A Study On Globacom Limited Marketing Essay

Nigeria’s mobile telecommunication industry started in 2001, with the launch of Global System of Mobile Communication (GSM). Since then, Nigeria has emerged as the fasting growing Telecommunications economies in the Africa, and third in the world, after China and Brazil (Aneke, 2009). Globacom is one of the biggest telecommunication companies in Nigeria, It is the only Telecommunication company amongst the top 4 GSM providers, to be have originated from Nigeria. Not only is Globacom a proudly Nigerian company, it has successfully been targeted as the pace setter (based on innovations) of the telecommunications industry in Nigeria (Ochai, 2009 ). Since its launched in 2002, and started its operations in August 2003, it was the first mobile phone service provider to offer per second billing in Nigeria. This gave Globacom a great competitive advantage, has other mobile operators were only offering per minute billing (Ochai, 2009). The next paragraph looks at the background of Globacom, to understand how it started, and see how far it has gone since its inception.

Background of Globacom

Globacom was launched in 2002 by Nigerian business tycoon / billionaire Dr Mike Adenuga, who is already successfully in the oil industry, with Conoil plc and the banking industry with Equatorial Trust bank (ETB). It started operations in August 2003 by offering both per second and per minute billing. Being the first in Nigeria to offer per second billings, people gradually started swapping their SIMS to Globacom SIMS as the per second billing was seen as a cheaper option. Globacom started to grow and gain market share, just one year after it started operations, it has gained 25% market share in the telecommunications industry. The next paragraph is the Globacom Vision, now that its background has been analysis, it is necessary to see where it plans to go. (check for definition of vision and adjust this part and the beginning of the next)

Globacom’s Vision

Globacom’s vision is building Africa’s biggest and best Telecommunications network (www.gloworld.com ). This is a big dream for a company that started just six years ago. So far they are aiming towards achieving their goal by being continuously innovative and being one of the best telecommunication services providers in Nigeria. Globacom is now present in Nigeria, Côte d’Ivoire, Benin republic and Ghana (www.gloworld.com). Now that the vision is known, the subsequent chapter analysises the Globacom strategies so far in the bid to realise its vision.

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Key strategies: creating a competitive positioning

Market target

Globacom Limited’s market target is the generation X and Generation Y of the Nigerian and African population, based on the type of products and services they offer. They have continued to offer services that would appeal to this target Audience. The products and services includes free Globacom to Globacom midnight, free MMS, and lots more. Globacom Limited has also targeted the average and below average citizen they constitute majority of the Africa population and they have done this by reducing their pricing, which makes their products and services more appealing to them.

Cost leadership

Cheap SIM cards: Globacom started its operation in Nigeria six years ago, when SIMS cards by the other existing Mobile phone service providers cost 20,000 Naira (£81.50/$132.50) which was unaffordable to a lot of Nigerians. Initially the price of a Globacom SIM was almost the same as the already existing Mobile phone service providers, after a few months of slow sale, they slashed 90% of the price off making it 2,000 Naira (£8.15/$13.25) which also included the same amount of top up, making it more or less free. The price splash was announced on the 1st of October (Nigeria’s Independence Day) making it seem like an independence day present to the Nigeria public. Doing this, they were able to attain cost leadership, one year after, they had gained 25% market share (www.mobilecomms-technology.com). Not long after other mobile phone service providers, started reducing prices also, as they realised that they were beginning to lose customers to Globacom.

Variety in Top Up pricing: Before Globacom came into the Nigerian Telecommunications market other mobile service providers only had two top up options 1500 Naira and 750 Naira (£6 / $10 and £3/$5). Many Nigeria’s struggled to top up as these options were a bit on the expensive side to them. When Globacom started and offered even cheaper options, the to appeal more to the lower class citizens.

Differentiation

Globacom gained its reputation of being known as a pace setter by being continuously innovative in Nigeria / Africa telecommunications industry. It has been able to differentiate itself from other mobile phone service operators by continuously being the first to introduce new product and services to its customers.

Per second billing: Globacom came in to the Nigeria mobile telephony market by offering per second billing and became the first in Nigeria to offer such a billing system. Before than people other mobile phone service providers, said it was impossible to attain such a billing system in Nigeria, till the year 2007. The Nigeria people were please of such a bill system, as they were going to be charged based on the actual time spent. In doing this, Globacom created an impression that they understood the needs of the people and were ready to meet their needs.

Constant Promotions: Globacom was the first mobile phone service provider to offer promotions to it customers. Globacom started by offering free multimedia messaging services (MMS) and Mobile Internet. Before this no other mobile phone network was offering this services, and Globacom was offering it for free. With this promotion, they targeted the youth, to get them attached to these services so that they would be hooked to it and continued even when they start charging for the services.

Others: Globacom also was the first to provide 3G facilities in Nigeria, and recently launched its Glo-1 submarine cable, (first of its kinda in Africa) that is 9800km long. The cable runs from Bude in the United Kingdom and connects Nigeria with the rest of Africa. This submarine cable is to enable faster and clearer and cheaper voice, data and video connections (www.gloworld.com).

Other strategies

Advertising / Sponsorship:

Globacom has over the years invested heavily on sport sponsorship, especially football. Football is one of the oldest and most popular sporting activities in Africa; it is a sport that Africans (young and old) are very passionate about. Globacom realises this and hence invests heavily on it. Their many sponsorship includes: The Nigerian and Ghanaian National teams, Nigerian and Ghanaian Premier Leagues, CAF (Confederation of African Football) Awards, Glo Lagos International Half Marathon and Manchester United ( a platform that sponsors aspiring African footballer to the Manchester United Academy and Sponsor some fans to watch live football and meet fans)(Solaja, 2009). Globacom also sponsors a lot of musical concerts in Universities campuses all over the country and invests a lot in celebrity endorsement, which would be elaborated on in explaining the extended self theory. The next paragraph, Creating National Identity looks at how Globacom uses factors to appeal to its consumers. It will Analysis how Globacom has used its Logo to achieve a sense of national Identity.

Creating National Identity

The Globacom Logo, is glo written in white in a green circle(appendix ….). The world glo looks like a short form of glow, which means to be bright, to shine in the dark, a sense of pride. The Globacom prides itself of being a truly indigenous brand, as the other top telecommunications companies are from other countries. Globacom reflects this with it’s logo colours, which are green and white , these colours plays with national identity. The Nigeria flag consists of three equally divided vertical stripes, the first colour is green, followed by white and ends with green again. Green is the dominate colour of the Nigerian flag, which also is the dominate colour of the Globacom logo. The colour green in the Nigeria flag represents rich in Agriculture while while represents peace and unity. Generally, green represents fruitfulness, plenty, wealthy, richness etc while white represents ……..

To analysis how Globacom plays with consumer’s psychology, the Globacom catch phrase, colour / logo, use of celebrity endorsement and a Globacom advert would be analyised.

Semiotics

Rule your world (appendix….)

The Globacom slogan, originally was Glo with pride, which suggests that if you are a member of the Globacom network, you will shine in the dark, and with pride, which suggest that despite all the hardship in Africa, being in the Globacom network, will enable one to shine and be happy. They changed their slogan about three years later to rule your world. Rule your world as the new Globacom catch phrase, is quite individualistic, though in a collectivistic society. Globacom realises that though Nigeria and Africa has a whole is very collective, they (Africa), always tries to emulate the western world, which is very individualistic. Also, the catch phrase

uses semiotics being that it is trying to pass a message that being a member of the Globacom network will give you the opportunity to rule your world. Attaching freedom, control and power to the use of a mobile network. Also being that Nigeria and Africa at large has at a point being colonised by foreigners, they know what it’s like to be restricted and dominated, even after the colonial era, most people in African countries still can’t practise true freedom, has there are lots of restrictions by the Government and other types of officials. So it is only normal for Africans to automatically attach themselves to a brand that preaches freedom and the ability to rule your own world.

7. The Extended Self

7.1. Having, Doing and Being

The extended self suggests that one’s possession is an extension of one’s self (Belk, 1988). A product that is bought has the power to perform certain functions which differs from individual to individual and the function it performs gives a sense of fulfilment or satisfaction. “Objects in our possession literally can extend self, as when a tool or weapon allows us to do things of which we would otherwise be incapable” (Belk, 1988. P.145). “Nationality is a crucial aspect of people’s identity, the argument goes. If one’s nation is demeaned or weakened, then one’s self-respect will be as well” (Spinner-Halev and Theiss-Morse). Globacom is the only Mobile phone Telecommunication Company to have originated from Nigeria, consumers in Nigeria will automatically connect with it as a sense of National pride. To them, supporting the company will be supporting their country where by uplifting themselves. Nigeria is regard as the giant of Africa, being that largest (population) country if Africa, but its image to the rest of the world is far from large. Globacom is one of the few companies to showcase a sense of strength in Nigeria. The Globacom catch phrase insinuates that being (having) on the Globacom telecommunications network would give one the ability to connect to people via telephony (doing) wherever they are, whenever they want, for whatever reason which would give them the ability (being) to rule their world (appendix…).

7.2. Celebrity endorsement

Celebrity endorsement involves using people in the public eye (actors, Musicians, Politicians etc) to accredit the product create attention and there by improve sales of such products, “celebrities have the potential to hold viewers’ attention and penetrate the clutter of brief and numerous advertising spots that competes for the audience’s attention” Jayaswal, 2008 (p.37). Celebrities have different personalities and different people connect with these personalities, because they see it has an extension of them. The people see the celebrities as the type of personality they have, or they would like to be, or even be with (in the case of the opposite sex). A brand associating with such a personality would lead to people associating with the brand. Globacom uses a lot of celebrity endorsements; they are called the Glo Ambassadors. They consist of different popular Nollywood (Nigeria movie industry) stars and Music Artiste. Nollywood is quite popular in Africa, being the third largest movie industry in the world, after Hollywood and Bollywood. The Glo Ambassadors associates the Globacom with positive feelings, such as fun, excitement, being cool (Apendix….).

8. Expectancy Theory

Expectancy Theory involves the expectation of a particular satisfying end result which was inspired through motivation (Solomon, 2009). This theory suggests that it is what people expect to gain from a product that pushes them to buy it. Globacom uses their slogan (Rule your World) to make people (both the customers and prospects) believes that their products and services will give them the ability to expand their capability and achieve what they want. Expectancy theory involves “rational calculations made by people between anticipated rewards, value of the reward and the cost/effort involved in achieving the rewards” (Vroom 1964, cited in Wright 2006). Globacom offers a lot of promotions, such as weekly regional draws, with different prizes such as cars, mobile phone, cash etc, to attract new customers and maintain already existing customer. The aim of such promotions is to motivate them and keep them anticipating about their rewards. This will in turn boost customer retention and lead to increase in market share.

Hofstede’s Dimensions of culture

According to Hofstede there are five dimensions of national culture, and they can be used to understand the different personalities present in each culture.

Individualism vs. collectivism

Individualism suggests that people think of themselves and are not directly influence by the group they belong to, where collectivism suggests that people are influence by the group they belong to (Hofstede, 2004). Nigeria and Africa as a whole is made up of collectivistic cultures, people doing things based on the social network they belong to. This is not completely the case anymore, as people as beginning to think of themselves as an individual, and not as a group, because it has become difficult to survive so people are beginning to drift from the collectivistic approach of doing things to a more individualistic approach. The Globacom limited slogan, is more individualistic than collectivistic, this suggest that they were trying to differentiate themselves to create more attention. They realised that because they were entering a market that had tight competition it would have been easier to appeal to people individually than in a group. Also Because Africans are generally uncertainty avoidance people, they would rather stick to what they knew than try a new thing, they (Globacom Limited) knew that had to do things differently, because other telecommunication industries were preaching the same message. They also showed a form of collectivism by using the colours of the Nigeria flag for their logo to create a sense of belongingness, so that people will see the colours of the logo and indentify with it.

Uncertainity Avoidance

Uncertainity Avoidance is the extent to which people threat the unknown (Mooij, 2004). Based of hofstede’s dimension of culture, Nigeria is an uncertainty Avoidance Country. Globacom knew they had to make Nigerian more comfortable and feel connected to the company. In doing this they link the colours of their logo (Appendix ….) to that of the Nigerian Flag, automatically creating a sense of National pride, familiarity and a comfort zone. Making people drift away from their uncertainty avoidance nature and attach themselves to it. Globacom also realised that they had to go an extra step to attract the people, this they were able to achieve by reducing the price of their products.

Power Distance

Power distance suggests that a nation is made up of people of different social class, and power is not equal share between members of each class. In Africa, there is a big gap between the haves (upper class) and the have not’s (lower class). The members of the lower class constitutes a large majority (population) of the society. Globacom Limited was able to target that part of the country by lower price of the product, thereby by increase sale and gaining market share.

Masculinity

Masculinity culture suggests a society where majority of its citizens are more interested in showing off and status than in caring and quality of life (Mooij, 2004). According to Hofstede’s Dimensions of culture in West Africa, including Nigeria (apendix …), there is an average level of Masculinity. I strongly disagree because most power see status and power as there priority, instead of quality of life and standard of living as a group. Globacom realised thereby using the slogan to appeal to people.

Long – Term Orientation

Limitations

Distance: As a result of the above company, Globacom Limited being in Africa , thousands of miles away, I was unable to conduct a focus group interview, as I would have wanted, to get some first hand response on what influence to being on the Globacom Network.

Lack of adequate secondary data: There was very little information on the internet about Globacom Limited. This made the research a bit difficult as I couldnt get a lot of information online, and I had to call a couple of people that work for the Globacom Limited to gain some information and confirm some others.

Conclusion

Use of celebrity endorsment is good for low involvement goods.

Reference

Mobilecomms-technology.com (Globacom (Glo Mobile) GSM Expansion Projects, Nigeria)

Russell W.Belk 1988 possessions and the extened self, Journal of consumer Research

Graham Hooley, Nigel F. Piercy, Brigitte Nicoulaud, 2008 Marketing Strategy and competitive positioning

Hofstede, Geert and Hofstede, Gert-Jan. Cultures and Organizations: Software of the Mind. New York: McGraw-Hill U.S.A., 2004

Marieke de Mooij, 2004 Consumer behaviour and Culture; consequences for Global marketing and Advertising

Michael R. Solomon, M. 2009. Consumer Behavior Buying, Having and Being. Pearson Education.

Jeff Spinner-Halev and Elizabeth Theiss-MorseNational Identity and Self-Esteem

Nishant Jayaswal 2008, Management Advertising, Celebrity Endorsement as a strategy and publicity: case study of Pepsi

Ray Wright 2006 Consumer Behaviour. Thomas Learning

Electronic Resources

Frank Aneke, 15th sept, 2009 Think Global dynamic export.[Accessed 11th December 2009] Available from World Wide Web:

Pita Ochai , 8th sept, 2009 Set to rule Africa. [Acessed 11th December 2009] Available from World Wide Web:

Globacom website [Acessed 10th December 2009] Avaiable from World Wide Web:

Femi Solaja, 2nd November , 2009 Globacom Manchester United in Five-Year Sponsorship Deal. [Acessed 12th December 2009] Available from World Wide Web: