THE EFFECT OF MARKETING STRATEGIES ON
PRODUCT LIFE CYCLE
(A
CASE STUDY OF MTN NIGERIA KADUNA)
ABSTRACT
Marketing
strategies have been the effective tool available for organization in achieving
the marketing goals and objectives. It serves as a determinant for a product
movement along the product life cycle curve (Product Life Cycle ).
Telecommunication industries is not left out, an attempts is made to evaluate
the extend to which the effect of marketing strategies on a product life cycle
is applied by MTN Nigeria Kaduna mobile phone service providers. The method
used for data collection was structured questionnaire. The randomly selected
size of (20) out of a estimated population of twenty five (25) management staff
and eighty out of a population of one hundred customer/distributors were used
for the research work. The data collected were tabulated, analyzed and
interpreted using simple percentage method for easy comprehension. Hypothesis
was developed and put into test, thus: Ho: Application of marketing
strategies of MTN Nigeria does not have any significant effect on the product
life cycle. H1: Application of marketing strategies of MTN Nigeria
have a significant effect on the product life cycle. After the proof of the
above hypothesis, the alternate hypothesis was accepted, while the null
hypothesis was rejected. The study conclusively found that MTN Nigeria (Kaduna)
applies marketing strategies in its marketing operation while it observe its
product life cycle curve, even though the effectiveness of the marketing
strategies have not been fully maximized due largely to some constraint that
come from both the internal and the external factors. It is thus recommended
that for the company to improve on its current marketing share through the
application of marketing strategies it has to urgently improve the quality of
its service to the subscribers.
TABLE OF CONTENTS
Title Page – – – – – – – – – – i
Declaration – – – – – – – – – ii
Approval Page – – – – – – – – – iii
Dedication – – – – – – – – – iv
Acknowledgement – – – – – – – – v
Abstract – – – – – – – – – – vi
Table of contents – – – – – – – – vii
CHAPTER ONE
1.0
Introduction – – – – – – – – 1
1.1 Statement of General Problems
– – – – 2
1.2
Historical
Background of Subject Matter – – – 4
1.3
Objective
of the Study – – – – – – 6
1.4
Scope
of the Study – – – – – – – 8
1.5
Limitation
of the Study – – – – – – 9
1.6
Definition
of Terms – – – – – – – 10
CHAPTER TWO
2.0
Literature
Review – – – – – – – 13
2.1 The Concept of product life cycle – – – – 13
2.2
The
Product Concept – – – – – – – 14
2.3
New
product Development – – – – – 16
2.4
Product
Life Cycle – – – – – – – 23
2.5
Selecting
Marketing – – – – – – 27
2.6
Marketing
of product over their life cycle – – – 34
2.7
Marketing
strategies – – – – – – – 37
CHAPTER THREE: Research method
3.0
Introduction – – – – – – – – 48
3.1 Research method used – – – – – – 48
3.2
Research
population and Sample size – – – 49
3.3
Sample
size and procedure – – – – – 50
3.4
Justification
for the method used – – – – 50
3.5
Statistical
Techniques used – – – – – 51
3.6
Formulation
of Hypothesis
CHAPTER FOUR
4.0
Introduction – – – – – – – – 53
4.1 Presentation and Analysis
of Staff Questionnaire – 53
4.2
Presentation and Analysis of Customers/Distributors
Questionnaire – – – – – – – – 59
CHAPTER FIVE
5.0
Discussion
of results – – – – – – – 65
5.1 Discussion of findings – – – – – – 65
5.2
Proof
of Hypothesis – – – – – – – 68
CHAPTER SIX
6.0
Summary
of findings, Conclusion and Recommendations 70
6.1 Summary of findings – – – – – – – 72
6.2
Conclusion – – – – – – – – 73
6.3
Recommendations
– – – – – – – 74
Bibliography – – – – – – – – 76
Appendix – – – – – – – – – 78
CHAPTER ONE
1.0 INTRODUCTION
The effect of
marketing strategy on Product Life Cycle (Plc) is adopted in order to forecast
the activities involving the strategy in the stages in the Product Life Cycle
(Plc).
Its successful
accomplishment requires analysis of the data from the past decision in the
present, and evaluation of the future.
However, the
company’s position and differentiation strategy must change the product, market
and competitors changes over the Product Life Cycle (Plc).
To say that a product
has Life Cycle (LC) is to assert four things:
1.
Product
have a limited life
2.
A
product sales pass through a distinct stage, each posing different challenges,
opportunities and problem to the seller.
3.
Profit
rise and fall at different stages of the Product Life Cycle (Plc).
4.
Product
requires different marketing financial, manufacturing, purchasing and human
resource strategy in each Life Cycle (LC) stage.
Most Product
Life Cycle (Plc) curves are portrayed as lock-shaped. This curve is typically divided into four
stages: Introduction, growth, maturity
and decline.
In the
functional units of the telecommunication industry, the responsibility of
ensuring that the product stayed long in the market depends on the efficiency
of the marketing unit in the firm; which will also look at the ways at which
product are developed i.e. the right product for a target market that will come
in either physical goods or service or a blend of both; though reaching the
target market, which is concerned with getting the right product to the target
market place as a product is not much good to the customer it is not available
when and where it is wanted.
1.1 STATEMENT
OF GENERAL PROBLEMS
The major
problem of product life cycle has to do with inefficiency of the executive,
which make it difficult to achieve success in the various stages of the LIFE
CYCLE curve.
So many
products have died before they were being lunched into the market because of
the poor introduction of marketing strategies.
Therefore, a lot of companies are into debt to remain in operation.
Producers are
no longer interested in marketing profitability or profitable sales through
satisfying customer’s needs, but they are only interested on marketing high
profit which consequently has lead to inflection as one of the major problems
facing product survival within the business world.
Irregularity
like bribery an corruption practices, blackmailing so as to gain large market
share between companies and competitors, companies no longer use quality and
efficient service delivery to gain large market, but instead they use obsolete
equipment in providing services which result into poor service delivered at an
exorbitant price all in the bide to make high profit, therefore, this project
will look at the effective way of applying the marketing strategy to gain good
and healthy result on the cycle of a product, and also it will highlight the
impact the concept has made in telecommunication world especially in MTN
service in Nigeria.
1.2 THE HISTORICAL BACKGROUND OF THE SUBJECT MATTER
MTN Nigeria is
part of the MTN group, Africa’s leading cellular telecommunications
company. On May 16, 2001, MTN became the
first GSM network to make a call following the globally lauded Nigeria GSM
auction conducted by Nigerian communication commission earlier in the
year. Therefore the company launched
full commercial operations beginning with Lagos, Abuja and Port Harcourt.
MTN paid $285m
for one of the four GSM licenses in Nigeria in January 2001 to date, in excess
of US $1.8 billion has been invested in building telecommunication
infrastructures in Nigeria.
Since launch
in August 2001 MTN has steadily deployed its services across Nigeria. It now provide service in more than 223
cities and towns, more than 10,000 villages and communities and a growing
number of high-ways across the country, spanning the 36 states of Nigeria and
the Federal Capital Territory, Abuja.
Many of these villages and communities are being connected to the world
communication for the first time ever.
The company is
digital microwave transmission backbone, the 3,400 kilometre Y’elloBahn was
commissioned in January, 2003 and is reported to be most extensive digital
microwave transmission infrastructure in all Africa. The Y’elloBahn has significantly helped to
enhance call quality on MTN network.
The company
subsists on the core brand values of leadership, relationship, integrity,
innovation and “can-do”. It prides
itself on its ability to make the impossible, possible connecting people with
friends, family and opportunities.
MTN Nigeria
has been expanding its. Network capacity
to include the numbering with the prefix 0806 to 070, marketing the MTN the
first GSM network in Nigeria to have adopt an additional numbering system
having exhausted its initial subscriber numbering range – 0803.
In its resolve
to enhance quality customer service, MTN Nigeria has also introduced a
self-help foll-free 181 and 180 customer care line through which subscriber can
resolve their frequently asked question free of charge.
MNT’s
overriding mission is to be a catalyst for Nigeria economic growth and
development, helping to unleash Nigeria’s strong developmental potential not
only through the provision of world class communications but also through
innovative and sustainable corporate social responsibility initiatives.
1.3 OBJECTIVES
OF THE STUDY
The major
objective of this research is to appraise the effectiveness of marketing
strategies on the various stages of product life cycle. This will also look at how the various stages
can be expantiated to exploit the dynamism of the life cycle through aligning
the stages and connecting it to marketing strategies to reap out the tremendous
result by effectively studying he MTN service in Nigeria Kaduna.
This study
will be geared towards stressing the importance of effective application of
marketing strategies to product life cycle.
It effect on the performance of telecommunication sectors, especially
the one on study. Also such as its
contributions to management decision making to achieve their organizational
goals and objectives. In doing this, it
is necessary to identify the importance of marketing strategies on product life
cycle. Its effects on the performance of
organization activity. Also, such as
contributing to the management of MTN would be highlighted. This study is also expected to widen the
knowledge of both the researcher and the organization ( MTN) on how marketing
strategies is to be handled to reflect on the stages of the product life cycle. Regine from the stage of introduction when
the product is first launched. This
level takes time and sales growth is apt to be slow. The growth stage, in which sales will start
climbing quickly, the maturity stage.
This stage
poses challenges to marketing management.
Most products are at maturity stage of life cycle and therefore most of
the marketing management deals with the mature product to the decline
stage. Sale decline for many reasons,
including technological advances shift in consumer tastes and increased
competition. As sales and profit
declines.
Finally, at
each stage of product life cycle base on this study, marketers should endeavor
to manipulate the marketing mix well enough so as to be able to attain maximum,
profitable sales in other that return on investment should out-grows cost and
various elements utilized during production, it will also serve as reference in
the future for the individual or students undertaken similar write up.
1.4 SCOPE
OF THE STUDY
The scope of
this study – product life – cycle cover virtually all the four stages of
product life cycle which include; introduction, growth, maturity and
decline. Every product manufactured for
market consumption don’t exist in the market forever, products just like human
beings live a life cycle. They come into
existence at a point in time passes through various stages of life and
eventually phases out.
At
introduction period of the stages, there is slow growth as the product is newly
introduced into the market profit at this stage is almost non-existence because
of the heavy expenses required.
Growth is a
period of rapid market acceptance and substantial profit improvement where the
sales increase along with profit. At
maturity stage, there is slow down in the sales because the product has
achieved acceptance by most of the potential buyers and the product also face a
lot of competition.
Decline is the
stage or the last stages of product life cycle before the phase out stage
possibly. At this stage that sales
continue a downward drift and profit code down toward zero point. It also at this stage that market will decide
when or not to abandon a product.
In essence,
the product life cycle defers according to the type of product whatever the
span of life cycle, the implication for marketers is of equal importance that
is the appropriate strategies are embarked on for each stage etc. irrespective of the difference in the life
cycle of the products, the life cycle of the product lies within the above
mentioned four stages.
1.5 LIMITATION OF THE STUDY
The information contained there
in is limited to available date obtained from primary and secondary sources,
however some difficulties were encountered as several information that are
significant to the research are not available or out of reach due to lack of
adequate time and resources. So the analysis is only limited to the information
made available.
1.6 DEFINITION
OF TERMS
Product Life
Cycle : This means product life cycle.
MTN: This mean mobile
telecommunication network.
Product: This is anything that is viewed as
capable of satisfying a need or want or set of tangible and intangible
attribute including packaging, colour, price, manufacturer prestige, retailer
prestige and manufacturer and retailer service which the buyer may accept as
offering want, a satisfaction.
Marketing: This is any human activities that is
directed at satisfying need and want through exchange process.
Market: This is a set of all potential
buyers and seller of a product in a particular market.
Market Segmentation: This is a process of talking the total
heterogeneous market for a product and dividing it into several submarkets or
segment each of which tends to be homogeneous in all significant aspect.
Marketing
research: This is a systematic gathering,
recording, analyzing and interpreting facts for purpose of arriving at a market
decision.
Marketing
concept: This involve concentrating of
all marketing effort toward satisfying consumer at a point.
Marketing Mix: This is the term used in describing the
combination of the four input that constitute the core of the marketing unit or
department.
Marketing
system: This is the product, the price
structure, the promotional activity and distribution system.
Life cycle: This is the existence stages of a
particular thing.
Product line: A group of product within a product class
that is closely related either because they function in similar manner as old
to the same customer group, and market through the same type of outlet or falls
within a given price range.
New product: Any product which is perceived to be
completely new findings, modified product and old product in new market.
Market
environment: It consist of all
factors and forces that influence the marketing function of an
organization. It includes micro or
controllable environment (market mix) and macro or uncontrollable environment
(external variable)
Obsolete: Out of fashion.
LIFE CYCLE: Life cycle.