Full Project – DIAGNOSING CORPORATE RESPONSES TO CONSUMERISM IN NIGERIA

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CHAPTER 1

INTRODUCTION

• BACKGROUND OF THE STUDY

Several studies have been gaining attention in marketing as concepts and tools for understanding consumer’s behaviour and remedy required. This trend seems linked to the fact that offering more value to consumers has become an increasingly necessary part of overall marketing programmes. A societal emerging trend is the concept of consumerism.

Consumers in Nigeria today are becoming more and more educated and well-informed. They need improved and sophisticated products as well as an enlarged assortments of products to choose from. They equally require reparations to be paid for the use of their environments and natural resources therefrom, as witnessed in the Niger-Delta oil rich area of the country. Competition has tremendously increased especially as there is a free market economy typical of the Nigerian telecommunications industry. The consumers therefore, now mobilize themselves into movements in order to actualize their rights and freedoms. Although according to Osuala (1988: 20), “the Nigerian consumer enjoys the freedom to spend, the freedom of time and the freedom to move around,” but they feel a sense of neglect, unfair-play, distrust, absence of confidence in business firms and a measure of seeming illegalities in the conduct of official business transactions. Their desires therefore to always come together and fight a common course always remain elusive but yet imperative. This desire of coming together into an organized movement of citizens as consumers or groups to achieve consumer rights and protection is termed consumerism, (Nwokoye 2004:299). In Nigerian telecommunications industry, the consumer parliament organized by the Nigerian Communications Commission has been a strong force advancing the course of consumers and the effort seems to pay off.

Consumerism is a social movement spreading throughout the world. It involves the action of individuals, government and its agencies, and organizations responding to consumer complaints and to enhance their rights. Anyanwu (2000:84) says consumerism is a social movement to increase the powers and rights of buyers/consumers. He observes that through such movements, a company’s product may be discredited and declared unfit for human consumption. Such social forces are a concern to companies which strive to produce and market their products in line with consumer expectations. Therefore, given the existence of such forces, management of companies are conscious of not being associated with misleading advertisements, poor product performance, hidden financial charges and inadequate product information.

In Nigeria, the trend in marketing activities has continued to stimulate challenging societal issues thereby forcing an increasing need for business firms to plan response programmes. In this regard, this research examines these corporate actions, which Zain Nigeria (Telecommunications Network), imbibe to handle the consumers dissatisfaction. There are several societal issues but this research will focus specifically on consumerism and its influence on corporate organization. The study will contribute objectively to the general industry needed actions. Also, in the study, effort is made to indicate the inherent difficulties in designing and implementing these consumer-oriented programmes, and to provide guidelines to the company and others who desire to implement such consumer programmes. In the course of the study, intermittent references will be made of relevant theories associated with consumerism, while at the same time, it proposes to extend on previous researches conducted within this field to both logically and empirically demonstrate effect of consumerism on corporate programmes.

• STATEMENT OF THE PROBLEM

Continuous manifestations of consumerism pressures resulted in the  increase in companies adopting one approach and programme or the other that are workable to address consumers dissatisfaction. Although evidences on the success of these efforts are limited and often lack adequate resources but there are other broad problems, which arise from various angles.

Zain Nigeria is one of the four major GSM operators in Nigeria. The company’s products include: Unity Tariff packages – Zain 30, simply special, simply smooth and simply smart. Trutalk and trutext packages; Zain Joli – offers the choice of four distinct options: Joli People, Joli Padi, Joli Yans and Joli Yonda; Zain StepUP plan. Other value-added services include: Emergency 112, Zain Crisis Centre (C199), Call Centre 111, PUK Retrieval, GPRs, WAP (Mobile Internet Access), SMS, SMS Business Directory, CNN Alerts, Local Flight Information, MMS, Mobile banking, Conference Calling, International Roaming, Caller Back Ring Tone, Pay4Me, Me2U, Call Me Back, Voice Mail, One Network, Mobile Top Up, E-pins and Zain Extras, (Celtel Journal, 2006:20, Zain Journal, 2008:68 and Daily Sun, 2009:56).

A critical look at most of the products mentioned above show that some exist at one time over the other but with one or more advantages over another. An indication of the existence of corporate responses is so far as the various products are introduced to handle consumerism. How has the attempt at introducing these response programmes address consumer’s needs and wants? This question constitutes the major problem to be addressed in the study.

1.3    PURPOSE OF THE STUDY

While this research is aimed at fulfilling a university degree requirement, its main purposes among others include:

1. To examine the efforts made by Zain Nigeria in developing positive consumers programmes.
2. To find out whether or not there are difficulties in identifying and addressing the fundamental problems of consumers by management.
3. To identify those problems associated with the implementation of effective response programmes.
4. To highlights the importance of evolving consumer-oriented programmes by corporate bodies in Nigeria.

1.4    RESEARCH QUESTIONS

In order to aid the researcher in his quest for a thorough analysis of the subject matter, answer will be sought for the following questions:

1. Is there any effort made by Zain Nigeria in developing consumer programmes.
2. Does difficulty arises in identifying and addressing the consumers problems by Zain management
3. Are there problems associated with the implementation of effective response programmes.
4. Is there any importance attached to evolving consumer-oriented programmes by corporate bodies.

1.5    STATEMENT OF THE HYPOTHESES

The following hypotheses will be considered in this study.

1. HO: Approaches used by companies to meet consumers needs          and satisfactions are not measurable.

1. HO: There are difficulties in identifying, the basic consumer’s problems and offering worthwhile solutions by          management.

1. HO: Inherent barriers will prevent corporate managers from                       developing effective response programmes.

• SIGNIFICANCE OF THE STUDY

The concept of consumerism as a movement and responses expected from the corporate organizations made it very necessary for a study of this nature, as it will assess the level of consumers’ influence in terms of responses by business firms. It will also aid the Nigerian telecommunications operators in designing promising consumer-oriented programmes and matching decision-making process with organizational structure to reduce social consequences. To a large extent, this will help in correcting the wrong impression against most Nigerian firms.

The academia would find this study of immense benefits due to its contribution to the literature. In addition, it is hoped that the research will add to the existing body of knowledge on the subject matter under study, while it will aid the researcher meets university graduation requirement.

1.7    SCOPE AND LIMITATION OF THE STUDY

To achieve an effective study within the given time frame, this research was restricted to Zain and its franchise offices located in Uyo, Akwa Ibom State, Nigeria and Internet source.

Uncompromising attitude of some respondents, and time factor constituted some of the limitations encountered by the researcher. As a result this study does not claim to be completely down to earth. Despite these problems, a considerable effort was made to process the data for the successful completion of the research. Moreso, attempts have been made to actually present an unbiased and a constructive image of the company based on substance.

1.8    HISTORICAL BACKGROUND OF THE CASE STUDY

The Zain Nigeria, established as Econet Wireless Nigeria Limited came into existence in Nigeria in 2000. The company was established by a group of institutional and private investors as well as three state governments of Lagos, Delta and Akwa Ibom States in Nigeria. It made history on August 5, 2001 by becoming the first telecoms operator in Nigeria to launch commercial Global Services for Mobile Telecommunications (GSM) services trading with the brand name Econet Nigeria. Early in 2004, it became known as Vodacom following an acquisition. The Econet-Vodacom marriage was later dissolved and the company became known as Vee Networks Limited operating as Vmobile, (The Nation, 2006:21).

On May 31, 2006, following Celtel International (founded in 1998 by an African entrepreneur, under the name of MSI) acquisition of majority stake in the Vmobile with the sum of US $1.5 billion in a transaction described as the largest deal in the country’s telecoms sector, it was re-branded Celtel and became an important part of Celtel’s pan-African operations spanning 15 African countries. That is two-thirds or over 66 percent of the population in Africa. But interestingly, Celtel itself in March 2005 was bought over by Mobile Telecommunications Company (MTC) of Kuwalt for US $3.4 billion and the deal became the largest mobile phone transaction in Africa.

On August 1, 2008 Celtel Nigeria was rebranded Zain Nigeria following the global acquisition of Celtel International by MTC Group, which transformed to Zain Group, a leading emerging markets player in the field of telecommunications aiming to become one of the top ten mobile groups in the world by 2011, (Zain Journal 2008:42). It has a commercial presence in 24 countries of the world as at May 31, 2009. Zain Nigeria, which currently covers over 1500 towns and 14000 communities across the six geopolitical zones of the country, scored a series of many other “firsts” in the highly competitive Nigerian telecommunications market including the first to introduce toll-free 24-hour customer care line-111, first to launch service in all the six geo-political zones in the country, first to introduce N500 recharge card, first to commence emergency service (Celtel 199), first to introduce monthly free SMS and first to introduce monthly airtime bonus. The Company was awarded the prestigious “Best Overall Operator in Africa and Middle East” at the annual CommsMEA Awards 2008 organised by the regions foremost business-to-business telecoms publication, (BusinessDay 2009:20).

Zain Nigeria thrives under a highly effective Strategic Leadership Team (SLT) driven by the passion to realize the company’s vision. It is headed by Chief Executive Officer, Mr. Alain Sanite – Marie, MBA (Information Systems), DUT (Business Administration) who assumed the leadership position on September 18, 2009.

The Zain brand and its new theme: A Wonderful World, captured the energy, inspiration and diversity of the Group’s customers, employees and other stakeholders. The new logo and its colourful identity reflect the Group’s freshness, boldness and vitality with the “swirl” communicating the idea of an aura, something important to human life echoing growth, progression and diversity. Its mission is “to enrich the lives of our global family”.

1.9    DEFINITION OF TERMS

One of the major problems often encountered during this type of investigation in management sciences is that of understanding complex terms and key concepts. On this basis, it is pertinent to define some terms as used.

Consumer: A group of people or an individual, who buys products or services for personal use, maintains or disposes of and not for manufacture or resale. They constitute one of the uncontrollable variables and it is the hop upon which all other factors revolve. This is because the consumer is the main focus of marketing.

Corporate Responses: Reaction by producers, providers, manufacturers or suppliers of goods and services to the legitimate complaints of their customers (consumers) by living up to their full potential as business organizations, to give consumers what it promised, to be honest and to give the society a product that is reasonably safe and above all, to recognize and respect the rights of consumers.

Customer Satisfaction: This is the extent to which a product perceived performance matches a buyer’s expectations. If the product’s performance falls short of expectation the buyer is dissatisfied. Where performance matches or exceeds expectations, the buyer is satisfied

Exchange: This occurs when two or more individuals, groups, or organizations give to each other something of value in order to receive something else of value.

Implementation: The actual execution of a strategic plan or programme by an organization.

Industry: An industry is a group of companies producing a similar product or service such as telecommunications services.

Informative Advertisement: This is an advertisement that is educative in nature, that one learn something from, ….that help one in a particular way or another because of the information they provide.

• ORGANIZATION OF THE STUDY

This research work is organized to conform to the standardized research format, which consist of five chapters.

Chapter one being the introduction contains: the background of the study, statement of the problem, purpose of the study, research questions, statement of hypotheses, significance of the study, scope and limitation of the study, historical background of the case study, definition of terms used and organization of the study.

Chapter two presents a review of related literature from secondary data, which contain expert opinion on the subject matter.

Chapter three gives an insight into the research methodology. It includes: research design, the study area, population of the study, sample and sampling technique, research instrument, validity test, administration of the instrument and methods of data analysis.

Chapter four is data presentation, analysis and interpretation. The section includes: sample characteristics, analysis and testing of null hypotheses and discussion of findings.

Finally, chapter five presents the summary of findings, conclusion, recommendations as well as suggestions for further studies.

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