THE EFFECTS OF MARKETING MIX (4Ps) ON SALES

PERFORMANCE OF TIGO TELECOMMUNICATION

COMPANY IN TANZANIA

THE EFFECTS OF MARKETING MIX (4Ps) ON SALES

PERFORMANCE OF TIGO TELECOMMUNICATION

COMPANY IN TANZANIA

By

Joyce Frank Saguti

A Research Dissertation Submitted to Mzumbe University Dar es Salaam

Campus College in Partial Fulfilment of the Requirements for the Award of the

Degree of Master of Science in Marketing Management (MSc - MKT) of

Mzumbe University

2015

THE EFFECTS OF MARKETING MIX (4Ps) ON SALES

PERFORMANCE OF TIGO TELECOMMUNICATION

COMPANY IN TANZANIA

By

Joyce Frank Saguti

A Research Dissertation Submitted to Mzumbe University Dar es Salaam

Campus College in Partial Fulfilment of the Requirements for the Award of the

Degree of Master of Science in Marketing Management (MSc - MKT) of

Mzumbe University

2015

i

CERTIFICATION

We, the undersigned, certify that we have read and hereby recommend for

acceptance by the Mzumbe University, a dissertation entitled The Effects of

Marketing Mix (4ps) On Sales Performance of Telecommunication Company in

Tanzania in partial fulfilment of the requirements for award of the degree of Master

of Marketing Management of Mzumbe University.

----------------------------------------

Major Supervisor

----------------------------------------

Internal Examiner

Accepted for the Board of -----------------------------------------------

DEAN/ DIRECTOR, FACULT/ DIRECTOR/ SCHOOL/ BOARD

ii

DECLARATION

AND

COPYRIGHT

I, Saguti, Joyce Frank hereby declare to Mzumbe University that this work is my

own original work and that it has not been submitted to other university for academic

or professional award.

Signature: _______________________

Date: ___________________________

Copyright © 2015

This dissertation is a copyright material protected under the Berne Convention, the

copyright Act 1999 and other international and national enactment, in that behalf, on

intellectual property. It may not be reproduced by any means in full or in part, except

for short extracts in fair dealings, for research or private study, critical scholarly

review or discourage with an acknowledgement, without the written permission of

Mzumbe University, on behalf of the author.

iii

AKNOWLEDGEMENTS

I hereby acknowledge the support of my supervisor Dr Madale; it is through the

abundance of his knowledge that has made this work to its perfection. I also thank

Tigo staff and Tigo Customers who were willing to participate in this study. Special

thanks to my young sister Rosemysticar, my sister Nelina and Consumer

Understanding Team at Tigo Headquarters office who contributed much in

conducting this research.

It is through the unique love of my precious husband Peter that made me come this

far in this research. I real appreciate your concern.

iv

DEDICATION

I dedicate this work to my lovely husband Peter and my lovely son Ethan future

Brand Manager. Also much dedication to the Almighty God who protected and

guided me during the whole process of conducting this research, May the glory and

honour is to our God forever and ever “Umenifanya Ning’are”, Amen.

v

LIST OF ABBREVIATIONS

ARPU - Average Revenue per User

MO - Marketing Operations

MP - Marketing Performance

TCRA - Tanzania Communication Regulatory Authority

TTCL - Tanzania Tele-Communication Limited

USSD - Unstructured Supplementary Service Data

ZANTEL - Zanzibar Telecommunication

vi

ABSTRACT

Effects of marketing Mix elements on sales performance of telecommunication

Company in Tanzania have not received sufficient attention. This knowledge gap

inspires this proposed study. The broad objective is to investigate how product, price,

promotion and place can be applied to increase sales volume of telecommunication

company especially Tigo telecom in Tanzania. The specific objectives of this study

comprises four objectives in this report which are to explore how product

considerations influence sales performance of telecommunication Company in Dar es

Salaam town as well as to determine the extent to which price influence sales

performance of telecommunication Company in Dar es Salaam town, also to

establish the effect of promotion on sales performance of telecommunication

Company in Dar es Salaam town, and lastly to examine the effect of place/location

on sales performance of telecommunication Company in Dar es Salaam town. Recent

studies conducted in the developing economies are reporting contradictory evidence

regarding the impact of marketing practices on organizational performance. Ellis

(2005) in Hong Kong, Appiah-Adu (1998) in Ghana and Akimova (2000) in Ukraine

found that marketing practices impact on performance much more than market

orientation. Herein lays a major gap in knowledge. Marketing as a concept revolves

around customer, profits and sales volume. Its implementation must involve the

entire organization in an integrated manner. It focuses on obtaining information

about customer needs and wants and taking action based on this information in order

to satisfy the needs and wants. The 4Ps of product, place, price and promotion is a

generic marketing mix that has been applied by many organizations and businesses

to position themselves competitively in the market. When designed properly, it

promises high sales, profits and market share (Turner and Spencer, 1997). A survey

of selected service stations in the town is chosen to determine the effects of the 4 Ps

on sales performance of the products in the telecommunication. 65 Customers and 35

members of staff make up the sample drawn from Tigo telecom. Systematic

sampling was applied to select from respondents from each Tigo telecom. The data

collection tool is questionnaire designed and tested by the researcher for reliability

vii

and validity. Tigo telecom sections were included in covering product, price,

promotion place and sales performance. The results of the study will benefit industry

players; marketers, telecom of Tanzania, staff and regulator (TCRA). The expected

outcome is that the marketing mix elements (4Ps) hold the key to improving sales

performance of telecommunication Company in Tanzania. This happens through the

singular and collective contribution of the variables to sales performance.

viii

TABLE OF CONTENTS

Pages

CERTIFICATION ...................................................................................................... i

DECLARATION ........................................................................................................ ii

AND ............................................................................................................................. ii

COPYRIGHT ............................................................................................................. ii

AKNOWLEDGEMENT ........................................................................................... iii

DEDICATION ........................................................................................................... iv

LIST OF ABBREVIATION ...................................................................................... v

ABSTRACT ............................................................................................................... vi

TABLE OF CONTENTS ........................................................................................ viii

LIST OF TABLES .................................................................................................... xi

Pages ........................................................................................................................... xi

LIST OF FIGURES ................................................................................................. xii

Pages .......................................................................................................................... xii

CHAPTER ONE ........................................................................................................ 1

INTRODUCTION AND BACKGROUND .............................................................. 1

1.1 Introduction of the study ........................................................................... 1

1.2 Background of study ................................................................................. 2

1.3 Statement of the problem .......................................................................... 4

1.4 Research Objectives .................................................................................. 5

1.4.1 Overall objective ....................................................................................... 5

1.4.2 Specific objectives..................................................................................... 5

1.5 Research Questions ................................................................................... 5

1.6 Significance of the Study .......................................................................... 6

1.7 Scope of the Study..................................................................................... 6

1.8 Limitations of the Study ............................................................................ 7

CHAPTER TWO ....................................................................................................... 8

LITERATURE REVIEW .......................................................................................... 8

2.1 Conceptual Definition of terms ................................................................. 8

ix

2.1.1 Product ...................................................................................................... 8

2.1.2 Price ........................................................................................................... 8

2.1.3 Place (Distribution) ................................................................................... 9

2.1.4 Promotion .................................................................................................. 9

2.2 Marketing mix ......................................................................................... 10

2.4 Marketing Mix and Sales Performance ................................................... 22

2.5 Marketing Strategies ............................................................................... 23

2.6 Marketing Theories ................................................................................. 24

PESTEL Analysis ..................................................................................................... 24

Boston Consulting Group Matrix theory ............................................................... 24

Relevance of Boston Theory to the Study .............................................................. 25

2.7 Mobile Phone Industry in Tanzania ........................................................ 25

2.8 Empirical studies related to the problem ................................................. 26

2.9 Conceptual Framework ........................................................................... 30

2.10 Research Gap........................................................................................... 31

CHAPTER THREE ................................................................................................. 33

RESEARCH METHODOLOGY ........................................................................... 33

3.1 Introduction ............................................................................................. 33

3.1.1 Research Design ...................................................................................... 33

3.2 Area of the Study..................................................................................... 33

3.3 Research Approach ................................................................................. 34

3.4 Population, Sampling Design and Sampling procedures ........................ 34

3.5 Sample Size and Sampling Techniques .................................................. 34

3.5.1 Research Sample size .............................................................................. 34

3.5.2 Sampling Techniques .............................................................................. 34

3.6 Source of Data ......................................................................................... 35

3.6.1 Primary Data Collection .......................................................................... 35

3.7 Reliability and Validity of Data .............................................................. 36

3.7.1 Reliability ................................................................................................ 36

3.7.2 Validity .......................................................................................................... 37

3.8 Data Presentation and Analysis ............................................................... 37

CHAPTER FOUR .................................................................................................... 38

x

RESULTS AND DISCUSSION .............................................................................. 38

4.1 Introduction ............................................................................................. 38

4.2 Demographics information ...................................................................... 38

4.3 Influence of Product consideration on Sales performance ...................... 41

4.6 Effect of Place on Sales Performance .............................................................. 52

CHAPTER FIVE ...................................................................................................... 56

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS ......................... 57

5.1 Introduction ............................................................................................. 57

5.2 Summary ................................................................................................. 57

5.3 Conclusion ............................................................................................... 58

5.4 Recommendations ................................................................................... 59

xi

LIST OF TABLES

Pages

Table 2.1: Subscribers per Operation .................................................................... 25

Table 2.2: Growth of Mobile Market Industry ...................................................... 26

Table 3.1: Distribution of Respondents ................................................................. 34

Table 4.4.2 To what extent price influence customer to buy product ........................ 46

xii

LIST OF FIGURES

Pages

Figure 2.1: The Elements of Marketing Mix .......................................................... 10

Figure 2.2: Illustrative Diagram to Conceptual frame work ............................... 30

Figure 4.1: Demographics Information: Gender .................................................... 39

Figure 4.2: Demographics information: Age .......................................................... 39

Figure 4.6.1: Where do you sell Tigo Products?.................................................... 52

1

CHAPTER ONE

INTRODUCTION

1.1 Introduction of the study

Marketing mix has a vital role in sales performance in telecom industry. Because of

the large amount of requirements in projects forced decision makers to establish new

strategies to increase sales in Tigo Telecom Company. In addition they should

prepare marketing plan for using in their marketing strategic planning and firm

strategic planning in order. For this reason marketing strategists as refined persons in

this field need to know about the marketing condition in present time in the industry.

Therefore comprehending the priorities in this field of industry are very considerable.

The fact that current research focused on market orientation has done a lot of

research in this field but, the marketing mix review as a very important issue in the

Telecom industry that can be a great help to researchers and those working in the

industry specifically investors. In addition sales performance as one of the most

important factors in any activity on the factors that make up the marketing

infrastructure can satisfy the needs of the company and adjust the level of

expectations of this industry. According to Crittenden marketers have done an

excellent job of instilling the 4Ps of the marketing mix into the mind of anyone

interested in business (Crittenden, 2005).

With respect to this thought, all companies expect to improve their sales

performance.In competitive world, today, customers place in focus of firms’

attention and their satisfaction is major factor of organizations competitive

advantage. The necessity of inviting customers’ satisfaction is completely fulfilment

of their needs and accurately recognition of their desires, expectances, capabilities,

and their limitation of purchase. By access to this information, it can correctly

identify influence factors of consumers’ behaviour and use it to take corporations

marketing decisions (Salar, 2009, p.2).Therefore the objective was to explore the

2

effects of marketing mix as one the important issues in marketing management and

sales performance.

1.2 Background of study

Marketing mix is originating from the single P (price) of microeconomic theory

(Chong, 2003). McCarthy (1964) offered the marketing mix, often referred to as the

4Ps, as a means of translating marketing planning into practice (Bennett, 1997).

Marketing mix is not a scientific theory, but merely a conceptual framework that

identifies the principal decision making managers make in configuring their offerings

to suit consumers’ needs. The tools can be used to develop both long-term strategies

and short-term tactical programmes (Palmer, 2004).

The idea of the marketing mix is the same idea as when mixing a cake. A baker will

alter the proportions of ingredients in a cake depending on the type of cake we

wishes to bake. The proportions in the marketing mix can be altered in the same way

and differ from the product to product (Hodder Education, n.d). The marketing mix

management paradigm has dominated marketing thought, research and practice

(Gronroos, 1994), and as a creator of differentiation. (Kent, 1986) refers to the 4Ps of

the marketing mix as the holy quadruple of the marketing faith written in tablets of

stone. Marketing mix has been extremely influential in informing the development of

both marketing theory and practise (Moller, 2006).

Borden (1965) claims to be the first to have used the term marketing mix and that it

was suggested to him by (Culliton’s1948) description of a business executive as

mixer of ingredients. An executive is a mixer of ingredients, who sometimes follows

a recipe as he goes along, sometimes adapts a recipe to the ingredients immediately

available, and sometimes experiments with or invents ingredients no one else has

tried(Culliton, 1948).

The early marketing concept in a similar way to the notion of the marketing mix,

based on the idea of action parameters presented in 1930s by Stackelberg (1939).

(Rasmussen, 1955) then developed what became known as parameter theory which

3

proposes that the four determinants of competition and sales are price, quality,

service and advertising. (Mickwitz1959) applies this theory to the Product Life Cycle

Concept. Borden’s original marketing mix had a set of 12 elements namely: product

planning; pricing; branding; channels of distribution; personal selling; advertising;

promotions; packaging; display; servicing; physical handling; and fact-finding and

analysis.

Frey (1961) suggests that marketing variables should be divided into two parts: the

offering (product, packaging, brand, price and service) and the methods and tools

(distribution channels, personal selling, advertising, sales promotion and publicity).

On the other hand, Lazer and Kelly (1962) and Lazer, Culley and Staudt (1973)

suggested three elements of marketing mix: the goods and services mix, the

distribution mix and the communication mix. McCarthy (1964) refined Borden’s

(1965) idea further and defined the marketing mix as combination of all of the

factors at a marketing manager’s command to satisfy the target market.

Frey regrouped Borden’s twelve elements to four elements or 4Ps, namely product,

price, promotion and place at a marketing manager’s command to satisfy the target

market. Especially in 1980s onward, number of researchers proposes new ‘P’ into the

marketing mix. Judd (1987) proposes fifth P (people). Booms and Bitner (1980) add

3 Ps (participants, physical evidence and process) to the original 4 Ps to apply the

marketing mix concept to service. Kotler (1986) adds political power and public

opinion formation to the PS concept.

Baumgartner (1991) suggested that the concept of 15 Ps. MaGrath (1986) suggested

the addition of 3 Ps (personnel, physical facilities and process management).

Vignalis and Davis (1994) suggested the addition of S (service) to the marketing

mix. Goldsmith (1999) suggested that there should be 8 Ps (product, price, place,

promotion, participants, physical evidence, process and personalisation).

Moller (2006) presented an up-to-date picture of the current standing in the debate

around the Mix as marketing paradigm and predominant marketing management tool

4

by reviewing academic views from five marketing management sub-disciplines

(consumer marketing, relationship marketing, services marketing, retail marketing

and industrial marketing) and an emerging marketing (E-Commerce). Most of

researchers and writers reviewed in these domains express serious doubts as to the

role of the Mix as marketing management tool in its original form, proposing

alternative approaches, which is adding new parameters to the original Mix or

replacing it with alternative frameworks altogether.

1.3 Statement of the problem

Recent studies conducted in the developing economies are reporting contradictory

evidence regarding the impact of marketing practices on organisational performance.

(Ellis 2005) in Hong Kong, (Appiah-Adu, 1998) in Ghana and Akimova (2000) in

Ukraine found that marketing practices impact on performance much more than

market orientation. Herein lays a major gap in knowledge.

Marketing as a concept revolves around customer, profits and sales volume. Its

implementation must involve the entire organisation in an integrated manner. It

focuses on obtaining information about customer needs and wants and taking action

based on this information in order to satisfy the needs and wants. The 4Ps of product,

place, price and promotion is a generic marketing mix that has been applied by many

organisations and businesses to position themselves competitively in the market.

When designed properly, it promises high sales, profits and market share (Turner and

Spencer, 1997).

What inspired this study is the knowledge gap about the effects of marketing mix

elements (4 p’s -product, price, place and promotion) on sales performance of

telecommunication among selected service stations in Dar es Salaam town. By

gaining insights into how sales are affected by the 4Ps marketing mix, industry

player are going to design their marketing campaigns better to reap higher profits

while minimizing costs hence improving on the efficiency (Kotler, 2003). In a highly

competitive industry like the telecom, each shilling spent must be justified by the

gain in the marketing efforts pursued. Only through finding from studies like this

5

would lend credence on the marketing activities undertaken by the various service in

the firms, effects of marketing Mix elements on sales performance of

telecommunication Company in Tanzania have not received sufficient attention,

therefore in this study is to assess the effects of 4ps Marketing Mix on Sales

Performance of telecommunication company in Tanzania.

1.4 Research Objectives

This part of the study introduced the objectives which were covered by the study.

The general objective showed the general purpose that have been attained while

specific objectives showed how specifically the study addressed different issues of

online services.

1.4.1 Overall objective

Generally, the study investigated the factors influencing sales performance of

Telecommunication Companies in Dar es Salaam

1.4.2 Specific objectives

(i.) To explore the influence of product consideration on sales performance of

Tigo telecom firm in Dar es Salaam

(ii.) To determine the extent to which price affect sales performance of Tigo

telecom firm in Dar es Salaam

(iii.) To establish the effect of promotion on sales performance of Tigo telecom

firm in Dar es Salaam

(iv.) To examine the effect of place/location on sales performance of Tigo telecom

firm in Dar es Salaam

1.5 Research Questions

(i.) How do product considerations influence sales performance of Tigo telecom

firm in Dar es Salaam?

(ii.) What are the extents to which price influence sales performance of Tigo

telecom firm in Dar es Salaam?

6

(iii.) What are the effects of promotion on sales performance of Tigo telecom firm

in Dar es Salaam?

(iv.) What are the effects of place/location on sales performance of Tigo telecom

firm in Dar es Salaam

1.6 Significance of the Study

The study benefited to the telecom marketers who are facing increasing competition

identified the right mix for managing sales in order to improve their profit margins.

Also, Staff members in the retail outlets understood how the 4P’s influenced sales

performance so that they improved layout and service quality. Besides the successful

completion of this research by the researcher enabled her to be awarded Masters in

Marketing Management.

1.7 Scope and delimitation of the Study

Results of the study based on data which was collected from Tigo staff at Tigo

Headquarters’ office and Tigo customers in Dar es Salaam, where the study

investigated the factors influencing sales performance of Tigo Telecommunication

Company.

A researcher was compelled to take a local leave so as to overcome demanding work

schedule which gave her time for field work. A case study design was chosen in Dar

es Salaam region where the researcher is working so as to overcome financial

constraint.

The researcher had to explain to the respondents the necessity of their information to

the study and the importance of them taking part in the process. Also the researcher

ensured that respondents’ information is anonymous.

The researcher translated the questions into Swahili language so that the respondents

could understand and provide the needed information.

7

1.8 Limitations of the Study

This section presented limitations that were encountered and how they were

addressed. In carrying out the research, some of the limitations which were

encountered in the study include:

(i.) Financial and Time resource

The study was carried out under limited resources since the researcher funded it

through own sources. The costs includes, traveling costs and stationary. To address

this challenge, the researcher conducted the study based in Dar es Salaam to

minimize the cost. Also, the study was conducted under limited time to meet the

academic calendar of Mzumbe University. The study collected data from the sample

and generalized them to meet the challenge of time. Also, the researcher extended

working time to include weekends in addressing the challenge.

(ii.) Resistance from Respondents

The study collected data from respondents who were willing to participate; it was

expected that some respondents (among respondents) were resistant at providing the

information. The researcher provided required information to make respondents

understood the importance of taking part in the process.

(iii.) Language barriers

The accepted language for academic communications in Tanzania is English. On the

other hand, Swahili is the national language of Tanzania; therefore most of

respondents were not competent in communicating through English. The researcher

translated the questions to include Swahili language for easy understanding.

8

CHAPTER TWO

LITERATURE REVIEW

2.1 Conceptual Definition of terms

These four P's are the parameters that the marketing manager can control, subject to

the internal and external constraints of the marketing environment. The goal is to

make decisions that centre the four P's on the customers in the target market in order

to create perceived value and generate a positive response. As Pedhazur and

Schmelkin (1991, p. 164) have noted, “Even for people who speak the same

language, words have different meanings, depending on, among other things, who

speaks, to whom, in what context, at what time, and with what purpose . The point is

that the different terms reflect different outlooks, values, attitudes, and the like.”

2.1.1 Product

The term "product" refers to tangible, physical products as well as services. Although

this typically refers to a physical product, it has been expanded to include services

offered by a service organization. (Armstrong, 1997)

The product has to have the right features - for example, it must look good and work

well.

Lamb et al (2009) divided product into two parts, namely business and customer

product. A product can be a good or as service. When considering product as a

marketing element, issues such as brand, quality, design and packaging are very

important. A company must devise strategies to boost demand for its product in order

to succeed in the market. The brand should be acceptable to the customer; the quality

should be high so that loyalty of the buyer can be won through satisfaction. (Seine,

1993).

2.1.2 Price

This is the amount paid for a product. Price means the monetary value of the product

has been fixed for exchange purpose. (Kotler, 1997)

Price is the one, which creates sales revenue - all the others are costs. The price of an

item is clearly an important determinant of the value of sales made. In theory, price is

9

really determined by the discovery of what customers perceive is the value of the

item on sale.

The main element of this is the amount a customer pays for a product. This amount

determines the level of profit for a company and consequently its survival. Charging

price has a profound impact on marketing strategy, price elasticity of the product

which then affects demand and sales. The price should therefore be set to

compliment other elements of two marketing mix (Needam Dare (1996) Business for

High Awards, Oxford England Heinemann).

2.1.3 Place (Distribution)

Place represents the location where a product can be purchased. It is often referred to

as the distribution channel. It can include any physical store as well as virtual stores

on the Internet. (ibid)

'Place' is concerned with various methods of transporting and storing goods, and then

making them available for the customer. Getting the right product to the right place

at the right time involves the distribution system. The choice of distribution method

will depend on a variety of circumstances. It will be more convenient for some

manufacturers to sell to wholesalers who then sell to retailers, while others will

prefer to sell directly to retailers or customers.

Businesses need to decide on the place of purchase or where and how to distribute

the product to the customer. Consumer would be satisfied if products are made

available at the right time, in the right place and in the right quantity. (Hashin, 2011).

2.1.4 Promotion

This represents the various aspects of marketing communication, that is, the

communication of information about the product with the goal of generating a

positive customer response. (Aderemi, 2003).

Promotion involves a variety of activities undertaken by a firm to communicate the

merits of its products and to persuade target consumes to purchase it. (Nasirundin,

2011) It includes activities like advertising, sales promotion, personal selling and

10

publicity. Promotional techniques common to the oil industry has been price

discounts, free gifts and vouchers, advertisements in the press

2.2 Marketing mix

The marketing mix is a model of creating and implementing marketing strategies. It

stresses the blending of various factors in such a way that both organizational and

consumer objectives are attained. The elements are the marketing tactics, also known

as the 'four Ps', the marketing mix elements are price, place, product, and promotion.

The model was developed by Neil Borden (Borden, 1964) who first started using the

phrase in 1949. When blending the mix elements, marketers must consider their

target market. They must understand the wants and needs of the market customer

then use these mix elements in constructing and formulating appropriate marketing

strategies and plans that will satisfy these wants.

Figure 2.1: The Elements of Marketing Mix

Source: Borden, 1964

All the elements of the marketing mix influence each other. They make up the

business plan for a company and handled right, can give it great success. But handled

Target

Market

PRICE

PROMOTION PLACE

PRODUCTION

11

wrong and the business could take years to recover. The marketing mix needs a lot of

understanding, market research and consultation with several people, from users to

trade to manufacturing and several others.

2.3 About Telecom Industry in Tanzania

Telecommunication facilities in Tanzania are available in most parts of the country

and are linked to the rest of the world through Dar es Salaam, the country's

commercial capital. Until 1993, the Tanzania Posts and Telecommunications

Corporation (TPTC) not only regulated this sector, but also held a monopoly in the

provision of communications in Tanzania.

When the Communications Act was enacted, as part of the government's move to

liberalize the communications sector in the country, the Tanzania Posts and

Telecommunications Corporation was split into three different entities: the Tanzania

Posts Corporation (TPC), the Tanzania Telecommunications Company Limited

(TTCL) and the Tanzania Communication Commission (TCC).

Furthermore, in 1997 the National Telecommunications Policy (NTP) was launched.

Since then, the telecommunications sector has become partially liberalized and

competition has grown in mobile cellular services, radio paging, and internet services

and data communications services.

Today, the Information and Communication Technologies (ICTs) sector in Tanzania

has been completely liberalized. Within such a framework, the Tanzania

Telecommunications Company Limited (TTCL) was privatized in 2001.

Since then, the communications sector in the country has played an important role in

the social and economic development of Tanzania and it is expected to continue to

do so in the future.

2.4 Tigo Telecom in Tanzania

MIC Tanzania Limited (tiGO) was found on November 30, 1993. This corporation

was a joint venture between Millicom International Cellular based in Luxembourg,

12

Ultimate Communications Limited of Tanzania and Tanzania Posts and

Telecommunications Corporation. In this venture, 27.7% of the issued share capital

was allotted to the Ultimate Communications Limited and Tanzania Posts and

Telecommunications Corporation.

In 1993, there was liberalization of telecommunication sector in the country which

result into dissolution of Tanzania Posts and Telecommunications Corporation

(TPTC) in early 1994. Its shares ware then transferred to Tanzania

Telecommunications Company Limited. Further steps towards full liberalization of

the market causes the privatization of TTCL on February 23, 2001 and its shares

were transferred to the Tanzanian Government.

In February 2006, after buying out its minority shareholders, the Luxembourg-based

pan-African mobile operator Millicom International Cellular announced to take a full

control of three of its African-based Mobile operators including MIC Tanzania

limited.

In Tanzania a USD 1.332 million deal enables Millicom to acquire the remaining

16% stake it did not already own after the cello’s minority shareholders agreed to

cancel their call option on the business. Since then Millicom is the full controller of

the company where they now own 32% of Telecom market share in Tanzania and

company has almost 12m customers.

2.2The perspective of marketing mix factors

2.2.1 Product perspective

In a purchase context, it is important to consider what elements of an item will be

obvious. Definitely one is the product itself, and the other is the brand of the product

(Bearden and Etzel 1982). A brand can be defined as a name, term, sign, symbol, or

design, or combination of them, which is intended to identify the goods and services

of one seller or group of sellers and to differentiate them from those of competitors

(Keller 1993).

13

A company's corporate brand provides consumers with expectations of what the

company will deliver (Argenti and Druckenmiller). Brand name is a critical

indication for customer perceptions of product quality (.Krishnan R, et al. 1998).

In a context of global competition and decreasing profits from product sales, the

after- sales services and activities (i.e. those taking place after the purchase of the

product and devoted to support customers in the usage and disposal of goods)

constitute a relevant profit source as well as a key differentiator for manufacturing

companies and resellers (Wise and Baumgartner 1999).

The strategic importance of after sales product support services that enable the

availability of mission critical products has been recognized in industries where

products are complex and the consequences of product downtime can be severe . In

some industries, the profit margin for the sales of service parts and for the provision

of after sales services (for repair, maintenance and upgrades), far exceeds the margin

on the sale of the product itself (Cohen, 1997).

The service market can be four or five times larger than the market for products

(Bundschuh and Dezvane 2003) and it may generate at least three times the turnover

of the original purchase during a given product's life cycle ( Wise and Baumgartner

1999). Cohen and Whang (1997) report on a benchmarking study of 14 companies in

the electronics, computing and communication industries. They found after sales

service revenues constitute 30% of product sales revenues. The notion of after sale

support is becoming an important feature of any product sale.

Ampuero and Vila (2006) have indicated that positioning has its origins in product

packaging (the concept was called product positioning). This literally means the

shape of the product, the size of the package and its price in comparison to the

competition. Once the positioning plan has been completed (and the company knows

how it wants to present itself to the market with respect to its competition),

the company implements a plan of action through the construction of a suitable

marketing mix. If we focus on "communication" activities, the sequence should be

the following: a positioning decision identifies the product characteristics that

should be stressed in the marketing mix, particularly in its communication campaign.

14

Packaging is becoming an increasingly important factor for many reasons. Managers

are increasingly recognizing that packaging can create differentiation and identity,

above all in relatively homogenous perishable consumer goods.

However, in general terms, packaging is the container that is in direct contact with

product itself, which holds, protects, preserves and identifies the product as well as

facilitating handling and commercialization (Vidales, 1995). From the managerial

point of view, in order for packaging to suitably develop its functions, the structural

and graphic design of the packaging and even the optimum size of the pack will be

subject to market research undertaken by the company and the positioning that the

company wants the product to occupy in the market.

Therefore, packaging is specifically related to the strategic decisions of the

marketing mix (Underwood 2003). While from the consumer perspective, packaging

is crucial, given that it is the first thing that the public sees before making the final

decision to buy (Vidales, 1995). All the packaging elements, including texts, colours,

structure, images and people/ personalities have to be combined to provide the

consumer with visual sales negotiation when purchasing and using the product

(McNeal, et al. 2003). Packaging plays a major role in communicating brand

personality by means of several structural and graphic elements (Ampuero and Vila

2006).

Product uniqueness is defined as the degree to which the product is designed or made

to satisfy unique needs or to be used for unique purposes (Cavusgil et al. 1993). That

product uniqueness and superiority is such an important ingredient in new

product success is so obvious and trusty that it tends to be overlooked. The product is

the core or central strategy in most industrial new product ventures; and it is through

the product that the firm must seek its differential advantage (Cooper, 1979).

Unique products are typically highly innovative and new to the market, the products

meet customers' need better than the competing products, the new products can bring

along cost reductions and they are in general more durable, reliable and of higher

quality than their predecessors (Cooper and Kleinschmidt, 1995). By developing a

unique value proposition to create a strong differential from competitors, firms aim at

15

attracting more consumers and achieving a better positioning on the

competitive market. The value proposition should skilfully integrate the increasing

quality of prospective leads and market share and the improvement of operational

efficiency to attract consumers to enter into a relationship with the firm. In that way,

firms increase the perceived value of their products and services relative to the

perceived value of the products and services of their competitors, achieving

competitive advantage.

2.2.2 Place perspective

Distribution channels are primarily set up to perform a set of essential economic

functions in society, bridging the gap between production and consumption (Stern

and Reve, 1980).

The channel relationship can be perceived as a reference group that uses normative

influence when, for example, a distributor feels compelled to conform to

norms established by the supplier in order to continue the channel partnership.

This normative function appears commonplace in a channel in which a large

or well established supplier sets goals and norms of behaviour for the

distributor. The distributor then is willing to behave in a manner dictated by the

supplier to reap the reward of higher profits.

As noted in the study of the office systems and furniture industry, operating

suggestions from the supplier can become strategic mandates for the distributor. It is

important to recognize that it is through distribution that the manufacturer can

provide the kinds and levels of service that create superior customer value and lead

to very satisfied customers (Simpson et al. 1998). When the distributor takes on

major responsibility for promoting a product line, it is likely to be a line that provides

a large share of his total volume (Webster, 1991).

Globalization progressed significantly in the past decade, facilitated by modern

communication, transportation and improved legal infrastructure as well as the

Political choice to consciously open markets to international trade and finance2. This

rapid globalization has occurred as a result of several circumstances:

16

rapid technological changes in communications and transport; an increasing trend

towards deregulation of foreign exchange, foreign investment and financial markets;

and the creation of greater incentives and opportunities for companies (Mohanty and

Nandi, 2010).

Companies go international for a variety of reasons, but the goal is typically

company growth or expansion. Companies go international to broaden

their workforce and obtain new ideas. A workforce comprised of different

backgrounds and cultural differences can bring fresh ideas and concepts to help a

company grow. Some companies go international to diversify. Selling products and

services in multiple countries reduces the company's exposure to possible economic

and political instability in a single country.

In addition, many companies look to international markets for growth. Introducing

new products internationally can expand a company's customer base, sales and

revenue. They find alternative sources of labour in international markets. Some

companies look to international countries for lower cost manufacturing, technology

assistance and other services in order to maintain a competitive advantage.

Moreover, they locate resources that are difficult to obtain in their home markets, or

that can be obtained at a better price internationally.

2.2.3 Price perspective

The consumer's perception of the quality of a product is an admixture of a variety of

informational inputs concerning a set of criteria he has established for judging the

product. The uncertainties associated with assessing the quality of a particular

product stem from (1) uncertainty concerning the criteria that should be used, (2)

uncertainty as to the degrees of completeness and reliability of the information held

on each criterion, and (3) uncertainty about the predictive value of each criterion.

When the customers do not have much of the information in above areas, they

always tend to judge by the level of the price and brand to judge products quality.

The price reflects the product’s competitive positioning and indicates the product

17

quality, innovativeness, and benefits for consumers. The consumer is knowledgeable

of the configuration of attributes that comprise a product or service. Further, the

consumer is aware of the product price alternatives available to him, has well defined

tastes and preferences, and can determine his marginal rate of substitution for each

product for the other possible alternative products involved in a particular purchase

decision (Tuli et al, 2007).

Scanning and penetration pricing strategy are two pricing strategies. The new

product pricing decision involves the launch price and the choice between scanning

and penetration (Hotlink et al. 2000). Some customers are used to choose higher

prices more frequently because they are more concerned with doing the

socially "right" things, which will guarantee acceptance either by their peers or

by the members of the next high stratum. In addition, the products themselves may,

for many reasons, carry with them some stereotyped notions about their own quality

(Leavitt, 1954).

A firm's prices must ensure that it is profitable, or at least that it covers its costs.

Cost- based pricing focuses on this consideration. Some customers should not find

themselves subsidizing the cost of providing services to other customers. If prices do

not reflect actual costs or they hide costs of inefficient production then they invite

competition from other firms. Since customers will choose the provider from whom

they believe they get the best deal, a game takes place amongst providers, as they

seek to offer better deals to customers by deploying different cost functions and

operating at different production levels. Prices must be subsidy-free and sustainable

if they are to be stable prices, that is, if they are to survive the competition in this

game (Courcoubetis and Weber, 2003).

In some Telecom industries particularly those in which there are a few dominant

competitors and many small companies, the top companies are in the position of

holding price leadership roles where they are often the first in the industry to change

price. Smaller companies must then assume a price follower role and react once the

big companies adjust their price. Using a competitive pricing tool can give retailers a

significant advantage over competitors. From there retailers can determine how to

18

best react. To compete with another company's pricing, a simple method is to price

the product at the same level competitors' price their product.

Most firms sell a variety of products and thus require a set of different marketing

strategies. Generally, the firm has several product lines-groups of products that are

closely related either because they are used together, satisfy the same general needs,

or are marketed together. Usually within a product line some products are

functionally substitutes for each other, and some products are functionally

complementary to each other. Because of the demand and cost interrelationships

inherent within a product line, and because there are usually several price-market

targets, the product-line pricing problem is one of the major challenges facing

a marketing executive (Monroe and Bitta, 1978).

The traditional approach to pricing a line of products, founded in economic theory,

focuses on obtaining the optimal price solution for a multiproduct firm when the firm

is interested in maximizing contribution to profit. Cost and demand information that

is needed for this approach is not readily available to the decision maker, in addition,

while optimization techniques can prescribe an optimal price for individual product

models under the objective of profit maximization, in reality the multifaceted

organization may have multiple objectives hat may not be solely profit oriented. Due

to these difficulties, costs have often provided the basis for product line pricing

(Petroshius and Monroe, 1997). Product line pricing is used when a primary product

is offered with different features or benefits, essentially creating multiple “different"

products or services.

2.2.4 Promotion perspective

The increase of promotional activity in many product categories may be training

consumers to buy on promotion. If so, consumer expectations about

future promotional activities are just as important to understanding consumer choice

behaviour as consumer expectations of price (Lattin and Bucklin, 1989).

The general phenomenon of promotion accompanied by significant discounts

has been widely researched in marketing literature (Dodson, et al. 1978). A

19

promotion typically leads to a dramatic increase in sales for the promoted brand

(Inman and McAlister 1993).

Though research has documented the success of pricing and promotion in stimulating

immediate sales response, there is concern about the long-run implications of such

activity (Guadagni and Little, 1983). Some industry experts contend that frequent

price discounting blurs the distinction between the deal price and the baseline price

of a product (Lattin and Bucklin, 1989).

In 1980s, retail promotion has had an increasingly important effect on consumer

choice behaviour (Lattin and Bucklin, 1989). Manufacturers of consumer

packaged goods were able to convince the retailer to conduct in-store promotional

activities for two reasons. First, a manufacturer's sales force provided evidence from

syndicated sales auditing services supporting the effectiveness of promotion in

cultivating new customers for a particular brand.

The implication was that the retailer would benefit directly from the increased sales

of the promoted brand. Second, trade deals were offered to increase (or maintain)

the retailer's margin for the manufacturer's brand. Retail promotion enables both

retailer and manufacturer to meet objectives when brand substitution occurs within

the store and customers from other stores switch, or cross-shop, to take advantage of

the promotion. Both the retailer and the manufacturer of a promoted brand also

could benefit when that brand yields a higher margin for the retailer (possibly

because of a trade deal) and consumers switch to this brand, producing greater sales

for the manufacturer (Kumar and Leone, 1988).

The selling and non-selling dimensions of trade show participation were examined. It

was found that better performing firms (as rated by the firms themselves) exhibited a

greater number of products, had more customers, greater sales volume, had specified

show objectives and used fewer horizontal shows (broad-based end user audience)

and more vertical shows (narrow end user audience) .

Personal selling is usually the largest single item in the business marketing

communications mix. Trade shows, like advertising, are typically viewed as

20

complementary to the direct selling activity. For example, trade shows uncover

previously unknown or inaccessible buying influences, can project a

favourable corporate image, can provide product information, generate qualified

leads for salespeople, handle customer complaints, etc. (Hutt and Speh, 1995). In

addition, trade shows are a popular medium for promoting products and services.

The most recently published figures indicate that more than 91,000 firms display

their wares to more than 31 million prospective buyers at some 8000 trade shows at a

cost of $7 billion annually (Cleaver, 1982).

The trade shows afford a unique opportunity to integrate and project a

coherent message to prospective and current customers through a firm's exhibit

structure, graphic displays, salesperson-customer interaction, collateral support

material, and product or service emphasis and demonstrations (Cavanaugh, 1976).

Through adroit event selection and product planning, a firm can use trade shows to

communicate its message to the right people about the right products at the right time

in the buying cycle (Bellizzi and Lipps, 1984).

Direct marketing is about making direct contact with existing and potential

customers to promote the products or services. Unlike media advertising, it enables

to target particular people with a personalized message. Direct marketing can be cost

effective and extremely powerful at generating sales, so it is ideal for small

businesses. It uses a variety of different methods. Direct mail, mailshots and

leafleting are widespread, and other forms of direct and integrated

communication are growing in popularity.

Telephone marketing, mobile marketing, email and texting offer more opportunities

to reach the target market4.

There are a lot of reasons to use direct marketing. According to Statistical Fact Book

(1993-1994), the percentage of adults spending $200 or more per year on

merchandise ordered through direct marketing rose from 16 to 21% in 1992. In fact,

more money is presently spent on direct marketing programs and solicitations than

on magazine or television advertising (Akaah, 1995).

21

Direct marketing allows companies to generate a response from targeted customers.

As a result, small businesses can focus their limited marketing resources where they

are most likely to get results. In addition, a direct marketing campaign with a clear

call to action can help companies boost their sales to existing customers, increase

customer loyalty, recapture old customers and generate new business. Whether the

companies are targeting business (b2b) customers or consumers, direct marketing can

deliver results. Choosing the right communication method is vital.

Advertising promotion is different from direct marketing promotion. Advertising and

promotion refer to activities undertaken to increase sales or enhance the image of a

product or business. It is used primarily to inform the customers about the new

product, persuade and encourage customers to switch to a different brand and remind

buyers where to find a product.

Promotional activities are important for maintaining customer traffic throughout

the market season-used early in the season to draw customers to business and

during the season to maintain customer traffic levels during slow periods (Dunn,

1995). There are many reasons to take advertising promotion. A business may want

to create awareness, customer interest or desire, or boost sales, build brand loyalty,

launch a new product and so on.

Brand-oriented advertising (e.g., non-price advertising) strengthens brand image,

causes greater awareness, differentiates products and builds brand equity (Aaker,

1991; Keller, 1993). Advertising may also signal product quality leading to an

increase in brand equity (Kirmani and Wright, 1989). Accordingly, several authors

have found advertising to have a positive and enduring effect on base sales (e.g.,

Dekimpe and Hanssens, 1999).

2.3 Marketing

From a purely theoretical perspective, marketing as a process ensures that all aspects

of a marketing program are presented in a consistent, simple, and disciplined manner.

The essence of marketing, then, becomes that of defining a target market and

22

developing the marketing mix that meets the wants and needs of the particular target

segment (Crittenden, 2005).

Marketing is generally considered to be fundamental to the development and

performance of firms (Narver, and Slater 1992), (Kohli and Kumar, 1993). But

marketing has changed significantly since it first emerged as a distinct business and

management phenomenon between the First and Second World Wars (Lindgreen, et

al 2004).

Marketing researchers argued the four Ps of the marketing mix became an

indisputable paradigm in academic research, the validity of which was taken for

granted (Grönroos, 1983). As noted by Shapiro, the marketing mix is truly bone of

the most powerful concepts ever developed for executives (Shapiro, 1985).

2.4 Marketing Mix and Sales Performance

Marketing efforts do not impact performance (product sales or market share)

independently of each other. Marketing mix activities need to be coordinated because

they interact to determine performance (Gatington, 1993). This will help managers to

take advantage of the complementarity and to avoid incompatibility between

marketing mix instruments given constraints by budget and the variables themselves.

Evidence from literature shows that, for example advertising effectiveness is

enhanced by the quality of the product(Gatington, 1993), Prior sales person contact

retail availability and higher or lower price depending on the advertising medium

(Prasad and Ring, 1976).

Sales call effectiveness increases with the use of samples and hand-outs in medical

marketing and with advertising, consumer price-sensitivity has been shown to be

affected by advertising Sometimes position advertising increasing price sensitivity

(Eskin and Baron, 1977), negative in other studies. This phenomenon was attributed

to amount of competitive reactions to advertising in the marketing (Gatington, 1984).

The 4P’s marketing mix have been criticized for ignoring the human factor, lack of

23

strategic dimension, offensive postures and lack of interactivity. The model is said to

reflect the sellers view rather than the buyer.

2.5 Marketing Strategies

Marketing strategies and tactics are connected with taking decisions on different

variables to influence mutually-satisfying exchange dealings and relationships.

Characteristically, marketers have different tools they can use; these include mega

marketing (Kotler, 1997) and also called 4Ps of product marketing (McCarthy,

2002). Marketing appears simple to describe, but very difficult to practice (Kotler

and Connor, 1997). In the service industry, the P’s increase to seven that is physical

evidence, process, and people (Bashan, 2011) Organizational leaders in many firms

have applied the so-called marketing concept, which may be easy or complex. The

marketing idea and variants like the total quality management concept for example,

are fundamentally concerned with satisfying customers’ needs and wants

beneficially.

Creating and implementing efficient and effective marketing strategies which

incorporate relevant dimensions of the marketing concept, engage the organic tasks

of selecting a target market (customers or clients) in which to operate and

implementing an efficient and effective marketing ingredient combination.

Marketing thought, with its practice, has been moving quickly into the service

industry (Kotler and Connor, 1997). Literature, in part, canters on the conversation of

whether physical product marketing is comparable to, or different from, the

marketing of service and concludes that the differences between physical product and

service might be a subject of emphasis rather than of nature or kind (Creveling,

2005).

According to (Schnars, 1991), marketing strategy has been a most important focus of

academic inquiry since the 1980s. There are number of definitions of marketing

strategy in the literature and such definitions reflect different viewpoints (Li et al.,

2000).

24

On the other hand, the consensus is that marketing strategy gives the avenue for

utilizing the resources of an organization in order to gain its set goals and objectives.

In general, marketing strategy deals with the adapting of marketing mix-functions to

environmental forces. It evolves from the interaction of the marketing mix elements

and the environmental factors (Li et al., 2000).

Therefore, the function of marketing strategy is to determine the nature, strength,

way, and interaction between the marketing mix- elements and the environmental

factors in particular circumstances (Jain and Punj, 2002). According to (McDonald,

1992), the aim of the development of an organization’s marketing strategy is to set

up, build, defend and maintain its competitive advantage. Decision-making judgment

is important in coping with environmental ambiguity and uncertainty in strategic

marketing (Brownie and Spender, 2005)

2.6 Marketing Theories

PESTEL Analysis

A PESTEL analysis is a framework or tool used by marketers to analyse and monitor

the macro-environmental (external marketing environment) factors that have an

impact on an organization. The result of which is used to identify threats and

weaknesses which is used in a SWOT analysis. PESTEL stands for: P – Political, E –

Economic, S – Social, T – Technological, and E – Environmental, and L – Legal

Boston Consulting Group Matrix theory

If you are working with a product portfolio you have a range of tools at your disposal

to determine how each one or a group of the products are doing. You could consider

using the Product Life Cycle but if you need a current “snap shot” of how the

products are doing you would benefit more from using the Boston Consulting Group

Matrix.

Back in 1968 a clever chap from Boston Consulting Group, Bruce Henderson,

created this chart to help organizations with the task of analyzing their product line

or portfolio. The matrix assesses products on two dimensions. The first dimension

25

looks at the products general level of growth within its market. The second

dimension then measures the product’s market share relative to the largest competitor

in the industry. Analyzing products in this way provides a useful insight into the

likely opportunities and problems with a particular product. Products are classified

into four distinct groups, Stars, Cash Cows, Problem Child and Dog.

Relevance of Boston Theory to the Study

Tigo Company falls under star group, since there is high growth of market share and

the business in general. There is an increase of customers in the last quarter of

September 2014 to December 2014 hence increase in market share. As the model

shows the growth of the business goes together with sales of products, Tigo has

increased a number of subscribers/market shares in 2014 where this goes with the

increase of sales and usage of products like Data, Voice and Tigo pesa. The TCRA

quarterly report of 2014 shows the increase of Tigo subscriber from 7million to

8million in a period of October 2014 to December 2014 as indicated in the table

below

Table 2.1: Subscribers per Operation

Source: TCRA Telecommunications statistics report 2014

2.7 Mobile Phone Industry in Tanzania

Mobile phone technology in Tanzania has been growing at an amazing pace in terms

of both the number of service providers as well as that of the users. Due to this

growth, the Tanzanian government through the act of Parliament (2003) established

the Tanzania Communication Regulatory Authority (TCRA) to regulate

communication and broadcasting activities.

26

By 2009, a total of six (6) mobile phone service providers were issued

communication licenses by TCRA. These providers are TIGO, Zanzibar Telecoms

(ZANTEL Mobile), Vodacom, Benson, TTCL (Mobile) and Celtic - now known as

Airtel. In addition to that, two fixed line companies i.e. Tanzania Tele-

Communication Limited (TTCL) and Zanzibar Telecoms (ZANTEL) have been

operating along with the existing mobile phone service providers. The table below

shows the 2009 status of mobile phone services.

Table 2.2: Growth of Mobile Market Industry

YEARS AIRTEL TIGO TTCL VODACOM ZANTEL TOTAL

2007 2,505,546 1,191,678 72,729 3,870,839 678,761 8,322857

2008 3,862,370 2,569,527 105,804 5,408,439 1,057,652 13,006,793

2009 4,910,359 4,178,089 115,681 6,883,661 1,378,595 17,469,486

Source: Calculated from the Operators Monthly Subscriber base reports compiled by

TCRA 2009

The rapid expansion of mobile phone usage in Tanzania has been triggered by a

highly competitive market and service diversification, with the operators now

providing different mobile phone services such as voice and message transmission,

data services, mobile financial services as well as value added service.

2.8 Empirical studies related to the problem

Wee and Chan, 1989 found that the pricing strategies and advertising appeals must

also be adapted to suit the consumer’s needs and tastes. Some studies measuring

customer attitude and perceptions towards marketing mix have been carried out in

Telecommunication industries where the significances of these studies measured

consumer views towards marketing practices.

In Tigo Telecom Company this can be seen by customers who perceive Tigo as

affordable, accessible and available. Also Tigo use comedian in advertisements so as

raise customers’ appeals on advertisements. For example in Tigo advertisements’ a

27

comedian Jota (Lucas Muriel) is used to deliver message and to raise awareness on

the products offered by Tigo Company.

Additionally, other study show the use of a combined predictor variables such as MO

measures (e.g. marketing as a guiding philosophy of business) and MP measures

(e.g. marketing as product promotion and positioning). The study discovered that

managers who emphasized MP activities had significantly better scores on the

measures of competitive advantage than those who emphasized selling or

production and also had greater sales volume, better profits and better return on

investment. (Asimov, 2000). In case of Tigo Company it uses both indicators say MP

measures and MO measures. The guiding philosophy of business used is 3A’s which

are affordability (cheap for everyone to consume), accessibility (the network and

services is accessible all over the country) and availability (the products are available

in the market like voucher).

Ferrell et al 2002, have broadly argued marketing strategy to be a concept built

on strong platform of segmentation, targeting and positioning. This is also true for

Tigo since it use the segmentation and positioning strategies. It segment its product

basing on target market that it has and position itself as the market require it to do so.

For example Tigo has positioned itself as a young and cool brand; most of its

customers are youth. Also the products are segmented basing on the customers’

needs say, average revenue per user (ARPU).

Marketing strategy requires decisions about the specific target of customers. Besides,

marketing mix may be developed to target market by positioning it suitably in

a superior way. In this context, the study of the effectiveness of the marketing

mix is essential for an appropriate marketing strategy. Appropriateness of

marketing strategies may be viewed as the similarity of market offerings of a

set of products and its corresponding consumer perception among its target

segment. More the target segment is able to understand and believe the indications

communicated by the firms through marketing mix more are the effectiveness of the

marketing strategies (Richardson, 1994). For Tigo Company the marketing strategy

28

used is top of mind brand, where all customers even those who are not using Tigo

products they know about the brand.

Despite the consistent effort by many physical businesses to deal with the 4P in an

integrated manner, the drafting but mainly the implementation of the policies

remains largely the task of various departments and persons within the organisation.

Even more significant thought is the fact that the customer is typically experiencing

the individual effects of each of the 4Ps in diverse occasions, times and places, even

in case that some companies take great pains to fully integrate their marketing

activities internally (Constantine’s, 2002; Wang et al, 2005). For the case of Tigo

Company this also applies to customers. It is difficult to integrate the 4P’s in diverse

occasion hence customers face the effect of each of the 4P’sfor example not all

customers can benefit the effects of Promotion at once, especially those who are

living in villages. Also some advertisements’ especial the television advertisements’

may not be seen by customers living in villages.

The introductory marketing texts suggest that all parts of the marketing mix (4Ps) are

equally important, since absence in any one can mean failure (Kellerman et al ,

1995). This is also true for Tigo Company since these 4Ps depend on one another.

Example in absence of promotion the market share drops very fast because Tigo sell

much basing on advertisements’ and promotion offered.

Number of studies of industrial marketers and purchasers indicated that the

marketing mix components differ significantly in importance (Burdick and Keith,

1985). Two surveys focused on determination of key marketing policies and

procedures common to successful manufacturing firms determined that these key

policies and procedures included those related to product efforts and sales efforts.

This followed in order by promotion, price, and place.

In a replication of this survey, Robicheaux (1976) found that key marketing policies

had changed significantly. Pricing was considered the most important marketing

activity.

29

Although it ranked only sixth in Udell’s survey (1968), it found that sales efforts

were rated as most important, followed by product efforts, pricing, and distribution.

For Tigo this is different, the system starts with product, where the Company

identifies what it sells. Then Pricing, the Company make sure that the price is

reasonable compared to the prices of competitors then communication follows

(promotion), the company communicates what it have to the customers at different

places. (Place)

LaLonde (1977) found product related criteria to be most important, followed by

distribution, price, and promotion. This differs from Tigo since product is followed

by price then promotion then place.

Perreault and Russ (1976) found that product quality was considered most important,

followed by distribution service and price. McDaniel and Hise, (1984) found that

chief executive officers judge two of the 4 Ps, pricing and product to be somewhat

more important than the other two place (physical distribution) and promotion. This

literature differs from Tigo system because Tigo considers all elements to be of the

same importance but in application some elements starts.

Kurtz and Boone, (1987) found that on the average, business persons ranked the 4 Ps

to be of most importance in the following order: price, product, distribution, and

promotion. Thus, it appears from these studies that business executives do not really

view the 4 Ps as being equally important, but consider the price and product

components to be the most important.

The concept of 4Ps has been criticised as being a production-oriented definition of

marketing, and not a customer-oriented (Popovic, 2006). It is referred to as a

marketing management perspective. Lauterborn (1990) claims that each of these

variables should also be seen from a consumer’s perspective. This transformation is

accomplished by converting product into customer solution, price into cost to the

customer, place into convenience, and promotion into communication.

30

2.9 Conceptual Framework

According to Smyth (2004) Conceptual frame work is a written or visual

presentation that explains either graphically or in narrative form, Reichel & Ramey,

(1987). Added that a conceptual framework is a set of broad ideas and principles

taken from relevant fields of enquiry and used to structure a subsequent presentation,

Conceptual framework, sometimes is referred to as a theoretical framework, is a type

of intermediate theory that attempts to connect to all aspects of inquiry such as

problem definition, objectives, literature review, methodology, data collection and

analysis. Conceptual frameworks can act like a map that gives coherence to empirical

inquiry. Because conceptual framework is potentially so close to empirical inquiry, it

takes different forms depending upon the research question or problem. In this

proposal, the researcher has developed a theory that illustrates dependent,

intermediate and independent variables.

Figure 2.2: Illustrative Diagram to Conceptual frame work

.

Source: researcher, 2015

Explanation of the model

From the model independent variables are expressed by marketing mix elements, and

independent variables are expressed by sales performance variables. Marketing

Sales performance

indicators

- Increase of

sales

- Decrease of

sales

- Marketing

policy

- Competitio

n level

Marketing mix

indicators

Prices/discount

Product

Promotion

Place/Location

Independent variable Intervening variables Dependent

variable

31

policy and competition level express intervening variables. It is assumed that from

the model when the price is affordable, product packages are of high volume and

there is special offer of unlimited packages, promotions are intensive and products

are accessible in all places with favourable marketing policy and low level of

competition then the sales performance tends to increase. On the other hand when the

prices are high compared to that of competitors, products packages are low, no

intensive promotions and advertisements’ with unfavourable marketing policy and

high level of competition then the performance of sales tends to be low.

The indicators of each variable are defined in appendix 3

2.10 Research Gap

Marketing mix management paradigm has dominated marketing since 1940s and

McCarthy (1964) further developed his idea and refined the principle to what is

generally known today as the 4Ps. However, in the post dot-com boom, marketing

managers are learning to cope with a whole host of new marketing elements that

have emerged from the online world of the Internet. In some ways these new

marketing elements have close analogues in the offline world, and yet from another

perspective they are revolutionary and worthy of a new characterisation into the E-

Marketing mix (or the e-marketing delta to the traditional marketing mix).

(Kalyanam and McIntyre, 2002), Marketing mix used by a particular firm will vary

according to its resources, market conditions and changing needs of clients. The

importance of some elements within the marketing mix will vary at any one point in

time. Decisions cannot be made on one element of the marketing mix without

considering its impact on other elements; therefore a researcher looked on the

impacts of the elements of marketing mix based on customer’s side. That is the

impacts of marketing mix element on customers.

As McCarthy (1960) pointed out that “the number of possible strategies of the

marketing mix is infinite. Even number of criticisms on 4Ps, however, it has been

extremely influential in informing the development of both marketing theory and

32

practise. There is also too little reflection on the theoretical foundations of the

normative advice found in abundance in the text books. Marketing mix was

particularly useful in the early days of the marketing concept when physical products

represented a larger portion of the economy.

From the literatures, most of the authors discussed that the marketing mix elements

has priorities in the way they apply. Therefore the researcher explained how

marketing mix (4P’s) are used by the Tigo telecom firm in Tanzania and determined

if the elements were applied in priorities as discussed by other researchers.

Also basing on the literatures, the marketing mix has influence on sales performance;

therefore this study intended to assess the effects of 4ps in marketing mix on sale

performance in Tigo telecoms firm. Dar es Salaam town was selected as a study area

where information was collected from.

33

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction

The purpose of this chapter was to identify the appropriate methodology that was

used during the study. The methodology demonstrated the entire process of this

study, as well as analysis of the various research methods employed during the

conduct of the research. It highlights the study design, area of the study, research

approach, sampling and sampling procedures, data collection and data analysis. This,

in different ways enabled the study to achieve the research objectives and questions

that guided the study.

3.1.1 Research Design

Research design is a systematic planning, organizing and executing a research within

specified time and resource limits. It tells type of data to be collected (primary or

secondary), the source of and the procedures to be followed in data collection.

Research design provides suitable framework that guides the collection and analysis

of data. Also, Ghauri and Gronhang (2005) talk of a research design as a plan

outlining how information is to be gathered for an assessment or evaluation that

includes identifying the data, how to administer the instruments and how to organize

the information and lastly how to analyze data.

This study employed case study design, simply because it allowed a researcher to

collect data only in one organization and made deep investigation study on the

problem in question. A part from that, case study was not cost full compared to other

research design. It also involved both quantitative and qualitative data collection.

3.2 Area of the Study

This study was carried out in Dar es Salaam city. The research study investigated the

effectiveness of marketing mix in sales performance in Tigo Telecom Company.

34

This was because Tigo head offices are allocated in Dar es Salaam and it has many

shops in Dar es Salaam compared to other regions.

3.3 Research Approach

For the better result, the study combined qualitative and quantitative approaches.

Participatory approach was employed as qualitative design. Semi structured

interviews with key informants, in-depth interviews and documentary review

methods were triangulated in order to allow new insight. The method helped to

obtain information that was not emerged from survey approach (Mbwambo, 2002).

3.4 Population, Sampling Design and Sampling procedures

The section involved three areas. Firstly, the target population i.e. the group of which

information sought have been specified. Secondly, the method for selecting the

sample developed (Sampling Techniques) and thirdly, the sample size was

determined.

3.5 Sample Size and Sampling Techniques

3.5.1 Research Sample size

Since it was difficult to collect data from every individual, the researcher used

representatives (sample) of the population. A total of 50 respondents’ were

consulted.

Table 3.1: Distribution of Respondents

Respondents Category Number of Respondents % of respondents

Tigo Staff 20 40%

Tigo Customers 30 60%

Total 50 100%

Source: Researcher proposed sample 2015

3.5.2 Sampling Techniques

35

Stratified Sampling Technique

Stratified sampling is a probability sampling technique wherein the researcher

divides the entire population into different subgroups or strata, then randomly selects

the final subjects proportionally from the different strata.

A random sample from each stratum was taken in a number proportional to the

stratum's size where it was compared to the population. These subsets of the strata

were then pooled to form a random sample. Therefore a researcher divided the

number of sample in relations to departments as well as number of Tigo shops in Dar

es Salaam so as to get the target sample to answer the questions.

The reasons why a researcher used Stratified sampling technique was: This

technique produce a smaller error of estimation than would be produced by a simple

random sample of the same size, also the cost per observation in the survey could be

reduced by stratification of the population elements into convenient groupings lastly

estimates of population parameters was desired for subgroups of the population.

3.6 Source of Data

This involved collecting primary and secondary data. Primary data was collected

during the research study. Questionnaire/Survey, Interviews and documentary review

were employed as the primary data collection methods while documentary review

was helpful to obtain secondary data.

3.6.1 Primary Data Collection

Questionnaires

A questionnaire is one of the tools that were used in data collection process. Most of

the questions included in the questionnaire were closed ended questions. The main

theme behind using this type of questions was to simplify the process of responding

to the questions. Also, closed questions were easy to interpret and provide strait

meaning to data. Finally, these questions fit better the extraction of statistical

information, which were the main theme of the study.

36

Interviews

In-depth and Semi-structure interview were among of the methods employed during

data collection. Respondents from Tigo were interviewed and their information’s was

quickly obtained. This eliminated unrealistic ideas and variables. Part of the

information collected here were those related with certain situations, feelings,

perceptions and clarifications on issues observed in the questionnaire.

This was useful since interviews obtained detailed information about personal

feelings; perceptions and opinions. Respondents allowed more detailed questions to

be asked. They achieved a high response rate.

Documentary Review

Documentary review was another method that was employed in obtaining data from

different publications. Documents such as Tigo annual and Tigo semiannual reports

that show the plan and their strategies was helpful in establishing the model and

making a trend analysis of different issues arising in the study.The researcher used

check list and compilation forms in the process of identifying and grouping data

relevant for the study. This was helpful in making comparison so as to establish

different facts on stock market in developing countries in Tigo telecom.

3.7 Reliability and Validity of Data

Credibility of research findings relies on the attention paid to two particular

emphases on research design: reliability and validity (Saunders et al, 2000 p.100). In

this study, reliability and validity aspects was handled with great concern to avoid

getting wrong answers to research question and objectives.

3.7.1 Reliability

This refers to how consistent or stable the ratings generated by the scale are. It entails

that the measure or data collection methods shall be influenced by changes in

context. The validity of information collected is seen in the extent to which the

methods were used to pick up what researcher expected them to (Edwards and

Talbot, 1994 p.70). Reliability of the measures ensured that all questionnaires and

interview guide were uniform to both respondents. The collected data was processed

37

in a uniform way to ensure that, the conclusion reached was similar to any other

study that was conducted in similar approach. No research assistant employed in this

study. Different method of data collection, questionnaire, interview and documentary

review resulted to high level of triangulation which in turn ensured reliability of the

data collected.

3.7.2 Validity

It is important to test for validity because, despite the fact that internal consistence of

the scale is necessary condition for validity, it is not sufficient evidence of the

validity (Churchill, 1999). Validity is concerned with whether the findings are really

about what they appear to be about (Saunders et al, 2000 p. 101). Validity of the

measures was ensured by analyzing data and making pilot tests of the questionnaire

before, within and after field work. For example, the number of data and reviews

collected from one branch using questionnaires matched with those obtained from

another branch. Thorough data cleaning was done after the field work.

3.8 Data Presentation and Analysis

Data analysis involves scrutinizing the required information and making inferences

(Kombo and Tromp, 2006 p.117). Qualitative data was analyzed by summarizing the

findings and explanations and there of using categorized and direct quotations to

present the findings and generate attributions and other findings will be presented

based on the respondent’s perceptions. Quantitative data was coded and analyzed in

the form of tables, percentages and simple statistical measures calculated using

spreadsheet formulas. The processes of interpretation based on inferential statistical

methods obtained by the use of SPSS (Scientific Package for Social Science) Version

20 or Microsoft office excel 2007. Analysis of variance and independent samples t-

test techniques was used with regard to variables influencing the respondents.

Basically, data analysis and interpretations enabled the researcher to address the

research problem, derive conclusions and eventually recommended possible market

implications and actions in a constructive manner.

38

CHAPTER FOUR

RESULTS AND DISCUSSION

4.1 Introduction

This chapter presents the research results from the field and theoretical propositions

basing on the predetermined research objectives and questions. The chapter analyses

the effect of marketing mix and its impact to sales performance in Telecom Business

Company a case of Tigo Telecom Company. Primary data presented in this chapter

was collected through questionnaires, observation and interviews. Secondary data

were collected through reviewing of existing literatures.

4.2 Demographics information

Tanzania has a Population of 44,928,923 people; this was reported on 2012

Population and Housing Census report. Where in Tanzania Tigo has almost 11m of

subscribers which is 24% of the population, and most of these Tigo customers are

found in town areas, This was easy shown by Dar es Salaam on of the region that is a

strong hold of Tigo company, it has almost 4m subscribers and the reports show the

gender demographic information of Dar es Salaam Tigo subscribers as table below

shows.

Table 4.2.1 Dar es Salaam Tigo Subscribers Demographic information: Gender

Gender

Male Female

54% 46%

Source: Market Share Report, 2015

The table above present the demographic information of the total subscriber base of

Dar es Salaam where 46% of the subscribers are women and men are 54%. This

shows that mobile phone penetration is high compared to women who own mobile

39

phone in Dar es Salaam. However as GSMA reports indicates that mobile penetration

in the society is highly to men where the report shows that many men owns mobile

phone than women. But this can be bit challenged in some areas especially in town

areas where number of women who own mobile phone is higher that the number of

women who own mobile rural areas.

Figure 4.1: Demographics Information: Gender

Source: Field Data 2015

The researcher findings shows that among of the Tigo customers who were

responding to this questions majority were women (64%) and men were 36%. The

reason why women number happened to be high than men is because women were

willingly to participate in this study compared to men. While, in the other group of

respondents of Tigo staffs who were part of the respondents to this study half of them

were male (50%) and half of them were Female (50%).

Figure 4.2: Demographics information: Age

Source: Field Data 2015

36%

64%

50% 50%

Male Female

Customer Tigo Staff

6%

51%

35%

7%0%

51%45%

4%

16 – 21 Yrs 22 – 30 Yrs 31 – 35 Yrs 36 – 45 Yrs

Customer Tigo Staff

40

The graph presents age distribution among the respondents of the study. A researcher

found out that Tigo customers were in all group range from 16-45years (16%) which

is an ideal age for a young age people to own mobile phone, while Tigo staff did not

have respondent with age range 16-21years (0%) and this is obvious for the company

and employment industry in general to employ people of that age is impossible.

However, age group between 22-30years a researcher found 51% of customer are

belonging on that age group as well as 51% of Tigo staff, and 35% of Tigo customer

and 45% of Tigo staff were belonging on age group between 31-35years. These two

groups includes large number of Tigo staff as well as Tigo customers who are the

respondents in this study, this implies that the majority of this age group own mobile

phones and also are the employed people in the society. The results of this research

can be verified with what was founded in Tigo Market Share report of 2015 that

showed on the Table 4.2.2 of Dar es Salaam Tigo Subscribers Demographic

information shows majority of Tigo customers their age range between 16years to

35 years.

Table 4.2.2 Dar es Salaam Tigo Subscribers Demographic information: Age

Tigo Age

16 – 21

Years

22 – 27

Years

28 -- 33

Years

34 -- 39

Years

40 -- 45

Years

46 and

above

Dar es Salaam 21% 25% 29% 10% 10% 5%

Source: Market Share Report, 2015

The table above emphasis more on what was founded by a researcher during the field

where customers below 21years are 21%, and 64% of subscriber who has age range

between 22-39years where customers above 40years are only 15%. This implies that

majority of Tigo customers are age group between 22years to 40years where at this

age group you can find students, entrepreneurs, employed people and all people who

are able to pay mobile phones bills, they are the ones who generate income so they

can also generate profit to the Tigo Company.

41

4.3 Influence of Product consideration on Sales performance

4.3.1 Relationship between Product consideration and sales performance

During the field, a researcher had few attributes that shows what do customer

consider in the product that they want to buy, these attributes includes types of the

product, validity of the product, if competitors don’t offer such product, price of the

product, demand of the product in the market and customer experience on the

product. A researcher found out that there is a significant relationship between

product consideration and sales performance where if the customers are in high

demand of such product in the market the sales performance will be high while if the

demand is low in the market sales performance will decrease.

In the findings that were addressed in this report, Tigo staff shared the reasons why

customers preferred such products. In general, Affordable price and Good offers

were highly rated as the reasons why customer preferred such product. The products

which were mentioned more than once is Data and Packages. This is one of the

attribute that a researcher had during the session of data collection, so this findings

show the relationship between what customers consider when the want to buy Tigo

product that leads to sales performance.

Moreover, high demand of the product in the market and promotions were second

highly ranked as reasons why customer prefer Tigo product. Also, in this study we

have found that customer buy Tigo Music because competitors do not offer that kind

of product.

Basing on the indicators, the study showed the significance of the required

relationship in based on the statistics provided and frequency of responses of the

respondents.

42

Table 4.3.1 Significance of Product Consideration on Sales performance

Level of Significances Frequency

(N=50)

Frequency in (%)

High 40 80%

Medium 7 14%

Low 3 6%

Not Applicable 0 0%

Source: Field Data 2015

Table 4.3.1 present the research findings that shows the levels of relationship

between product consideration and sales performance in the Tigo Company. Out of

50 respondents who respond to this question 40 who are equivalent to 80% of all the

sample say there is “High relationship between product consideration and sales

performance”, while 7 respondent which are equivalent to 14% of the sample say

there is a “medium relationship between product consideration and sales

performance” and 3 respondent who are equivalent to 6% of the sample say that

“There is low relationship between product consideration and sales performance in

the Tigo Company”

On the other hand, a researcher found that the reasons why customer make

considerations before making decisions on what product to buy from the Tigo

company including for them being own more than one SIM card (multi SIMmers).

Majority of the Dar es Salaam dwellers are multi SIM users that makes them to have

comparison whenever they want to buy Telecom products. Also, a researcher observe

that majority of them use Tigo as a main SIM that makes them to buy more Tigo

products as they use more that SIM compared to those who use Tigo as secondary

SIM.

However respondents spot another reasons why they consider before buying Tigo

products is; as a service provider, Tigo is also offering customers the opportunity to

purchase affordable smartphones, providing them with the best internet experience

43

and free access to a number of educational, health, news and social communication

sites via the Internet.org app. These are the services that are not offered by the other

service provider, so give customer a wider range when they want to buy telecom

product to choose Tigo products hence performance of sales in the company.

Also, when the products exceed the customers’ expectation here customer discussed

on Customer experience over a certain product example Tigo Internet, then the

customers will be satisfied. By having the customers’ satisfaction, it can increase the

sales volume of the company. Tigo is responding to what our customers want as a

key to our success. They operate in high-growth developing markets where

consumers want the same digital lifestyle that their peers in more developed markets

already enjoy. It is no longer a conversation about megabytes but about what services

customers want.

A recent report by the Tanzania Communications Regulatory Authority (TCRA)

shows that the number of internet users in Tanzania has increased from 7.5 million in

2012 to 9.3 million by June 2014 - equivalent to 18% penetration. The design of the

Telecom products such as validity of the package (if package last for a long time

compared to competitors package) it’s obvious that the product will be highly

demanded hence sales performance will rise.

Below is a graph that show Product usage Vs. Product sales, this explain more the

relationship of what customer use and what Tigo staff sale. This emphasise more on

the sales performance of the Tigo Company in relation to what customer buy.

44

Figure 4.3.1 Product usage Vs. Product sales

Source: Field Data 2015

Data from Figure 4.3.1 above show the relationship between product usage among

Tigo customers and the sales of individual Tigo staff, the study found out that the

sale of Tigo Pesa (75%) is equal to the use of it (75%), as the sales is same as to

SMS which is 50% to 50%. While the sale of Voice has difference of 25% compared

to what customer use, the difference can be covered by the presence of retail shops,

Tigo Rusha vendors who offer the same service in the streets. This can be applied to

use of data which is 50% vs. sales of data which is 50%, purchasing options of this

service is available online where customer can buy himself or bought by friends

which founded more convenient to Tigo customers.

4.4 The Extent to which Price affect Sales performance

4.4.1 Relationship between price and sales volume

There are many factors that can determine the flow of a business which can affect the

changes in the performance of a business from time to time. Pricing is one of the

elements of the marketing mix that is owned by multiple groups within a company.

The pricing decisions must be viewed as an interactive process.

75%

100%

50% 50%

0% 0% 0% 0%13%

75% 75%

100%

50%

75%

50% 50%

0% 0%

Tigo

Pesa

Voice Data SMS VAS RBT Tigo

Music

Tigo

Bima

Others

Customer Tigo Staff

45

According to Kotler (2006:570), “Sales Volume is the quantity or number of goods

sold or services rendered in the normal operations of a firm in a specified period.”

Therefore, the relationship between Pricing Strategy and Sales Volume is as follow:

SALES VOLUME (Y) PRICING STRATEGY (X) Figure 1 NOTE: X =

Independent variable (pricing strategy) Y = Dependent variable (sales volume)

Pricing is one of the effective ways to increase and maintain the sales, especially the

sales volume of the company. According to Kotler (2005, P.301) “Pricing has been a

major competitive weapon employed by Asian business. Their low cost positions

have provided the basis upon which they have priced aggressively to gain market

share both within and outside the region.”

Tigo has been applied this strategy where they price its product lowly compared to

what their competitors price their products. This strategy help Tigo to exist in the

market and for many Coastal zone customer to use it as a main SIM where

Affordable price these has been their success story to them as they experience

gradual increase of their revenue since 2011 to 2014. Table 4.4.1 Income Statement

of Tigo shows the trend of increase of the company income in general.

Table 4.4.1 Income Statement of Tigo

Attributes 2014

US $m

2013

US $m

2012

US $m

Revenue 6,386 4,390 4,136

Cost of Sales 2,522 1,723 1,539

Gross Profit 3,864 2,667 2,597

Source: Millicom Annual Report, 2014

The table above show the increase of revenue of the company where between 2012

and 2013 a company gain USD 256m, and also within the period of 2013 - 2014

company gain USD 1996m. The difference between year 2012-2013 and 2013-2014

is the sales of a products which went hand in hand with the low price strategy of a

company that resulted to an increase of sales.

46

Today, most of the consumers would like to search for the operators who have lower

price than the other ones that can really satisfy their needs and wants, either in the

taste of the product or the price of the product.

Basing on the findings respondents was able to show in what extent price affect sales

performance. These findings validate this assumption where majority say to large

extent price affect sales performance.

Table 4.4.2 to what extent price influence customer to buy product

Attribute Respondent (N=50) Respondent in (%)

To larger extent 24 48%

To some extent 16 32%

Not applicable 10 20%

Total 50 100%

Source: Field Data 2015

The research findings show that customers and sellers are very sensitive in price.

This may be the big factor that majority of the customers use for making buying

decisions. The results shows that 48% say to large extent price influence customer to

buy product, 32% say to some extent price influence customer to buy product whilst

20% say price influence is not applicable when customer wants to buy product.

This implies that, majority of Tigo customers who are price conscious are belonging

to the mid and Low ARPU group. A researcher found out that whenever there is a

price change in the market buying behaviour of this customer change. Also a

researcher found that these customers can stop buying the product when price is

high. Moreover, the highbred users of Tigo products are the ones who can have slight

change of buying product whenever there is price change. These are the ones who

say to some extent price influence customer to buy products. Most of these

customers are the primary users of Tigo SIM. However, there are other customer

who say price influence is not applicable in buying products. Most of these customer

are corporate customers and High ARPU customers, they believe in quality of

47

service that they get from their service provider. They are willing to pay any amount

of money as long as the product they are paying for has the same value with the price

that they pay.

By going further deeper, a researcher was able to find more insights from the study

where respondents were able to identify in which specific product price influences

them to buy Tigo products.

Table 4.4.3 To what extent price influence customer to buy product

Types of

Product

To large

extent %

To some

extent %

Not

Applicable %

Tigo Pesa 8 33% 7 44% 1 10%

Voice 3 13% 0 0% 1 10%

Data 4 17% 3 19% 1 10%

SMS 1 4% 3 19% 1 10%

VAS 0 0% 0 0% 1 10%

RBT 0 0% 0 0% 1 10%

Packages 5 21% 0 0% 1 10%

Tigo Music 0 0% 1 6% 1 10%

Tigo Bima 0 0% 1 6% 1 10%

Others 0 0% 1 6% 1 10%

Total 24 100% 16 100% 10 100%

Source: Field Data 2015

Data from Table 4.4.3 shows that majority of respondent say “To large Extent” price

influence customer to buy Tigo product where Tigo Pesa was highly ranked as a

product that customer are influenced by its price by 33%, Data 17%, Packages 21%

and Voice 13% where those who said “To some extent” ranked Tigo pesa 44%, Data

19%, SMS 19%, Tigo Music 6%, Tigo Bima 6% and other products 6%.

48

Results found out that Price is a sensitive indicator that drive sales of a company to

have a gradual change of whether increase of decrease. The observation of a

researcher shows that most of the Dar es Salaam customers are multi SIM (they have

more than one SIM card) but they use Tigo as a primary line but if there is a change

of price customer tend to compare with other operators, hence the sales performance

change depend on the price change.

During the interview a researcher found that Tigo Pesa was highly rated as product

that are used most and preferred by Tigo customers, followed by Data then Voice.

However, VAS, RBT, Tigo Bima and Tigo Music seemed neither preferred nor to be

most used by customer. The reason behind this probably is because they have options

against this service, as they mostly use data so for them to access YouTube for

listening/watching to music as an optional to Tigo Music and RBT, access to

websites as optional to VAS.

It is understood that price plays a crucial role in the consumer’s decision to purchase

a product or services. This implies that, consumers would only choose a product that

offers the best price (Aderemi, 2003). This therefore can influence their decision to

purchase a particular service or product from a company.

However, Tigo has been perceived as an operator who has best price (Affordable) to

their customer. This is because of the strategies that Tigo used in some years back

where they used to have offers and packages that allow customer to call all day only

for 1500. So these strategies and campaign has stacked to the customers mind and

perceived Tigo as affordable operator which is good to the company.

4.5 Effects of Promotion in sales performance

This study also focused on understanding the effect of promotion in sales

performances of Tigo telecom firm where the respondent clarify that with the

increasing of competition in the Telecommunication market, organisation has been

prompted to be resolute and ensure satisfaction of customer needs and wants more

49

efficiently and effectively than ones competitors hence they are supposed to come

with promotion ideas so as to increase sales.

The market has become very competitive in the recent days due to the growth in

technology, innovation and creativity in telecom industry. This has made the market

very complex and consumer preferences keep changing because of the low switching

cost in the usage. Due to this increasing demand of consumers in the market,

management of business organizations have to increase their resources with attention

focused more on attracting and retaining its customers (Kotler, 2003).

A researcher found out that Tigo staff come with two factors that will influence

customer to respond into the promotion offered by Tigo Telecom company, these

factor include Pull Theory “The Pull factor” which is about trying to market directly

to customers to increase their demand for your product. Advertising and links with

other products or services is the key to this strategy.

The factor goes that if you increase the demand for your product by consumers, they

will in turn demand the product from retailers, retailers will demand more of your

product from wholesalers and wholesalers will demand more products from you.

This is a way to increase your sales without decreasing the sale value of your

products. The second factor is “Push Factor” using this you can increase sales by

creating incentives to wholesalers or retailers to sell more of your product. In this

method you would offer discounts to wholesalers or retailers who buy your product

in bulk. This leaves them with more of your products on hand and drives them to sell

more of your product. Giving them the discount "pushes" them to buy more of your

product at a lower price to increase the amount of money they make. In turn they

must "push" your products to customers because they will make a better return on

them than on similar products supplied to them by your competitors

When the respondents respond to this objective, a researcher found the important

information where Tigo customers confirm what Tigo staff were responding to this

objective, these findings show the relationship of the customer promotion preference

with what Tigo promotions that sales most.

50

Table 4.5.1 Significance of Promotion in Sales Performance

Promo preferred Promo sales most

Types of

Promotion

Frequency

(N=30) %

Types of

Promotion

Frequency

(N=20) %

Smartphone

offer 8 27% Smartphone offer 8 40%

Acquisition 5 17% Acquisition 3 15%

Corporate

Package 6 20%

Corporate

Package 3 15%

Post Paid offer 4 13% Post Paid offer 2 10%

4G Offer 4 13% 4G Offer 2 10%

Prepaid Offers 3 10% Prepaid Offers 2 10%

Total 30 100% Total 20 100%

Source, Field Data 2015

The study also found out that the promotions which preferred by customers are

Smartphones offers 27%, Acquisition offers 17%, Corporate packages 20%, Post-

paid offers 13%, 4G offers 13% and Prepaid offers 10% where the researcher found

that the customer promotions preference is almost the same as what Tigo staff

respond that they are preferred promotion by customers due to the experience they

had in the market where Smartphones offer 40%, Acquisition offers 15%, Corporate

packages 15%, Post-paid offers 10%, 4G offers 10% and Pre paid offers 10%.

The research findings shows that there is a positive relationship between the effect of

promotion and sales performance. Where the effect of promotion in the market led

the increase of sales in the market hence the increase of sales in the company.

Generally, a researcher found that promotions add basic value to the product where

customer get stimulated and change their purchasing behaviour to the high one hence

the increase of sales.

51

Example: Free Facebook was the promotion that conducted by Tigo in mid of 2014

to date that resulted to the increase revenue due to the increase of data /internet users

and smartphone users who contribute much when they purchase data.

Demand for data is having a significant impact on industry. Affordable smartphones

are making the mobile internet accessible for millions who have never before been

online. Consumers no longer need to wait for a fixed connection to access the digital

world. Better mobile coverage makes everything possible. Meanwhile, the

development of mobile phone applications to educate, entertain, communicate and

make payments empowers consumers and societies. A recent report by the Tanzania

Communications Regulatory Authority (TCRA) shows that the number of internet

users in Tanzania has increased from 7.5 million in 2012 to 9.3 million by June 2014

- equivalent to 18% penetration.

Therefore, the researcher conclude that the effect of promotion in sales performance

will be ether sales performance to increase when the promotion is good to customer

or to decrease if the promotion is not attractive to customers. However, as

promotions tend to change customer buying behaviour it also can be used to retain

customers who threatens to churn.

52

4.6 Effect of Place on Sales Performance

Figure 4.6.1: Where do you sell Tigo Products?

Distribution Channel Frequency (N=50) %

Tigo Shops 10 20%

Freelancers 2 4%

Kiosk 1 2%

On umbrellas in the street 7 14%

Wakalas 3 6%

Online (*148*00#) 9 18%

Key Account Managers 16 32%

Direct sales 1 2%

Indirect sales 1 2%

Total 50 100%

Source: Field Data 2015

This study identified channel of distributions where Tigo staff used for selling Tigo

Products. The results showed that Key accounts managers 32%, Tigo shops 20%,

online (through USSD numbers) 18% and on the Tigo umbrellas along the street

14% are the channel that mentioned by the majority of the respondents during the

field of this research. Other channels or sales distribution channels includes direct

sales 2%, indirect sales 2%, kiosk 2% and freelancer 2%.

This study also identify product that are sold in the channel of distributions where

Tigo staff used for selling Tigo Products. The results showed that Key accounts

managers, Tigo shops, online (through USSD numbers) and on the Tigo umbrellas

along the street sell almost all products where other channels of distribution sell few

different products The study showed that direct sales, indirect sales, kiosk and

freelancer sell only Tigo Pesa and no other Tigo Products.

53

However, direct sales and indirect sales involve the super dealers and the company

itself where Tigo (the company itself) sell a product to super dealers at affordable

price then super- dealers distribute the products to the retail/customers, example of

these products include Tigo Pesa Tills, Vouchers, Epin and Smartphones

Majority of Tigo customers among those who participated on this study seemed to

use online as a way of buy Tigo Products. This is easy for them as it is convenient to

customer it does not require much time to do it. Most of the services which are

available online include buying packages, send and receive money through Tigo Pesa

as well as transferring money to bank account, where Tigo Pesa was bought in all

channel of distribution and this was the product which was highly mentioned by the

respondent due to its importance in daily life, Tigo MFS usage (Mobile Financial

Services) nowadays has penetration of 51% in Dar es Salaam only. As customer are

not using or preferring Tigo Bima, Tigo Music, RBT and VAS no channel of

distribution were mentioned as they do not use those products.

54

4.6 Factors influencing sales performance in Tigo Telecom Company

The table below present the factors that were mentioned randomly by the Tigo staff

during the interview of this study. This also involve the strategy that Tigo company

use to design and push the product in the market hence to increase sales of a

company.

Table 4.6.1 Factors influencing Sales Performance in Tigo Telecom Company

Product Plac

e

Price Promotion

Product

uniqueness

High

sales

Directly

to

custom

ers-

Tigo

shops

Penetrating price

Customer discounts

Brand

Retailers-

WAKALAs

Affordable price Smartphone Fairs

Volume

of the

packages

Wholesale

rs

Competitive price Bonus/Incentives to

customers

Availability

Distributo

rs

Product price

Promotio

n type

Push

Customer

needs and

Demand

Number of Tigo

Shops

Tigo Pesa Charges

Pull

Tagline

“Tigo

Tumefika”

Custome

r type

Private

customer

Competitor

don’t offer

such product

Corporate

customer

Advertisi

ng

method

Roadshows

Product

packaging

uniqueness

Ways

of

purch

asing

Online

TVC/Radi

os with a

strong

Character

(Joti)

Freelancer

s

Online Advertising frequency Source: Field Data 2015

55

Table 4.6.1 shows the factors that mentioned by Tigo staff who were part of the

respondents in this study.

Factors that belong to the Product show that product uniqueness, volume of the

package, availability of the product in the market, demand of the product in the

market are among of the factors that drive customers to buy Tigo products hence

increase of sales performance. However, Brand as brand prestige or popularity of the

brand in the market, and when competitor doesn’t offer the same product are the

factors that make a customer not to have other option when buying Tigo Product.

Price seem to be a big factors that customers can use in making decision whether to

buy Tigo products or not to buy Tigo products. Also the change of price in the

market can easily show the change of revenue whether the increase or decrease of

revenue in the company. When price increase the demand of the product decrease

especially for Tigo customer who use Tigo as secondary SIM they do not bother to

buy Tigo product for the secondary use. “When there is a price change in the market

you can see the decrease of revenue in Low ARPU category who are the Tigo

secondary SIM users”…said one of the Tigo staff.

Place is a bridge and channel of distribution that connect customer and seller of a

product. Tigo Company has a several ways of distributing its product to the

customer. There is a physical way and online way of getting Tigo products whenever

you want to access Tigo services. “We have the advanced way of selling our

products; we want our customer to have convenient and accessibility to our products

whenever they are.” Said Tigo staff from Technical department when he was

explaining one of the distribution methods of Tigo products.

There is online way that customer can use to access and buy Tigo product which is

Tigo Pesa by dialling USSD Code and buying Packages also by dialling USSD Code.

Also, Tigo has Tigo shops in different regions; however in some regions most big

regions where they have many customers Tigo has more than one Tigo shops so that

their customers will be able to get services at the nearest places from where they

stay. Example, in Dar es Salaam Tigo has 13 Tigo shops and this is allocated in all

56

district and populated areas like Mbagala, Manzese and Tegeta where these shops

accommodate almost 1500 customers a day on average.

In additional to that, Tigo also have indirect channel of distribution where super

dealers sell Tigo products and services on behalf of Tigo company, example of the

product that are sold by super dealers are vouchers, E-pin and Tigo Pesa TILL. There

also corporate customers who are taking cared by Key account managers.

Promotion, this is the element that speeds up sales of a product. From the factors

that Tigo staff mentioned during the interview with the researcher found out that

each Tigo product has its promotion where by grouping products or by single

product. “Promotion is highly used by Tigo Company compared to other mobile

phone operators not only because Tanzania is a good market to apply this strategy

but it because in general promotions speed up sales of any company”, said Tigo staff

from Marketing department.

Example: Free Facebook was the promotion that conducted by Tigo in mid of 2014

to date that resulted to the increase revenue due to the increase of data /internet users

and smartphone users who contribute much when they purchase data. This also has

been seen during Sabasaba fair, 2015 Tigo Banda was able to sell up to 300pc of

phone per day where 70% of them were smartphones.

This shows how promotion is a successful story to their business in this telecom

industry.

Basing on the factors mentioned by respondents, a researcher draw a relationship

between the factors and the sales performance where all factor mentioned has a

significance relationship with sales performance. These are the things that

respondents mentioned un-promptly by the researcher, this implies that customer has

their attributes to consider in each element of Marketing Mix when they decide to

purchase Tigo Product; moreover one factor within element of market mix can

change their buying behaviour.

In order for the company to increase its sales performance, it should work basing on

the respondents factors mentioned because these factors are what respondents think

they influence sales performance

57

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 Introduction

This chapter presents the summary, conclusions and recommendations on the

findings in chapter four based on research questions, objectives and

recommendations for further studies. The data obtained from the field included the

effect of marketing mix in sales performance in Telecoms market, the purchasing

behaviour of customer if is driven by the Marketing mix.

5.2 Summary

This study was required to investigate the factors influencing sales performance of

Telecommunication Company in Dar es Salaam.

During the study, it was noted that in marketing Mix influence sales performance,

where there is a significant relationship between efficient of marketing mix and sales

performance of a company. The findings show that, each element depends other if

one element doesn’t perform well it’s obvious it affect the other one hence no

performance of sales. And this has easily seen on the products that Tigo has

communicate to its customer those products are well used by customer and also they

are the ones that Tigo staff sell most compared to the ones which are not

communicated (Promoted) like RBT, VAS, Tigo Bima etc. are not highly used by

customers because they are not communicated.

The findings also showed that Tigo is perceived to have good taste of the product and

reasonable price of product, the customers will come back and the customers may

recommend Tigo products to the other people. The company should really notice on

the customers’ needs and wants, then the customers will return and this action is

going to increase the sales volume of the company. Success of the sales volume of

the products in Tigo Company depends in the marketing especially in pricing

strategy.

58

Generally, impact of sales performance has easily seen that is influenced by

marketing mix where if these elements of marketing mix are not implemented all at

once sales will be affected since customers will lack awareness to the product due to

absence of Promotion, lack of product awareness and usage if there will be no place

of distribution, also if price is higher sales will be affected.

5.3 Conclusion

The results indicate that marketing mix has significant relationship with the sales

performance. It means that all our hypotheses are supported and there are

relationship between Product, price, promotion and place as marketing mix with

sales performance as an outcome of marketing strategic. According to these finding

we can say that the marketing mix has been the marketing manager’s toolkit for

success. A firm’s marketing

Marketing plan of a company should go hand in hand with the 4Ps of the marketing

mix toolkit, with practitioners (other key players in the market) and marketer’s tasks

need to put emphasis into product, place, price, and promotion. It also fits with the

firm's sales performance, including changes to the company's performance will

occur, this also need to be evaluated by the responsible person so that to make sure

this elements of marketing mix have positive relationship with the performance of

sales in the company.

According to the research objectives, marketing managers and top managers should

pay sufficient attention to their marketing strategy planning, because all 4Ps have a

relationship with sales performance and all of them can play an important role in the

firm's success. Marketing is often seen as a key driver of business performance and

profitability.

Generally, from the findings presented and analysed in chapter Four, it can be learnt

that Marketing mix (price, product, promotion and placement) depends on each other

to make the sales performance either to be high or low and these are the factors that

influence sales performance in the market. Affordable price, good offers (product),

59

promotions and place of distributions enable customer to purchase more, to have

options while purchasing Tigo Products hence Increase of sales.

5.4 Recommendations

As mobile industry continues to scale rapidly, with a total of 3.6 billion unique

mobile subscribers at the end of 2014. Half of the world’s population now has a

mobile subscription—up from just one in five 10 years ago. An additional one billion

subscribers are predicted by 2020, taking the global penetration rate to approximately

60%. There were 7.1 billion global SIM connections at the end of 2014, and a

further 243 million machine-to-machine (M2M) connections, this opportunity gives

Tigo a bigger room to work on its marketing mix strategies so that to increase its

sales.

As per study findings showed that:

There is a need of reviewing of Product and Promotion from Tigo whereas the

findings show that some of the products are not popular to the customer because they

are not promoted.

Products like VAS, RBT, Tigo Music and Tigo Bima do not used by many

customers compared to the other product, this is likewise to Tigo staff that sale Tigo

product the mentioned products are not moving compared to the other products. So

the recommendation to Tigo Company is to reposition this product and promote

more to the customers and when the reposition and review these product they have to

consider the change of the technology, need of the service in the market, value of the

service to the customer and content of the service because these product are not the

core product to the company.

Also, the study shows that the reasons why customer buy Tigo products is not

because competitors do not offer these product but is because of Price and Good

offers, so I recommend Tigo Company to be innovative and design more new

products that their competitors do not have so that to have many customers and

increase sales.

60

To have loyalty programmes and products that will make the customer to maintain

their Tigo SIM and be their Primary SIM where this will make customer to spend

more money on this SIM hence the increase of sales performance in the company.

These loyalty programs may involve the Brand ambassadors I the collage, among

entrepreneurs, bloggers and employers where they need to give them incentives in

relation to what amount they spend in their Tigo SIM.

As the number of mobile phone users will increase by one billion by 2020 globally,

Tigo Company needs to be innovative in all aspects of Marketing mix so that to

make themselves sustain in Telecom market in Tanzania. It is obvious that things

will be more digitalized due to the advancement of technology so they need have to

position the brand in digital life style. This is supposed to include price where I

recommend service should be in affordable price as communication will be a primary

need and quality of the services /product should be good so that Tigo can be

perceived as a company that has value for money. Also, place and promotion should

be digitalized where the customer buying process should be easy and have rewarded

at the same time to speed up sales.

Finally, for further researches I suggest that investigating other components of

marketing which should able to develop sales performance. In addition, study on way

of pricing is highly recommended and will be useful under critical competitive

situation in Telecom.

.

61

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67

Appendix 1:

Schedule of Activities

The table below shows briefly how different activities will be performed in a given

period of time.

Table 1: Schedule of Activities from November 2014- June 2015

Activities Dec Jan Feb March April May June

Proposal writing

Proposal Submission

Data collection

Data analysis

Dissertation writing

Submission of first

draft

Revision of the draft

report

Dissertation binding

and submission

68

Appendix 2:

Estimated Budget

SN Activities Cost

1 Proposal preparation 4 draft 200,000

2 Transportation and communication 400,000

3 Stationary and photocopy 400,000

4 Meals and Accommodation 300,000

5 Data collection, analysis and entry 500,000

6 Correspondences with supervisor 300,000

7 Defending the dissertation 200,000

8 Miscellaneous 10% 200,000

GRAND TOTAL 2,500,000

69

Appendix 3:

Definition of Indicators

Indicators Definition

Price Price means the monetary value of the product has been fixed

for exchange purpose

Promotion The promotion include all communications a marketers used in

the market for his products of services to create awareness,

persuade the customers to buy and retain in future also.

Product Is a combination of tangibles and intangibles aspects of the

products offered by the manufacturer to the customers.

Place Is the point or location where the product is made available to

purchase.

70

Appendix 4:

Questionnaire for Tigo Staff

Tick the answer

1. Gender

o Male

o Female

2. Age

o 16 – 21 Years

o 22 – 30 Years

o 31 – 35 Years

o 46 and above Years

3. For how long have you working with Tigo?

o 1 – 5 months

o 6 – 12 months

o 1 – 2 years

o More than 2 years

4. Which department do you belong?

……………………………………………………………………………….

5. What Product do you sell?

o Tigo Pesa

o Voice

o Data

o SMS

o VAS

o RBT

o Tigo Music

o Tigo Bima

o Others

71

6. Which ones do you sell most?

7. Which ones are more preffered by customers?

Product Yes No

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

Product Yes No

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

72

8. Why do you think these customer prefer those product mentioned?

9. How do you think product consideration influence sales performance?

Product Low

Price

High

Price

Affordable

Price

Competitors

don’t offer

that service

High

demand

of the

product

Promotion

on that

product

Good

offer

Tigo

Pesa

Voice

Data

SMS

VAS

RBT

Tigo

Music

Tigo

Bima

Others

Product Very

Important

Somehow

important

Not

Important

Not Important

at all

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

73

10. To what extent you think product consideration influence sales performance?

11. What sales promotion do you offer?

Tigo Bima

Others

Product To Large Extent To Some Extent Not Applicable

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

Product Smartp

hone

Acquisitio

n

Corporate

packages

Post-paid

offer

4G Pre-paid

packages

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

74

12. Which promotion is most preferred by customers?

13. To what extent price affect customers purchasing behaviour?

14. Does promotion from Tigo makes you buy more of Tigo products?

o Yes

o No

Product Yes No

Smartphone

Acquisition

Corporate packages

Post-paid offer

4G

Pre-paid packages

Product To Large Extent To Some Extent Not Applicable

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

75

15. If YES please mention that promotion

…………………………………………………………………………………

……………………………………………………………………………….

16. Where do you sell Tigo products?

17. Does your place of distribution affect your sales performance?

o Yes

o No

o Other (please explain) ……………………………………………….

18. Impact of channel of sales in sales performance

Place Yes No

Tigo Shop

Freelancer

Umbrellas in the street

Wakalas

Online (*148*00#)

Key Account Managers

Direct sales

Indirect sales

Place High Sales Medium Sales Low Sales

Tigo Shop

Freelancer

Umbrellas in the street

Wakalas

Online (*148*00#)

Key Account Managers

Direct sales

Indirect sales

76

Appendix 5:

Questionnaire for Tigo Customers

1. Gender

o Male

o Female

2. Age

o 16 – 21 Years

o 22 – 30 Years

o 31 – 35 Years

o 46 and above Years

3. Do you use Tigo products?

o Yes

o No

4. What Product do you use?

o Tigo Pesa

o Voice

o Data

o SMS

o VAS

o RBT

o Tigo Music

o Tigo Bima

o Others (please mention) …………………………………………..

5. Which ones do you use most?

Product Yes No

Tigo Pesa

Voice

Data

SMS

77

6. What do you consider when you purchase/subscribe Tigo Products?

7. Are you influenced by price when you buy products from Tigo?

o Yes, I care about the price

o No, I don’t care about the price

8. In what extent price affect your purchasing behaviour?

VAS

RBT

Tigo Music

Tigo Bima

Others

Product Price Types of

product

Validity of

the product

Volume

of the

product

Many

people use

the

product

Pre-paid

packages

Tigo Pesa

Voice

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

Product To Large Extent To Some Extent Not Applicable

Tigo Pesa

Voice

78

9. Do you use any sales promotion offered by Tigo?

o Yes

o No

10. If YES please mention the promotion: ………………………….......................

11. Where do you get information about Tigo products and promotions?

o Online/web

o Facebook

o SMS

o IVR

o TV

o Radio

o Told by friend

o Billboards

o Brochures

o Journals

o Road show

o Others (please mention) …………………………………………

12. Does promotions form Tigo makes you buy more Tigo products?

o Yes

o No

Data

SMS

VAS

RBT

Tigo Music

Tigo Bima

Others

79

13. Where do you buy Tigo products?

Place Yes No

Tigo Shop

Freelancer

Umbrellas in the street

Wakalas

Online (*148*00#)

Key Account Managers

Direct sales

Indirect sales

80

Appendix 6:

Interview questions

1. Product

a. what product do you sell?...............

b. which product do you sell most?..................

c. Do you have any reason in mind on why the mentioned products are

moving so fast?............................

d. Why your customers preferred them more than the others?

....................

e. Are there any factors do you think users preferred more in a certain

product than the other?

f. Can these factors influence your customers on which product to

buy?..........

2. Promotions

a. Are there any promotions do you run in the market?...................

b. To what extent do you think promotion help to booster your

sales?...............

c. Do you have specific promotion for particular products?.............

d. Which criteria do you use in choosing a product to promote?.......

e. How do you measure the impact of your promotions?.......

f. How often do you run promotions?..........................

3. Pricing and Sales

a. To what extent do price affect purchasing behaviour of your

customers?

b. Do the customers increase their purchases of Tigo products?

c. Where do you sale your products?

d. Which sales point do you think sale more?

e. Do you think distribution affect your sales in any way?

f. Does location of a sales point affect your sales? How and Why?

THANK AND CLOSE