By Daniel Obi
What could have given rise to the plethora of consumer promos and lotteries embarked upon by virtually all marketers in different sectors? Except perhaps the oil industry, every other sector from telecoms to manufacturing, banking and service sectors are all engaged in one form of consumer promo or lottery.
Not minding the fatigue and disenchantment incessant promos could bring on consumers, “some of the promos hardly end before a new one is introduced to replace it.”
According to a social analyst, Salihu Othman Isah, what the Nigerian business environment has witnessed over the years is an inundation of promos after promos, day in and day out, every week and month, all year round.
Tunji Olugbodi, managing director of Verdant Zeal, agrees that promos are acceptable up to certain extend for marketers to offer some form of concession as a way of winning additional business or minds, but it is suppose to be an exception not a routine thing.
“But what we have found is that it has been turned into a routine thing. That way, companies offering incessant promos are not building equity, not in the brand, not in the product, not in the service. So, people only come to promo only for the fact that for this period in time, they can gain something in return not that they are loyal to the brand or to the organisation and it is worrisome for them. When what consumer sees everyday is promo, promo and promo, at a point he/she may tune off.
“Unfortunately, it is not a situation where the marketer can satisfy majority of the people and cater for all shades of needs and opinion,” Olugbodi explains.
Olugbodi attributed the frequent promos in order to win customers as a bandwagon effect which has not given much due to creative thinking. People however see most things they do only at the convenient point of departure rather than what ought to be done based on parameters they have set brand goals and their corporate objectives.
Unfortunately, the bandwagon effect does not pay for some corporate organizations and a lot of money would have gone down the drain, and efforts and resources would have been wasted. Promos, to analysts have become major competitive weapon as brands use it to provide an extra incentive to the “target audience to purchase or support one brand over another.” This explains why two competing brands run promos at the same time to the same target audience.
Ceaseless promos
Brand analysts have argued that the ceaseless promos are conceivably a failure of many brand owners to create what Muyiwa Kayode a brand expert called “Enduring value proposition”. Kayode in his book ‘The Seven Dimensions of Branding’ says that for any relationship to stand a chance of survival, or better still, stand the test of time, it has to be built on a symbiotic exchange of value.
“For any brand to command patronage and loyalty, its patrons must be deriving value from their romance with the brand. The branding process is about creating and sustaining that value. And central to that process is the creation and development of a strong and compelling value proposition,” Kayode says.
He regrets that not only because they (brand owners) often fall short of developing an enduring value proposition, but also because they do not even realize the need for a strong value proposition, as a pre-requisite for business success. Due to the lack of capability to create deep and acceptable value proposition on brands, brands owners turn to quick one – promos.
Emma Odowinma, Brand Health analyst, says the buying power is low and business is down. For brand owners to avoid pile up of inventory they run promos to lure consumers to buy, saying “whenever inventory is going up, the next strategy is promo. This is the only way they can remain in business.”
Often times, marketing managers are on the hot seat at board meetings to defend what is perceived as the ‘invisible’ impact of advertising budget. Unfortunately, some organizations don’t realise that their advertising campaign is “as important as the payroll and taxes”.
Because of the lack of ability to see the immediate impact of advert campaigns, advertising budgets suffer during operational hiccups. In order for marketing managers to maintain their jobs, they create campaign projects that would have immediate direct impact on numbers to justify their budgets not minding the long term effect as they come up with promos.
This is possible reason some brands run promos twice or thrice a year for a particular product as sales are said to increase during those exercises.
Seni Adetu, chief marketer, Guinness, notes that operational marketing is the type of marketing that works and supports top line.
“If you cannot prove that your advertising will make organizations grow top line, then it does not worth consideration. What matters in advertisement is that it should elicit reactions that will impact on brand growth,” Adetu says.
According to analysts, promo is a strong sales support strategy in the short term. Promos have therefore become easy ways to measure advert spends and increase immediate patronage with the possibility of retaining some of the consumers.
This is probably what prompted the telecom operators to embark on promos which added more subscribers – not necessarily loyalty – to their network and the weight of it was not planned for. Subsequently and due to public complaints over poor service, the Nigerian Communications Commission (NCC) clamped down on the promos.
The commission, in a statement cited overwhelming consumer complaints as the main reason for its action. The Director, Public Affairs, NCC, Tony Ojobo in a report confirms that the commission had, in recent times, been inundated with several complaints from consumers and industry stakeholders against the various promotions being offered by the operators.
He says that “NCC carefully evaluated the complaints received, especially against the backdrop of sustaining the integrity of mobile networks, general interest of the consumers, socio-economic impact of the promotions on operators and other relevant stakeholders before taking its decision.”
The decision, Ojobo hints, dovetailed into the commission’s statutory responsibilities such as to protect and promote the interest of consumers against unfair practices, promote fair competition in the industry by protecting operators from misuse of market power and anti-competitive/unfair practices by other operators.
“The commission has banned all promotions by telecommunications network operators as well as lotteries being carried out on such networks. This ban covers all proposed and approved promotions and lotteries on which the commission has given approval further to the Memorandum of Understanding entered into with the National Lottery Regulatory Commission,” Ojobo explains.
National Lotteries Regulatory Commission welcomed the ban of promos among GSM operators saying that the ban has been done in good faith. The commission said it is working with all stakeholders to ensure that only bona fide lottery operators with a valid national lottery licence are allowed to operate any form of lottery in Nigeria. This is to ensure transparency, integrity, and accountability in the Nigerian lottery industry.
On the other hand, Consumer Protection Council (CPC) feels the action of the NCC was timely and good for Nigerian consumers who had started complaining about poor quality of service occasioned presumably by the congestion being experienced on the network of most telecom operators in the country.
Ify Umenyi, Director General of CPC told BusinessDay that “we have information that the decision came as a result of the poor quality of service being experienced by telecom service subscribers across the country. As you may be aware, sales promotions in the telecom sector have direct bearings on the number of new subscribers added to a particular network, the volume of calls made and a host of other technical issues.”
“If the NCC perceives at anytime that sales promotions have begun to negatively affect quality of service in the sector; it owes it as an obligation to Nigerian consumers to do away with such promos. More so that sales promotion is not the primary service being rendered by the operators. Their primary obligation to Nigerian consumers is to make it possible for calls to be made successfully and for internet and other services rendered by them to work effectively.”
Promos touted as reward
Organizations have repeatedly leaned on ‘Consumer reward’ as reason for promos. John Awe, a public relations consultant believed that promos have always worked in delivering for the companies. “I believe they are delivering good results for companies”.
As the companies use promos more as a sales strategy rather than reward system, some of the promos also enrich the telecom companies as consumers are required to text certain numbers to certain codes at the cost of N10 and sometimes N50 or N100. The sharing formula of this money which may run into huge sum of money is yet to be revealed.
Absence of policy
The CPC recently decry the absence of a clear policy on consumer protection as hampering its efforts to consumer protection. According to reports, the council said this lapse has made it possible for firms which short-change Nigerian consumers to go away with their discrepancies.
Ify Umenyi, director general, CPC, which briefing journalists in Lagos, says that aside the lack of policy on consumer protection, the agency was also suffering from the problem of improper structure, as well as no take off grant for its operations as well as the non-admittance for the agency by the relevant authorities to budgetary provisions.
She laments the rampant trampling on the rights of consumers in the country despite that the consumer worldwide is regarded as king in the market place, adding that the agency would not tolerate it.
The challenges notwithstanding, the director said the commission has been able to execute surveillance and enforcement operations in different markets as well as the successful prosecution of offenders in Kano, Lagos, Zaria and Kaduna.
In the past it is said some organizations have failed to redeem prizes but the stepping in of CPC and NLRC has obviated that to a great extent.
Ajo Mohammed, director of enforcement and compliance, NLRC which is in-charge of regulating the lottery industry warns that companies which engage in promos and lotteries with the objective of cheating Nigerians, there days are over. He warned recently that the practice of not obtaining permits before running promos will not be tolerated by the commission.
In the same vein, Lagos State government recently warn illegal operators in that market to desist or face the law. The regulatory authorities may have banned promos in the telecom industry because of its impact on services. But Isah say the nature of several promotions itself many a time, going by expert analysis, have medical disadvantages on consumers.
Take an instance where the consumer will have to consume soft drinks, alcohol and confectioneries like sweets, pastries, chocolates, they take them in excess.
In an attempt to attract the attention of consumers, promos in Nigeria have become cluttered which has the tendency to lose consumers appeal and negate its underlying marketing objectives. As experts argue, although sales promotion is an important strategy for producing quick, short-term, positive results, it is not a cure for a bad product, poor advertising, or an inferior sales team and it may not be effective in building brand loyalty.
It is time brands began to innovate new ways to catch and retain consumers attention as promos are becoming cluttered with legal and illegal operators in the system. Adetu challenge marketers in Nigeria to embrace new thinking especially as the world becomes dynamic with various factors dictating consumer behaviour.
To Seni Adetu, what has served organizations now is not enough to take them to the future.
Benefits of promos, lotteries
Ajo Mohammed believes that those who don’t win in lotteries and promos are not losing totally as the law says that 20 percent of the proceeds must go back to the people. “In this process winners will emerge, but even those who are not lucky will not lose totally as 20 percent of the money they used in the exercise must go back to government to be used for good causes,” Mohammed explains.
He said there is trust fund which the companies must pay some amount of money which will be used to improve sectors like education, natural disasters and sports. What this means is giving prize to the winner and benefit to the nation.
It is said that NLRC has realized over N3.5 billion in the last three years and it is left for Nigerians to assess it. “If you have worthy cause for which you want to execute, you can apply to the National Lottery Trust Fund and the application will be processed and if the President realizes that the project is worthy, he will approve disposal of fund to the project. It is the societal benefit that why European countries play lottery,” Mohammed adds.
Source: BusinessDayOnline
