THE INFLUENCE OF TELEMARKETING ON CUSTOMERS’ PATRONAGE OF MOBILE TELECOM VALUE-ADDED SERVICES IN SOUTH-WEST NIGERIA

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ABSTRACT

Telecommunication in Nigeria is one of the fastest growing sectors in the country. Hence, competition for market domination amongst mobile telecom operators is prevalent. This tight competition has bred innovative means of making mobile services known to customers and prospects. Telemarketing is one of these means. However, telemarketing as practiced in Nigeria is not what it ought to be and it is likened to junking. It is now expedient to ascertain the influence of this means of advertising on customers’ patronage of mobile telecom Value-Added Services in South-west Nigeria in order to determine if this means should be modified or if it is a waste of the Nigerian Naira. This study generated five research questions bordering on extent of exposure, awareness, patronage, relationship between awareness and patronage of telemarketing messages and other factors that influences the patronage of mobile VAS. It employed multiple sampling techniques to arrive at the choice of Lagos, Oyo and Ogun states for the study. The NSS Australian calculator was used to get the sample size of 400 (but 394 were valid). Through the responses from the copies of the questionnaire, it was gathered that exposure to telemarketing messages was low (17.3% affirming exposure); as a result, awareness was even lower with 59.9% not being able to identify more than one example of telemarketing messages. However, patronage was not as low, showing that there are factors asides telemarketing that influences buying decision. The six constructs of the learning theory sufficed proving that telemarketing is not a major influence. The study recommended database telemarketing; this way, success is feasible; also, NCC as the major regulatory body is enjoined to impose appropriate sanctions to defaulters of the license framework for VAS; occasional researches should be carried out on customers to note the inevitable changes about them.


TABLE OF CONTENTS

Title page
Table of contents
List of tables
List of charts
Abstract

CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1.2 Statement of problem
1.3 Objectives of study
1.4 Research questions
1.5 Significance of the study
1.6 Scope of study
1.7 Definition of terms
References

CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Conceptual framework
2.1.1    Advertisers, customers and telemarketing messages
2.1.2    Telemarketing in Nigeria
2.1.3    The consumer and use of VAS in Nigerian telecom
2.1.4    Other types of mobile telecom advertising media
2.2 Empirical framework
2.3 Theoretical framework
2.3.1    Consumer Behaviour Theory
2.3.2    Categories Approach
References

CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Research design
3.2 Population of study
3.3 Sample size
3.4 Sampling technique
3.5 Measuring instrument
3.6 Validity of research instrument
3.7 Reliability of research instrument
3.8 Method of data collection
3.9 Method of data analysis
References

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Findings and discussion of demographic variables
4.2 Interpretation of findings and discussion of psychographic variables
4.3 Discussion of findings
4.4 Summary of findings
References

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations
References
Bibliography
Appendix

CHAPTER ONE
INTRODUCTION

1.1 Background of study
Nigeria is the most populous black nation on earth with about 170 million people and over 200 ethnic groups comprising people of multi-linguistic affiliations and religious groups. With a robust economy characterized by income from oil exports, the Country’s GDP rose to 521.8 billion USD in 2013. Nigeria revealed rebased Gross Domestic Product (GDP) figures for 2013 that showed an 89 percent increase in the estimated size of its economy using the estimates from the old base year 1990 (Atuanya & Augie, 2014). In this estimate, the telecommunication sector in Nigeria contributed N6.97 trillion to the country’s Gross Domestic Product in 2013. This disclosure was made by the Executive vice chairman, Nigeria Communications Commission (NCC), Dr. Eugene Juwah, at the 2014 annual workshop for judges on legal issues in telecommunications. This made 8.68 per cent to the Nigerian Economy (BusinessNews Staff, 2014). This contribution is borne out of an increase in telecommunication operators and operations in the country.


Prior to the country’s return to democracy in 1999, licenses issued to companies were revoked but by December 2000, the federal government reopened the process and issued four mobile cellular licenses. Initially, only two (Econet Wireless Nigeria and Mobile Telephone Networks [MTN] Communications Nigeria) were able to meet up with the payment of 285 million dollars each within the mandatory 14-day period (Onuegbu, 2014). They controlled a significant percentage of the market at the time and so, were required to connect a minimum of 100,000 subscribers each within their first years of operations and 1.5 million subscribers each at the end of the five years while attaining a minimum of five percent geographical coverage in each of the country’s six geopolitical zones.

But now, the changes that have taken place in the telecoms industry in Nigeria can only be described as phenomenal. The astounding increase in the number of telephone subscribers in the country has made Nigeria one of the fastest mobile networks in the world which has attracted over $2 billion investments between 2000 and 2005 (Lex Africa Law Network, 2005). As at January 2015, the figure for active subscribers for GSM was at 138,530,830 while a total of all forms of subscription (Mobile GSM, Mobile CDMA and Fixed Wired/Wireless) came to 140,822,483 subscribers giving a teledensity of 100.59 (NCC, 2015) which is 3096 per cent of the original mandate. However, as at September, 2015, subscriber statistics for all active lines was placed at 150,660,631 giving a teledensity of 107.61 based on a national population of 140 million according to 2006’s last census population figures (NCC, 2015).

What led to this outgrowth was borne from influences like import duty reduction on telecom equipment from 25 percent to 5 percent; tax exemption for five years to newly established telecom network operators to promote development of the sector, removal of restriction on foreign equity participation, simplification of procedures for importation on telecoms equipment and development of related software, fiscal incentives to encourage local manufacturers, enactment of the Nigeria Communication Act, 2003 amongst others. This pulled in more investors and with the investors came tight competition. Various operators are competing to dominate the market and industry. According to nairabrains.com as culled from NCC database, as at June 2014, MTN still had the highest number of active subscribers with 56,516,759 persons but Glo’s subscriber base climbed up by 2.8 million new subscribers between February and June of 2014, the largest by any operator within the period while MTN lost 666,986 subscribers.


Competition in the telecommunications market is intense with 15 operators providing fixed-line services and nine operators providing mobile services (Frost & Sullivan, 2010). They also added that mobile services are offered by five GSM and four CDMA operators. However, MTN, Glomobile and Zain (now Airtel) control approximately 85% of the mobile market by subscribers.
With these data, the major digital mobile telecom operators have been employing various services and strategies to dominate the market, one over the rest. They have employed means via basic telecommunications- simply the relay of voice or data from sender to receiver, e.g., voice telephone services, packet-switched data transmission services etc. and value-added services- for which suppliers add a value to the customer’s information, e.g., on-line data processing, on-line data base storage and retrieval etc. (World Trade Organisation, 2015).

More emphasis is now placed on Value-Added Services. These services are offered as already existing or for subscription to them. These services are options that complement a core service offering from the mobile telecom operator but are not as vital. The actual pricing structure for these services usually depends on whether the provider sees the service as an amenity that is intended to create a stronger rapport with customers or as a source of additional revenue, for example, teleconferencing, audio conferencing (http://m.wisegeek.org/what-are-value-added-services.htm). On another front, more services like health tips, news details, inspirational quotes, bible passages, language learning and beauty tips amongst others have been added to this VAS.

Various approaches (like TV commercials, radio jingles, pop-up adverts, newspaper placements and even the internet) have been employed to make known these services. But more recently, it has engaged the use of telemarketing.


Telemarketing is a category of mobile advertising and an aspect of mobile commerce; it is a form of advertising that targets users of handheld wireless devices such as mobile phones and Personal Digital Assistants (PDAs). In order to promote the sale of products and services, all the activities required to communicate with the customers are transferred through mobile devices. Combining with the customer’s user profile and context situation, advertising companies can provide the target consumer exactly the advertisement information they desire, not just “spam” them with advertisements they are not interested in (Tripathi & Mittal, 2013).....

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