marketing, sales promotion,

personal selling, events & exposures.

This study tried to study the impact of marketing communication messages of

Zain Nigeria‟s marketing activities as a way of determining the impact of

communication on marketing effectiveness. This study was conducted with

the objective of establishing:

1. the most popular marketing communication tool

2. the most effective marketing communication tool

3. the impact of marketing communication on consumer patronage of a

product

4. whether marketing communication serves as an instrument of

competition

5. whether sales promotion affects customer preference

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To do this, this study did a questionnaire survey of Zain Nigeria‟s customers in

Abuja and also made use of books, journals, newspapers and magazines and

was able to arrive at the following findings:

1. that Direct Marketing is the most popular marketing communication

tool

2. that Direct Marketing is the most effective marketing communication

tool

3. that marketing communication impacts heavily on consumer product

awareness

4. that marketing communication impacts heavily on consumer

patronage of a product

5. that marketing communication serves as an instrument of competition

6. that sales promotion does not greatly affect customer preference

With these findings and references from previous studies, this study was able

to establish that communication impacts heavily on marketing effectiveness

using Zain Nigeria as a focal point.

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TABLE OF CONTENTS

S/N ITEM PAGE

Title Page ………………………………………………...... i

Certification Page ………………………………………… ii

Dedication …………………………………………………. iii

Acknowledgement ………………………………………. iv-v

Abstract …………………………………………………….. vi-vii

Table of Contents …………………………………………. viii-ix

List of Tables ………………………………………………... x-xi

List of Figures ……………………………………………….. xii

CHAPTER 1 – Introduction ….….…..…………………………. 1-40

1.0: INTRODUCTION ………………………………………….. 1-7

1.1: STATEMENT OF PROBLEM ………………………………. 7-8

1.2: TELECOMMUNICATION INDUSTRY IN NIGERIA ……….. 8-14

1.3: PROFILE OF ZAIN NIGERIA ……………………………….. 14-35

1.4: RESEARCH OBJECTIVES …………………………………… 35

1.5: HYPOTHESIS …………………………………………………. 36

1.6: SIGNIFICANCE OF STUDY …………………………………. 36-37

1.7: LIMITATIONS OF STUDY ……………………………………… 37

1.8: DEFINITION OF TERMS ………………………………………. 38

REFERENCES ………………………………………………….. 39-40

CHAPTER 2 – Literature Review ………………………………… 41-75

2.1: HISTORICAL BACKGROUND ………………………….. 41-42

2.2: RELEVANT MODELS & THEORIES …………………………. 42-51

2.2:1: Related Theories ………………………………………… 42-45

2.2.2: Related Models ………………………………………….. 45-51

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2.3: REVIEW OF CURRENT LITERATURE ……………………… 51 –70

2.3.1: Marketing …………………………………………………. 51-57

2.3.2: Communication in Marketing ………………………… 57-60

2.3.3: Communication Impact on Marketing ……………… 60-70

REFERENCES ………………………………………………….. 71-75

CHAPTER 3 – Research Methodology …………………………. 76-82

3.1: SCOPE OF THE STUDY .…………………………………… 76-77

3.2: THE POPULATION .………………………………………… 77

3.3: SAMPLING ………………………………………………… 77-78

3.4: SAMPLE SIZE SELECTION TECHNIQUE .…..……………… 78-79

3.5: SOURCES OF DATA ………………………………………… 79-80

3.6: METHOD OF DATA ANALYSIS .…………………………… 80-71

REFERENCES ………………………………………………….. 82

CHAPTER 4 – Data Presentation and Analysis ……..………… 83-100

4.1: DISTRIBUTION & RETURN OF QUESTIONNAIRES .……… 83

4.2: ANALYSIS OF DATA OBTAINED ..……………..………… 83-97

4.3: TESTING OF HYPOTHESIS ………………………………… 97-100

CHAPTER 5 – Summary of Findings, Recommendations

and Conclusion …………………………………. 101-100

5.1: SUMMARY OF FINDINGS ………………………………… 101-105

5.2: RECOMMENDATIONS ……………………………………. 105-107

5.3: CONCLUSION …………………………………………….. 107-108

BIBILIOGRAPHY …………………………………………………………. .. 109-113

QUESTIONNAIRE …………………………………………………………. 114-116

APPENDIXES ……………………………………………………………….. 117-125

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LIST OF TABLES

S/N ITEM PAGE

1.2.1: Telecoms Subscriber Information 2006 –

September 2008 …………………………………………… 10

1.2.2: Data on Active Telephone Operators and

Subscribers in Nigeria as at 30th September, 2008…… 12-13

1.3.3.1: Additional Benefits with the Unity Tariff Plans ……….. 19

1.3.3.2: Other Features Available to Zain Subscribers ………. 20-22

1.3.3.3: Zain Nigeria Services Cost ……………………………… 23

1.3.3.4: Airtime Denominations of Zain …………………………. 25-26

2.2.2.3.1: Micro Models of Marketing Communications ………. 47-48

2.3.3.1: Common Communication Platforms …………………. 70

4.1.1: Distribution and Return of Questionnaires …………….. 83

4.2.1: Sex Distribution of Respondents …………………………. 84

4.2.2: Age Distribution of Respondents …………………………. 84

4.2.3: Occupational Distribution of Respondents …………….. 85

4.2.4: Educational Distribution of Respondents ……………….. 85

4.2.5: The Preferred Telecommunications Method …………… 86

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4.2.6: Usage of GSM Services ……………………………………... 87

4.2.7: The GSM Network Used by Respondents ………………... 87

4.2.8: The Favourite GSM Network Used by Respondents ……. 88

4.2.9: Reasons for Using Zain Nigeria Network ………………… 88

4.2.10: Respondents Awareness of Zain Marketing Activities … 89-90

4.2.11: Sources of the Respondents Information ………………… 91

4.2.12: The Respondents’ Preferred Source of Information ……. 92

4.2.13: Whether Respondents Know Much About Zain Products

and Services Through Marketing Communication …….. 93

4.2.14: Whether Respondents Use More of Zain Products and

Services Because of Marketing Communication

Messages …………………………………………………….. 93

4.2.15: Marketing Tools Used by GSM Companies for

Competition ………………………………………………….. 94

4.2.16: Sources of Conveying Competitive Messages ………. 95

4.2.17: Impact of Marketing Communication on Customer

Preference ……………………………………………………. 95

4.2.18: Reasons That Will Compel Customers to Leave Zain

Network ………………………………………………………. 96

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LIST OF FIGURES

S/N ITEM PAGE

Fig. 1: Hierarchy of Needs Theory ……………………………… 44

Fig. 2: Customer on Top Model ………………………………… 46

Fig. 3: The Macro Model of the Communication Process …. 47

Fig. 4: Influences on Communication Outcome …………….. 49

Fig. 5: Howard-Sheth Model of Consumer Behaviour ………. 50

Fig. 6: Effects of Marketing Intervention on Consumers ……. 51

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CHAPTER 1

INTRODUCTION

1.0 Introduction

We live in a world of competition where individuals and organizations try to

outdo themselves. In different areas of human endeavour, be it education,

business, parenting, dating, governance, warring or sports there is always a

competition going on as one group tries to outdo the others or one individual

tries to outperform the others.

In the business world, especially in a capitalist economy, competition enjoys

greater prominence as it forms the bedrock for the survival of a business

organization. For a business to continue to exist and satisfy the purpose of the

ownership, management, staff, society and other stake holders it must be

able to survive the competition posed by other businesses with similar

products and objectives.

As businesses compete, they rely heavily on marketing to outdo one another.

Through marketing an average business will be able to satisfy its customers

through its products and services, satisfy its shareholders through profitability,

satisfy management through increased sales and market share, satisfy staff

through increased remuneration and job security etc. This ability has made

marketing very vital and relevant in almost all endeavours of life be them

profit or non profit making.

Marketing according to the Marketing News (1985: 1) “is the process of

planning and executing the conception, pricing, promotion and distribution

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of ideas, goods and services to create exchanges that satisfy individual and

organizational objectives.” In this definition of marketing, creation of

exchange is seen as a vital part of marketing. By this function, marketing is

able to impact on sales, market share and profitability.

In another definition, Kotler and Keller (2006: 6) said that marketing “is the art

and science of choosing target markets and getting, keeping and growing

customers through creating, delivering and communicating superior customer

value”. This definition emphasises the importance of delivering and

communicating superior customer value as integral parts of marketing which

implies that marketing is very useful in bettering the life of the customer by

offering him what he needs and letting him know about it.

Mbah (2001: 10) on the other hand opined that “marketing is about

identifying, anticipating, conducting and managing the delivery of value in

exchange process that benefits or satisfies both parties and their society”. He

tried to establish that in marketing there is need for the satisfaction of both

parties – the producer/seller and the customer. This satisfaction breeds good

relationship which ensures trust, continuity and ability to withstand

competition.

In Varey‟s (2002: 4) definition, “marketing is concerned with creating and

sustaining mutually satisfying exchanges of value between producer/servers

and their customers. It has both managerial orientation and an organizational

/social function.”

Together, these definitions show that marketing is a process and not a once in

a while thing, aims at satisfying and creating wealth for all the parties

involved. This therefore shows that marketing is a must for every organization

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or company that wants to excel and survive. Hence, Onyebuagu (1995: 31)

remarked that “without marketing, business existence would be

unwholesome”

A company may produce goods and services but if it does not sell them it will

surely go out of business. Also it is not enough to just sell a product, care

should be taken to ensure repeat purchase by striving to make sure the

customer is satisfied. That is why the importance of marketing starts from the

time the product is conceived not when it is produced.

In totality, the fundamental basis of an average business is financial success

which comes from increased sales and customer satisfaction which are

achieved through marketing. According to Kotler and Keller (2006: 4)

“Financial success often depends on marketing ability. Finance, operations,

accounting and other business functions will not really matter if there is not

sufficient demand for the products and services so the company can make a

profit.”

The success or failure of marketing or a marketing activity lies in its ability to

meet the objective set out in the marketing plan. When a company wants to

carry out a marketing campaign it first draws up a plan of activities which will

show what actions need to be carried out, the cost of the campaign and

what the company plans to gain from the campaign within a specific period.

What the company stands to gain becomes its objective in carrying out such

a campaign.

According to Belch and Belch (2001: 202) “marketing objectives are usually

defined in terms of specific measurable outcomes such as sales volume,

market share, profit or return on investment.”

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The effectiveness of a marketing campaign therefore is determined and

measured by the extent to which the marketing objectives are achieved at

the end of the campaign. Generally marketing effectiveness or the

effectiveness of a marketing programme or campaign is measured on the

impact of that campaign on the company‟s sales, market share, profitability

and return on investment.

Marketing activities can be explained from the four marketing ps of product,

price, place and promotion. These are the variables available to the marketer

to use and achieve marketing and sales targets.

The marketer uses the product by conceiving, designing and packaging a

product that will meet the needs and desires of the consumer and also

compete favourably against competing products in the market.

He uses price by ensuring the product is priced in such a way that it conveys

the meaning intended to motivate the consumer into buying or wanting to

buy the product. As such care should be taken not to price the product

beyond the consumers affordability and not to price it so low that it ends up

appearing like an inferior product.

Place otherwise known as distribution is used by the marketer to ensure that

the consumer has easy access to the product. To do this he uses means that

allows him bring the product as near to the customer as possible without

cheapening, damaging or diminishing the value of the product.

Promotion on the other hand is aimed at creating awareness and knowledge

of what the marketer has been doing in the other marketing efforts so that the

consumer becomes informed. The marketer handles this by ensuring that he

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gets the message to the consumer in a way that will make it attractive and

understandable to the consumer. It is within this promotion that the

communication function in marketing lies.

Communication according to Wilbur Schramm (1955: 139) “is the passing of

information, the exchange of ideas or the process of establishing a

commonness or oneness of thought between a sender and a receiver.” This

old definition portrays communication as a process that involves the transfer

and sharing of knowledge between the sender and receiver of the

information.

In the explanation of Starch (1966: 1) “Communication among human beings

is the means by which human society carries on. Primitive man made signs

and sounds to reveal his inner feelings and thoughts and to tell others what to

do…. Education depends on communication. Business depends on it.

Government depends on it. All forms of dealing with people depend on it.”

Communication can be said to exist when there is an exchange of ideas and

thoughts between two or more people in other to convey a meaning that will

inform, educate, persuade or enrich the receiver. This communication is

carried out using symbols that are understood by both the sender and

receiver to ensure commonness of meaning.

Communication activities carried out in a marketing environment to achieve

marketing objectives are generally referred to as marketing communications.

According to Kotler and Keller (2006: 536) “Marketing communications are

the means by which firms attempt to inform, persuade, and remind customers

– directly or indirectly – about the products and brands that they sell.” He sees

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marketing communication as a way companies communicate their

marketing intentions to their customers.

Marketing communication also known as promotion according to Ehikwe

(2005: 236) “aims at wooing and convincing customers and other publics to

patronise products and services of various organisations”.

Varey (2002: 2) while showing the importance of marketing communications

explained that “managers have realized that it is important to organize the

demand as it is to organize the supply. Thus, straight away we can see the

significance of managed communication – exchange relationships are

needed and ideas must be generated and deployed”

Kotler and Keller (2006: 536) held that “Marketing communication consists of

six major modes of communication: advertising, sales promotion, events and

experiences, public relations & publicity, direct marketing and personal

selling”

Marston (1978:4) defined Public Relations as “The management function

which evaluates public attitudes, identifies the policies and procedures of an

organisation with the public interest, and executes a programme of action

and communication to earn public understanding and acceptance”

Public relations according to Cutlip and Center (1978: 7) is “a relationship with

the general public through publicity; those functions of an organisation,

church, corporation, government, military institutions etc concerned with

informing the public of its activities, policies etc and analysing these

information in an attempt to create favourable public opinion”.

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According to Belch and Belch (2001: 17) “Direct marketing is that in which

organizations communicate directly with target customers to generate a

response and for a transaction.”

Belch and Belch (2001: 21) defined sales promotion as “those marketing

activities that provide extra value or incentives to the sales force, distributors

or the ultimate consumer and can stimulate immediate sales.”

Belch and Belch (2001: 10) “integrated marketing communications (IMC)

involves coordinating the various promotional elements and other marketing

activities that communicate with a firm‟s customers.”

1.1 STATEMENT OF THE PROBLEM

In an average business organization, the major concern of shareholders and

management is how to optimize returns on investment and profit. To be

profitable, a company needs to achieve a desirable patronage of its goods

and services by the consumers. This desirable patronage is the ability to take

the company‟s sales to the point where its revenue substantially outweighs

expenses.

To achieve this is not easy because the company is faced with so many

challenges some of which include competition, absence of adequate

financing, the consumer‟s income, perception and disposition, the quality of

the goods and services, absence of basic facilities for doing business etc.

However, in the face of these challenges, a company depends mainly on its

marketing activities to be able to scale through these hurdles and improve its

profitability. This is because, marketing has the capability to build a good

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relationship with the consumer, understand what he wants and how he wants

it, inform and educate him about the goods and services the company offers

and how they can benefit him and delivers the product to him at the place,

time and price he wants it.

But a marketing programme must be well packaged if it has to be effective

and achieve these purposes. It is not enough for a company to sit down one

place and package marketing programmes believing that they achieve

these purposes. Among the many things a marketing programmes requires to

be effective is communication.

It is through effective communication that the company can properly relate

with the consumer, understand, educate and inform him. It is also through

effective communication that the consumer will relate with, understand and

believe the company. If for any reason a marketing programme is not

properly communicated, the consequence will be a misunderstanding or

ignorance of the marketing objectives of the company by the consumers.

To package a marketing programme without proper communication will lead

to waste of resources and failure of the marketing activity. It will also give the

competitors‟ advantage over the company and generally lead to poor

returns and profitability.

1.2. TELECOMMUNICATIONS INDUSTRTY IN NIGERIA

The origin of telecommunications in Nigeria can be traced to the colonial era.

According to Ogunlowo (2008:16):

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“Barely eight years after the first publicly witnessed long distance telephone

call in the United kingdom was made on January 14, 1878, the colonial

administration in Nigeria established a cable link between lagos and the

colonial office in London in 1886. This marked the beginning of

telecommunications in Nigeria.”

Prior to 2001, telecommunication in Nigeria was purely a government affair.

The only telecommunications service provider in the country then was

Nigerian Telecommunications Ltd (NITEL). During this period NITEL provided

land line and analogue mobile telephone services. During this period

telecommunications services in Nigeria was grossly inadequate, unreliable,

congested and expensive.

In 2001, government deregulated the telecommunications sector thereby

creating room for private investors in the sector. With this deregulation,

Nigerian Communications Commission (NCC) was created to regulate the

sector. It was NCC that eventually licensed private telecomm operators to

provide GSM and fixed wireless services in the country. According to

Udutchay (2001: 26) “the country officially became one of the operators of

GSM on August 7, 2001 when Econet one of the three licensed operators

announced its commencement of operations. The other two, MTN and NITEL

also followed suit in a matter of days.”

According to Okereocha (2008: 22):

“as at January 2008, there were two national carriers, seven national long

distance operators, of which four are active. There are also 13 fixed wireless

operators, of which nine are now active and four GSM operators. There are

also 12 active CDMA operators and four internet exchanges. Of the total 187

internet service providers, ISP’s, 95 are active.”

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Today in addition to the land line services provided by NITEL, we have such

notable companies like MTN Nigeria Ltd, Zain Nigeria, Globacom Nigeria Ltd,

Mtel and Etisalat offering GSM telecommunications services in Nigeria while

Starcomms, Multilinks, Zoom, Visafone etc provide fixed wireless

telecommunications services.

The telecommunications sector has become a major source of boost for the

Nigerian economy. First with the privatization and advent of GSM and fixed

wireless services, telecommunications services have become readily

available and affordable for the teaming Nigeria populace that needs the

services. This has created a boost for business operations and social life

standards in the country. Information from Nigerian Communication

Commission shows that total telecommunication subscription in Nigeria is

57,075,664 as at September 2008. This is made up of the following: GSM lines

51,710,456, mobile CDMA 4,125,826 and fixed wired and wireless 1,239,382.

TABLE 1.2.1: Telecoms Subscriber Information 2006 – September 2008

OPERATOR 2006 2007 1st Qrt-08

(Mar)

2nd Qrt 08

(Jun)

3rd Qrt -08

(Sept)

Connected Lines

Mobile (GSM) 32,184,861 N/A N/A N/A N/A Mobile (CDMA) N/A N/A N/A N/A N/A Fixed Wired/

Wireless 1,673,161 N/A N/A N/A N/A

Total 33,858,022 N/A N/A N/A N/A

Active Lines

Mobile (GSM) N/A 40,011,296 43,786,542 47,897,527 51,710,456 Mobile (CDMA) N/A 384,315 567,185 2,113,520 4,125,826 Fixed Wired/

Wireless N/A 1,579,664 1,545,984 1,602,102 1,239,382

Total N/A 41,975,275 45,899,711 51,613,149 57,075,664

Installed Capacity

Mobile (GSM) N/A 76,545,308 79,625,308 85,125,308 87,125,308 Mobile (CDMA) N/A 1,540,000 3,170,000 2,630,000 8,989,377 Fixed Wired/ Wireless N/A 6,578,303 5,676,481 7,230,417 3,866,637

Total N/A 84,663,611 88,471,789 94,985,725 99,981,322 [1]Teledensity 24.18 [3]29.98 32.79 36.87 40.77

Culled from www.ncc.gov.ng/index5.htm

http://www.ncc.gov.ng/subscriberdata.htm#_ftn1#_ftn1http://www.ncc.gov.ng/subscriberdata.htm#_ftn3#_ftn3

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The privatization has created a lot of employment by employing a substantial

number of workers from the Nigerian labour market both directly and

indirectly. The Nigerian telecommunications industry is reputed to have

generated about one million jobs in the country.

The sector has also become a major source of economic growth for the

nation. It has attracted substantial amount of money in foreign exchange into

the country. According to Manuaka (2008: 12) “as at December 2007, the

country had realized well over $12.5 billion, about N1.47 trillion from foreign

exchange investments in the telecoms sector, thereby boosting its foreign

exchange earning.”

It is worthy to note that more than 90% of the growth recorded in the

telecommunications sector comes from GSM services.

Despite the achievements recorded in telecommunications in Nigeria, there is

still a lot of rooms for growth. Manuaka (2008: 12) held that “even with the

volume of foreign investment inflow into the country, mobile penetration still

remains at about 20% of the population” This shows that the potential for

growth in the sector is still enormous.

In addition, the sector is still riddled with problems that range from

connectivity delay, dropping of calls and high tariffs. These have become

source of worry for the service consumers in the country. The

telecommunications operators have tried to blame some of these problems

to the dearth of basic infrastructures like constant power supply which the

government has failed to stabilize.

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Because of the many number of operators in telecommunications business,

competition in the sector is very high. This has resulted in very extensive

marketing activities in the sector that range from product design and

packaging, product technological advancement, adverts, sales promotion,

brand building, public relations campaigns, wide distribution networks and

pricing war.

According to Oduwale (2001: 20) “In the telecommunications industry as

competition gets stiffer, the various GSM providers are giving different kinds of

incentives to win more customers and persuade them to go for one instead of

the other.”

The data from Nigerian Communication Commission shows that as at

September, 2008, MTN controlled 36.12% of GSM and 35.34% of the total

telecom market followed by Zain Nigeria which controlled 28.48% of GSM and

27.87% of the total telecommunications market in Nigeria.

TABLE 1.2.2: Data on Active Telephone Operators and Subscribers in Nigeria

as at 30th September, 2008.

OPERATORS MOBILE

FIX. WIRELESS TOTAL

SHARE OF MOBILE MARKET (%)

SHARE OF FIXED MARKET (%)

SHARE OF

TOTAL TELEPHONE MARKET (%)

MTN Nigeria Communications Ltd

20,170,000

-

20,170,000

36.12

-

35.34

Globacom Limited

15,377,034

-

15,377,034

27.54

-

26.94

Zain (Nigeria) Limited

15,904,902

-

15,904,902

28.48

-

27.87

Nigerian Mobile

Telecoms (M-Tel) Limited

258,520

-

258,520

0.46

-

0.45

Emerging

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Markets Telecoms Services Ltd

- -

- - - -

Starcomms Limited

795,798

665,710

1,461,508

1.43

53.71

2.56

Visafone Limited 1,221,840

109,376

1,331,216

2.19

8.83

2.33

Multilinks-Telkom Ltd

1,474,113

96,989

1,571,102

2.64

7.83

2.75

Reliance Telecoms (Reltel) Ltd

634,075

70,452

704,527

1.14

5.68

1.23

Intercellular

Nig. Limited

-

42,924

42,924

-

3.46

0.08

VGC Communications Ltd

-

53,684

53,684

-

4.33

0.09

MTS 1st Communications

-

37,551

37,551

-

3.03

0.07

21st Century technologies

-

31,326

31,326

-

2.53

0.05

Disc Communications

-

2,020

2,020

-

0.16

0.00

Startech

Connections

-

75

75

-

0.01

0.00

O'Net (Odua Telecom)

-

39,994

39,994

-

3.23

0.07

Rainbownet Limited

-

28,322

28,322

-

2.29

0.05

Monarch Communications

-

975

975

-

0.08

0.00

XS Broadband Ltd

-

329

329

-

0.03

0.00

Webcom Ltd -

905

905

-

0.07

0.00

NITEL -

58,750

58,750

-

4.74

0.10

TOTAL 55,836,282

1,239,382

57,075,664

100.00

100.00

100.00

Culled from www.ncc.gov.ng/index5.htm

26

1.3: PROFILE OF ZAIN NIGERIA

Zain Nigeria, formerly known as Celtel Nigeria, was established in year 2000,

by a group of institutional and private investors as well as three state

governments.

It made history on August 5, 2001 by becoming the first telecoms operator to

launch commercial GSM services in Nigeria. In 2006, following Celtel

International‟s acquisition of majority stake in the company, it was re-branded

Celtel and became an important part of Celtel‟s pan-African operations

spanning 14 countries.

On August 1, 2008 Celtel Nigeria was rebranded Zain Nigeria following the

global acquisition of Celtel International by MTC Group, which transformed to

Zain Group, a leading emerging markets player in the field of

telecommunications.

Zain Nigeria, which currently covers over 1500 towns and 14000 communities

across the six geopolitical zones of the country, scored a series of many other

"firsts" in the highly competitive Nigerian telecommunications market including

the first to introduce toll-free 24-hour customer care line-111; first to launch

service in all the six geo-political zones in the country; first to introduce N500

recharge card; first to commence emergency service (Zain 199); first to

introduce monthly free SMS and first to introduce monthly airtime bonus.

The company changed its business names severally as Econet Nigeria Ltd, V-

mobile Nigeria Ltd and Celtel Nigeria Ltd. These changes are attributed to

change in the ownership structure. The company had to change its name

each time a new core investor joins the company.

27

The parent company of Zain Nigeria is Zain Group (formerly MTC). It was

established in 1983 in Kuwait as the first mobile operator in the region. Zain

Group became a pioneer of mobile telecommunications in the Middle East

and is now a major player on the African continent. Today, it is a leading

wireless services provider in 22 countries across the Middle East and Africa

with over 16,000 employees providing a comprehensive range of mobile

voice and data services to 56.3 million active individual and business

customers.

Going by information from Nigerian Communication Commission Zain Nigeria

has a total subscriber base of 15,904,902 and therefore controls about 28.48%

of GSM and 27.87% of the total telecommunications market in Nigeria.

1.3.1: Executive Management

The company thrives under a highly effective leadership team driven by the

passion to realise the company's vision.

Adebayo Wasiu Ligali - Chief Executive Officer

Lars Stork - Chief Operating Officer

Roy Masamba - Chief Human Resources Officer

Tayo Bright - Chief Sales Officer

John Earley - Chief Technical Officer

Norman Moyo - Chief Marketing Officer

Media Contacts:

28

Emeka Oparah, Head PR, Events and Sponsorships

Emmanuel Otokhine, Public Relations

1.3.2: MARKETING /PROMOTIONAL CAMPAIGNS

Some of the notable marketing activities carried out by the company recently

include:

Rebranding Celtel to Zain which commenced on 01 August 2008 – Zain

Group, the leading telecommunications mobile operator servicing over

50 million customers in 22 countries across the Middle East and Africa,

announced it has re-branded its entire African operations from Celtel to

Zain (www.zain.com). The move coincides with the linking of the world‟s

first borderless mobile service „One Network‟ across two continents.

The introduction and launching of BlackBerry Solution in Nigeria which

commenced on February 27, 2008.

The launching of new mobile access codes of 0708. this code was an

addition to the already existing two mobile access codes of

0802xxxxxxx and 0808xxxxxxx.

On June 13, 2007 Celtel Nigeria announced the introduction of a new

promotional offer which gives the company‟s loyal pre-paid customers

an opportunity to make FREE on-net calls on Sundays.

On May 27, 2007 in commemoration of one year of operating as Celtel

Nigeria and to express appreciation to their loyal customers, Zain

29

announced an anniversary offer of N220m free airtime totaling 10million

minutes.

On March 22, 2007 Celtel Nigeria made a strong statement on its

intentions for the Nigerian telecommunications market, when it

launched its FLAT “Unity Tariffs”, a tariff plan which eliminates price

discrimination across networks by providing the same rates across all

networks at 33k/sec.

On February 25, 2007, Celtel reaffirmed its leadership position in the

Nigerian telecommunications industry when it clinched the Brand of the

Year Award at the 2007 Thisday Awards for Excellence and Good

Governance.

Win Your Dream Promo by Celtel Nigeria Limited was taken to the Port

Harcourt International Trade Fair in its bid to offer more Nigerians the

opportunity to win the various prizes on offer.

On May 30, 2006 Celtel International, a subsidiary of MTC, has

concluded its acquisition of a controlling stake of 65% in Vmobile, one

of Nigeria‟s leading mobile telecom operators, for US$1.005 billion.

1.3.3: PRODUCTS

The Company‟s products are divided into two main categories personal and

business plans

30

1.3.3.1: Personal plans

Personal plans are designed for individuals who want the convenience of

stress-free connections devoid of credit checks, contracts or monthly

subscriptions. It recognizes people who simply want to top up and keep

talking. Customers pay upfront for calls when they want and there are no bills.

All Zain prepaid plans offer a wide range of value added benefits to suit

customer profile and needs: 199 (free emergency service), Free voicemail

retrieval, call conferencing (dependent on your phone model), flexible and

cost effective tariff structure, international direct dialing (IDD) facility, text

messages (SMS) to anywhere in the world, mobile internet connectivity, 24/7

access to customer care.

Some of the products that fall under personal plans include:

Zain 30: The Zain 30 prepaid plan comes with a per second billing (PSB) tariff

by default. With Zain 30 you pay for just the exact time you spend on the

phone! If you make a 10 second call, you will be billed for only 10 seconds.

Zain “Unity Tariffs” - the First Ever Flat Tariffs in Nigeria: Zain's “Unity Tariffs” are

the first FLAT tariffs to be launched in Nigeria. With these plans, subscribers can

call to all networks (on-net and off-net) for the same affordable price per

second.

Unity tariffs come in three convenient plans: Simply Special, Simply Smooth

and Simply Smart. All come with different characteristics and are tailored for

the various needs of the Nigerian people. By providing the same rate,

regardless of network, the “Unity Tariffs” unite all subscribers regardless of their

network, while providing affordability, simplicity and transparency.

http://www.ng.zain.com/en/zain-extras/zain199/index.htmlhttp://www.ng.zain.com/en/phone-services/voicemail/index.htmlhttp://www.ng.zain.com/en/phone-services/voicemail/index.htmlhttp://www.ng.zain.com/en/phone-services/voicemail/index.htmlhttp://www.ng.zain.com/en/phone-services/conference-calls/index.htmlhttp://www.ng.zain.com/en/personal-plans/prepaid-starter-pack/index.htmlhttp://www.ng.zain.com/en/personal-plans/prepaid-starter-pack/index.htmlhttp://www.ng.zain.com/en/phone-services/roaming/index.htmlhttp://www.ng.zain.com/en/phone-services/roaming/index.htmlhttp://www.ng.zain.com/en/phone-services/roaming/index.htmlhttp://www.ng.zain.com/en/customer-care/index.htmlhttp://www.ng.zain.com/en/customer-care/index.htmlhttp://www.ng.zain.com/en/customer-care/index.html

31

Zain Simply Special: This package is for all Nigerians looking for a simple tariff

plan with affordable prices and maximum benefits.

Simply Smooth: For business people and high volume users looking for

affordable prices while removing complexity and price discrimination for calls

between networks.

Simply Smart: For business people, very high volume users or SME owners

looking to increase convenience and take control of their phone costs.

TABLE 1.3.3.1 Additional Benefits with the Unity Tariff Plans:

Benefit Details

Midnight Happy Hours Call for 10k/sec between 00.30-04.30

Friends and Family Select 5 friends or family members and make calls for as

low as 21k/sec to them

Free On-net SMS per

month

15 (Simply Special and Simply Smooth), 30 (Simply

Smart)

Recharge bonus 10% upon recharge (recharges of N1000 and above)

“Call me back” 300 per month (free)

“Credit me” 300 per month (free)

Culled from www.zainng.com

32

TABLE 1.3.3.2: Other Features Available to Zain Subscribers

Service Description How to use it Tariff

Customer

Care Access to help lines

Dial 111 (prepaid

subscribers) or 131

(postpaid subscribers)

Free

Voicemail

Voicemail box for

subscribers to retrieve

messages

Dial 333122 to activate. Dial

122 to retrieve voice

messages.

Free

Call

forwarding

Subscribers can

forward their calls to

other phone numbers

To activate, dial **21*

(number to be diverted to)

# then press Yes/Send/Ok.

To deactivate, dial ##21#

then press Yes/Send/Ok

Applicable tariffs for

numbers dialled apply.

Conference

calling

Subscribers can

connect up to 5

parties in a phone

conversation

Place current call on hold,

initiate new call and click

on 'conference'. Review

your handset manual for

details on setting up

conference calling on your

phone.

Applicable tariffs for

numbers dialled apply.

Call waiting

Put calling parties on

hold while the called

party is on another

call

To activate, dial *43# then

press Yes/Send/Ok. To

deactivate, dial #43# then

press Yes/Send/Ok

Free

IDD International Direct

Dialing

To make international calls,

enter the prefix 009 or + (the

plus sign), the calling code

for the country you are

calling, then the phone

number of the person you

Check for current tariffs

http://www.ng.zain.com/en/customer-care/index.htmlhttp://www.ng.zain.com/en/customer-care/index.htmlhttp://www.ng.zain.com/en/phone-services/voicemail/index.htmlhttp://www.ng.zain.com/en/phone-services/call-forwarding/index.htmlhttp://www.ng.zain.com/en/phone-services/call-forwarding/index.htmlhttp://www.ng.zain.com/en/phone-services/conference-calls/index.htmlhttp://www.ng.zain.com/en/phone-services/conference-calls/index.htmlhttp://www.ng.zain.com/en/phone-services/call-waiting/index.htmlhttp://www.ng.zain.com/en/phone-services/international-dialling/index.htmlhttp://www.ng.zain.com/en/personal-plans/tariffs-and-topup/index.html

33

are calling, and press

yes/send/ok

Please call

me back

facility

Please call me back

facility

*140* mobile number of the

person who the subscriber

wishes to talk to # press

Yes/Send/Ok

Free

International

roaming

International

Roaming Access

Contact your Service

Provider or the nearest Zain

shop to enable roaming

capabilities on your line.


Provider or the nearest

Zain shop on roaming

tariffs

SMS Short Message

Service

Simply type text, enter

recipient's number and

press Yes/Send/Ok

Premium

rated SMS

Premium rated Short

Message Service

Simply type text, enter

recipient's number and

press Yes/Send/Ok

Ranges from N10 to N15

Premium

rated Calls

Premium rated VAS

Calls

Dial applicable VAS

number

Monthly free

SMS

6 monthly free SMS

available to all Zain

subscribers

Dial *456*2# to check

monthly free SMS balance Free

Balance

Enquiry

(Postpaid)

Ability to check

credit balance or

usage

Send SMS CB to 123 Free

Balance

Enquiry

(Prepaid)

Ability to check

credit balance or

usage

Dial *123# Free

GPRS General Packet

Radio Service

To activate, text WAPGPRS

'space' 'phone model'

Currently free until

commencement of

http://www.ng.zain.com/en/phone-services/call-me-back/index.htmlhttp://www.ng.zain.com/en/phone-services/call-me-back/index.htmlhttp://www.ng.zain.com/en/phone-services/call-me-back/index.htmlhttp://www.ng.zain.com/en/phone-services/roaming/index.htmlhttp://www.ng.zain.com/en/phone-services/roaming/index.htmlhttp://www.ng.zain.com/en/phone-services/sms-text-messages/index.html

34


'space' 'phone make' to 184 billing for GPRS services

is announced

WAP

Access to Zain

Wireless Application

Protocol

GPRS - To activate, text

WAPGPRS 'space' 'phone

model' 'space' 'phone

make' to 184

Currently free until

commencement of

billing for GPRS services

is announced

MMS Multimedia Message

Service

Text MMSGPRS 'space'

'phone model' 'space'

'phone make' to 184

Currently free

Fax Facsimile messages


Provider or the nearest Zain

shop to enable fax

capabilities on your phone

Same tariff for voice

calls.

Zain 199 Access to Zain Crisis

centre

To register, call 177. In case

of emergency, call 199 Applicable tariffs apply.

CLIP (Caller

Line

Identificatio

n

Presentation

)

Know who is calling

before you answer

the phone

Review your handset

manual for directives on

using CLIP feature on your

phone

Free

CLIR (Caller

Line

Identificatio

n Restriction)

Hide your number

when calling another

party

Review your handset

manual for directives on

using CLIR feature on your

phone

Free

http://www.ng.zain.com/en/zain-extras/gprs/index.htmlhttp://www.ng.zain.com/en/zain-extras/mms/index.htmlhttp://www.ng.zain.com/en/phone-services/sms-text-messages/index.htmlhttp://www.ng.zain.com/en/zain-extras/zain199/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.htmlhttp://www.ng.zain.com/en/phone-services/call-line-id/index.html

35

Prices

The cost of using some of Zain Nigeria services are as follows:

TABLE 1.3.3.3: Zain Nigeria Services Cost

Plan Zain

30

Simply

Special

Simply

Smooth Simply Smart

Monthly charge No No N400 N3,600

Inclusive minutes No No NO N100

Peak, On-net N0.75 N0.66 N0.59 N0.61

Peak, Off-net N0.8 N0.66 N0.59 N0.61

Off Peak, On-net N0.65 N0.39 N0.33 N0.33

Off Peak, Off-net N0.8 N0.39 N0.33 N0.33

International N1 N0.55 -

1.00

N0.55 -

1.00 N0.55 - 1.00

SMS local N15 N9 N9 N9

SMS international N15 N15 N15 N15

Free SMS (per

month) 6 15 15 30


36

All Unity packages offer N0.10 for all on-net calls between the hours of

12:30AM and 4:30AM everyday. Peak hours: Monday to Sunday 6am –

9.59pm. Off-peak hours: Monday to Sunday 10pm – 5.59am.

Prepaid starter pack: The Zain prepaid starter pack contains:

A SIM card

A welcome booklet

A SIM certificate which contains the default PIN (Personal Identification

Number) and your PUK (PIN Unblocking Key).

Validity Period - Zain for life: Zain customers who make a call, send an SMS or

recharge airtime credit at least once every 90 days are granted a prepaid

subscription, will remain active for life and their airtime credits will never

expire. They will not worry about complicated validity periods or being

disconnected! All recharge denominations have the same validity period.

To make calls and send text messages (known as Short Messages or SMS) a

customer needs to add airtime to his account by purchasing airtime cards

from any authorized Zain dealer. Loading airtime onto an account is called

topping up. Zain Top Up cards are available everywhere in a wide range of

values and they are easy to use.

New international Tariffs

The “Unity Tariffs” from Zain reduce international calling rates to the most

popular international destinations by up to 45%. Also, additional discounts

enable subscribers to enjoy the benefits of Zain's pan-African presence and

get great rates to popular countries in regional Africa.

37

Mobile Top Up

Mobile Top up is an easy and convenient means to recharge customers'

airtime accounts over-the-air. Customers are able to purchase recharge

values of different denominations without the use of physical recharge cards.

It is sold to subscribers virtually through Zain registered trade partners and

vendors.

Available Airtime Denominations

The table below shows the airtime denominations available for purchase

either by a top up voucher (physical) or mobile top up (electronically).

TABLE 1.3.3.4: Airtime Denominations of Zain

Available Via

Airtime

Denomination

Top up cards Mobile Top Up E-PINS

N50 - Yes Yes

N100 - Yes Yes

N200 Yes Yes Yes

N300 - Yes -

N500 Yes Yes Yes

N1,000 Yes Yes Yes

N2,000 Yes Yes Yes

38

N5,000 Yes Yes Yes

N20,000 Yes Yes Yes


Mobile Top up is sold via Point of Sale terminals from all Zain Centers and

authorized dealer outlets.

1.3.3.2: Business Services Plans

This is a set of professional and personalized business service designed to

meet the needs of corporate organisations, SMEs, NGOs and individuals.

Zain offers 9 postpaid plans. A customer‟s business, preferences and mobile

requirements will determine which type of tariff plan to choose. All of these

plans provide equal quality of service, advanced features and excellent

coverage.

This offering also consists of a wide range of additional cost-effective and

innovative services that appeal to corporate organizations and individuals

alike.

The Postpaid packages are designed for business executives, managers,

entrepreneurs, in both public and private organisations or simply private

individuals who use a considerably amount of airtime monthly.

39

BlackBerry Enterprise Service (BES): BlackBerry Enterprise Solution (BES) from

Zain Nigeria is a mobile enterprise product that keeps customers connected

to their office while they are in the field or moving about.

This service is available to Postpaid subscribers only.

Features of Black Berry:

Push technology

Corporate data access

Wireless activations and provisioning

Wireless email synchronization

Wireless backup

Attachment viewing

Remote address lookup

High security

On-device help

Instant Messaging and WordMate Pro (12-month licenses) included

BIS service included free of charge

BlackBerry Internet Service (BIS): BlackBerry Internet Service (BIS) offers

customers:

Access up to 10 personal or corporate existing e-mail accounts such as

Yahoo! Mail*, Google Gmail*, Hotmail* or any other POP3/IMAP-based

email account from a single BlackBerry handheld.

40

Real time push email delivery of a customer‟s emails to his BlackBerry.

Easy setup of a customer‟s email accounts, directly on his Blackberry or

on Zain web site.

In addition, a free Blackberry email account, just for customers - your

[email protected].

Full Technical Support provided by Zain Nigeria.

It is also only available to PostPaid subscribers.

The Bundle Tariff Plans - Zain 100, Zain 200, Zain 300 & Zain 500: These are 24-

month contract packages that provide discount on bundle minutes. There

are 4 variants, namely Zain 100, Zain 200, Zain 300 and Zain 500 which are

billed per second. These packages are particularly suited for subscribers who

know their estimated monthly usage and make most of their calls to

local/national destinations. International calls, MMS and SMS are not included

in the discounted bundle. Unutilised bundle minutes/value can be carried

over for 3 months.

Business Tariff Plans - Zain 90 and Postpaid Elite: The Business Tariff Plans are

designed for businessmen who are willing to pay a monthly access charge to

enjoy low attractive call rates on calls within and out of Zain network.

This tariff plan is offered on per second and flat rate billing options. It is ideally

suited for high spending subscribers who do not have a specific minimum

monthly airtime usage. This tariff plan does not offer any bundled airtime but is

tailored to allow subscribers use up to a value of an agreed credit limit.

The Value Tariff Plans - Zain 4000, Zain 6000 & Zain 8000: The value plans are

24-month contract packages. They come in 3 variants Zain 4000, Zain 6000,

https://bis.eu.blackberry.com/html?brand=zainng

41

and Zain 8000 with N4000, N6000 and N8000 minimum monthly commitment

respectively. They are billed per second and give subscribers the enhanced

ability to top up using recharge cards and corporate top-up.

Zain Postpaid solutions are obtained through the following mediums:

Designated Zain Service Providers

The Zain Postpaid Team (the company-owned service provider)

Zain Centres and Franchise shops nationwide

Zain 50: This is a flat per second tariff plan for short time business users who

spend less than a minute on each call but prefer the simplicity of a prepaid

tariff plan. Benefit from the low per second rate anytime they call and spend

their time enjoying keeping in touch. This billing plan is idea for short time callers

who spend two minutes or less on each call.

Bumpa: The Bumpa card is a value voucher which reduces your tariff to as low

as 30k per second when used with a Zain top up card. There is no airtime on

this card.

To enjoy the benefits of Bumpa Card, it must be used with a Zain top up card

of any denomination. The Bumpa Card tariff plan is available on Per Second

Billing (PSB) only. Bumpa cards are valid for 30 days from the date of loading.

The cards are available for only prepaid customers and are applicable to

local calls only.

42

Service Provider Banks and Dealers: The SP Model is a strategic business unit

that is set up to enlist Banks and Dealers who will in turn sell Zain post paid

products to their corporate and individual clients.

The objective of the SP Model is to establish a corporate relationship between

Zain and these banks to jointly acquire and service Zain's subscribers who

bank with them.

Some of Zain Service Provider banks (SPs) include: GEL Limited. (UBA), Tower

Universal Limited (NAL Bank), Corporate Flyers (Oceanic bank), Flexmore

Limited (Gateway Bank), Cyberspace Networks Limited (Zenith Bank)

Zain E-Bills: Corporate E-Bills is one of Zain's corporate solutions targetted at

post-paid subscribers. It assist with the following: fast and efficient download

of bills in PDF format and access to 6 months backlog of bills

Zain SME Club

Requirements for Membership: The SME Club is open to all SME customers who

show evidence of the following:

1. Acquisition of the SME Pack / evidence of migration to SME number

range

2. Evidence of registration as SME i.e. proof of membership with SMEDAN,

NASME or affiliate of any small-scale institution, certificate of

incorporation of company.

3. Minimum monthly usage of between

N4, 000 and N10, 000 for 3 months.

43

Membership Categories: There are 3 categories of members of the SME Club

based on usage:

Diamond members: Average monthly spend of N10,000 and above

over a 3 month period

Gold members: Average monthly spend of N7,500 to N9,999 over a 3

month period

Silver members: Average monthly spend of N4,000 to N7,499 over a 3

month period

Benefits of Membership: SME customers can enjoy the following benefits by

being members of the SME club:

1. Attend Zain SME exhibitions and forum at a discount depending on

membership category

2. Attend Zain organized SME training programs for free depending on

membership category

3. Networking and contacts expansion opportunity

1.3.4: Phone Services of Zain Nigeria

Voicemail: When a subscriber can't answer phone calls or it's switched off,

voicemail will take messages from people who call.

Travelling Abroad: This allows subscribers to use Zain mobile phone when

travelling abroad. And when people visit Nigeria, they can use their mobile

44

phone here, on Zain's network. It's called Roaming.

SMS text messages: When there is no time to talk, a customer can send and

receive text messages instead. They're quick, cheap and fun. SMS text

messages are perfect when a subscriber is too busy to call, or wants to send a

small piece of information - where to meet, what time, somebody's phone

number, and so on.

SMS stands for Short Message Service, and it lets you send and receive

messages up to 160 characters long.

Call Me Back: A customer can prompt other Zain subscribers to call his line

during an emergency or when he is out of airtime.

Friends and Family: Family and Friends is a discounted tariff service available

to all Zain Prepaid customers. The service was crafted with the subscriber in

mind. It brings family and friends even closer with discounted rates on calls

made to favorite numbers registered on the Family and Friends (FAF) service.

Toll-Free line: The Zain Toll–Free line is a postpaid number in which the calling

party is not charged for the call, rather the called party pays the charge for

the calls. It is designed to help corporate organizations and Small-Medium

Enterprises (SMEs) garner new customers and retain existing ones as well.

Fax services: Zain fax services enables a customer to send and receive fax

messages using Zain SIM card in a fax capable mobile device.

Zain Mobile Office (Email. On The Go):

With Zain Mobile Office, you can access your office Calendar, Contacts, and

Email when you're away from your desk - your office - even your laptop with

45

just your Zain phone. It works with Microsoft® Outlook and IBM® Lotus Notes

and is used to view daily schedules or past and future appointments.

Content and Service Provider Resources

In line with its corporate goal to operate a network with world-class standards,

Zain Nigeria has made its network easily accessible to content, information,

service and product providers and developers who wish to offer services using

the Zain network as a transport medium.

A WASP is any external party who wishes to, or is using the Zain network to

offer content, products or services to Zain subscribers either at a fee or at no

charge.

Bulk SMS: Bulk SMS is the delivery of high SMS volumes from a server. It is best

used by clients who need to deliver messages to large groups of people

either on a once-off or continuous basis.

It is also effective where clients need to send instantaneous messages such as

sports, community news or local information. It can also be used to deliver

contents such as marketing messages.

Zain wholesales bulk SMSs to Content and Service Providers who are

connected to its network. The Content and Service Providers can then offer

this functionality to their clients to use.

1.3.5: MARKETING COMMUNICATION TOOLS USED BY ZAIN

Zain Nigeria uses a wide range of marketing communication tools to promote

its marketing activities. Because the urban and central nature of Abuja, most

46

of their customers in Abuja are exposed to the media and messages of these

communiucations.

Some of the highly used marketing communication tools in Zain Nigeria

include:

Advertising: the company uses advertising to communicate its change of

company name and identity, introduce new products, promote sales

promotion etc. It uses such media like television, radio, newspapers,

magazines, billboards, signs, point-of-sale materials, fliers, internet etc. (See

appendixes II to IX)

Public Relations and Publicity: the company uses public relations and

publicity to promote the company‟s image, promote new product

introduction, sales promotion, change of company name and identity. It uses

such media like television, radio, newspapers, magazines and internet. (See

appendixes I and II)

Sales promotion: Zain Nigeria does a lot of sales promotion by encouraging

customer to either load certain credits, of spend certain amount of credit

over a certain period of time. Winning customers are often rewarded with free

credits, free phones, and other kinds of gifts. There are also promotions for free

calls at certain times of the day. (See appendixes III and IV)

Personal Selling: The company has employees that work as sales persons who

go about selling their lines and credits to potential customers. This is sometimes

used to facilitate sales promotions.

47

Events and Exposures: Zain Nigeria sometimes organizes special events

through which they try to reach their customers. Some of these events are

sporting and musical in nature. (See appendixes VI and VII)

Direct Marketing: Many times the company sends SMS messages to customers

to inform, educate and persuade them on a product or service of the

company. They also drop their fliers and brochures in special places and with

customers to sensitise them. This is often used during sales promotion.

1.4. RESEARCH OBJECTIVES

The objectives of this study are to assess:

6. the most popular marketing communication tool

7. the most effective marketing communication tool

8. the impact of marketing communication on consumer product

awareness

9. the impact of marketing communication on consumer patronage of a

product

10. whether marketing communication serves as an instrument of

competition

11. whether pricing affects customer preference

12. whether sales promotion affects customer preference

13. whether adequacy of goods and services affects customer preference

14. whether marketing communication affects customer preference

48

1.5. HYPOTHESIS

This study will be conducted under the following assumptions:

1. Ho (Null Hypothesis): Marketing communication does not affect

product awareness

H1 (Alternative Hypothesis): Marketing communication affects

product awareness

2. Ho (Null Hypothesis): Marketing communication does not motivate

consumers to patronize a product

H1 (Alternative Hypothesis): Marketing communication motivates

consumers to patronize a product

3. Ho (Null Hypothesis): Marketing communication does not affect a

customer‟s preference of a product

H1 (Alternative Hypothesis): Marketing communication affects a

customer‟s preference for a product

1.6. SIGNIFICANCE OF STUDY

The study of “The Impact of Communication on Marketing Effectiveness” will

be of significant importance to companies, their management, marketing

departments, educational and research institutions.

Through this study, it can be established whether or not marketing activities

carried out by companies are really useful to their product sales and whether

marketing programmes need to be extensively communicated to make the

49

right impact on consumers and the audience. This way it will be possible to

know whether the money spent on marketing and marketing

communications by companies are worth it.

In addition, marketing departments will be able to know whether their

marketing communication activities really influence the consumers and the

best way to package their marketing communication activities to achieve

their marketing goals.

The outcome of this study will also be useful to educational and research

institutions in deriving data needed to teach students of marketing

communications and furnish marketing communication experts with data

needed to make professional decisions.

1.7. LIMITATIONS OF STUDY

For reasons of limitation of time and resources, this study will not be able to

include the following relevant areas:

A sampling of all the consumers of Zain Nigeria services throughout

Nigeria

Establishing the success or failure of particular marketing

communication programmes executed by Zain Nigeria.

Establishing a proportional relationship on the degree of

communication needed to achieve a certain degree of marketing

effectiveness.

50

1.8: DEFINITION OF TERMS

Some of the terms used in this study and their operational definitions as used

in this study are:

1. GSM: this is a telecommunication method that uses digital technology

and allows the subscriber to receive or make phone calls on the move

wherever he may be so far as the service provider operates there.

2. Service Provider: these are companies that offer GSM lines and

networks to customers.

3. SMS: this is a GSM service that allows a subscriber to send a short

written message to another subscriber of same or different network.

4. Credit/Airtime: this is the value which a subscriber uses to make

payment for calls made and is deducted based on the cost of the

phone call.

5. Recharge Bonus: this is a bonus credit given to a subscriber by the

service provider for recharging his credit to a certain amount of

money.

6. Call Me Back: this is a service that enables a subscriber to send a

message requesting another subscriber of Zain network to call him. The

sender is not charged for the message.

7. Friends and Family: this is a service that reduces the cost of phoning

some select family and friends whose numbers have been set aside by

the subscriber by 50%.

8. Roaming: this is a service that allows subscribers to use their phones in

another country where the service provider also operates.

9. Off Peak: these are periods between 10.00pm and 5.59am when less

calls are made.

10. Peak: these are periods between 6.00am and 9.59pm when the

networks are busy with calls.

51

REFERENCES

1. Marketing News, (March 1, 1985). “A.M.A. Board Approves New

Marketing Depaction,” Marketing News, P. 1.

2. Philip Kotler and Kevin Keller, (2006) Marketing Management (12th

ed); New York. Pearson Prentice Hall, P. 6.

3. Chris E. Mbah, (2001) Marketing Management: Theory and Practice;

Lagos: Sivar Industry Ltd, P. 10.

4. Richard Varey, (2002) Marketing Communication, Principles &

Practice; London: Routledge, P. 4.

5. C.S Onyebuagu, (1995) Contemporary Marketing: Principles and

Practice; Enugu: Global Rays Academic Publishers, P. 31.

6. Philip Kotler and Kevin Keller , Op. Cit, P. 4

7. George Belch and Michael Belch, (2001) Advertising and Promotion:

an Integrated Marketing Communications Perspective (5th

edition); New york: Mc Graw Hill, P. 202.

8. Daniel Starch, (1966) Measuring Advertising Readership and Results:

New York, McGraw-Hill, P. 1.

9. Philip Kotler and Kevin Keller , Op. Cit, P. 536.

10. Andrew E. Ehikwe, (2005) Advertising and Other Promotional

Strategies, Enugu: Precision publishers Ltd, P. 236.

11. Richard Varey, Op. Cit, P. 2.

12. Philip Kotler and Kevin Keller, Op. Cit, P. 536.

13. John Marston (1978) Modern public Relations; New York: McGraw Hill,

P. 4.

14. Scott M. Cutlip and Allen N. Center, (1978) Effective Public Relations

(5th Edition); New Jersey: Prentice Hall, P. 7.

52

15. George Belch and Michael Belch, Op. Cit, P. 17.

16. Ibid, P. 21.

17. Ibid, P. 10.

18. Ademola Ogunlowo, (July 7, 2008) “Hello, This is How it All Began” Tell

Magazine, P. 16

19. Henry Udutchay, (September 10, 2001) “GSM in Nigeria: Tortuous

History, Glorious End” Vanguard, P. 26

20. Chikodi Okereocha, (July 7, 2008). “One Revolution, a Thousand

Gains” Tell Magazine, P. 22.

21. www.ncc.gov.ng/index5.htm

22. Tony Manuaka, (July 7, 2008). “The Prime Investors’ Destination” Tell

Magazine, P. 12.

23. Ibid.

24. Funke Oduwale, (October 18, 2001) “Boosting Sales With promotions

at Christmas” Daily Champion, P. 20.

25. www.ncc.gov.ng/index5.htm

26. www.zainng.com

27. ibid .

28. ibid.

29. ibid.

http://www.ncc.gov.ng/index5.htm

53

CHAPTER 2

LITERATURE REVIEW

2.1. HISTORICAL BACKGROUND:

In the business world, there is so much emphasis on the importance of the

customer to the success of a business. This is because he constitutes the major

if not only source of income for the business. As a result, a lot of research has

been centered on knowing who the customer is, what he likes and dislikes,

what he does, his income, needs, education, sex, location, preferences etc.

Companies have in a bid to ensure they properly take care of their customers

established marketing departments or divisions to manage their customers

and ensure sales. Marketers rely on what they know about their customers to

be able to work. In addition they seek information on what competing

companies and products are doing, what societal trends are and the best

ways to influence and motivate their customers.

The job of the marketer is becoming increasingly more challenging as new

companies and products enter the market day by day and new ways of

doing business evolve. In other words he has to do more than the ordinary to

achieve his targets. This means that in doing his job he needs to be more

precise and thorough. He needs to be able to win and retain his customers by

making sure they are satisfied and competing companies do not steal them

away.

The importance of communication as a veritable tool of influencing the

attitude of an individual was long established in different studies carried out to

54

show that communication can affect what we know, what we believe, what

we prefer and what we will do. The strength of the saying that “man is the

product of his environment” has its basis on the fact that man is in constant

communication with his environment which invariably affects his attitudes

and disposition.

There have equally been great interest and concern on how communication

is able to have so much impact on an individual. Different studies have been

carried out by professionals and experts which are concentrated on the

sender of the message, the message of the communication, the channel, the

receiver and the receiver‟s feedback.

In addition studies were carried out to show how content, form, colour,

imagery, aesthetics, clarity, language, timeliness, location, constancy,

presentation, etc can affect the efficacy of a communication process.

To study the impact of communication on marketing effectiveness will involve

a review and understanding of previous researches, studies and literary works

in these areas.

2.2. RELEVANT MODELS & THEORIES

2.2.1: RELATED THEORIES

2.2.1.1: Herzberg’s Theory

The Herzberg‟s theory was focused on what motivates customers to buy a

product. According to Kotler and Keller (2006: 185) “Fredrick Herzberg

developed a two factor theory that distinguishes dissatisfiers (factors that

cause dissatisfaction) and satisfiers (factor that cause satisfaction). The

55

absence of dissatisfiers is not enough; satisfiers must be present to motivate a

purchase”.

This theory shows that in trying to satisfy a customer it is not enough to

concentrate effort in avoiding what the customer does not like but that the

company should carry out activities aimed at generating what the customer

likes to be able to please and satisfy him.

2.2.1.2: Hierarchy of Needs Theory (Maslow’s Theory)

This hierarchy of needs theory was developed by Abraham Maslow hence it is

also known as Maslow‟s theory. By this theory Maslow tried to explain the

motivation of people by categorizing human needs according to their

motivational importance.

Kotler and Keller (2006: 185) explained this theory thus “human needs are

arranged in a hierarchy, from the most pressing to the least pressing in order

of importance. They are physiological needs, safety needs, social needs,

esteem needs and self actualisation needs. People will try to satisfy their most

important needs first.”

This theory shows that customer satisfaction depends on the category of the

customer‟s need. That a customer will first satisfy physiological needs before

bothering about safety needs, that his need changes as he gets satisfied and

that he cannot be satisfied by a higher need unless a more basic one has

been satisfied.

56

This theory is very important for the marketer to know how important his

product is to the customer by determining the position the product occupies

in the consumer‟s scale of preference.

FIG. 1: Hierarchy of Needs Theory

Self ac tualisation needs (self development and realisation)

Esteem needs (self esteem and recognition states)

Social needs (sense of belonging and love)

Safety needs (security, protection)

Physiological needs (hunger and thirst)

Culled from Belch and Belch (2001: 110)

2.2.1.3: Psychoanalytic Theory (Freud’s Theory)

The psychoanalytic theory was developed by Sigmund Freud hence it is also

known as Freud‟s theory. Belch and Belch (2001: 111) explains this theory thus

“consumers‟ motivation for purchasing are often very complex and unclear

to the casual observer and to the consumers themselves. Many motives for

purchase and/or consumption may be driven by deep motives one can

determine only by probing the subconscious”.

This theory posits that what motivates a customer lies within his subconscious.

This implies that to satisfy him will require feeding him with desirable messages

which he stores in his subconscious and uses whenever he wants to make a

buying decision.

57

2.2.1.4: Theory of Symbolic Interactionism

Varey (2002: 48) remarked that “according to the theory of symbolic

interactionism, our behaviour towards an object or event depends on the

symbolic meaning ascribed by referent others in society. As consumers we

behave towards goods and services according to this theory, according to

the symbols attached to them by other social entities (reference groups,

persons, societies)”.

This theory posits that the meaning and value a customer will attach to a

company or its products will depend on what other relevant groups like

government, media, community etc think of that company or product. These

groups are considered vital in public relations.

2.2.2: RELATED MODELS

2.2.2.1: Customer on Top Model

The customer on top Model tries to portray the importance of a customer to a

company as contrasted with thinking it is top management that is most

important.

According to Kotler and Keller (2006: 140) “at the top are customers; next in

importance are frontline people who meet, serve and satisfy customers;

under them are middle managers whose job is to support the frontline people

so they can serve customers well; and at the base is top management whose

job is to hire and support good middle managers”

58

This model shows that every company should value its customers and also

consider those staff that relate with the customers as very vital to the success

of that company.

FIG. 2: Customer on Top Model

Culled from Kotler and Keller (2006: 140)

2.2.2.2: The Macro Model of the Communication Process

This model looked at the key players in a communication process and their

roles. The importance of the sender (company) which packages and sends

out (encoding) a message (MC Programme) to the understanding and

expectation (decoding) of the customer (receiver) who in turn responds by

either purchasing the product of the company or not (feedback). It also

shows the need to avoid anything that will distort the message and its

understanding (noise).

In other words, this model shows how the communication process can be

utilized by a company to relate with its customers and help them to

satisfaction.

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FIG. 3: The Macro Model of the Communication Process


2.2.2.3: Micro Models of Marketing Communications

These models tried to examine and explain how customers react to and use a

communicated message.

TABLE : 2.2.2.3.1: Micro Models of Marketing Communications

MODELS

AIDA Model Hierarchy of

Effect Model

Innovation

Adoption

Model

Communication

Model

Cognitive

Stage

Attention

Awareness

Knowledge

Awareness

Exposure

Reception

Cognitive

Response

60

Affective

State

Interest

Desire

Liking

Preference

Conviction

Interest

Evaluation

Attitude

Intention

Behaviour

Stage

Action

Purchase

Trial

Adoption

Behaviour


The Micro Models of Marketing Communications show that when a message

is sent to a customer he first receives and understands it (cognitive stage),

decides what to do with the message (affective stage) and then undertakes

an action of either buying or not buying (behaviour stage). Each of these

stages is important to the marketer who must satisfy the customer at each

stage to get him to move to the next stage of the process.

2.2.2.4: Influences on Commun

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