Promotional Strategies as Tool for Improving Marketing Management in Nigeria {a Case Study of Niger Insurance Plc}

Promotional Strategies as Tool for Improving Marketing Management in Nigeria {a Case Study of Niger Insurance Plc}

Chapter One of  Promotional Strategies as Tool for Improving Marketing Management in Nigeria {a Case Study of Niger Insurance Plc}

INTRODUCTION

GENERAL DESCRIPTION OF THE STUDY

A Marketing Promotional Strategy is saliently concerned with the role be played by each of the promotional mix elements towards effective and efficient dissemination of information potential customers and clients. Promotion practices are essential especially under condition of imperfect competition, noon-rational behaviours of customers and incomplete market information.

Intensified competition among different insurance companies may well inform the need for serious attention to promotion. The emphasis to be placed on promotion has relevance for both products and services marketing. The Insurance marketer needs to understand the environment in which the function, and to look at the promotion mix elements those he uses and those which he must adjust.

Promotion Strategy can therefore, be seen as the design and management of a marketing subsystem for the purpose of informing and persuading present and potential customers and clients.

A firm should coordinate all its promotional efforts as a complete subsystem in the total marketing system. In economic terms, the basic purpose of promotion is to change the location and shape of the demand curve for a company’s products, service or idea. Through promotion, a company attempts to shift a product’s demand curve to the right, and change the shape of the curve. Through the use of promotion, a company hopes to increase a products sales volume at any given price. It also hopes that promotion will effect the demand elasticity for the product, that is, making the demand elastic when the price decreases.

The basic purpose of promotion strategy is to let actual and potential customers, clients know about the product/ service, i.e. to disseminate relevant information. Nigerian corporate marketing managers should determine what combinations of advertising, personal selling and other promotional tools will be the most effective promotional strategy for their companies. Four factors that should be taken into account in deciding on the promotional mix.

• The amount of money available for promotion
• The nature of the market
• The nature of the product
• The stage of the products life cycle

The major purpose of promotion is to inform, persuade and influence people including customers, clients and other relevant publics.

A marketing promotions strategy/policy prescribed the role to be played by every means of disseminating information to consumers about a particular product or service. The relevant aspects of formulating this strategy include such topics as determining the information to be communicated to consumers, clients, the budget for it, and the choice of means or tools for disseminating information.

Meeting promotion is also salient in the strategy or market segmentation. Promotion is used to inform market segments of the availability of products or services produced for them to meet their precise needs and wants. Good customer/company relations should be paramount in a Nigerian product or service organization. Nigerian company employees should develop a behaviour that is tolerant, patient, polite, honest and sincere in all their dealings with customers and clients.

Promotional activities and decisions, other than advertising activities and decisions, include special price reduction, free offers, technical leaflets, exhibitions, seminars and conferences, press free edition In appropriate media, planning the size, selecting the administrative methods to be used and nature of the sales office staff, remittent, remuneration and training of the members of the sales department and devising a suitable monitoring service and information system to keep track of results versus plans.

STATEMENT OF PROBLEM

Nigerian business environment is full of uncertainties and instability. Therefore, a Nigerian marketing manager must identify, understand and utilize the major element of the business environment in strategic marketing decisions. Generally, a Nigeria marketing manager operates within the following business environments’ economic, technological, legal restrictions, competitive, socio-­cultural, political and operating environment among others.

• The economic environment includes inflation rate, interest rate, exchange rate, income per capital, more also as the world experience global economic crisis which is affecting many industrial and organization and also budget constraints.
• The socio-cultural environmental factors are consumers’ and clients’ lifestyles, level of hygiene, customs, beliefs, values, age, geographical distribution and literacy level of consumers and clients.
• The technological components are company’s technical facilities for the production and delivery of goods and services.
• The legal environment includes the business laws operating in land and its compliance.
• The political environment refers to the type of government policies, philosophies, programmes and priorities.
• The competitive environment refers to the alternative companies that could provide products or service to satisfy specific market needs and wants.
• In developing an efficient and effective marketing strategy and policy, it is important for a marketing management to study the elements of any business environment and this must be subjected to SWOT.

AIM & OBJECTIVES OF THE STUDY

The aim and objectives of this research is to delve into the study of promotional strategies as tool for improving marketing management in Nigeria.

• Distinguish marketing of goods from marketing of services.
• Examine how the element of marketing mix called “promotion” relates to marketing as Insurance policies services in Nigeria, e.g. advertising, sales promotion and personal selling.
• Provide a general view on Insurance products and examine the risk characteristics that can be the result of lack of promotion, in the face of intense competition and the provision of services that are generally identical in nature.
• Present the theoretical explanations for promotion of services and obtain a theoretical conclusion on the benefits of marketing.

SIGNIFICANCE OF THE STUDY

The need for embarking on this project work cannot be over emphasized.

Organization will benefit as involved in the policy formulation and implementation of development and utilization of promotional resources to achieve organizational goals. This work will be an attempt to improve their productivity, increase profit and improve market share as a result of promotional effort.

It will also go a long way in helping future researchers and students alike who might be interested in studying prospects and problems of lack of promotion.

RESEARCH HYPOTHESES

The following hypotheses will be tested:

H₀:     There is no positive relationship between promotional activities and increase in market sales.

Hi:    There is a positive relationship between promotional activities and increase in market sales.

H₀:     Promotional strategies is not a potent tool for achieving growth.

Hi:    Promotional strategies is a potent tool for achieving growth.

RESEARCH QUESTIONS

The research intends to answer or find solutions to the following questions.

Does strategies Marketing Management lead to positive development?

Can Promotional Strategies be a potent tool for improving marketing?

Can Promotion enhance efficiency in the marketing management in Nigeria?

SCOPE OF THE STUDY

In this study, attempt will be made to state the promotional strategies as tool for improving marketing management in Nigeria.

The study will be carried out in Niger Insurance Plc from July to December 2011 and all suggestions and recommendations will be advisably relevant to the industry.

DEFINITION OF TERMS

As the research progresses, many terms will be used which the researcher find imperative to define to help simplify the research work and prevent ambiguity in the course of study.

STRATEGIC MANAGEMENT: According to Bowman and Asch (2009), states that strategic management is the process of examining both present and future environments, formulating the organization objectives, implementing and controlling decisions and activities targeted of achieving these objectives in the present and future environment. It is in essence, the deployment of the firm’s internal strength and weakness to exploit external opportunities and minimize its external problems or threats.

STRATEGIC MARKETING MANAGEMENT: It is that segment of strategic management of an organization that focuses on the marketing activities that have relevant bearings on both present and future marketing operative of the firm. It is concerned with gaining competitive advantage in marketing which is a continuing process.

MARKET DRIVEN STRATEGY: According to Cravens and Crittenden (2007), emphasize that market-driven strategy is to gain competitive advantage by a firm which calls for analyzing and strategically responding to changing environmental opportunities and threats. These strategies being with accurate understanding of the market and focus on the customer is the basis for deciding how, when and where to compete.

STRATEGY: According to Chadlar (2007), it is the determination of basic long-term objectives and goals of an organization, the adoption of courses of action and the allocation of resources necessary to carry out these goals and objectives.

PRODUCT STRATEGY: A set strategy for new products, product improvement and product deletion.

DISTRIBUTION STRATEGY: This includes the strategy to be used for each distribution channel, including role of middlemen assistance and support provided and specific.

PRICE STRATEGY: This specifies the role of price in the marketing strategy and the planned actions regarding price.

MARKETING RESEARCH: Identify information needs, planned project objectives, estimated costs and timetable.

PROMOTIONAL STRATEGY: It indicates the planned strategic and actions for advertising publicity, personal selling and sales promotions.

BRIEF HISTORICAL BACKGROUND OF NIGER INSURANE PLC

Niger Insurance Plc was incorporated on the 29^th day of August, 1969 as a Private Limited Liability Company (The Niger Insurance Company Limited) with an authorized share capital of N50,000 to take over the undertakings, assets and liabilities of the Yorkshire Insurance Company Limited, a fully owned British Company that had decided to stop transacting Insurance business in Nigeria from 1969, sequel to the promulgation of the Companies Decree of 1968, requiring all foreign companies in Nigeria to be formally incorporated locally and be operated as such. This was the situation up to December 1973 when Yorkshire Insurance Company Limited of England sold its entire shareholding in the Niger Insurance Company Limited to National Insurance Corporation of Nigeria. The result of the above transaction was that the Niger Insurance became a wholly-owned subsidiary of National Insurance Corporation of Nigeria.

The company is now a fully privatized composite Insurance company quoted on the floor of the Nigerian Stock Exchange. Currently, Niger Insurance Plc is among the “BIG FOUR” in terms of total gross premium income.

CAPITAL/ASSET BASE

The public quoted composite Insurance company presently operates with an assets based in excess of N5 billion and a fully paid up authorized share capital of N400 million.

MAN POWER BASE

The management team of the company is made up of trained, experienced and competent professionals with extensive management and technical skills.

Niger Insurance Plc is fully computerized with the most advanced software technology. The computer network is capable of expansion and upgrading to meet with present and future increases in the volume of business.

Niger Insurance plc has also put in place sound reinsurance treaties with local and foreign first class reinsurance companies led by Swiss Re.

These comprehensive securities ensure financial stability and exude confidence in its service to both present and prospective customers.

As a composite Insurance Company, Niger Insurance Plc transacts all classes of Insurance business and offers a wide range of innovative and customer-oriented products and services to its growing clientele.

At Niger Insurance Plc, they are very flexible in their product development because they realize that no two customers are exactly the same.

Moreover, their products are backed up with one of the most efficient and constantly improving claims settlement procedures in the insurance market.

The following are broad spectrum of the products and services the company is offering:

LIFE AND PENSIONS

The company’s commitment to rendering the best service in this area of operation places its among the top three companies in the industry with the largest life and pensions portfolio. These products which the company has carefully packaged include:

• Personal Pension and Saving
• Niger Cash Plan
• Child Endowment Scheme
• Deposit Administrative Scheme etc.

GENERAL BUSINESS

The policies relating to the above and designed to provide indemnity against material and pecuniary losses arising out of various risks.

• Motor
• Money
• Marine Cargo
• Fire and Allied Perils
• Burglary and Housing Breaking etc.

SPECIAL RISK AND MISCELLANEOUS INSURANCE BUSINESS

In this category, the company offers specialized policies to cover losses from risks such as:

• Bonds
• Oil and Energy
• Engineering
• Aviation and Marine Hull etc.

Niger Insurance Plc branch offices are manned by well ­trained and motivated personnel nationwide but are co­ordinated from five Regional Offices.

• Eastern Regional Office, Port Harcourt
• Lagos West Regional Office
• Abuja Regional Office
• Kano Regional Office
• Ibadan Regional Office