The Influence of Promotion on Marketing Decision-Making: A Case Study of Albtelecom & Eagle Mobile in Albania

Introduction

Modern marketing should include something more than simply developing a good product, putting a good price or developing the product for the target customer. The added element affecting the success now days is related to the “communication” companies do with their customers. Companies have to communicate with the customers and to achieve this they deal with the marketing decision-making process, and more specifically marketing decision-making process regarding the mix of promotion. Many of major companies in Albania have passed the stage of whether to communicate or not, and are on that phase of decision-making process which Koekemoerand Bird (2004) define as decision-making situation of when, where, how and by what means should be communicated.

While communicating with the target audience companies use a set e tools known as communication mix or promotional mix. But, the determination of this mix requires a well-analyzed and well-alternated decision. According to Nour and Almahirah(2014), determination of the elements of the most appropriate, most effective and most influential promotion mix requires involvement of the marketing planners of the company and it requires at the same time a good measurement of the indicators.

Marketing decision-making take place on a constantly changing environment, which is seen as an interactive process which includes analyzing, planning, implementing and controlling of all the factors influencing on it.Business reality conditioned by the time and competition, together with incomplete and imperfect information shows that marketing decisions are taken based on the concept of limited rationality (Simon, 1957; March & Simon, 1958).

Organization must continuously make decisions. As the environment of operation become more competitive, the more complex is the world they deal with, and, as quicker this environment change with time, the more qualified and quantified the decision taken must be (Streufert, 1978). Often, decisions are closely linked with the imagination and creativity, as the severity of the competition where the businesses operate requires something more to succeed. According to Levitt (1986), to “think straight” in a successful way in an environment full of smarts, the thoughts must be qualitative in order to overcome the ordinary and to reach the imaginary beyond the obvious. According to him the future belongs to those who see the possibilities before they become obvious and localize resources effectively to achieve them. Spurred by the complexity of decision-making process and the lack of works done related to this, the aim of this paper is to advance in literature related with marketing decision-making and more specifically on marketing decision-making process regarding promotional mix.

Problem Statement

Decision-making is what is behind every action carried out in each entity, organization, company, etc. Behind every visible or tangible result is hidden a long working process which is finalized with the decision making and become tangible through the results. Focusing on what we see, we forget to take into consideration complexity and difficulty with which companies are faced before they arrive at a decision, further more regarding marketing decisions which often appear as abstract, require rationality in an irrational environment, etc.

Given the fact that telecommunication companies may be listed as the organizations which use almost more than other companies promotion, and due to the fact that we continuously see promotional activities undertaken by them, often seemingly not well thought, it is reasonable to see if companies have method, way or concrete solutions related to the promotional mix they use, and at the same time to the way of decision making process of those activities.

Objectives of the Study

The aim of the study is to analyze the complexity of the marketing decision making process related to the promotion mix that telecommunication companies decide to use. More specifically this study aims to:

Investigate marketing decision making process at telecommunication companies;

Disclosure of the practical part of the marketing decision making based on a case study;

Identification of the factors influencing this decision making process on those companies operating in the Albanian market environment.

Importance of the Study

In the first part of the study is made a brief introduction regarding the paper, initially introducing the topic and the issues it includes. In this part it is presented the aim, problem statement and the importance of the study, and it is closed with the structure of it.

In the second part it is done a summarized review of the literature, starting with the definition of the term decision-making. Further, it is reviewed literature related to the marketing decision making by posing similar studies done and the way they have treated the topic, closing it with the review of decision making process about the promotion mix since it is the core of the paper.

In the third part it is shown the methodology used and in the fourth part it is given analyzed and processed case study. It is closed with some conclusions and recommendation on the final part.

Literature Review

Companies need to make decisions every time they need to perform any of marketing functions. Marketer must constantly decide what should be done, who should do, how to do, when is the right time and where is the best place for something. Pearce & Robinson (1985) show that decision-making is inevitable, because even if you avoid to make a decision, in fact it is also a decision.

Decision-making is the identification and selection of alternatives based on the values and preferences of decision makers. Making a decision means that there are many considerable alternatives from which we choose, but in such a case, we do not need to identify as many as possible alternatives, but we need to choose one which best meets our objectives, goals, desires, values and so on (Harris, 1998).

According to Baker et al., (2002), decision-making should begin with identification of decision-maker and stakeholders, and with the reduction of possible disagreement about the determination of problem, requests, goals and criteria.

Considerable part of everyday decisions companies make is also marketing decision-making. Marketing decision-making requires a comprehensive analysis of the internal and external environment of the company. It requires a wide range of strategic information, including easy and difficult information, but at the same time it requires managers to deal with issues which have high degree of uncertainty, subjectivity and ambiguity. Finally it involves intuition, judgment and personal vision of the managers (Li & Davies, 2001).

Van Bruggen et al., (1998)analyzed the impact of supportive system of the marketing decisions in the decision making process and found that the use of such a system improves the performance, the quality and the process itself, and at the same time it reduces doubts especially under limited time pressure.

Researches related to marketing decision-making or related to different managerial decision are extremely limited. The initial fields on which researches focus are managerial judgment on parameterizing the decision making models (Little, 1969). Many of these theories are based on Bowman (1963) theory about managerial decision-making. Among the first authors who discuss the use and development of marketing decision-making is Eisenhart (1990).

Researchers of marketing decision-making cannot skip the role of human on the decision-making, indeed, Alpar (1991) emphasize that even on quantitative models human judgment is necessary. On the same line goes also Magrath (1988), who explain that major contributors to the success of companies in the marketare marketing decision of the stuff and their superior capacity compared to that of the competitors.

Something widely faced is that researches on the past have just started to explore marketing decision-making, based on the fact that for example, search for information is only a part of marketing decision making.

Regarding genuine marketing decisions, they include the traditional 4Ps - product, price, placement and promotion, as well as extra 7Ps which have the same level of importance in the field of marketing decision. On the 7Ps are included: positioning, portfolio segmentation, placement of base portfolio to the segmented one, portfolio of the world product by segmenting it, political marketing tools such as negotiations, public relations and public works (Wind, 1979).

So far we have clearly seen the decision making process and marketing decision-making with its characteristics and difficulties, due to the importance and the fact that the focus of this work is marketing decision regarding the promotion mix, we see promotion mix related decision are a considerable part of marketing decision-making process. For this reason one other concepts necessary to be reviewed is also promotion and promotion mix, finishing than with the revision of marketing decision related to promotion mix. The process of communicating a massage from the organization to customer is widely called as promotion. This message is transmitted to influence the purchase decision and can be realized through different ways. So the company must in additional to marketing decision take important decision regarding promotion, the way it is realized, the time when or other necessary overlaps needed for this operation of the company.

Marketing decision-making requires a broad involvement and it is not a decision of the moment but an ongoing process, therefore it is done in several phases. Hans &Thabor (1973) transmitted by Kılıç (1994), define those steps according to the following Figure1.

Promotion is one of the elements of the marketing mix, which has its mix of communication tools that should be integratedharmoniously. Kotler (2000) defines it as the set e tools the firm uses to achieve marketing objectives on targeted market. Berkowitz et al., (1997) define promotion as the way of communication between the buyer and the seller, and that, the company can use one or more alternatives of promotion mix: personal sales, advertising, sales promotion, or public relations. While Fischer (1996) emphasizes that three of those elements; advertising, promotional sales and public relations usually are used for mass sales because they targetgroups of potential buyers.

Figure 1. Decision-Making Process. Source: Hansen, Thabor, Marketing-Modelle

The selection of tools of promotion or the determination of the combination of those tools is an important marketing decision and it is somehow like solving a difficult problem for the company. Consumers can get informed in different ways, but the management must be careful to make a decision about the promotion mix which best meets promotion’s objectives and marketing plans. Robinson & Luck (1964) have developed a model, called Adaptive Planning and Control Sequence (APACS), which determine optimal promotional mix on 5 steps:

Defining the problem and setting the goals must be consistent with the aims and objectives of the company.

The assessment of the overall situation. Determine "the feasibility space," which consists of the potential opportunities and limited to finding a solution to the problem.

Determination of tasks and identification of ways. Set different objectives needed to be achieved, as well as promotional tools to achieve them.

Identify alternative promotional mix. Different ways of combining the tools of promotion.

Calculation of expectable results.Calculations are made on how well will meet the objectives of promotional mix of the designed alternatives.

Defining the promotion mix is a difficult decision which Thomas Petit & McEnally (2007) define as a decision with a sick “structure”, because it is not the possibility of testing in determining which promotional mix is more appropriate. For this they list 5 reasons:

Exchangeability of promotional tools. Tools can be interchanged with each-other and there is no certainty which one is the best for promotional purpose.

Synergy between promotional tools. The effect of their combination is greater than the effect of each tool alone.

The complexity of the relationship between the promotional mix and marketing mix. Promotional tools must support and strengthen marketing objectives.

The impact of market forces. Promotional mix is affected by the purchase process, the extent and nature of competition and by market characteristics.

Difficulty of application of cost considerations. You cannot make measurements or tests related to the use or try of product. This is the biggest problem, especially for new products.

Kevin et al., (2004) state that the promotion strategies consist in moving the product through distribution channels and that, the company must decide whether to use push, pull or both channels of distribution. Push strategy occurs when the manufacturer or provider of the product/service directs marketing activities towards distribution channels by encouraging them to bring or promote the product to end users. The main promotion mix of this strategy is advertising and sales promotion.While Pull strategy happens when, the manufacturer directs promotional mix to final customers in order to encourage them to ask for the product at the stores, and as a result, due to the demand, the stores order this product for their clients. This is most commonly used strategy (Brocato, 2010).

Marketing decision related to promotional mix is affected by different factors. According to Stumpf& London (1981) the likely factors to influence promotional decisions include, the decision-making process, attributes of decision-maker, promotional policies of the organization and the supportive system, other organizational elements and environmental context. According to them, the process of promotional decision-making can be separated into five phases: strategy formulation, research, information achievement, evaluation and selection, and planning ofr implementation. According to some other authors (Mintzberg et al., 1976; Payne, 1978) generally those phases come in accordance to this rank, but they can even change the range. It can be influenced by the fact that, how quick the decision should be made, how many possible alternatives are, who take the decision and other contextual factors.

Tanner & Raymond (2012) state that that there are various factors that affect the process of decision-making regarding the choice of promotional mix such as, budget, life cycle of product, product itself, type of buying decision, market characteristics and customer readiness to buy, way how it is demandedti arrive the customer, regulations and legislations, competitors and environmental factors, and finally the willingness of the media.

Methodology of the Study

In this paper the method used is "Case Study", which is an empirical research that observes a contemporary phenomenon within the context of real life, where the boundaries between phenomenon and context are not clearly visible (Yin, 1994). The study illustrates the experience of a telecommunications company in Albania regarding the marketing decision-making process related to the promotional decision. It was conducted an interview with one of the top executives of the company “Albtelecom and Eagle Mobile" by which it is tried to identify the methods followed by this company in marketing decision-making process and of those of promotion strategies. The interview is done with Mr. IndritDaci, Chief of Consumer Business Group, at the same time responsible for Distribution and Promotion and in the past Director of Sales Department. On the study have been used also data taken from official web page of the company (albtelecom.al). After the telephonic conversation with Mr. Daciquestions of the interview were sent by e-mail and after answering them, were sent back.The study was conducted at the beginning of the month of November, 2015.

Case Study

About Company “Albtelecom& Eagle Mobile”

Albtelecomcompany was established in 1912, immediately after the declaration of Independence of Albania and is licensed to provide fixed telephony and the Internet in 1992 by the Telecommunications Regulatory Authority (TRA). Until the ’90 Albtelecom has passed various periods during which, according to the priorities, has tried to increase and develop its capacities. The year 1990 brought a new wave of positive changes in Albania, which coincided with the establishment of a new government system, which was accompanied by large changes in the telecommunications field too. The year 2000 found this Company into a new phase; that of the preparation for privatization. On 1st of October 2007, CETEL AS Company, consisting of one of the largest companies in Turkey, Çalık Group (80% stake) and Turk Telecom (20% stake), bought 76% stake in Albtelecom, while the rest of the shares of 24% are owned by the Government and other stakeholders. While Eagle Mobile shares were owned 100% by Albtelecom. Thus, under the contract, ÇALIK HOLDING with its headquarters in Istanbul, in consortium with Turk Telekom, officially became the owner of Albtelecom fixed telephony giant and of the third telecommunication operator in Albania, “Eagle Mobile”. Albtelecom company provides communication service of fixed telephony, ADSL, Dedicated Internet Access, Dial-up, Intranet, ISDN service, Prepaid Cards, etc. In late 2013, Albtelecom numbers 210 thousand subscribers PSTN service (landline) and 71 thousand internet service subscribers. On March 2011, begins the process of merger of companies ALBtelecom& Eagle Mobile, which despite of being part of a package, function as two different companies. On February 2013, mobile phone company "Eagle Mobile" is part of ALBtelecom, which turned into a brand within it. Eagle Mobile covers 92.5% of the national territory. It offers full service Roaming in over 170 countries, with 373 operators and marks around 700,000 subscribers. Network Eagle stores already are integrated with those of Albtelecom and together they number a total of 150 stores. ALBtelecom& Eagle Mobile has around 1,400 employees across the country. On April 2014, ALBtelecom& Eagle Mobile introduced to the public unified new brand with amaranth color and the new image of the company. In the structure of the company there are six directories, CXO, CFO, CMO, etc., And three main director, like Legal Affairs, PR and Human Resources, who are not part of the groups, but report directly to the CEO.

Promotion on Marketing Decision-Making: Albtelecom & Eagle Mobile

Firstly, we should note that, for marketing decisions in the company has a decision-making structure, which consists of marketing group headed by the Head of Marketing. This is regarding the structure, but the importance of such decision requires it to extend beyond that. For this reason, in the case of our company, the decision is part of a commercial table ofthe MarketingDepartment and Sales Department due to the fact that they are the first line that faces the terrain and customers, and at the same time receive first direct feedback, exchange their experiences, information, goals, needs and define strategies. Based in this agreement Marketing Department designs the product.

Marketing decision is influenced by several factor or variables, but the list of all those factors are elements which can be considered as paths driving the company to the final goal, so in short we may say that marketing decision making is influenced by the objective or the goal. By the goal we mean the objective that the company wants to achieve. Generally the goal is separated into two directions: (a) increase of market share of the product, (b) increase of revenues by increasing or promoting added value of the product. Increase of market share, is achieved by increasing the penetration in the society or more simply said, by increasing the presence to as many as possible customers. Increase of revenue is realized through added value of the product, and the aim in this case is precisely promotion of added value.

Those promotional campaigns are strategically designed with mid-term and long-term effects, by skipping so short-term or immediate incomes. The main focus is to create a wide base of clients that secure returns on the future.

Variables affecting the marketing decision-making are all classical variables that society is made up with, and in our case, variables that consumers have such as, their segmentations, different demands they have, as well as more easily distributional channels of information. The totality of models of targeted groups is the path followed to build a strategy in accordance with determined objectives.

Decisions that Albtelecom and Eagle Mobile company make are different. Marketing decisions of companies, as well as to our Company, cannot be sustainable over time and suitable for all environmental changes faced when operating, said CCBO -Responsible for distribution and promotion, z. Daci. He goes on saying that those decision cannot be sustainable because the market they operate itself is not such. The market where this company operates has great dynamics and consists of constantly changing needs. Moreover, the product/service this company offers, communication, is based on technology and in this sector the present and future are completely different. One other reason that makes company’s decisions unstable in time and on different environments is the harsh competition. On both of them, fixed telecommunication and mobile communication, the market is very small and fragmented, which does not allow a quite competition, but it is always faced an aggressive and opened competition. We can demonstrate this by the simple case of two years ago, when the market offered 3G mobile service, while before that, people navigated at a speed of 368 Kbps. But in contrast to this, we can try 4G on mobile with a speed of 100 mbps, meanwhile the package is consumed than the clients have again access but with the speed of two years ago. Despite those great improvements on the service offered by the company, satisfaction of the client remains always a challenge, as to the user switching from 4G to 3G is perceived as if there is no internet, but it is normal to b so, because passing from a higher speed to a lower one is not that satisfactory. Besides the tough nature of the competition, another challenge at this point remains the continuous imitation competitors do with each-other.

Marketing decision-making of the company uses different models in order to be successful, which all have analytical bases. Professionals of the field, from the beginning link their intuition with the reality at least 80%. Crucial for every decision is data mining. When it is spoken for a consumption base made of hundreds and thousands of users, the basis for decision-making still remains the use of models. All the discussion is constructed on customer behavior and the strategy pursued in the use of analytical tools is commercial table and the strategy that Marketing Department and Sales Department use.

One of the main and most important parts of marketing decision-making of Albtelecom& Eagle Mobile Company is the decision related to promotional mix. Those decisions include: determination of elements of promotional mix to be used, their combinations, promotional approach, factor that influence promotional mix, involvement of a strategy at this decision, etc.

Regarding the question about the company’s promotional approach, Mr. Daci states that, unlike the theory, practically, it should be said that the best promotion is done by satisfied clients. The effects of a qualitative service in line with what the market absorbs, contributes to the subsequent effects and stability. In this context we may say that, this fact is essential for company’s continuity and its long run. While what is done through marketing lines is conveying a strong and quick message, in order to quickly penetrate into customer’s attention.

Practically, the company Albtelecom and Eagle Mobile uses ATL and BTL. Such spaces are expensive, and the return compared to costs does not go positively. This is the least strategic way but is the most visible one. Day to day challenge is finding the right channel for the right target group.

Currently the company uses ATL (above the line), i.e., television advertising and other areas of television to promote the product and the company in general. The company does not neglect BTL-in (below the line) also, which includes the invisible work done to segmented customers with similar behavior by offering something suitable for them. This is realized through direct targeting, channels of direct sales, stores, sales through TV or even promotional massages.

What is noted at Albtelecom and Eagle Mobile company (which is not a specific of it only), is that the majority of the customer’s base is not positioned with the most appropriate product for them. Product awareness by customer is low and this can be understood by its use, ex: there are seen many cases when customers buy a product they do not use. This customer base is taken into account and company offers to them an appropriate product which, even it causes an immediate cost to company, it is worth, because affects in increasing customers loyalty. The opposite of this is much more costly, because sooner or later, the client will understand he/she is not buying the needed/wanted product/service and as a result he /she leave, turning so in a disappointed customer.

Regarding the decision about promotional mix elements used by the company, or the combination of them, the issue ones again is related with the base of marketing decisions: accurate understanding of the market, its needs and trends. Selection of promotional package is defined precisely by those factors, because the aim can be wide, and it varies from creation of a product in accordance to the needs till the stimuli of the need for something new the company offers as a trend by sparkling curiosity.

According to Mr.Daci, promotional mix implies: two elements on product quality and one element on communication quality. The product can promote a monetary value, the price or the inverse correlation with it, the added value that constitutes the second aspect, therefore, value. Both groups have very large subdivision and bring to the attention of decision-makers, the care that should be given to message in order to find to that channel where the target segment has the attention. A typical case of this is advertising online to an Internet service provider in the banner of an application that measures the speed of the internet. Due to the fact that the service that the company offers is already perceived as a consumer good, customer’s needs and want are the bases in designing a successful product.

Before arriving at e decision regarding the promotion mix, usually, companies design different alternatives and choose among them. In the case of Albtelecom and Eagle Mobile company, the alternatives are almost depleted in the case of ATL's (on the line), from where we understand that after you spend the resources, energy, or effort using an advanced tool, it is not reasonable to add even more than that. The feedback of these assets is measurable in the short term, based on the figures of volume of sales on the days that follow ATL campaign.

When using BTL (below the line), there is always something to add, or that can be done better, with other segments that are the most affected. In this case are take ninto consideration market standards. This can demonstrate so, if you promote at specific channel with a set of tools that the whole world has as standard return 7%, any value below it indicates a possible error in the message, the product or the determined target.

Every year, this company divide or commissions funds for market research in support of different alternatives, to see how stands the perception of the message, the company, the service, etc. this is seen from year to year, from one area to one other, and off course by comparing it with the competitors.

Based on long experience of the company, it is confirmed once again that in today's market where everything is easily copied by competitors, and as a result, imagination and creativity are the two elements that make the difference in marketing and communication strategies. According to Mr.Daci, telecommunication sector is not known for any specific creativity and this is considered as a gap which is seen at competing companies also. Based on this, one of the biggest challenges of the company is to draw attention with creativity and imagination which is easily digestible by the target group. Regarding this point we can say about creativity and imagination that, as they are not easily bought they are not easily found also.

Among the factors that affect marketing decisions regarding the mix of promotion we can mention: budget, product life cycle, and at a minimum level the willingness of the media and the legislation. Budget and finance are key conditions to approve a planned offer. Finance analyzes the cost of the proposed purchase and determined return at the time given. In our company it is not the case, but there are cases when the strategy chosen by finance is costly or that a product has little or no profit margin. The life cycle of the product is a determining factor, likeas the time needed to reach the point where costs and revenues are the same. We should note that products cannot be built with costs higher than 8 month, even though the product life is longer than that. Regarding the Albanian environment, the willingness of the media is a minor problem. Legislation is predetermined for each product. The telecommunications sector has regulation which goes at the department level, consisting of an internally specialized team to check the compliance of activities with the legal framework.

To summarize, it can be said that the use of a promotional strategy in decision making, absolutely makes it more successful. A promotional campaign where the strategy is not well-determined, it is a waste of economic resources. Stating like this, it may sound quite easy, but often companies fall into the trap of the need to be present and at the customer attention, even though there is not something real to promote. In those case, it is promoted for the sake of promotion and not to the strategy. The most important element here is that, the aim of promotion must be to sell something, and to realize this, the best strategy is the creation of strong relationships between the message and the product.

At the telecommunication strategies the most appropriate strategy to be used is mix strategy, which include both pull and push strategy, so a combination of both. Most of the products are changeable and complementary with those of the competitors, while the base is continuously under the threat of competitors. From here we understand that pull strategy, is an idle one, according to which attraction of the company is very strong and it is sufficient only the presence in the market and a strong message to have impact on sales. But the reality is not like this. The fact that, the company offers individual and group products makes the issue more complicated, because often the target group is not the decision-maker. For example, internet at the house may be e need of 15- year son while the decision-maker is his father even though he is not the last user of the service. Direct sales in this case have effect because they offer the opportunity to have an intermediary, as the person who buys makes the transaction. The parent in this case is not interested on product details but however he does not want that the choice he have done not to be accented by the child.

Fixed telephony products, as household product are part of a collective decision-making, where the user and decision maker is not the same, so they necessarily need direct sales.

Regarding mobile products, due to the fact that they are individual products, pull strategies are more effective. But despite this, overload of the audience with messages and the nature of the market, causes low level of absorption of all the advantages that all the details of a specific product may offer.Encouraging direct sales with promotional schemes on sales clearly shows the immediate effect of the sales. Given those facts we may conclude that, push strategy is continuously becoming a constant strategy while pull strategy a complementary one.

Conclusions and Recommendations

Conclusions

Decision-making begins with the identification of the decision maker and ends with the reduction of disagreements on determining the problem, requirements aims and criteria.

Marketing decision-making requires a comprehensive analysis of the internal and external environment of the company.

Despite the fact that specifically we can list a wide range of factors that affect the decision-making of a company, in macro level the one that can summaries all those factors is the “aim”.

A deep analytical base and data mining is the main concentration where the marketing decision-making is based.

Contrary to theories of promotion, practically the best promotion is done by satisfied clients.

Marketing decision-making when choosing the mix of promotion is closely linked with the bases of marketing: accurate understanding of the market, correct reading of needs and wants of the market, etc.

Product life cycle is an important factor to be taken into consideration in marketing decision-making. There should not be undertaken promotional activities with a life cycle more than 8 months although promoted product life cycle may be longer than this.

Determining a strategy in decision-making is essential to the success of the promotion. A promotional campaign where the strategy is not well defined is nothing more than a waste of economic resources.

The aim of promotion must be to sell something, and in its essence must have a strong correlation between the promotional message and the product.

An important factor affecting the promotional strategy used by telecommunication companies is the buying nature of the clients. It differs substantially if the buyer is the final consumer of the product or not.

5.2. Recommendations

Based on the experience of Albtelecom & Eagle Mobile company, it is recommended that, on the promotional activities to show utmost care in selecting the proper channel of communication for the right segmented market.

It should be taken into consideration the base of clients and the product should be designed if full accordance with their needs.

It is recommended to increase the activities that increase product awareness by the clients.

It is strongly recommended to develop more attractive promotional activities, and the attraction of the attention of the target market through these activities. Marketers should be careful that the message is easily understandable by the clients and the customers.

References