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CERTIFICATION The undersigned certify that he has read and hereby recommends for acceptance by the INILAK the thesis entitled “The role of promotion in influencing customer purchasing decision in telecommunication companies in Rwanda”. A case study of Airtel Rwanda Ltd (2012-2014) in fulfilment of the requirements for the degree of Master of Business Administration option of marketing. Signature……………………………………… Supervisor: Prof. BIDERI ISHUHERI NYAMULINDA Date………………………………………...……. i DECLARATION AND COPYRIGHT I, UWAYO Noel hereby declare that this thesis is my own original work. To the best of my knowledge it contains no materials previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at the INILAK or any other institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by others, with whom I have worked at INILAK or elsewhere is explicitly acknowledged in the thesis. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the thesis’s design and conceptions or in style, presentation and linguistic expression is acknowledged. Signature: ………………………….. Date…………………………………… No part of this thesis may be reproduced, stored in any retrieval system, or transmitted in any form or by any means without prior written permission of the author or the INILAK. ii DEDICATION To my father To my mother To my brothers and sisters iii ACKNOWLEDGEMENT I would like to express my thanks to my supervisor; Prof. BIDERI ISHUHERI NYAMULINDA for his assistance to the end of this work. I would also like to thank INILAK for the efforts and resources committed to my education. Many thanks go to the management of Airtel Rwanda for their assistance in conducting this research. I thank also my colleagues at INILAK, for their teamwork spirit displayed for the success of my studies. Finally, I would like to recognize the contribution of family members for heir encouragement, material support during my academic struggle. iv ABSTRACT The topic of the research was entitled “The role of promotion in influencing customer purchasing decision in telecommunication companies in Rwanda. A case study of Airtel Rwanda Ltd (2012-2014)’’ The purpose of the research is find out the promotion tools which are the source of purchasing information for customers, which medium that has been more effective as a source of product information and to examine the relationship between promotion tools used by Airtel Rwanda Ltd and customer purchasing decision. Quantitative study was the form of research methodology adopted for the study. Data collection was done with gathering information via a questionnaire, and the appropriate responses were evaluated using a statistical package for the social sciences programme, (SPSS). Findings about advertising showed that radio is the most source of information and it has been used by (60%), the majority of the respondents do not appreciated about personal selling used. More customers have been subscribed in 2013 with (73.5%). Only (12.1%) of Airtel subscribers mostly use Airtel line, (58.2%) rarely recommend Airtel products. Findings on brand switching showed that only 105 (30.9%), have replaced other line with Airtel and (69.1%). Airtel should increase advertising on radio and Billboards because it is the most source of information to many customers. Training on customers care is very necessary. Key words: Mobile telecommunication, Promotion, customer purchasing decision. v TABLE OF CONTENTS CERTIFICATION ............................................................................................................................ i DECLARATION AND COPYRIGHT ............................................................................................ ii DEDICATION ................................................................................................................................ iii ACKNOWLEDGEMENT .............................................................................................................. iv ABSTRACT..................................................................................................................................... v LIST OF ABBREVIATIONS, ACRONYMS AND SIGNS .......................................................... ix LIST OF TABLES ........................................................................................................................... x LIST OF FIGURES ........................................................................................................................ xi CHAPTER ONE: GENERAL INTRODUCTION .......................................................................... 1 1.1Introduction ............................................................................................................................. 1 1.2 Back ground of the study ....................................................................................................... 1 1.3 Statement of the problem ....................................................................................................... 4 1.4 Research questions ................................................................................................................. 5 1.5.1 General objective ............................................................................................................ 5 1.5.2 Specific objectives .......................................................................................................... 5 1.6 Hypothesis of the study.......................................................................................................... 6 1.7 Significance of the study ........................................................................................................ 6 1.8 Justification of the Study ....................................................................................................... 7 1.9 Scope of study ........................................................................................................................ 7 1.10 Conceptual framework ......................................................................................................... 7 1.11 Operational definitions......................................................................................................... 8 CHAPTER TWO: LITERATURE REVIEW ................................................................................ 11 2.1 key concepts ......................................................................................................................... 11 2.1.1 Promotion...................................................................................................................... 11 2.1.2 Advertising:................................................................................................................... 12 2.1.3. Sales Promotion: .......................................................................................................... 18 2.1.4 Personal Selling ............................................................................................................ 22 2.1. 5. Public Relations .......................................................................................................... 25 2.1.6 Publicity ........................................................................................................................ 27 2.1.7 Direct Marketing ........................................................................................................... 29 vi 2.2 Consumer Purchasing Decision ........................................................................................... 29 2.2.1 Attraction of customers ............................................................................................... 33 2.2.2 Increase in sales .......................................................................................................... 33 2.2.3 Customer loyalty ........................................................................................................... 35 2.2.4 Brand switching .......................................................................................................... 35 2.3 Relationship between Promotion and customer purchasing decision .................................. 36 CHAPTER THREE: RESEARCH METHODOLOGY ................................................................ 41 3.1 Company profile .................................................................................................................. 41 3.1.1 Vision of Airtel Rwanda ............................................................................................... 41 3.1.2 Core values.................................................................................................................... 41 3.1.3 Mission of Airtel Rwanda ............................................................................................. 42 3.2 Research design ................................................................................................................... 42 3.3 Area of the study .................................................................................................................. 42 3.4 Population, sample size and sampling techniques ............................................................... 42 3.4.1 Population (N) ............................................................................................................... 42 3.4.2 Sample size (n) .............................................................................................................. 43 3.4.3 Sampling procedures ......................................................................................................... 43 3.5 Data collection ..................................................................................................................... 43 3.5.1 Research Instrument.......................................................................................................... 43 3.5.2 Data collection procedures ................................................................................................ 44 3.6 Validity of the Instrument .................................................................................................... 44 3.7 Reliability of the Study ........................................................................................................ 44 3.8 Data analysis ........................................................................................................................ 45 3.9 Ethical Considerations ......................................................................................................... 45 3.10 Limitations of the study ..................................................................................................... 46 CHAPTER FOUR: DISCUSSION AND INTERPRETATION OF FINDINGS .......................... 47 4.1: Demographic characteristics of the Respondents ............................................................... 47 4.1.1Gender ............................................................................................................................ 47 4.1.2 Age ................................................................................................................................ 48 4.1.3 Marital Status ................................................................................................................ 48 4.1.4 Education level.............................................................................................................. 49 vii 4.2 Using promotion tools.......................................................................................................... 49 4.2.1 The use of advertising and publicity ............................................................................. 50 4.2.2 Sales promotion ............................................................................................................ 50 4.2.3 Personal selling ............................................................................................................. 52 4.2.4 Public relations.............................................................................................................. 53 4.2.5 Direct marketing ........................................................................................................... 55 4.3 Customer purchasing decision in Airtel Rwanda Ltd .......................................................... 55 4.3.1 Attraction of new customers ......................................................................................... 56 4.3.2Increase in sales ............................................................................................................. 57 4.3.3 Customer loyalty ........................................................................................................... 57 4.3.4 Brand switching ............................................................................................................ 58 4.4. Relationship between Promotion and customer purchasing decision in Airtel Rwanda Ltd ................................................................................................................................................... 59 4.5 Testing of hypothesis ........................................................................................................... 60 CHAPTER FIVE: CONCLUSION AND RECOMMENDATION ............................................... 61 5.1 Summary of the major findings ........................................................................................... 61 5.2 Conclusion ........................................................................................................................... 63 5.3 Recommendations ................................................................................................................ 63 REFERENCES .............................................................................................................................. 65 APPENDICES ............................................................................................................................... 67 viii LIST OF ABBREVIATIONS, ACRONYMS AND SIGNS INILAK : Independent Institute of Lay Adventists of Kigali RURA : Rwanda Utilities Regulatory Authority TV : Television CRM : Customer Relation Management C.V.I : Content validity index SPSS : Statistical Package for Social Science research software ix LIST OF TABLES Table 3. 1: The Reliability of the Instrument .................................................................... 45 Table 4. 1: Gender Distribution........................................................................................ 47 Table 4. 2: Age distribution.............................................................................................. 48 Table 4. 3: Distribution of Marital Status ........................................................................ 48 Table 4. 4: Distribution of Education level ...................................................................... 49 Table 4. 5 : Advertising medium most used by Airtel Rwanda ....................................... 50 Table 4. 6: The most types of sales promotion used by Airtel Rwanda Ltd .................... 51 Table 4. 7: Perception of customers towards salesmen .................................................... 52 Table 4. 8: Constructing public relation ........................................................................... 53 Table 4. 9: Tools of Direct marketing which are mostly used by Airtel .......................... 55 Table 4. 10: New customer’s attraction ........................................................................... 56 Table 4. 11: Level of increase in the sales ....................................................................... 57 Table 4. 12: Level of customer loyalty of Airtel .............................................................. 58 Table 4. 13: Brand switching ........................................................................................... 58 Table 4. 14: Spearman's rho correlation between Promotion and customer purchasing decision ............................................................................................................................. 59 x LIST OF FIGURES Figure 1.1: Conceptual framework ..................................................................................... 8 xi CHAPTER ONE: GENERAL INTRODUCTION 1.1Introduction The present chapter, presents about, back ground of the study, the statement of the problem, research questions, objective of the study, hypothesis of the study, significance of the study, justification of the study, scope of study, conceptual framework and operational definitions of the studied variables. 1.2 Back ground of the study You may have the finest product and the most attractive prices, but if potential customers don’t know about your business, your chances of success are limited. Promotion refers to activities undertaken to increase sales or enhance the image of a product or business (Douglas, 2010). Promotion is the process of marketing communication to inform, persuade, remind and influence consumers or users in favour of product or service (Satnam, 2014). Promotion has three specific purposes. It communicates marketing information to consumers, users and resellers. The term promotion- mix is used to refer to the combination of different kinds of promotional tools used by a firm to advertise and sell its products. In this process the promotional mix includes four ingredients: 1) advertising; 2) publicity; 3) personal selling; 4) sales promotion (Satnam, 2014). Promotion is used primarily to inform the potential customer of the availability of product or services, when they are in season, where you are located and anything special about your product. Promotional activities are important for maintaining customer traffic throughout the market season used early in the season to draw customers to your business and during the season to maintain customer traffic levels during slow periods. Research conducted on direct farm marketing indicates that promotion, with emphasis on product 1 freshness and quality, is more likely to move produce than price cutting. In conceptual terms, promotion is the element in an organization’s marketing mix that serves to inform, persuade and remind the market and/or the organization of a product, in the hope of influencing the recipients’ feelings, beliefs or behaviour. Promotion is aimed at communicating a message to customers about a product or service that is being offered by a firm. Customer purchasing decision mainly sheds light on how consumers decides to spend their various resources like time, money etc. on various products so as to meet their needs and requirement. Consumer behaviour encompasses study of what, when, why and where the consumers will buy their products. It also focuses on how often the consumers use the products. Furthermore, it also sheds light on how the consumers evaluate the products after the purchase and the effect of evaluations on their future purchases (Schiffman, 2005). According to Neha (2013), in India, promotion plays a significant role in consumer purchase decision; those customers are influenced the most by offer further followed by premium and contest. Offering discounts on a brand name has bigger impact on customer’s purchase intention (Kumar & Sharma ,1998). In this present day, the telecommunication industry faces stiff competition as many telecommunication companies are aggressively promoting their products and services in an attempt to create customer awareness as well as attract them to purchase as much and as often as possible. The telecommunication industry delivers voice communications, data, graphics, and video at ever increasing speeds. (Grönroos, 2004). 2 The success of telecommunication industry depends on prudent efforts and feasible investments. In a competitive market, service providers are expected to compete on both price and quality of services and also it is necessary for the service providers to meet the consumers’ requirements and expectations in price and service quality (Melody, 2001). The growth rate in the use of telecommunication facilities has increased dramatically, especially in the rank of increasing number of telephone subscribers. Mobile phone is used for different purposes: calls and short messages sending/receiving, money transfer, recording and playing music and movies, picture shooting, listening to the radio, watching TV, internet connectivity, advert and publicity etc. The increase of ownership of mobile phones goes together with the increase of economic growth of a country. For this reason the Government of Rwanda plans to have a telephony penetration rate of 50% for the whole country and 25% for the rural areas by year 2020 (Government Rwanda report, 2002). Telephone, for example, provides ubiquitous social interactions between and among individuals, groups, organizations, and the governments alike and that subsequently makes and operates a broadly networked international environment tying nations, cultures, casts, creeds, national identities and businesses. Deutsch (1953) states this trend as “a web of nations. In Rwanda there are three telecommunication companies. Among them MTN Rwanda is an active telecommunication company with about 3.363,976 subscribers, followed by Millicom International Cellular owned Tigo Rwanda doubling with 2,099, 807 and Bharti Airtel Rwanda with 1,116,883 subscribers ( RURA,2014). 3 The City of Kigali made a big progress in terms of mobile phone ownership because the percentage of households with at least one mobile phone in Kigali City was 79.6 per cent in 2010/2011 from 33.2 per cent in 2005/2006, which is a growth rate of 46.4 per cent in only five years (Rwanda Statistical yearbook 2012). From 2012, Airtel Rwanda was committed mainly in providing affordable mobile phone services to the rural populations by using different promotion launches like igitego promotion (Gasana, 2015). Despite of this, Airtel is facing fierce competition on the Rwandan market. So far the battle has stood between MTN and Tigo. The researcher has chosen to conduct this research in order to examine the role of promotion for consumers purchasing decision in Airtel mobile telecommunication company. 1.3 Statement of the problem In early 2012, Airtel Rwanda was committed mainly in providing affordable mobile phone services by using different promotion activities like igitego promotion, tunga etc (Gasana,2015). Despite of the promotion practices, Airtel is facing fierce competition on Rwandan telecommunication market. According to RURA (2014), Airtel Rwanda had the lowest market share of 15% in 2014 compared to that of MTN Rwanda with 51.5% of the market share followed by Tigo with 33.5%.of market share. In its geographic area only 45% of the populations use its services, while MTN Rwanda 98.42% of the population use its services and Tigo 99% of the population use Tigo services. AIRTEL market share of internet has reduced from 15%in 2013 to 14% in 2014(RURA, 2014). It is against this 4 backdrop that the researcher examines the extent to which promotion influences customers purchasing decision in Airtel Rwanda Ltd. 1.4 Research questions 1. What are the promotion tools that are the source of purchasing information for customers? 2. Which medium that has been more effective as a source of product information? 3. What is the situation of customer purchasing decision in Airtel Rwanda Ltd? 4. How promotion tools have impacted on customer’s commitment to the Airtel products? 1.5 Objectives of study The present research study aims at both general and specific objectives; 1.5.1 General objective The general objective of the study is to examine the relationship between promotion tools used by Airtel Rwanda Ltd and customer purchasing decision. 1.5.2 Specific objectives 1. To find out the promotion tools which are the source of purchasing information for customers 2. To find out which medium that has been more effective as a source of product information 3. To analyze the situation of customer purchasing decision in Airtel Rwanda Ltd? 4. To find out how promotion campaign has impacted on customers’ commitment to the Airtel products. 5 1.6 Hypothesis of the study Ho: There is no significant relationship between the use of promotion mix and customer purchasing decision in Airtel Rwanda Ltd. H1: There is a significant relationship between the use of promotion mix and customer purchasing decision in Airtel Rwanda Ltd 1.7 Significance of the study 1.7.1 Personal significance This study will help the researcher to understand how promotion tools influence on the purchasing decision of the customers. The research will also serve as partial fulfilment of the requirement of award of Master Degree of Marketing. 1.7.2 Scientific significance Findings of this study will serve as source of information for other researchers who will be interested in research related to this topic 1.7.3 Social significance The management of Airtel Rwanda Ltd has invested much in promotion as strategy to increase market share in Telecommunication industry in Rwanda, but still now the company facing a strong competition of MTN and Tigo Rwanda. Because there is no any research conducted in relation to promotion and customer purchasing decision, findings of this research will help Airtel Rwanda to know its level of using promotion and the level of customer purchasing decision. Findings will help the company to know the 6 relationship between the using promotion and the level of customer purchasing decision. Then the management will take correction majors if possible. 1.8 Justification of the Study Many researchers have shown that promotion influence positively customer purchasing decision on products. But still, there is a gap in telecommunication industry because Airtel Rwanda Ltd invested much in promoting its services but still now the company is suffering a shortage of customers, compared to other telecommunication companies in Rwanda. Even if this gap is there is no empirical research which has been conducted to address this issue. Therefore the researcher has seen very important to conduct this study in order to help the company to address the issue. The study also will open new doors for new upcoming researcher, in telecommunication industries. 1.9 Scope of study This study will cover the period between 2012-2014. This period is taken because it is a period which presents recent information. Regarding the geographic space, this research takes place in Rwanda; the study will be limited on two variables including Promotion and customer purchasing decision and on the relationship between them. 1.10 Conceptual framework The conceptual framework of this study is made of the two variables; Independent and dependent variable. The independent variable is the use of Promotion and the dependent variable is the Customers purchasing decision. 7 The figure one represents a schematic representation of the conceptual framework of this study. Independent variable Dependent Variable Customers purchasing decision Attraction of new customers Increase in sales Customer loyalty Brand switching Promotion Advertising and Publicity Sales promotion Personal selling Public relations Direct marketing Figure 1.1: Conceptual framework Source: Drawn from the compiled data by Researcher As it is shown in this figure the independent variable is promotion. It will be analyzed by measuring how the company is using, Advertising, Public relations, Publicity, Personal selling, direct marketing and Sales promotion in its promotion practices. The dependent variable which is Customers purchasing decision will be analysed under Attraction of new customers, Increase in sales, Customer loyalty and Brand switching. 1.11 Operational definitions Promotion: It refers to raising customer awareness of a product or brand, generating sales, and creating brand loyalty. Promotion is also defined as one of five pieces in the promotional mix or promotional plan including personal selling, advertising, sales promotional, direct marketing and publicity. Advertising: It refers to the activity of attracting the public attention to a product or business by a paid announcement in newspapers or magazine, on radio or television. To 8 measure this variable the researcher used descriptive statistics (Frequency and percentage). Sales promotion: It refers to short term use of incentives or other promotional activities that stimulate the customer to buy the product. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Personal selling: This involves face to face interaction between seller and buyer for the purpose of sale. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Public relations: It refers to the practice of creating and maintaining goodwill of an organization’s various publics (customers, employees, investors, suppliers etc) through, charitable activities like, education, sporting events and other civic engagements. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Publicity: It refers to the type of promotion carried usually freely by mass media. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Direct marketing: It refers to a type of advertising campaign that seeks to elicit an action from a selected group of consumers through postal mail, telemarketing, direct email marketing etc. To measure this variable the researcher used descriptive statistics (Frequency and percentage). 9 Customers purchasing decision. It refers to a series of choices made by consumer before making a purchase after they have the willing to buy. The measures of this variable are: Attraction of new customers: It refers to the increase of the numbers of customers during the period of the study. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Increase in sales: It refers to the increase of the quantity of services sold during the period of the study. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Customer loyalty: It refers to how customers perceive the services of Airtel Rwanda Ltd services. To measure this variable the researcher used descriptive statistics (Frequency and percentage). Brand switching: It refers to the process of choosing to switch from use of other telecommunication companies services to steady usage of Airtel services Rwanda Ltd. To measure this variable the researcher used descriptive statistics (Frequency and percentage). 10 CHAPTER TWO: LITERATURE REVIEW This chapter contains the literature review of the study. The researcher constructed the literature in line with the objectives and the conceptual framework of the research. 2.1 key concepts 2.1.1 Promotion In today’s era, competitive environment is everywhere. To stay in competitive market, communication is one of the ways to reach customers. Communication is also one of the tools to achieve company objective (Fill & Jamieson, 2011). To having customer buy products, the seller should be able to influence customer-buying decision. For that, promotional mix is one of the tools to wooing the customer to buy their products .As many managers believe, promotion has play important role in creating brand awareness of the product (Blythe, 2005). According to Swastha and Irawan (2008), promotion is information flows or one way persuasion which directing someone, people, or organization to make a demand. Promotion is used to expand and penetrate the market, build the company’s image, provide information, increase and stabilize sales, add value to product and differentiate the products (Williamson, 2012). There are various tools and elements available for promotion. These are adopted by firms to carry on its promotional activities. The marketer generally chooses a combination of these promotional tools including, Advertising, Sales promotion, Personal selling, Public relation and publicity. 11 2.1.2 Advertising: Advertisement can be defined as the paid form of non-personal presentation and promotion of idea, goods or services by an identified sponsor. It is an impersonal presentation where a standard or common message regarding the merits, price and availability of product or service is given by the producer or marketer. The advertisement builds pull effect as advertising tries to pull the product by directly appealing to customer to buy it (Buel, 2004). Three distinct features of advertising are Paid Form, Impersonality and Identified Sponsor (Buel, 2004). By Paid Form the sponsor has to pay for advertising. He has to bear a cost to communicate with customers. By Impersonality there is no face to face contact between customers and advertiser. It creates a monologue and not a dialogue. By Identified Sponsor, advertisement is given by an identified company or firm or individual. The Merits of Advertisement include Reach, Choice, Legitimacy, Expressiveness, Economy, Enhancing Customer Satisfaction and Confidence (Buel, 2004). Reach means that advertising can reach a large market. As through various media of advertising there is benefit of mass reach for example, any message given on Radio or TV can reach in different corners of the country wherever TV and Radio network is available (Buel, 2004). Choice means that there is wide variety of media available for advertising for video, audio, visual audio, print media etc. Under each category large variety is available for example, in print media we can select from magazines, newspaper, banner etc. This 12 variety or choice helps the marketer to select the media, keeping in mind the target customer (Buel, 2004). Legitimacy means that in advertisement the messages regarding the product or service are given publicly to customers so there is always a proof for it and customers believe that publicly the company will not give false information of the product. The customer feels comfortable to buy a product which is widely advertised (Kotler, 2008). Expressiveness means that advertising provides enough opportunities to marketers to dramatize the message with the help of drawings, colours, pictures, music, dance etc. They can easily express the use of product through various techniques, and can add multimedia effect also (Kotler, 2008). Economy means that it is always felt that advertising increases the cost of product or service but advertising is considered economical as compared to other promotional techniques because it reaches masses and if we calculate cost per customer it is very low or nominal ( Osuagwu and Eniola, 1997). By enhancing Customer Satisfaction and Confidence it means that Customer feel more assured about quality and feel more comfortable if sponsors claim these benefits in advertising. Advertising have Disadvantages. The first disadvantage is that Advertising is an Impersonal Communication/Less Forceful. In advertising there is no direct communication between the customer and marketer. The marketer assumes that the message is communicated but the audience or customers do not pay any attention to impersonal messages conveyed through advertising. The response of customer cannot be known in advertising (Osuagwu and Eniola, 1997). 13 The second disadvantage is that Advertising is less effective. In advertising there is only one way communication i.e., communication from seller only, but two way communication is always more effective as in two way communication the customer gets chance to clarify his or her queries. Sometimes customers have many doubts regarding the use of product, these doubts can be clarified only when there is two way communications (Osuagwu and Eniola, 1997). The third is advantage is that it is difficulty in media choice. In advertising various media are available. Each media have its own advantages and disadvantages. So the effectiveness of advertisement depends to a great extent on the right choice of media. When choice of media is faulty or wrong no matter how good the advertisement is it will not reach the target customer (Peattie and Peattie, 2009). The fourth advantage is that advertising is inflexibility. It is very difficult to change advertisement as companies use standardised messages which cannot be changed according to the need of customers. The fifth disadvantage is that there is a lack of Feedback. The evaluation of effectiveness of advertisement is very difficult as there is no immediate and accurate feedback given by the customers (Peattie and Peattie, 2009). Advertising has been subject to lot of criticisms. The following are main objections raised on advertisements by a group of people. Along with objections the answers to these objections are also mentioned below (Peattie and Peattie, 2009). The major objection on advertisement is that it promotes materialism. The advertisements inform people about more and more products, the use of existing products and the new products are shown dramatically to attract the customers. This knowledge about more and more products induces the customers to buy more and more products. They start 14 demanding the products which they don’t even require. If there was no advertising the company would be less aware of material things and it can be more contented (Peattie and Peattie, 2009). The advertisement increases the knowledge of customers by informing them about various products along with their utilities. The advertisement only informs the customers, the final choice of buying or not, lies with the customers only. The advertisements show all types of products irrespective of their quality. With the help of advertising anything can be sold in the market (Peattie and Peattie, 2009). The objection to sale of inferior goods is not correct because what is inferior and what is superior depends upon the economic status and preference. Every one cannot afford to buy superior quality expensive products but it does not mean they should not use the product. The lower income group people satisfy their needs with low cost inferior goods. So it is not advertisements which encourage sale of inferior goods; it is one’s pocket or financial capacity which decides this (Peattie and Peattie, 2009). Another objection to advertisements is that advertisements use bad language, the way they are speaking may not appeal everyone, sometimes women are shown in the advertisements where they are not required for example, a woman in after shave lotion and in advertisements of suiting etc. The most serious objection to advertisement is that it increases the price of product because the firms spend a huge amount on advertisement and these expenses are added to cost and consumer has to pay a higher price for the product or service (Prentice, 1985). 15 To know the best advertising medium is not simple. Effectiveness depends on how well the medium fits with the rest of a marketing strategy that is, it depends on (1) your promotion objectives, (2) what target markets you want to reach, (3) the funds available for advertising, and (4) the nature of the media, including whom they reach, with what frequency, with what impact, and at what cost. For example, direct mail may not be a flexible choice in a country with a weak postal system. Internet advertisements might be worthless if few target customers have access to the Internet. Similarly, TV audiences are often less selective and targeted, but a special-interest cable TV show may reach a very specific audience (Prentice, 1985). The medium should support the promotion objectives. If the objective requires demonstrating product benefits, TV or Internet with video may be the best alternative. If the objective is to inform, telling a detailed story and using precise pictures, then Internet advertising might be right (Prentice, 1985). Newspapers work well for businesses operating in local markets. Alternatively, with a broad target market or when there is a need to show colour, magazines may be better. To guarantee good media selection, the advertiser first must clearly specify its target market. Then the advertiser can choose media that reach those target customers. Most media firms use marketing research to develop profiles of their audiences. Generally, this research focuses on demographic characteristics rather than the segmenting dimensions specific to the planning needs of each different advertiser. The audience for media that do reach your target market may also include people who are not in the target group. But advertisers pay for the whole audience the media delivers, including those who aren’t potential customers. Because it’s hard to pick the best media, media analysts often focus on cost per thousand of audience size. This may seem an objective approach, but 16 advertisers preoccupied with keeping these costs down may ignore the relevant segmenting dimensions and slip into mass marketing (Neha, 2013). Today, advertisers direct more attention to reaching smaller, more defined target markets. The most obvious evidence of this is in the growth of spending on direct mail advertising to consumers in databases. However, even traditional media are becoming more targeted. TV is a good example (Neha, 2013). In many countries there are about as many cell phones as adults, and people carry them everywhere. This has a lot of advertisers wishing their advertisements could give their customers a call. Now they’re getting help with this wish. In the United Kingdom, for instance, the leading cellular service provider signs up subscribers to receive once-a-week text-message offers, such as half-price movie tickets. Some firms are even experimenting with advertisements that target customers based on the customer’s location at a particular moment (Neha, 2013). People continue to increase time spent surfing the Internet, while spending less time watching TV and reading magazines and newspapers. The Web lets people socialize with friends, consume news and other information, enjoy entertainment like videos, and shop. This change in consumer behaviour creates new challenges and opportunities for marketing managers as they try to target specific customers or segments through Internet advertising. Advertising on the Internet takes a variety of forms, but the purpose is usually to attract the interest of people in the advertiser’s target market so they’ll click through to the firm’s Web site. This is not as easy as it sounds since many people try to 17 ignore any advertising. To get the attention of Web surfers, Internet advertisers have created many different types of advertisements (Neha, 2013). Selecting which media to use is still pretty much an art. The media buyer starts with a budgeted amount and tries to buy the best blend to reach the target audience. Often must buys, like the Yellow Pages for a retailer in a small town, will use up much of an advertising budget. 2.1.3. Sales Promotion: Sales promotion refers to short term use of incentives or other promotional activities that stimulate the customer to buy the product. Sales promotion techniques are very useful because they bring short and immediate effect on sale, Stock clearance is possible with sales promotion, Sales promotion techniques induce customers as well as distribution channels and Sales promotion techniques help to win over the competitor (Neha, 2013). Some of the sales promotion activities commonly used by the marketer to increase the sale are Rebate, Discounts, Refunds, Premiums or Gifts/or Product Combination, Quantity Deals, Samples, Contests, Instant Draws and Assigned Gifts, Lucky Draw, Usable Benefits, Full Finance @ 0%, Packaged Premium and Container Premium(Neha, 2013). Rebate refers to selling product at a special price which is less than the original price for a limited period of time. This offer is given to clear off the stock or excessive inventory. Discounts refers to reduction of certain percentage of price from list price for a limited period of time. The discounts induce the customers to buy and to buy more. Generally at 18 the end of season big companies offer their products at discounted price to clear off the stock (Neha, 2013). Refunds refer to refund or part of price paid by customer on presenting the proof of purchase. Premiums or Gifts/or Product Combination are most popular and commonly used promotion tool. It refers to giving a free gift on purchase of the product. Generally the free gift is related to product but it is not necessary (Palmer, 2004). Quantity Deals refers to offer of extra quantity in a special package at fewer prices or on extra purchase some quantity free for example, buy three get one free. Samples refer to distribution of free samples of product to the customers. These are distributed when the seller wants the customer must try the product. Generally when a new product is launched. Contests refer to participation of consumers in competitive events organised by the firm and winners are given some reward. Instant Draws and Assigned Gifts includes the offers like scratch a card’ and win instantly a refrigerator, car, T-shirt, computer etc. Lucky Draw. In this draws are taken out by including the bill number or names of customers who have purchased the goods and lucky winner gets free car, computer, T.V., etc. Draw can be taken out daily, weekly, monthly, etc. Usable Benefits. This includes offers like Purchase goods and get a holiday package or get a discount voucher, etc. Full Finance @ 0%. Many marketers offer 0% interest on financing of consumer durable goods like washing machine, T.V. etc. Packaged Premium. In this type of sales promotion the free gift is kept inside the pack. The gift is kept in limited products but the excitement of getting the gift induces the customer to buy the product. 19 Container Premium refers to use of special container or boxes to pack the products which could be reused by the customer. Sales promotion has the advantages. They include Attention Value: Useful in New Product Launch, Synergy in Total Promotion Efforts, Aid to other Promotion Tools. By Attention Value, the incentives offered in sales promotion attract attention of the people. It is Useful in New Product Launch as the sales promotion techniques are very helpful in introducing the new product as it induces people to try new products as they are available at low price or sometimes as free sample. Sales promotion is Synergy in Total Promotion Efforts because it supplements advertising and personal selling efforts of the company. Sales promotion adds to the effectiveness of advertisement efforts. Sales promotion aid to other Promotion Tools as it makes other promotion techniques more effective. Salesmen find it easy to sell products on which incentives are available. Even if sale promotion has advantages, it has also demerits. These demerits are Reflect Crisis and Spoil Product Image (Palmer, 2004). About reflect crisis, if firm is offering sales promotion techniques again and again it indicates that there is no demand of product which can create crisis situation. About Spoil Product Image, the use of sales promotion tool may affect the image of product as buyer feel that product is of low quality that is why firm is offering incentives. According to Jobber (2004) sales promotion boosts sales during the promotion period because of the incentive effect. This is followed by a small fall in sales to below normal level because some consumers have stocked up on the product during the promotion. He stipulated that the long-term sales effect of the promotion could be positive, neutral or 20 negative. If the promotion has attracted new buyers, who find that they like the brand, repeat purchases from them may give rise to positive long-term effects. Alternatively, if the promotion has devalued the brand in the eyes of consumers, the effect may be negative. Where the promotion has caused consumers to buy the brand only because of its incentive value, with no effect on underlying preferences, the long-term effect may be neutral. Also, he said certain promotions by their nature encourage repeat purchase of a brand over a period of time (Jobber ,2004). Over the last few years there has been a rapid increase in the use of sales promotion, for a number of reasons. Internally there has been a greater acceptance of the use of sales promotion by top management and more people are now qualified to use it. In addition, there is greater pressure today to obtain a quick sales response, something which sales promotion is good at achieving. There has been a general proliferation of brands with increased competitive pressure. As a result of this and the changing economic environment, consumers are more deal orient and this has led to pressure from intermediaries for better incentives from manufacturers and service principals. It has been argued by many that advertising efficiency is declining due to increasing costs and media cluster. New technology in targeting has resulted in an increase in the efficiency and effectiveness of sales promotion (Palmer, 2005), According to Jobber (2004) the reasons for the increasing growth of sales promotion in recent times as follows: Sales promotions are becoming respectable: through the use of promotions by market leaders and the increasing professionalism of the sales promotion agencies. 21 2.1.4 Personal Selling Personal selling means selling personally. This involves face to face interaction between seller and buyer for the purpose of sale. The personal selling does not mean getting the prospects to desire what seller wants but the concept of personal selling is also based on customer satisfaction (Palmer, 2004). The features of Personal Selling include Personal Interaction, Two ways Communication, Better Response, Relationship and Better Convincing. About Personal Interaction, in personal selling the buyers and sellers have face to face interaction. This closeness allows both the parties to observe each other’s action closely. About two ways Communication, in personal selling the sellers give information about the product; at the same time the buyer get a chance to clarify his doubts. It is suitable for sale of complex products where buyer wants to interact with the manufacturer. For Better Response, when seller is personally explaining the utilities of product to the customers then customer do pay some attention and listen to the information. Concerning Relationship, when the seller and buyer come together this may improve relation between the customer and seller. Salespersons normally make friendly relations with the customers (Palmer, 2004). Furthermore, about better convincing, Personal selling is most effective form of promotion because with this the sales person can convince the buyer by demonstrating the use of product and making changes in the product according to the need of customer. For a better Personal selling the flowing qualities of a good Salesman should fulfilled: Physical Qualities: a salesman must have good health and pleasing personality. He must be well built and free from physical defects. A pleasing and charming personality boosts 22 self-confidence. Good grooming, appropriate dress, clean and tidy appearance and a good posture will go a long way in creating a first impression. More importantly, a salesman must always have a cheerful smile on his face (Palmer, 2004). Social Qualities: A salesman must have good manners, courtesy in dealing with customers. The practice of greeting and thanking customers, using polite expression are necessary for success in personal selling. He should not be shy or reserved but an extrovert and a good listener. He must have the ability to say the proper things and do the right thing without offending others (Achumba, 2000). Mental Qualities: A good salesman must have a high degree of intelligence, initiative and foresight. He must be intelligent and imaginative enough to understand the customer quickly and read his mind accurately. Salesman must have two basic qualities i.e., empathy and ego drive. Empathy means he must have ability to understand the problem from customer’s point of view. Ego drive means salesman must pursue sale not just for money but for recognition and personal success. A good salesman must have presence of mind and good common sense. Technical Quality: The salesman must have full technical knowledge about the product. Other qualities, a salesman must possess, are: A salesman must have a good power of memory and observation. A salesman must be honest and should not try to win the customer through false and misleading representation. A salesman must be a man of sound character, loyal and dependable. He must perform his duties sincerely. The salesman must have wide knowledge about the product he is selling and company he is representing. He must have capacity to inspire trust. 23 Personal selling plays a very important role in marketing of goods and services. It is important tool for businessmen, customers and society. It is important for businessman because it is an effective tool to increase the sale of product. Salesmen explain the merits of products to customers. It is a flexible Tool because its efforts can be changed according to the type of customer salesmen are attending. They may change the offer in varying purchase situations. As compared to other methods of promotion in personal selling the wastage of efforts is minimum. Through personal selling it is easy to get the attention of customer as there is face to face interaction between salesman and customers. Personal selling helps to create lasting relationship between customers and sales-persons which help in increasing sale. Through personal selling salesmen can create personal support with the customers. This can improve competitive strength of organisation. Personal selling is very effective to introduce a new product as salesman can explain the merits, show the demonstration and clarify the doubts of customers. Personal selling is very important from customer’s point of view, as customers can get required information about the product from customers. Salesmen help the customers to discover their needs and wants and they also help customers to know how these needs and wants can be satisfied. In personal selling salesmen provide information regarding the new products available in market, uses of those products etc. Customers can get expert advice and guidance in purchasing various goods and services. Personal selling induces customers to buy products for satisfying their needs. 24 Personal selling brings positive effects for society. Personal selling creates effective demand which results in increasing sale and more income. With more income there will be more products and services which in turn bring economic growth. Unemployed youth can work as salesman and earn their livelihood. Personal selling offers attractive career with job satisfaction and security. Sales people move from one place to other, this promotes travel and tourism industry. With the help of personal selling there can be uniformity of consumption by supplying standardized products. 2.1. 5. Public Relations An important tool of promotion is maintaining Public Relations. In simple words, public relations mean maintaining public relations with public. By maintaining public relations, companies create goodwill. Public relations evaluate public attitudes; identify the policies and procedures of an organisation with the public interest to earn public understanding and acceptance. Public does not mean only customers, but it includes shareholders, suppliers, intermediaries, customers etc. The firm’s success and achievement depends upon the support of these parties for example, firm needs active support of middle men to survive in market, it must have good relations with existing shareholders who provide capital. The consumers’ group is the most important part of public as success of business depends upon the support and demand of customers only. 25 There are Role, Significance, advantages of public relations: Public relations help to convey the policies and programmes of the organisation It helps to collect information about public opinion about the organisation, management activities etc. It helps to overcome the complaints and dislikes of public. It helps to mould people’s attitude in favour of organisation. It helps to maintain goodwill and understanding between organisation and public. It helps to build an image of the organisation. The companies can use the tools to improve their relations with public including News Speeches, Events, Written Materials and Public Service Activities: About News, sometimes companies get involved in such kind of activities or make such policies so that they get some positive coverage in news. For example, a company’s name may be covered in news for reservation of jobs for women or for introducing new technology etc. For Speeches, the speeches given by the leaders of corporate sectors influence various members of public specially banks, shareholders etc. Public relations department creates occasion when the speeches are delivered by the leader of company. Events refer to organizing press conferences, multimedia presentation, matches, stage Written materials such as Balance Sheet, Annual Reports, Special documents, Brochures etc. are circulated to various parties to improve and maintain public image of the company. About Public Service Activities, big business houses often associate themselves with various social service projects such as women welfare programmes, charity shows, up- 26 keeping of parks, planting trees on road side, training schools, running schools, colleges, hospitals etc. 2.1.6 Publicity Publicity is the promotion and management of the public’s impression towards a subject. It is the process of creating news through sponsorship, exhibitions, staging a debate, organizing a tour of the business, and inventing and presenting an award. Through involvement in these activities, the individual or company’s name will be extensively mentioned in the media and attract the attention of people to the individual or for consumers to a company’s products and services. Publicity is any unpaid form of non personal presentation of ideas, goods, or services. Publicity is usually an unpaid promotion, although a minimal cost is incurred for the materials used in the publicity. When you are trying to generate publicity for your business through public relations efforts, the only cost is the manpower that it takes to create the documents that you send out to the news media and the costs of delivering or shipping. However, since it is unpaid, the individual or company has no control over how the material is presented if it is released at all. With publicity, you don’t dictate when, where, or if your promotional messages ever see the light of day. You can send a news release to a print publication, and the editor or journalist who receives it might see value in it and print it in the next issue. Since it is featured in a magazine or newspaper, the company’s name and products being mentioned by a writer or editor, consumers will see them as a positive 27 feedback about the product and the company. People will believe in the product if somebody else talks about it. In recent years as consumers try harder and harder to avoid advertising, publicity has emerged as a more prominent promotion tool. Many consumers view advertising as an interruption to what they would rather be doing watching their favourite TV program and not a commercial, seeing a pleasant vista when driving crosscounty and not a billboard, listening to a popular song and not an ad jingle on the radio. Also, many consumers don’t trust advertising as a source of product information. So they’ve gotten better at avoiding advertising. As advertising becomes more costly and less effective, publicity is gaining. As we discussed Promotion can influence buying decisions when customers trust the source and find the information credible. Importantly, the most trusted sources are forms of publicity, not advertising. In fact, advertising is generally the least trusted source, while cell phones and the Internet are the least trusted communication. There are a wide variety of publicity tools. Given their potential as a trusted communication source. Many of these tools are the result of advances in technology and changes in consumer behaviour. Marketing managers must be on the lookout for new tools and try to understand how they can be used to support promotion objectives. Publicity can be used to help a firm sell more products, generate leads for the sales force, get contributions to a charitable cause, or encourage people to join an organization. Often publicity works in combination with other promotion tools as part of an integrated marketing communications program with specific objectives. In addition, most 28 laws covering advertising apply to most of the publicity approaches. Common sense, honesty, and fairness are important. 2.1.7 Direct Marketing Direct marketing is a type of advertising campaign that seeks to elicit an action from a selected group of consumers in response to a communication from the marketer. The communication itself may be in any of a variety of formats including postal mail, telemarketing, direct e-mail marketing, etc (Mihaela, 2012). It is a form of advertising in which physical marketing materials are provided to consumers in order to communicate information about a product or service. Direct marketing does not involve advertisements placed on the internet, on television or over the radio. Direct marketing reaches the consumer without the influence of any outside party (Mihaela, 2012). Direct marketing removes the middle man from the promotion process, as a company's message is provided directly to a potential customer. This type of marketing is typically used by companies with smaller advertising budgets, since they cannot afford to pay for advertisements on television and often do not have the brand recognition of larger firms (Mihaela, 2012). 2.2 Consumer Purchasing Decision Customer purchasing decision is a series of choices made by consumer before making a purchase after they have the willing to buy. Consumers can purchase different products and this difference because that different buying decisions buying process 29 consists of several steps. Some purchases are so important that the consumer is forced to do all these steps carefully and meticulously (GilaniNia, 2010). These steps include Identify the problem .It is the first stage of the decision-making process. It is that people can feel the difference between current and desired situation, so trying to resolve these differences. The second stage is Data collection for solving this problem. This information can be internal (experiences) and external (family, exhibits, etc.) The third stage is assessment options. After gathering information, the consumer is ready to make a decision. At this point, he should be able to evaluate different options and choose products that meet the demands of him. The last stage is Purchase. This stage is the stage that all marketing activities are the result. Consumer at this stage, according to the information already obtained, Select a product that feels satisfy his need and buys it. Pride and Ferrell (2012) stated that to understand consumer buying decision, the marketer should understand the consumption process and the utility of products in consumers’ perceptions. They also declared that when purchasing products unconsciously, consumer gets through several steps in the making of purchase decision, purchase, and post-purchase evaluation. The first step decision is problem recognition where the consumers are able to differentiate between their needs and wants. Marketers usually use advertising, sales person, and packaging to stimulate recognition of the needs or wants. Furthermore, situational factor that can influence on consumer buying process consists of five categories; the first one is physical surrounding like location, store ambience, or weather. Second is social surrounding like characteristics and interactions with others. Third is the time dimension. Time playing an important role as the buyer considers the durability of the product or the frequency of product use. Forth is the reason 30 why consumer buy certain products. The last is consumer’s condition or feeling might affected to consumer buying decision process. The consumer is faced with various stimuli to respond to in the market; the stimuli include the marketing mix (4Ps) alongside other forces within the environment. However, the stimuli pass through decision making process of the consumer which led to the aspect of observable buyer response in form of brand choice, dealer choice, product choice, time of purchase and amount to be expended on the products amongst others. It is expedient for the marketers to know what happens between the stimuli and consumer’s response behaviour (Odugbesan and Gbolahan, 1996). The consumers’ characteristics and their influences serve as a major ingredient in the buyer’s perception about stimuli and their purchase decision making process, hence Hawkins et.al, (1989), stated that the marketing manager needs to view the consumer as a problem solver due to the fact that consumer is a decision making unit that takes in information, processes it in light of existing situation, take actions to accomplish satisfaction that enhances lifestyle. It is obvious that consumer behaviour is the soul of marketing concept. One should not lose sight of certain factors which influence consumer behaviour such as cultural, social, personal, psychological and situational factors are all comprehensive approach to buying behaviour acknowledgement that makes man a complex creature. Interestingly, some researchers have also shown that promotion is likely to repeat purchases if consumers are satisfied with the brand that is being promoted; it is more likely that they will also buy it later after the promotion is over (Peattie and Peattie 2009). However, it was concluded that sales promotions should be handled with care the outcomes vary from products or services to consumer groups is the situational factors 31 play a major role in the outcome analysis bearing in mind that most promotions research are based on the context of USA markets. Most organisations now concentrate their efforts on promotion strategies and techniques to reach the dwindling profit problem. Promotion being a short-term incentive is to encourage purchases (Kotler,2008) and is combined with advertising. It is not all sales promotion techniques that are directed to consumers, some are directed to the middle men and some to the organisation’s own sales force (Govon, 2006). One gets involved in making decisions of the product to buy which is now a problem solving process that is dependent on the consumer’s level of involvement which is the degree of interest on a product or service. The high involvement products are those that are not expensive with less society risk attached to them (Witton, 2006) Choosing between 2 brands put one in a position to make decisions but if there is no alternative, one is literally forced to buy because there is no choice to choose from and this does not constitute a decision, such a no-choice decision is commonly referred to s a Hobson’s Choice (Achumba, 2000). Due to its present economic recession in the world at large, this brought about increased economic pressure on the consumer and a corresponding increase pressure on the consumers’ disposal income which lead to consumers becoming more conscious and rational in their purchasing decisions (Buel, 2004). Promotion becomes increasingly important in marketing as it serves as a way of increasing the demand for products, as a substitute for price competition and as a way of differentiating similar products (Osuagwu and Eniola, 1998). 32 2.2.1 Attraction of customers A well managed company is aware of the need to develop close coordination with key customers with the objective of jointly increasing value and decreasing cost. Customer relation management is the core of an organizational strategy playing an important role in four aspects of customer identification, customer attraction, customer retaining, and customer satisfaction. Customer attraction is highly important today. In competitive business environments, the ability to identify profitable costumers and consistent development of existing relationships are the key competitive factors of an organization. Customer Relation Management helps organizations recognize customers' value, identify the most profitable ones and develop high quality relations with them. Careful examination of profitability of each customer and identification of the most profitable ones are key factors of CRM success (Cheng et al. 2009). Customer Relation Management is a key commercial strategy in which an organization focuses on its customer’s needs and should develop a customer-oriented approach in the entire organization (Cheng et al. 2009). A perfect commercial process includes customer attraction, customer increase, and customer retention (Yong et al. 2008). 2.2.2 Increase in sales Gaining customers and/or market share is inevitably a goal of every marketing campaign and communications effort. For that forgetting about the existing customers, lead always to detriment of a company. There for the marketing manager should make sure that he is paying a lot of attention to the customers the company already has (Achumba, 2000). 33 There are three key reasons. The reason one is that if you gain a customer through your marketing efforts but lose one you already had because you weren’t paying enough attention to her, you end up with the same number of customers but lower margins because it costs far more to gain a new customer than to keep an existing one. So, staying even by adding one customer to offset everyone who goes away is actually causing you to lose ground (in the form of decreased profits that come about through increased marketing costs). That is no way to run a business (Achumba, 2000). The second reason is that there are times when, by remaining in place, you actually gain ground. Let’s use a straightforward example: Let’s say you have 14% of a $100 million market. Your sales are $14 million. Now assume two additional competitors enter the field, increasing the size of the total market to $110 million.If you can just keep your market share at 14 percent, your sales will climb to $15.4 million. Even better, since your share has remained the same, it means some of your competitors will have lost ground to the new entrants, i.e. their market share will have declined while yours increased (Achumba, 2000). The third reason is that it is far easier to sell products and services to existing customers than to someone you don’t have a relationship with. If you have done a good job taking care of your customer in the past, and your products have performed well for them, they are usually willing to give any addition to your product line a try. Because the relationship is in place, far less (expensive) selling is required. A key part of creating a growing business is making sure you don’t lose the customers/clients/members you already have (Achumba, 2000). 34 And once you have them, make them your first option when you have an additional product or service to sell. Your costs of sales will be less and you will find it easier to gain momentum. Once you have sold all you can to your existing customers, you can start reaching out to gain more (Achumba, 2000). 2.2.3 Customer loyalty Loyalty is what customers think about the company and how they perceive its services. This usually plays a critical role in the development of your business and services that you provide. For most businesses, customer retention directly affects the profitability. One of the most effective measures of loyalty is to measure the degree to which your customers will vouch for you. If your customers go out of their way to recommend your product or service to others, it’s an effective measure of their perception (Achumba, 2000). 2.2.4 Brand switching Sometimes known as brand jumping, brand switching is the process of choosing to switch from routine use of one product or brand to steady usage of a different but similar product. Much of the advertising process is aimed at encouraging brand switching among consumers, thus helping to grow market share for a given brand or set of brands. Convincing consumers to switch brands is sometimes a difficult task. It is not unusual for customers to build up a great deal of brand loyalty due to such factors as 35 quality, price, and availability. To encourage switching brands, advertisers will often target these three areas as part of the strategy of encouraging brand switching. Price is often an important factor to consumers who are tight budgets. For this reason, advertisers will often use a price comparison model to entice long time users of one brand to try a new one. The idea is to convince the end user that it is possible to purchase the same amount of product while spending less money. However, price is not always enough to encourage brand switching. There are consumers who are less concerned with cost. For these users, the approach is to present the new brand as being of superior quality to the established brand. Essentially, this means demonstrating that the new brand can do everything the older brand can do, plus a little more. For example, a product that can be used to dust wood, glass, and plastic surfaces may be more attractive than a product that is formulated for glass only. The implication is that the one product can take the place of three products, and may motivate brand switching. 2.3 Relationship between Promotion and customer purchasing decision Sales promotions are comparatively easy to apply, and are likely to have abrupt and considerable effect on the volume of sales (Hanssens, Parsons and Schultz 2001). Resultantly, according to Currim and Scheinder (1991) the finances of companies regarding the marketing increase constantly. Research conducted by Ailawadi and Neslin (1998) had revealed that consumer promotions affect the consumers to purchase larger amount and consume it faster; causing an increase in sales and ultimately profitability. Oyeniy (2011) mentioned that to retain consumers in the face of keen competition, service providers must develop marketing strategies that will not only win customer but 36 help to retain them. Sales promotion plays an important role in retaining old consumers and attracting new ones. Parts of the essence of a business existence are to produce goods and services that will be required by customers and to make profit from such activity. Enough sales must be generated for profit to be made. Sales estimate is the foundation in budgeting or profit planning process (Ayanwale et al, 2005). Coupons, discount, and free samples used strategically in various industries not only increase brand awareness, but also encourage consumers to try new products. For example, a manufacturer might utilize coupon incentives to encourage consumers to try a new product, enabling the trial at a discounted price, instead of buying the same flavour they normally do at full price. Therefore, this incentive may reduce consumers’ perceived risk associated with trying a new, less-familiar product for the first time (Blackwell et al. 2001). Blackwell and colleagues argued that new products are more apt to succeed when consumers can experiment with or try the idea on a limited basis, with limited financial risk. Therefore, sales promotion such as sampling, couponing, and trial-sized products are useful to induce the trial of products. Dama (2010) clearly identified that every organisation has specific group of customers it is serving, each of them has different needs and expectations. Still on the importance and effectiveness of promotion, Palmer (2005) stipulates that although it can be used to create awareness, sales promotion is usually used for the later stages of the buying process, that is, to create interest , desire and in particular to bring about action. He added that sales promotion can successfully complement other tools within the promotion mix, for instance by reinforcing a particular image or identity developed through advertising. 37 According to Sameen A. (2014), promotion is a key factor of influencing customer purchasing decision. For instance Sales promotion offer and provide benefits to the customers to seek their attention and to motivate them to purchase, therefore it is considered an important tool in building customer loyalty. It has been determined that the cost of gaining new customers is considerably higher than that of retaining the old ones. Sales promotion provides sellers to attract profitable customers which may assist in building brand loyalty (Shira 2003). Therefore, retailers are trying harder to cope with the changing competitive environment by using different promotional tools and understanding the preferences of customers. Customers’ preferences and commitment for a brand or a product play a vital role in building customer loyalty as it has been proved earlier by Nagar (2009), that only repeat purchasers are profitable. Customer’s commitment adds to the profitability of the businesses but it is not every purchase that leads towards customer loyalty and profitability. Sales promotions enable customers to get motivated towards unplanned purchases by considering it a valuable exchange (Sameen 2014). Research focusing on the factors that can influence the customer buying decision on fast food industry showed that advertising, publicity, sales promotion, personal selling, and price are factors which strongly affect the customer buying decision on fast food. 37.2% of customer buying decision influenced by the company’s promotional mix and price set while, the rest 62.8% is influenced by other factors. Overall, this percentage proves that promotional mix and price set decently influence customer buying decision on fast food (Tarinee, 2007). Results on the research Portable PCs in Thailand the study indicates that the sales promotion factors Offer member card for discount Extend warranty period, Bundled with scanner, Billboard, radio, leaflet, and magazine, and Able to pay by instalments are the 38 important factors that impact on consumers’ purchasing decision. The researcher recommended that Portable PC in the study should focus on these sales promotion factors in order to increase the customer base and make more market share in this segmentation as follow (Rangsan & Titida, 2011). The researcher continues showing that Acer should maintain a strategy about. Offer member card for discount and Extend warranty period. This means that Acer should update/develop member card for discount and warranty period conditions continuously in order to increase the customer base over the competitors. Compaq & HP should maintain a strategy about Bundled with scanner, Billboard, radio, leaflet, and magazine, and Able to pay by instalments. This means that Compaq & HP should increase the number of billboards, radio, leaflet, and magazine. Moreover, Compaq & HP should use the special sale promotion tools such as premiums, how to pay by instalments in order to attract theirs customers which it make increasing in the sale volume and the customer base (Rangsan & Titida, 2011). 2.4 Gap in literature Numerous studies have examined the effectiveness of promotion tools in the past decade. The common measures of promotional mix include advertisement recall, advertisement recognition, and brand awareness, attitude towards the advertisement and the brand, and purchase consideration, publicity, sales promotion, personal selling, and price are factor. The effectiveness of these measures was assessed by their ability to predict purchase decision. Advertising, sales promotion and public relations are masscommunication tools available to marketers (Prasanna & Venkateswara, 2013). Today, we might define promotion as communication process, a marketing process, an economic and social process, a public relations process or information and persuasion process viewed as communication through various media by business firms. Promotional 39 strategies provide a major tool in creating product awareness and condition the mind of a potential consumer to take final purchase decision. Promotion primary mission is to reach potential customers and influence their awareness, attitudes and buying behaviour. Ayanwale et al (2005) conducted research on promotion of Bournvita. He found that it has a major influence on consumers’ likeness for Bournvita food drink. The finding are opposing what is happening in Airtel Rwanda Ltd. from 2012, Airtel Rwanda Ltd has invested much in promoting its product and services like providing affordable mobile phone services to the rural populations, by using different promotion launches like igitego promotion (Gasana,2015). This should increase the customer purchasing decision but the company is sill the last in telecommunication industries in Rwanda. It market share has decreased from 15% in 2013 to 14% in 2014 (RURA, 2014). Even if these problems are there is no empirical research to link the use of promotion tools and customer purchasing decision. The study will fill this gap. 40 CHAPTER THREE: RESEARCH METHODOLOGY This chapter presents the methods that have been used to carry out this research. It talks about the research design, population of the study, sample size and sampling procedures, area of the study, research instruments, data collection, data analysis procedures and ethical considerations. 3.1 Company profile Airtel is a subsidiary of Indian Telecommunication Company, Airtel’s African operations are owned by Bharti Airtel Limited, a leading global telecommunications company with operations in 20 countries across Asia and Africa. The company offers mobile voice and data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national and international long distance services to carriers. Bharti Airtel has over 200 million customers (November 2010) across its operations, including 50 million in Africa. 3.1.1 Vision of Airtel Rwanda By 2015 Airtel will be the most loved brand in the daily lives of African people. Preferred by more customers. Targeted by top talent. Benchmarked by more businesses. 3.1.2 Core values Empowering People to do their best Being Flexible - to adapt to the changing environment and evolving customer needs Making it Happen - by striving to change the status quo, innovate and energize new ideas with a strong passion and entrepreneurial spirit, openness and transparency with an innate 41 desire to do well Creating Positive Impact with a desire to create a meaningful difference in society. 3.1.3 Mission of Airtel Rwanda As one of the world’s top mobile communications companies, Airtel Rwanda aims to connect communities across Africa by providing affordable, relevant and innovative mobile solutions to all, and to produce an overall positive impact on stakeholders and Rwanda society. 3.2 Research design This study was descriptive quantitative and descriptive qualitative because the research was describe the promotion tools used by Airtel Rwanda Ltd .He was also describe the level of customer purchasing decision in Airtel Rwanda Ltd (Amin, 2005). The study was a survey because the researcher collected data from the sample of the population using the questionnaire. The study was a correlational research because the researcher tested the relationship between promotion and customer purchasing decision (Amin, 2005). 3.3 Area of the study This study was conducted at Airtel Rwanda Ltd in Rwanda. 3.4 Population, sample size and sampling techniques 3.4.1 Population (N) The population of this study was made of the 1,116,883 subscribers of Airtel Rwanda Ltd in a whole country ( Rura, 2014). 42 3.4.2 Sample size (n) 𝑁 To determine the sample size the following formula was used 𝑛 = 1+𝑁∗𝑒 2 Where n= sample size N: population e: Significance level which is 0.05 As the population of this is 1,116,883 subscribers the sample size was: 1,116,883 n= 1+1,116,883 ∗0.052=340 respondents. 3.4.3 Sampling procedures Convenient sampling method was used in selecting the respondents of the study. Convenience sampling is a non-probability sampling technique where subjects are selected because of their convenient accessibility and proximity to the researcher. The subjects are selected just because they are easiest to recruit for the study (Mugenda, 2003). 3.5 Data collection 3.5.1 Research Instrument The instrument of the research was self administered questionnaire. The questionnaire contained three sections A, B and C. Section A contained questions related to personal characteristic of the respondents. The section B contained questions related to promotion tools used in Airtel Rwanda Ltd. The section C contained the questions related to Customers purchasing decision. 43 3.5.2 Data collection procedures The researcher got a letter of data collection from the INILAK. This letter helped him to introduce himself to the Airtel Rwanda Ltd. The researcher distributed the questionnaire to the selected respondents. 3.6 Validity of the Instrument Validity is the extent to which the instrument measures what it supposed to measure. Before administering the questionnaires, four experts in research including the supervisor, was selected to assess the relevant questions. Relevant questions are the questions which can help the researcher to test the objectives of the study. Validity was tested using Content Validity Index (CVI).In this researcher relevant questions were 15 out of 18 questions. CVI= 𝑅𝑒𝑙𝑒𝑣𝑎𝑛𝑡 𝑞𝑢𝑒𝑠𝑡𝑖𝑜𝑛𝑠 𝑇𝑜𝑡𝑎𝑙 𝑞𝑢𝑒𝑠𝑡𝑖𝑜𝑛𝑠 The calculated CVI was CVI= 15 𝑟𝑒𝑙𝑒𝑣𝑒𝑛𝑡 𝑞𝑢𝑒𝑠𝑡𝑖𝑜𝑛𝑠 18 𝑡𝑜𝑡𝑎𝑙 𝑞𝑢𝑒𝑠𝑡𝑖𝑜𝑛𝑠 =0.83 Because the calculated C.V.I is greater than 0.60 the instrument was valid (Sounders, 2000). 3.7 Reliability of the Study Reliability ensures the degree of consistency/stability; hence the researcher checked the reliability of the questions in the instrument. To reach this, a pilot study was conducted to detect any major challenge likely to result from the research instrument to be applied. A total number of 10 respondents were used for the pretesting. The researcher used Cronbach’s alpha (α) using SPSS software. 44 Table 3. 1: The Reliability of the Instrument Reliability Statistics Cronbach's Alpha 0.891 Source: Primary data Number of Items 18 The instrument was reliable if the value of Cronbach’s alpha is greater than 0.70 (Amin, 2005). 3.8 Data analysis After a successful collection, data was edited, coded, transcribed and analyzed using SPSS. Objective one and two and there was analyzed using descriptive statistics (frequency and percentage).The objective four was analysed using inferential statistics especially correlation analysis in providing affordable mobile phone services to the rural populations by using different promotion launches like igitego promotion (Gasana,2015).. The results were presented and discussed according to the research objectives (Mugenda, 2003). 3.9 Ethical Considerations The researcher ensured voluntary participation of respondents in the research. For this he motivated the respondents by clearly informing them about the objectives and benefits of the study. The researcher also promised to keep the information given by respondents as for academic purposes only and promise to offer a copy of the completed dissertation. Information from the respondents was kept top secret. Plagiarism was avoided in this research. 45 3.10 Limitations of the study The researcher may face the challenges of some respondents who were not willing to fill the questionnaire because of different causes like lack of interest of the research, pretext of being busy, and fear of giving information which are sensitive to their work. To overcome these limitations the researcher convinced the respondents showing the importance of this research and assuring them that all information they provide should be confidential and treated for academic purpose only. 46 CHAPTER FOUR: DISCUSSION AND INTERPRETATION OF FINDINGS This chapter presents the results of the study and their discussion in line with research objectives. The discussion of the study results is done while comparing present research findings with those of previous and recent-related research studies. Still in discussing the study results, the findings were used to answer the research questions. 4.1: Demographic characteristics of the Respondents The actual research participants included 340 respondents. Descriptive statistics, mainly frequency and percentages, were used to analyze data on the demographic profile of the respondents in terms gender, age, level of education, marital status. The frequency and percentage were meant to establish the most frequently occurring responses and the least frequently occurring responses. 4.1.1Gender Table 4. 1: Gender Distribution Description Male Female Total Frequency 218 122 340 Percentage 64.1 35.9 100 Primary data (2015) Referring to the table 4.1, the findings on the demographic characteristic revealed that male represent 218 (64.1%) and female are 122 (35.9%. This can be explained that a big number of customers of Airtel are male even if female do not have a negligible number. 47 4.1.2 Age Table 4. 2: Age distribution Group Age ( years) Less than 18 18-35 36 -55 56-65, Above 65 Total Primary data (2015) Frequency 34 196 68 27 15 340 Percentage 10.0 57.6 20.0 7.9 4.4 100 With reference to the table 4.2, finding on age found that those in the age bracket of 1835 years were dominant in this study representing 196 (57.6%), followed by those in the age bracket of 36-55 years who were 68(200%), followed by those in the age bracket of less than 18 years who were 34(10%), followed by those in the age bracket of 56-65 years who were 27(7.9%), and lastly those who were above 65 years and above, who were 15 (4.4%). This shows that a big number of customers of Airtel are youth. This is an opportunity of the company because a big number of Rwandan populations are youth. But Airtel should look a method of approaching old people because they are the ones who have enough money. 4.1.3 Marital Status Table 4. 3: Distribution of Marital Status Marital Status Single Married Divorced Total Primary data (2015) Frequency 184 148 8 340 Percentage 54.1 43.5 2.4 100 Referring to the table 4.3, findings on marital status showed that the majority were 184 (54.10%) were single, followed by those who were married 148 (43.50%) followed by 48 those who were divorced 8(2.4%). This indicates that the majority of Airtel customers are single. This implies that the customers of Airtel do not have many responsibilities and they can used more services of telecommunication once they realise that it is affordable 4.1.4 Education level Table 4. 4: Distribution of Education level Level of education Frequency No formal education 15 Percentage 4.4 Primary education Secondary University level Total Primary data (2015) 199 83 43 340 58.5 24.4 12.6 100 Referring to the table 4.4, findings on education showed that a big number of respondents had attained primary level 199 (58.5%), thus dominating the study, followed by those who had secondary education 83(24.40%), followed by those who university level 43 (12.60%) and lastly those with no formal education 15 (4.40%). This indicates that most of the Airtel customers have low education (primary level). This is in line with the at least the customers of Airtel can read and write. For this they can understand many services provided by the company 4.2 Using promotion tools The first objective of the study was to find out the promotion tools which are the source of purchasing information for customers. For this objective the researcher analyzed the use of advertising and publicity, Sales promotion, Personal selling, Public relations and direct marketing as promotion tools. This objective was analyzed using the frequency and percentage. 49 4.2.1 The use of advertising and publicity To test the use of advertisement and publicity usage in Airtel the researcher tested the usage of the most used medium of advertisement and publicity for many companies, including Radio, Television, Newspapers, Bill board and Internet. Findings are summarised in the table 4.5. Table 4. 5 : Advertising medium most used by Airtel Rwanda Medium source of information Frequency Radio 204 Television 53 Newspapers 10 Bill board 59 Internet 14 Total 340 Source: Primary data (2015) Percentage 60.0 15.6 2.9 17.4 4.1 100.0 Referring to the table 4.5, findings on adverting and publicity, radio is the most source of information and it has been used by 204 (60%). It is followed by Billboards with 59 (17.4%) followed Television with 53(15.6%), followed by internet with 14(4.1%), and the last was Newspapers with 10(2.9%). Direct mail has not been used as a source of information. These findings showed that Airtel should concentrate investing in advertisement using radio and Billboard because they are the most source of information in advertisement and publicity. 4.2.2 Sales promotion About sales promotion, the researcher tested the types of sales promotion mostly used by Airtel. He tested also the most factors which influenced the customers of Airtel to use its products and services. Findings are summarized in the table 4.6 50 Table 4. 6: The most types of sales promotion used by Airtel Rwanda Ltd Items Scale Frequency The most types of sales Rebate, 88 promotion used by Airtel Discounts, 107 Rwanda Ltd Refunds 36 Instant Draws and Assigned 45 Gifts Lucky Draw 64 Factors which has influenced customers to purchase Airtel products and services Percentage 25.9 31.5 10.6 13.2 18.8 Total Affordable price Availability 340 187 21 100.0 55.0 6.2 Superior customer care Reliable connectivity Total 32 100 340 9.4 29.4 100.0 Source: Primary data (2015) Referring to the table 4.6 findings about the type of sales promotion discount showed that the most appreciated by 107 (31%) followed by rebate, with 88 (25.9%) followed by lucky Draw with 64(18.8%), followed by Instant draws and Assigned Gifts with 45(13.2%) and the last was refunds with 36(10.6%). Considering these findings, Airtel should continue using discount and rebate because they are the types of sales promotion that are more appreciated by customers. About factors which has influenced customers to purchase Airtel products and services Findings showed that affordable price was the most factor which influenced customers to purchase Airtel products and services with187 (55%) followed by Reliable connectivity with 100(29.4%) followed by superior customer care with 32(9.4%) and the last was availability with 21(6.2%).From these findings Airtel should continue selling its product at affordable price because this factor is the most influenced customers to buy. It should increase also availability of its products and services because findings showed that this variable is the least among others. 51 4.2.3 Personal selling To test personal selling as a promotion tool, the researcher used four questions that the respondents should answer by yes or no. Findings are summarized in the table 4.7 Table 4. 7: Perception of customers towards salesmen Items Scale The salesmen of Airtel have good health Yes and pleasing personality No Total The salesmen of Airtel always have a Yes cheerful smile on their face. No Total The salesmen of Airtel have good Yes manners, courtesy in dealing with No customers. Total The Salesmen of Airtel Rwanda Ltd have Yes the basic qualities like empathy and ego No drive Total Source: Primary data (2015) Frequency 46 294 340 56 284 340 130 Percentage 13.5 86.5 100 16.5 83.5 100 38.2 210 61.8 100 22.4 77.6 100 340 76 264 340 Referring to the table 4.7 findings showed that 294 (86.5%) of the respondents said no to the statement saying that the salesmen of Airtel have good health and pleasing personality and only 46 (13.5%) accepted the statement. 284 (83.5%) of the respondents said no to the statement saying that the salesmen of Airtel always have a cheerful smile on their face. only 56 (16.5%) accepted the statement. 210 (61.8%) of the respondents said no to the statement saying that the salesmen of Airtel have good manners, courtesy in dealing with customers and 130 (38.2%) accepted the statement. 264 (77.6%) of the respondents said no to the statement saying that the Salesmen of Airtel Rwanda Ltd have the basic qualities like empathy and ego drive and 76 (22.4%) said yes to the statement. 52 These findings showed personal selling are not very well practiced because all indicators of personal selling have been refuted by the majority of the respondents. This implies that Airtel should come back on this practice by making training to its agents and employees on how they should behave in front of the customers. 4.2.4 Public relations To analyze public relation at Airtel Rwanda the researcher used three statements containing the most practices of many companies for constructing a good relation to with the public. Findings are summarised in the table 4.8. Table 4. 8: Constructing public relation Items Scale The activities involved in Population welfare Public relations use by programmes Airtel Charity shows Training schools and helping schools to perform Hospitals None Total Leaders of Airtel Rwanda Never Ltd use Speeches which Seldom influence positively Often various stakeholders. All the time Airtel Rwanda Ltd organize press conferences, multimedia presentation, matches, stage shows etc about is product and services Frequency 177 Percentage 52.1 7 29 2.1 8.5 10 117 340 153 165 13 2.9 34.4 100 45.0 48.5 3.8 9 2.6 Total Never 340 150 100 44.1 Seldom 163 47.9 Often 11 3.2 All the time Total 16 340 4.7 100 Source: Primary data (2015) 53 Referring to the table 4.8, findings in constructing Public relations showed that the most known activity is Population welfare programmes, known by 177 (52.1%) followed by Training and helping schools to perform, with 29 (8.5%), followed by hospital with 10(2.9%) and the last was Charity shows with 7(2.1%). 117(34.4%) said that they don’t know any activity in relation to construct public relation. Considering these findings, Airtel should increase and extend the activities of public relation. 117(34.4%) of the respondents who do not know any activity of the Airtel in constructing public relation is not negligible. They have to be also approached. About using speeches which influence positively various stakeholders, findings showed that 153(45%) did not hear any speech, 165(48.5%) rarely heard the speech, 13(3.8%) often heard the speech and 9 (2.6%), all the time heard the speech. From these findings it is shown that a big number of customers do not know the speech of Airtel staff in building public relationship. For this the management of Airtel should prepare speeches explaining the potentiality of using Airtel product services. About organizing press conferences, multimedia presentation, matches, stage shows, finding showed that 150(44.1%) never know any press conferences multimedia presentation, matches, stage shows about Airtel , 163(47.9%) rarely know conferences multimedia presentation, matches, stage shows about Airtel press ,11(3.2%) confirmed that often Airtel use press conferences multimedia presentation, matches, stage shows about Airtel and 16 (4.7%), confirmed that all the time there are press conferences multimedia presentation, matches, stage shows about Airtel. This is a very big problem because according to the finding, customers of Airtel do not know press conferences multimedia presentation, matches, stage shows used by Airtel for 54 constructing Public relation. The management should take correction major in order to increase a good reputation of the company. 4.2.5 Direct marketing To analyse the use of direct marketing as a promotion tool, the researcher assessed the usage of Postal mail, Telemarketing, Direct e-mail marketing and others. Findings are summarised in the table 4.9. Table 4. 9: Tools of Direct marketing which are mostly used by Airtel Frequency Telemarketing 92 None is used 248 Total 340 Source: Primary data (2015) Percentage 27.1 72.9 100.0 Referring to the table 4.9, findings on Direct marketing showed that only 92(27.1%) of the respondents know Telemarketing and other 248 (72.9%) do not know any. others like Postal mail and Direct e-mail marketing are not known at Airtel. The company should try to use other techniques of direct marketing and extends the existing one in order to approach many customers. 4.3 Customer purchasing decision in Airtel Rwanda Ltd To analyse customer purchasing decision at Airtel Rwanda Ltd, the researcher used the indicators like attraction of new customers, Increase in sales, Customer loyalty and Brand switching. 55 4.3.1 Attraction of new customers To analyze attraction of new customers, the researcher analyzed the increase of subscription per year, and the number of lines the subscriber of Airtel the subscriber has. Findings are summarised in the table 4.10. Table 4. 10: New customer’s attraction Items Scale Year of subscription to Airtel 2012 2013 2014 2015 Total The number of subscription to Airtel only mobile telecommunication (line) do Airtel and MTN you have Airtel and Tigo Airtel Tigo and MTN Total Frequency 44 250 26 20 340 40 198 67 Percentage 12.9 73.5 7.6 5.9 100 11.8 58.2 19.7 35 10.3 340 100 Source: Primary data (2015) With reference to the table 4.10, findings from the respondents showed that a big number of Airtel customers has been subscribed in 2013 with 250 (73.5%), followed by 2012 with 44 (12.9%), followed by 2014 with 26 (7.6%) and 2015 with 20 (5.9%) customers. This shows that from 2012 which is the year of starting the number of subscription was increasing but from 2013 to 2015 the subscription was reducing. This shows that Airtel could have a problem of losing customers. Strong majors are necessary to increase the numbers of subscribers. Otherwise the company will face big problems. There is not any company that can perform if it doesn’t have customers. 56 4.3.2Increase in sales To test this variable, the researcher tested the most line used by the customers and the level of increase of the money spends in using Airtel services. Findings are summarized in the table 4.11. Table 4. 11: Level of increase in the sales Items Scale Which mobile telecommunication Airtel only subscription (line) do you often use during MTN your communication? Tigo Total Does money you spend by using Airtel Yes services increases with the time? No Total Frequency 41 229 70 340 114 226 Percentage 12.1 67.4 20.6 100 33.5 66.5 340 100 Source: Primary data (2015) With reference to the table 4.11, findings showed that a big number of Airtel customers use mostly MTN 229 (67.4%), followed by those who mostly use Tigo 70(20.6%), only 241 (12.1%) mostly use Airtel. This showed that even if Airtel has many subscribers a big number of them use other lines in their communication. Findings also showed that only 114(33.5%) have increased the money they spend in using Airtel services and 226 (66.5%) did not. These findings show how big Airtel is facing a big problem of competition. 4.3.3 Customer loyalty To test this variable, the researcher used two statements to the reputation of the company and the behaviour of the customer in the recommending the company. Findings are summarized in the table 4.12. 57 Table 4. 12: Level of customer loyalty of Airtel Items Scale Airtel has a good reputation among its customers customer recommend Airtel product and services their friends and relatives Yes No Total Frequency 91 249 340 Percentage 26.8 73.2 100 Never Seldom Often All the time Total 106 198 26 10 340 31.2 58.2 7.6 2.9 100 Source: Primary data (2015) With reference to the table 4.12, finding showed that only 91 (26.8%), confirmed that Airtel has a good reputation among its customers and 249(73.2%), showed Airtel doesn’t, 106 (31.2%) never recommend Airtel to their friends and relatives, 106 (58.2%) rarely recommend Airtel products, 26 (7.6%) often recommend Airtel products and services and 10 (2.9%) recommend Airtel products all the time. This showed that a big number of subscribers of Airtel are not loyal to the company. 4.3.4 Brand switching To test brand switching, the researcher used a statement in order to know a proportion of the customers who have replaced other lines services with Airtel services. Findings are summarized in the table 4.13. Table 4. 13: Brand switching Items Scale Have you ever stopped using other lines and replace them by Airtel line Source: Primary data (2015) 58 Yes No Total Frequency 105 235 340 Percentage 30.9 69.1 100.0 As it is found in the table 4.13, only 105 (30.9%), have replaced other line with Airtel and 235(69.1%), have never replaced Airtel .This show many customer of Airtel continue using other lines despite promotion tools used the Airtel. It shows big problems of competition 4.4. Relationship between Promotion and customer purchasing decision in Airtel Rwanda Ltd The objective three was to find out how promotion campaign has impacted on customers’ purchasing decision to the Airtel products and services. To test this relationship the researcher used correlation analysis especially spearman's rho correlation. Findings are summarized in the table 4.14. Table 4. 14: Spearman's rho correlation between Promotion and customer purchasing decision Customer purchasing decision Values Indicators Promotion Spearman's rho Correlation Coefficient P- Value N *. Correlation is significant at the 0.05 level (2-tailed). -0.137* 0.011 340 Source: Primary data (2015) With reference to the table 4.14, Spearman's rho coefficient (rho) was -0.137 with the pvalue (0.011). According to Sounders (2000), when rho is more than 0 there is a positive relationship between independent and dependent variables. This means as the value of independent variable increases, also the value of dependent variable increases and vice versa. When the (rho) is less than 0, there is a negative relationship between the variables which means that if the value of independent variable increases the value of dependent variable decreases and vice versa. Buglear (2005) has given interval showing the level of relationship. He said when rho is 0.9 to 1.00 the relationship is strong. When rho ranges 59 from 0.6 to 0.89, the relationship is fair / moderate. When rho ranges from 0.3 to 0.59 the relationship is weak. When (rho) ranges from 0 to 0.29 the relationship is negligible. The author continues saying that the relationship is significant when the P-value is less than the level of significance of the study. Basing on the above theories there is a negative negligible relationship between the two variables. Relationship between promotion and customer purchasing decision at Airtel was negligible because the (rho) was -0.137 the value which is between 0 to -.0.29. Because p-value (0.011) is less than 0.05 level of significance, the relationship is significant. The negative relationship between promotion and purchasing decision explains that the methods of promotion that Airtel is using are affecting negatively purchasing decision of customers. This is a big challenge because generally promotion affects positively purchasing decision. Therefore the management of the company should try to modify the ways they are promoting its products and services, because if they do not change they are going to continue investing in promotion while the results are negative. 4.5 Testing of hypothesis From findings in the table 14 the null hypothesis was rejected and the alternative hypothesis was accepted. Therefore there is a significant relationship between the use of promotion and customer purchasing decision in Airtel Rwanda Ltd. This relationship was negative. 60 CHAPTER FIVE: CONCLUSION AND RECOMMENDATION 5.1 Summary of the major findings Findings showed revealed that the highest percentage of the respondents were male (64.1%), the highest percentage of the respondents were in the age range of 18-35 years (57.6%), the majority of the respondents were single (54.10%), the big number of respondents had attained primary level (58.5%). Findings about advertising and publicity showed that radio is the most source of information and it has been used by 204 (60%). It is followed by Billboards with 59 (17.4%) and Television with 53(15.6%). Finding on sales promotion showed that discount is the most appreciated by 107 (31%) followed by rebate, with 88 (25.9%) followed by lucky Draw with 64(18.8%). Affordable price was the most factor which influenced customers to purchase Airtel products and services with187 (55%) followed by Reliable connectivity with 100(29.4%). Finding about Personal selling, 294 (86.5%) of the respondents said that the salesmen of Airtel do not have good health and pleasing personality.284 (83.5%) of the respondents said that the the salesmen of Airtel do not always have a cheerful smile on their face. 210 (61.8%) of the respondents said that the salesmen of Airtel do not have good manners, courtesy in dealing with customers . 264 (77.6%) of the respondents said that the Salesmen of Airtel Rwanda Ltd do not have the basic qualities like empathy and ego drive . Finding on Public relations showed that the most known activity is Population welfare programmes, known by 177 (52.1%) followed by Training schools and helping schools to 61 perform , with 29 (8.5%). findings showed that 13(3.8%) often heard the speech from the management influencing positively various stakeholders, and 9 (2.6%), all the time heard the speech. About direct marketing, findings showed Airtel use only Telemarketing and it known by 92(27.1%) of the respondents know and other 248 (72.9%) do not know any method of direct marketing. To analyse customer purchasing decision the researcher used the indicators like attraction of new customers, increase in sales, Customer loyalty and Brand switching. Findings on attraction of new customers, Airtel attracted more customers in 2013 with 250 (73.5%). About the increase in sales, findings showed that only 41 (12.1%) of Airtel subscribers mostly use Airtel line. Others use other lines like MTN and TIGO. Findings on the customer loyalty, showed that only 91 (26.8%), confirmed that Airtel has a good reputation among them. 106 (31.2%) never recommend Airtel to their friends and relatives and 106 (58.2%) rarely recommend Airtel products. Findings on brand switching showed that only 105 (30.9%), have replaced other line with Airtel and 235 (69.1%). The Spearman's rho correlation (-0.137) showed that there is a negative negligible relationship between Promotion used by Airtel and customer purchasing decision. This relationship was significant because the p-value (0.011) was less than the level of significance (0.05).From these finding the researcher can conclude that all objectives have been verified. 62 5.2 Conclusion The study was about the role of promotion in influencing customer purchasing decision in telecommunication companies in Rwanda. The research addressed the problems that Airtel is suffering including the lowest market share of 15% compared to other competitors in 2014, a low population coverage 45%. The study analyzed four objectives. The first objective was to find out the promotion tools which are the source of purchasing information for customers. The second was to find out which medium that has been more effective as a source of product information. The third was to analyze the situation of customer purchasing decision in Airtel Rwanda Ltd. The fourth was to find out how promotion campaign has impacted on customers’ purchasing decision to the Airtel products and services. Findings showed that radio is the most source of information; discount is the most appreciated, affordable price was the most factors which influenced customers to purchase Airtel products salesmen of Airtel do not have good health and pleasing personality. Airtel does not have good reputation among its customers. Many customers rarely recommend Airtel products. Only 105 (30.9%), have replaced other line with Airtel and there was a negative negligible relationship between Promotion used by Airtel and customer purchasing decision. In general the objective of the study has been reached. 5.3 Recommendations From these findings the researcher has formulated the following recommendation: 63 To the customers of Airtel The customers should try to use the telecommunication company product and services because they are useful and easily reached To Airtel management The management of Airtel should increase advertising on radio and Billoards because findings showed that they are the most source of information to many customers. They should train their employees of customers care because customers do not appreciate their behaviours. They should increase the activities which help the company to increase it good public image like diversified social activities and speech explaining its activities. 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Please, kindly assist the researcher in filling the questionnaire knowing that your information will be confidential and used only for academic purpose. Think you for your cooperation. Section A: Identification of Respondents Tick the correspondent point 1. Age: Less than 18 18-35, 36 -55 56-65 above 65 2. Sex: Male Female 3. Marital Status: Single , Married , Divorced 4. Education Level: No formal education Secondary , University level 67 , Primary education Section B: Promotion Please, tick your appropriate answer. Advertising and publicity Q1. Which of the following medium has been the most source of information about Airtel products to you? a. Radio b. Television c. Newspapers d. Bill board e. Direct mail f. Internet Sales promotion Q2.Among the list below shows the types of sales promotion Airtel Rwanda Ltd mostly uses: 1.Rebate, 2.Discounts, 3.Refunds, 4.Premiums or Gifts/or Product Combination,5. Quantity Deals, 6.Samples, 7.Contests 8.Instant Draws and Assigned Gifts,9.Lucky Draw 10.Usable 11.Benefits 12.Full Finance @ 0%, 13.Packaged Premium 14. Container Premium. Q3.Please rank the following factors which has influenced you to purchase Airtel products and services with 1 indicating the most influential factor. a) Affordable price of Airtel product and service b) Availability c) Superior customer care d) Reliable connectivity 68 Personal selling Q4.The salesmen of Airtel have good health and pleasing personality. 1.Yes 2.No Q5. The salesmen of Airtel always have a cheerful smile on their face. 1.Yes 2.No Q6. The salesmen of Airtel have good manners, courtesy in dealing with customers. 1.Yes 2.No Q7. The Salesmen of Airtel Rwanda Ltd have the basic qualities like empathy and ego drive. 1.Yes 2.No Public relations Q8. What are the activities involved in Public relations 1. Population welfare programmes helping schools to perform 2. Charity shows 4. Hospitals 5. Others 3. Training schools and 6. None Q9. Leaders of Airtel Rwanda Ltd use Speeches which influence positively various stakeholders. 1.Never 2. Seldom 3. Often 4. All the time Q10. Leaders of Airtel Rwanda Ltd organize press conferences, multimedia presentation, matches, stage shows etc about is product and services 1.Never 2. Seldom 3. Often 69 4. All the time Direct marketing Q11.Which tools of Direct marketing does Airtel mostly used to give you the information 1.Postal mail 4.Others 2.Telemarketing 3.Direct e-mail marketing 5. None is used Section C: Customers purchasing decision Please, tick the appropriate answer. Attraction of new customers Q12.When have you been subscribed to Airtel? 1. In 2012 2.In 2013 3.In 2014 4.In 2015 Q13.How many subscription of mobile telecommunication (line) do you have ? a)I have subscribed to Airtel only b.I have Airtel and MTN c) I have Airtel and Tigo d. I have Airtel and Tigo and MTN Increase in sales Q14. Which mobile telecommunication subscription ( line) do you often use during your communication? a. I often use Airtel only b. I often use MTN c) I often use Tigo 70 Q15. Does money you spend by using Airtel increases with the time? 1.Yes 2.No Customer loyalty Q16.Do you attest that Airtel has a good reputation among its customers. 1.Yes 2.No Q17. As a customer of Airtel, do you recommend its products or services to your friends and relatives? 1.Never 2. Seldom 3. Often 4. All the time Brand switching Q18. Have you ever been stopped using other lines to replace them by Airtel line? 1.Yes 2.No 71