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.

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