SERVICE DELIVERY AS AN INSTRUMENT OF ACCESSING COMPETITIVE ADVANTAGE IN MARKETING (A STUDY OF ZAIN NIGERIA PLC)
ABSTRACT
This project examined the role service delivery in accessing completive advantage in marketing – using specifically Airtel Nigeria Plc. Thus, the project had the following as object (i) to determine what constitutes effective customer service for a typical service – oriented telecoms company like Airtel Nigeria, (ii) to examine the roles that marketing strategies could play influencing consumer buying behavior in the modern telecoms industry, (iii) to determine the contributions of marketing research to the growth of Airtel Nigeria and (iv) to find out the role of effective customer relationship management as a competitive tool in the telecoms industry. In order to highlight the forgoing objectives, the survey method of research was employed in the study. Both primary and secondary sources of data were utilized in gathering information. The primary sources consist of questionnaires and oral interviews while the secondary sources were gathered from existing literature on the subject matter of the study. Tabular presentation of data analysis was used whereby the effect and relationship of one data with another was being quantified by simple percentile presentations, the study hypotheses were tested for validity using the chi – square technique. The study showed that it was critical that Airtel Nigeria Plc should acquire knowledge of customer buying behavior in the telecoms industry and seek customer delight with respect to its customer service. Additionally, the study revealed that the service quality was a critical success factor for consumer patronage in the telecoms industry and that the aim of product and service launch by organizations in the telecoms industry should be to satisfy customer needs and consequently, telecoms products and services should be designed to satisfy a wide range of customer types in the market. Thus, Airtel Nigeria Plc should deploy those marketing strategies backed up with marketing research that would positively influence consumer buying behaviour, Airtel’s product launch and product development must be up with the latest telecoms technology for competitiveness and effectiveness in the market.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Telecommunications businesses exist basically to provide efficient and effective communications services to the public in order to earn good revenue, expand operations and operate profitably. To effectively achieve these business objectives, telecommunications organizations must re-strategize, re-engineer and re-focus – especially with relations to service delivery. The customer demands the best – at the shortest possible time, and at a reasonable price. In short, telecoms companies must deliver on promises made, imbibe the highest level of professionalism and competence in service-delivery show integrity, honesty and transparency in all their activities, and treat the customer with utmost respect, courtesy, and compassion in service-delivery to each and every customer (Kanter, 2003; 23, 58)
Thus, Woherem (2007) argued that it is obvious in the highly competitive telecommunications industry that service-providers must develop strong and attractive telecommunications products so that they can become highly visible and increase their income base – which would normally lead to increased profits. After such products have been developed, effective marketing strategies via service delivery must be developed and adopted in order to ensure optimal results for the company (Onyemenam, 2006). This project would set out to critically examine and analyze service delivery in telecoms industry and proffer solutions as to how Airtel Nigeria can utilize it effectively to ensure and guarantee customer-loyalty, retention and satisfaction at all times.
In the Nigerian market, there is a strong “thirst” for the digital mobile telecommunications products. There was thus much excitement in the land when in February, 2001, the Obasanjo civilian regime decided to fulfill its vision of bringing Nigeria into the mainstream of modern and mobile telecommunications by granting Digital Mobile Licences (DMLs) to three successful telecommunications companies to provide Global Satellite Mobile Telecommunications (GSM) services to the nation. Moses=Nwangwu (2007) listed the three companies as MTN, Globacom Nigeria Plc, and Econet Wireless Nigeria – now Airtel Nigeria.
While MTN Nigeria Plc was a South-African-based GSM operator, Econet Wireless Zimbabwe established Econet Wireless in partnership with three (3) Nigerian State Governments (and later on First Bank of Nigeria Plc). These were Lagos State, Delta State and Cross River State. However, Globacom Nigeria Plc was wholly Nigerian – being the brain-child of Chief Mike Adenuga, Chairman Equitorial Bank Plc and ConOil Plc (Moses-Nwagwu, 2007)
However, Globacom Nigeria Plc did not fulfill all the requirements set by the NCC (Nigerian Communication Commission). Thus, according to Moses-Nwagwu (2007), Globacom’s licence was eventually revoked; and the field was left open only for the two foreign-based GSM operators (MTN and Econet) to compete in the Nigerian market.
As observed by Akabueze (2007), Econet Wireless Nigeria was the first GSM operator in Nigeria – having been established in 2000. The company made history on August 5, 2001 by becoming the first telecoms operator to launch commercial GSM services in Nigeria. It immediately deployed its services and telecoms technology in many Nigerian cities, urban centers, and rural settings – in all the six geo-political zones of Nigeria (namely, South-South, South West, South East, North Central, North East, and North West)..
In its desire to become the telecoms company of choice for Nigerians, Econet Wireless Nigeria vigorously strove to become the first telecoms company to introduce:
- Free voice mail retrieval
- Toll-free 24-hour customer care line (111)
- Free account balance check
- Commence emergency service (199)
- Monthly airtime bonus
- Free Sunday calls, etc. (Akabueze, 2007).
But despite all these achievements and spread, MTN soon over-took Econet Wireless late in the year 2001 and for so very long established itself in the minds of Nigerians as the telecoms company of first choice. No matter what Econet did, MTN persistently kept up the pressure and continued to provide real business leadership in the Nigerian market. Particularly, for most Nigerians, Econet was seen and continue to be seen as a poor telecoms giant. Econet Wireless Nigeria played second fiddle to MTN; and when Globacom re-emerged in 2003; Globacom soon overcame Econet Wireless, thus leaving Econet Wireless in the 3rd position. As a matter of fact, as Akabueze (2007) rightly posited, Globacom grew astronomically in the Nigerian telecoms market that soon it was seen by many as the No. 1 telecoms in Nigeria.
Thus, while there is doubt among pundits as to which telecoms company was 1st – between Globacom and MTN – there seemed to be no doubt that Econet the first telecoms company was 3rd. This perspective has not changed – even as Econet Wireless Nigeria has changed ownership over four times ((from Econet Wireless to (1) Vodacom of South Africa’s Telekom in 2003 to (2) Celtel, a pan-African telecoms giant spread across many African countries, in 2006, to (4) Zain Communications of Mobile Telecommunications Company, a telecoms giant based in Kuwait, in 2008), and now to (5) Airtel Nigeria in year 2010.
This is the crux and thrust of this project – the inability of Airtel Nigeria to deliver quality and effective telecoms services to its customers; and provide leadership in the telecoms market. Thus, while both MTN and Globacom which came into the competition late (in 2003) easily reached the 20 million mark in subscribers; it took much longer for Airtel Nigeria, the first, to reach the 20-million customer base.
1.2 Statement of the Problem
Though, a telecoms giant, customers still perceive Airtel’s services as inadequate. This is because as Moses-Nwagwu (2007) posited, telecoms customers feel they are being short-changed in various ways because calls on its network are full of hitches as discussions over the phone get disrupted and cut off while conversation is still going on. Additionally, often times, subscribers do not hear each other and yet the company charges the customer. Moreover, often times, text messages do not go through, and yet customers are charged. Finally, the Airtel Customer Service Unit is hardly accessible to customers.
Unlike both Glo and MTN, Airtel Nigeria does not have an effective marketing strategy on the ground to match the competition in deploying its products and services from itself through its distributors and marketers to the final consumer of telecoms products. Thus, both MTN and Glo have effectively seized the market and dominate it. As a mater of fact, Etisalat, the new telecoms entrant is outstripping Airtel Nigeria in its marketing efforts and campaigns.
Airtel Nigeria marketing research team has very little competitor knowledge. They do not carry out extensive competitor analysis and intelligence gathering (otherwise known as industrial espionage). Airtel’s management does not provide the tools needed by its marketing research team to carry out a competitor survey with regards to their (competitors’) strengths and the opportunities in the external environment utilized by these competitors for competitive edge. For instance, according to Woherem (2007), Glo utilizes the fact that it is a Nigerian telecoms to seize the marketing opportunity of positioning itself “as a truly Nigerian telecoms industry with the interests of fellow Nigerians at its heart.
Airtel’s Sales and Marketing Team simply lacks an effective sales management strategy and knowledge for them (i.e., Sales and Marketing Team) to deliver effective after sales services to their customers; or pro-actively seek out new product opportunities for Airtel via effective customer survey and needs analysis.
Moreover, there is now a stiff competition out there in the telecommunications industry. Because NCC is issuing more GSM licences out to other telecoms corporations. Specifically, NCC has given licences to two more telecoms corporations, Etisalat Communication and Visafone Telecoms. Each of these competitors is making strenuous efforts to win the minds and hearts of the customer for patronage. Specifically, the issue now for Airtel Nigeria is that these two new entrants (Etisalat and Visafone) are vigorously striving to overtake Airtel Nigeria seeking to possibly hit a 25-million customer base before Airtel Nigeria.
1.3 Objectives of the Study
The following are the objectives of this study:
- To determine what constitutes effective customer service for a typical service – oriented telecoms company like Airtel Nigeria.
- To examine the roles that marketing strategies could play in influencing consumer buying behaviour in the modern telecoms industry.
- To determine the contributions of marketing research to the growth of Airtel Nigeria.
- To find out the role of effective customer relationship management as a competitive tool in the telecoms industry.
1.4 Research Questions
Consequently, the following are the research questions that this research study would be addressing:
- What constitutes effective customer service for a typical service – oriented telecoms company like Airtel Nigeria?
- What are the roles of marketing strategies in influencing consumer buying behaviour in the modern telecoms industry?
- What are the contributions of marketing research to the growth of Airtel Nigeria?
- What are the roles of effective customer relationship management in providing a competitive tool for Airtel Nigeria?
1.5 Formulation of Hypotheses
Consequently, the following four (4) hypotheses would be tested in this research work:
- Customer service is significant to the growth of Airtel Nigeria.
- Marketing strategies play significant roles in influencing consumer buying behaviour in Airtel Nigeria.
- Marketing research contributes to the growth of Airtel Nigeria.
- Customer relationship management plays significant roles in providing a competitive tool for Airtel Nigeria.
1.6 Scope of the Study
This research work was restricted to a critical and all-inclusive comprehensive, and working knowledge of customer services; service industry, product development and deployment, corporate vision, mission, goals and objectives, marketing strategies and tools, the 4 P’s of marketing in the telecoms industry; telecoms services and products, and business strategies – with specific reference to Airtel Nigeria and its current strategies in the telecoms industry.
1.7 Limitations of the Study
Issues that constituted limitations of the study included the fact of partial commitments from some respondents which led to their inability to fully participate in the face to face interview and in the completion of the administered questionnaires. Additionally, some relevant data required from staff and management of Airtel could not be easily obtained – because some were afraid of the ultimate usage of the information.
However, the researcher made meticulous and intense efforts were made by him to obtain relevant data from respondents and other sources. Consequently, the researcher was able to obtain cooperation and supports that were of immense benefits to this study.
1.8 Significance of the Study
This study would be of great significance to Airtel Nigeria because it would set out to help the new out of its nagging problems in service delivery.
Secondly, this study would become significant to organizations in the telecoms industry because like with Airtel, consumers also would judge these other telecoms companies by their effectiveness and efficiency with relations to customer satisfaction and quality service delivery. A satisfied consumer is likely to inform and persuade his/her friends and relatives to patronize the telecoms company which delivers quality services to him/her. The contemporary consumer wants the telecoms service provider to empathize with him/her and show concern for his/her enquiries and needs. The consumer wants value for his/her patronage of the telecoms company. In effect, the consumer desires service delivery and value from telecoms companies. Consequently, Airtel Nigeria as well as telecoms companies would benefit from this study because the findings of the study would place in their hands those critical tools they would need to for effective service delivery for marketing advantage in order to be able attract, retain and bring satisfaction to users of telecoms services, and thus attain their organizational goals and objectives.
Thirdly, the study would also be of great significance to other researchers who would be conducting various researches in the areas of service delivery; customer service, product and service development in the telecoms industry. The study would also be of significance to other service – oriented industries in the Nigerian economy (e.g., insurance, hospitality industry, etc).
Finally, the study would be of significance to users of telecoms services because as recipient of telecoms services, they would be concerned about the need for telecoms companies in the country (Nigeria) getting things right with respect to service delivery towards them as consumers of telecoms services. Consumers desire quality service at reasonable prices, effectively marketed to them the consumers – based on updated marketing research activities by the telecoms companies.
1.8 Definitions of Terms
The following terms and concepts are critical to the study; and so their definitions would be useful to an understanding of the research study:
Marketing Mix: Lamb (2005) defined marketing mix as being the four “Ps” of marketing. These are Product, Price, Place, and Promotion. An organization must properly mix them in order for it to optimize its benefits in the market.
Customer-Focus: Zekeri (2004) defined customer focus as the processes and practices of an organization which are aligned to maximize value to customers from the products or services of the organization. .
Responsiveness to Customers: Kotler & Armstrong (2001) defined responsiveness to customers as keeping in touch with customers, by the organization, with the organization continuing to learn about customers’ wants and needs, and doing things for the convenience of the customers.
Customer Expectation: Osunbiyi (2001) defined customer expectation as customer perceptions of the value that he/she will receive from the purchase of a product or service. Customers form expectation by analyzing available information, which may include experience, word-of-mouth, and advertising and sales promises.
Customer Satisfaction: Perrault et al (2000) defined customer satisfaction as the degree to which a customer’s experience with a product or service meets customer expectations for that product or service.
Quality: Kanter (2003) defined quality as the extent to which products and services produced conform to customer requirements. Quality concept has been defined as being about value, conformance to standards, specifications or requirements, fitness for use, meeting or exceeding customers’ expectation, a predicable degree of uniformity and dependability, at low cost and suited to the market (Kanter, 2003).
Assurance: Kanter (2003) defined assurance as the knowledge and courtesy of employees and their ability to convey trust and confidence. This assurance includes competence, courtesy, credibility and security. Competence is the possession of the required skills and knowledge to perform the service. Courtesy means politeness, respect, consideration and friendliness of contact personnel. Credibility is trustworthiness, believability, honesty. Security is freedom from danger, risk or doubt
TABLE OF CONTENTS
Page
Title Page I
Certification ii
Dedication iii
Acknowledgements iv
Table of Contents v
Abstract vi
CHAPTER ONE – INTRODUCTION
1.1 Background of the Study 1
1.2 Statement of the Problem 6
1.3 Objectives of the Study 7
1.4 Research Questions 8
1.5 Statement of Hypotheses 9
1.6 Scope of Study 9
1.7 Limitations of the Study 10
1.8 Significance of the Study 11
1.9 Definitions of Terms 11
References 13
CHAPTER TWO – REVIEW OF RELATED LITERATURE
2.1 Introduction 15
2.2 History of Telecommunication in Nigeria 18
2.3 The Marketing Process and Consumer Satisfaction in the Telecoms Industry 20
2.4 Service Quality 22
2.5 The Marketing Mix 24
2.6 The Modern Customer 25
2.7 Consumer Types and Buying Behaviours 27
2.8 Factors Influencing Consumer Behaviour 29
2.9 Service Quality in the Nigerian Telecoms Industry 31
2.10 The Challenge for Zain Communications 32
Summary 33
References
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction 15
3.2 Research Design 18
3.3 Area of Study 20
3.4 Population of the Study 22
3.5 Sample size Distribution 24
3.6 Sample Technique 25
3.7 Validity of Instrument 27
3.8 Reliability of the Instrument 29
3.9 Procedure of Data Collection 31
3.10 Instrumentation 32
3.11
3.12 Method of Data presentation and Analysis
Questionnaire 33
References
CHAPTER FOUR – DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Introduction 15
4.2 Data Presentation and interpretation 19
4.3 Test of Hypotheses 20
4.4 Discussion of Findings 22
CHAPTER FIVE – SUMMARY, CONCLUSIONS AND RECOMMENDATION
5.1 Summary 15
5.2 Conclusion 19
5.3 Recommendation 20
5.4 Areas for Further Studies 22
Bibliography
Appendix: Table of Chi – Square Statistics