EFFECTIVE PROMTIONAL STRATEGIES ON PROFITABILITY OF AVIATION INDUSTRY
(A CASE STUDY OF ARIK AIRLINE, NIGERIA)
1.1 BACKGROUND OF THE STUDY
Marketing and promotional strategies in the Aviation industry may differ depending on the unique situation of the individual business like Arik Airline.
However there are a number of ways of categorizing some generic marketing strategies. A brief description of the most common categorizing schemes by David J (2002) is presented below:
· Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies:
The recent trend of company collapse in Airline businesses in Nigeria is becoming very alarming and needs urgent solution to nip the trend in the bud. Many companies in Nigeria are folding up; many of them are operating at relatively business competition in their various industries, sectors or brands.
Thus, any company that must survive the negative trend must put necessary business marketing strategies and plans of actions in place to enable it make ends meet, break even and equally make business gains/profits; effective marketing plan therefore comes into focus as a company's saving grace that adequately adopts it.
Promotional strategy is needed to meet short-term and long - term objectives of a company. At its most basic, short term planning is required simply in order to identify where the company is now, and where it will be next week, or next month or year.
According to Curry (1999), marketers who fail to conduct thorough marketing strategy and marketing research works run the risk of not achieving their marketing promotional goals and objectives. Catterall, (1988), notes that some marketing executives consider academic research as irrelevant to their marketing problems, while academics complain that marketing executives ignore their marketing research efforts marketing plan and marketing research is real, vital and costly process, without which marketing management decisions would be made.
According to mechanically Osuagwu, (2002).Marketing promotional strategy is a very indispensable tool in marketing decisions and strategy formulation. Developing a very useful marketing plan would however depend on having a sound and reliable information data on the business/organization/company and on the market, the uncontrollable factors and these elements that make up the marketing mix in Arik Airline.
1.2 STATEMENT OF THE PROBLEM
The Nigerian business environment is a competitive business environment which is opened to all types and forms of business operators. For most of these businesses in the aviation industry, their survival lies on the patronage they receive from their customers and clients.
Airline Organizations in Nigeria have not really benefited from marketing strategies and plans because of the wrong notion about the concept of marketing. Some people believe that marketing is only meant for the financial institutions like banks and other financial institutions or Telecom firms. Because of this they rarely practice marketing in their business firms.
Another problem about the Nigerian business environment In relation to the concept of effective marketing strategy is the wrong approach to marketing promotions by most organizations. However, most organizations in Nigeria use marketing as a way of de-marketing other organizations. They use the medium to disseminate negative information about other rival business firms and organization.
Consequently, the problem of unethical standards and uncontrolled disseminations of information by organizations when marketing through advertising and other electronic means is becoming unbearable for the business environment.
Finally the overhead cost incurred on promotions by organizations affects the turnover and profitability of the business.
Therefore, this study is aimed at considering the potential effects of the above factors on the company and the society at large, thus, the impact of effective marketing plan on the profitability of a company with particular reference to Arik Airline.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study include the following;
1. To evaluate the impacts of effective promotional strategies on the profitability of the Aviation industry, using Arik Airline, as a case study.
2. To examine whether effective marketing promotion plan is more of negative or positive impacts on a company's profitability.
3. To establish measures that could be used to introduce effective promotion plans in a company that has no such plans.
4. To make recommendations on what could be done in order for companies to take advantage of the gains resulting from effective marketing strategies and plans.
1.4 SIGNIFICANCE OF THE STUDY
The significance of the research work shall:
1. To enable Nigerian managers, marketing executives in Arik Airline and even the general public to see clearly the gains and losses of having effective marketing plan in a company.
2. It will reveal immediate solutions to proffer to the disadvantages culminating from unimplemented marketing promotion strategies.
3. To enable business organizations take advantage of the gains of effective marketing promotion plans to the profitability of the company.
4. It will equally contribute to the wealth of knowledge and literature available on the subject/topic of study for future references.
1.5 RESEARCH QUESTIONS
It is the intention of this researcher that questions such as are stated below are answered in the course of this research:-
i) What constitute marketing promotion strategies?
ii) What are the objectives of this strategies and plans in Arik Airline?
iii) What are the challenges facing the implementation of this strategies?
iv) How effective are the instrument used in the implementation of these promotion strategies?
v) Does it actually lead to increase in the profitability of the company?
1.6 STATEMENT OF HYPOTHESES
The following null hypotheses are proposed and tested in the course of this study. Hypothesis one
Ho: Effective Marketing promotion strategy does not have any impact on the
profits of Arik Airline
H1: Effective Marketing promotion strategy has impact on the profits of Arik Airline.
Ho: Effective market promotion cannot improve on the turnover of Arik Airline.
H1: Effective Market promotion can improve on the turnover of Arik Airline
1.7 THE SCOPE OF STUDY
The scope of this Research work IS limited to the Aviation industry in Lagos State. References made to other organisations and areas are for comparative purpose only. The company selected for the study is Arik Airline.
1.8 LIMITATIONS OF THE STUDY
Time and cost of conducting the survey on market promotions and strategies in the aviation industry, are the main limiting factor for the study. These are responsible for the scope of the study to be limited to Arik Airline in Lagos areas of main Land and Island only. Also the assumption that respondents will honestly and accurately answer the Questionnaires is another limiting factor.
1.9 ORGANIZATION OF THE STUDY
Chapter one is the introduction while chapter two is the literature review and theoretical framework and chapter three is the research methodology. However, chapter four is the analysis and interpretation of the result while chapter five is the summary, recommendation and conclusion.
1.10 DEFINITION OF TERMS
Marketing: the whole activities in an organisation aimed at producing goods and services and making the products available to the consumers.
Marketer: Any person who sells goods and services.
Advertising:All the techniques channels through which goods and services are brought to the knowledge of the consumers.
Advertising practitioner: Any person who engages in the practice of Advertising.
Advertising code: All the standards to be observed by advertising practitioners.
Purchase behaviour: The way the consumers react to advertised goods and services