The effects of sales promotion strategies on company performance: a case of Telone Zimbabwe

Abstract

The study was to determine the effectiveness of sales promotion strategies on company performance with special reference to TelOne Zimbabwe. The aim of this study was to measure sales promotion strategies effectiveness in terms of profitability (ARPU), sales volume and market share in terms of subscriber growth. The study was guided by the following objectives, to determine the effects of contests and sweepstakes on profitability, to determine the effects of bonuses on subscriber growth and to establish the effects of price-offs on sales volume. Sales promotion was defined, its scope and objectives and effects of the techniques on company performance are presented in this study. The main sources of data used in the research are primary and secondary data. Two research designs were used which are explorative and descriptive research designs. A sample size was calculated using the Lucy model of determining sample size. The sample frame consisted of employees, management and key subscribers. Stratified random sampling was used in drawing samples from the target population. Questionnaires were administered to employees and key subscribers and management interviews were conducted. The results of the research tools indicated that sales promotion strategies were effective with contests and sweepstakes being the most effective and price discounts contributing a minimal of the three strategies employed. The study concluded that sales promotion induced subscribers to consume TelOne products on the market thus increasing consumption rate, profitability and sales volume. Major findings are that TelOne widely used contests and sweepstakes as the main promotion activities to stimulate their profitability, bonuses increased sales volume and lastly price discounts enhanced market share growth. It was also found that there is a very strong positive relationship between sales promotion activities and company performance measured in relation to growth to profitability, sales volume and market share. The study concluded that sales promotion activities induce customers to consume TelOne products on the market thus increasing consumption rate and the sales volume. The researcher recommended that TelOne need to understand the promotion activities and which media to communicate to consumers. It should put a lot of emphasise in planning promotional programs, set promotional goals and strategies. The company need to carryout period evaluation in the course of the sales promotion and control of promotion and make adjustments where possible. Public relations and advertising are further area of study are critical and give the organization a competitive edge in the ever evolving telecommunication sector.