Full Project – IMPACT OF TELECOMMUNICATION ADVERTISEMENTS ON STUDENTS’ PERCEPTION AND PREFERENCE FOR MOBILE SERVICES IN THE UNIVERSITIES

Full Project – IMPACT OF TELECOMMUNICATION ADVERTISEMENTS ON STUDENTS’ PERCEPTION AND PREFERENCE FOR MOBILE SERVICES IN THE UNIVERSITIES

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CHAPTER ONE

1.1         Background to the Study

Prior to the deregulation of the Global System of Mobile Communication (GSM) in Nigeria, only a small percentage of Nigerians could brag of having used telephone services. The establishment of phone booths on several of the country’s main thoroughfares in the late 1990s provided little relief to telephone users, since it allowed them to make calls despite the fact that they had to leave their homes to reach the booths.

However, the 2001 liberalization of Nigeria’s telecommunications sector was a watershed moment in the industry. This was a watershed moment in the sector, as it ended the former Nigeria Telecommunications Limited’s (NITEL) monopoly, allowing service providers such as MTN and Vodafone, who had since rebranded as AIRTEL, GLO, and ETISALAT, to enter the market. This phenomena resulted in a surge in GSM subscribers, established the four key providers (MTN, GLO, AIRTEL, and ETISALAT) as market leaders, and provided Nigerians with access to GSM services.

According to Akinkuotu (2008), when the pioneer GSM networks started operating in Nigeria, there were around 800,000 users for a nation with a population of over 100 million. However, throughout the first seven years of GSM operation in Nigeria, the number of subscribers surged from less than a million to more than 60 million in 2008, and by 2012, the number of active lines had surpassed 90 million. By 2013, however, the active subscriber count had surpassed 113 million (NCC: GSM customers currently exceed 113 million in 2013), and by October 2014, the figure has risen to 130 million (GSM subscriber base hit 130 million-NCC, 2014). With the number of customers expanding at a geometric pace, the level at which service providers compete for market dominance, the number of active lines may possibly exceed 140 million by the end of 2015.

The tug-of-war in the telecom business and the drive to demonstrate control over competitor brands pushed operators to evaluate their pricing structure from per minute to per second billing and costs each short message (SMS) from 15 naira to 4 naira. Additionally, the expensive cost of purchasing a cellphone line has decreased significantly from around 10,000 naira to as little as 100 naira in most circumstances.

The market’s competition for subscribers has resulted in the creation of items to fulfill their diverse wants. Within their years of operation in Nigeria, service providers produced a variety of packages to fulfill the varied demands of their thronging customers and charged a variety of tariffs for these programs. For instance, MTN launched prepaid bundles such as super saver, family and friends, and others. GLO, for example, offers infinito, G-bam, and Bounce. On the other hand, ETISALAT offers the simple cliq, easy beginning, and easy life packages, whilst AIRTEL offers the 2good plan and the AIRTEL come alive package. All of these items are intended to entice subscribers to the brand by offering the lowest feasible call rate.

Apart from lowering call rates and developing GSM packages, service providers also use various marketing communication tactics to attract users, such as promotion and advertising. Some provide discounts on recharges, free SMS, and data, while others sell their goods and services via various forms of advertising.

To do this, outlets such as mass media (television, radio, newspaper/magazine), the internet, outdoor, mobile advertising, billboards, Interactive Voice Response (IVR), and on-campus show (for students) are used.

Despite this commendable achievement in the telecommunications industry, network providers’ service quality has remained suspect due to their failure to produce a seamless service devoid of complaints from users. These concerns vary from rare network outages to difficulties with card recharging, checking balances, and erroneous credit reduction, among others. The NCC ordered several service providers to compensate all customers who were active on their network in January 2008 as a consequence of the prolonged network outage (Babaita, 2010).

Even though service providers have been ordered to pay compensation, these issues that have hampered the efficient functioning of GSM in Nigeria to date have not been remedied. Coincidentally, youngsters are frequent consumers of GSM services and are constantly eager to take advantage of the competitive market environment. Apart from calling and texting, the majority of them download software that allow them to communicate on any of the social media platforms. However, the pervasive network issue connected with GSM services forces them to make a choice between networks. Often, customers are left with no choice but to subscribe to many GSM networks, which allows them to explore, analyze, and evaluate the services offered by the various networks before to making their decision.

1.2          Statement of the Problem

Consumers’ perception over the years suggests that attitudes toward advertising have become more and more unfavourable (Cheung, Harker and Harker, 2008). Various studies (Calfee and Ringold, 1994; Elliot and Speck, 1998; Coulter, Zaltman and Coulter, 2001; Cheung, Harker and Harker 2008) attempt to explain consumers’ perception towards advertising in order to understand how it impacts them in making purchase. Cafee and Ringold (1994) found that on average, two third of consumers think that advertising is untruthful and it persuades people to buy things that they do not necessarily need or want. On their part, Coulter, Zaltman and Coulter, (2001) found out that advertising is manipulative and unrealistic because it encourages excessive compulsive shopping and unrealistic lifestyle.

According to Okeyere, Agyapong and Nyarku (2011) every advertising message need to speak the consumer’s language, and provide convincing evidence of product’s attributes. This is because people may express skepticism towards the product if it fails to meet their expectations as advertised. Given the frequency at which GSM service providers advertise their products and services, subscribers have occasionally express doubt over the services offered. This is because they often complain of occasional network failure among GSM networks in the country when trying to use the services. At some point, subscribers experience persistent problems like drop calls, call set up, connection problem and inability to sometimes recharge the mobile line. When this happens, it often leaves subscribers in dilemma of choice of service providers.

Students of tertiary institutions are mainly youths who are active users of GSM services. Apart from calls, they surf the internet, sometimes chat with friends or download materials for assignments using the services of any of the GSM networks. They may be discouraged to continue patronizing a service provider when they experience any of the service shortcomings. The service providers therefore tend to impact consumers’ perceptions and choices through frequent advertisement. This leaves an agitation for investigating the links between telecommunication advertisement and consumers’ perceptions and preferences of GSM services.

1.3         Aim of Study

The principal aim of this study is to make an empirical contribution to existing understanding of the impacts of advertising on consumer behaviour in the Nigeria’s telecommunication industry.

 

1.3.1     Objectives of the Study

1. To find out the level of advertising impact on students’ GSM service preference
2. To determine the element of advertisement that appeals the most to students’ GSM service patronage.
3. To determine user approval (perception) rate of GSM prepaid package advertisements among students.
4. To examine the extra-advertorial factors that intervenes in students’ choice of GSM service provider.
5. To determine if an association exist between the level of advertising impact and students’ GSM preference.

1.4         Research Questions

To achieve the objectives of the study, the study aims at providing answers to the following research questions:

1. What is the level of advertising impact on students’ preference of GSM service?
2. Which element of advertisement appeals most to students’ GSM service patronage?
3. What is the user approval (perception) rate of GSM prepaid package advertisements among students?
4. Are there extra advertorial intervening factors that impact students’ choice of GSM network?
5. What association exists between the level of advertising impact and students’ preference of GSM services?

 

1.5         Significance of the Study

The central focus of most studies on mobile phone service providers is that researchers focused more on factors that impact the choice of service provider by consumers without emphasis on the impact of advertising. These studies give attention to promotional elements like price, service quality, and service availability. On the other hand, most studies on advertising research centre on consumers’ attitude (Van der Wald, Rebello and Brown 2009) or the language use in advertising (Dada, 2010). Unfortunately, the impact of advertising in most of these studies has, is not clearly stated.

This study is significant in that it explores the impact of advertising on consumers’ perception and preference of GSM services among subscribers. Its findings will also assist service providers in Nigeria to know how subscribers perceive their brand, thereby enabling them to improve where necessary. Furthermore, the study contributes to the quantitative understanding of the association that exists between advertising and consumer behaviour in the telecommunication industry in Nigeria.

 

1.6         Scope of the Study

Kogi state tertiary institutions are the data location for this study. This is because base on available literatures, there are limited studies done in the area GSM and advertising impact in the state, and hence the need to carry out a study using students of selected tertiary institutions in the state. Furthermore, students as active users of GSM can provide the required information and also, tertiary institutions are cosmopolitans, with people from all the major ethnic groups in Nigeria, thus represent the Nigeria ethnic composition. The study focuses only on prepaid services of GSM networks advertisements in Nigeria. This is because most GSM users subscribe to prepaid services. And it covers only the four major players of GSM services in the Nigeria’s telecommunication industry.

 

1.7         Limitations of the Study

Since the study was conducted using population of students from selected tertiary institutions in Kogi state, there may be variations if similar study is conducted in tertiary institutions of other states of the country with larger population. Also, results may not be a true reflection of the entire telecommunication market especially where the populations of a similar study are not students hence generalization in the national context may be affected.

1.8          Definition of Terms

1. Impact: the effect of a persuasive message resulting into a possible outcome.
2. Preference: the most frequently subscribed GSM network by consumers.
3. Perception: possible views or feeling of subscribers about GSM products and services
4. GSM advertising: messages of GSM service providers in the media to create awareness to subscribers about their products and services.
5. GSM networks: operators of GSM that provide telephony services
6. Students: undergraduates in any tertiary institutions in Kogi state who users of GSM networks are.

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Full Project – IMPACT OF TELECOMMUNICATION ADVERTISEMENTS ON STUDENTS’ PERCEPTION AND PREFERENCE FOR MOBILE SERVICES IN THE UNIVERSITIES