`CHAPTER TWO

2.0       LITERATUE REVIEW (A STUDY OF AIRTEL (NIG.) LTD.

2.1 CONCEPTUAL REVIEW

2.1.1 PRICE

Price is both the money someone charges for a good or service and what the consumer is willing
to give up to receive a good or service.

 Price is the money charged for a good or service. For example, an item of clothing costs a
certain amount of money. Or a computer specialist charges a certain fee for fixing your
computer.
 Price is also what a consumer must pay in order to receive a product or service. Price
does not necessarily always mean money. Bartering is an exchange of goods or services in
return for goods or services. For example, I teach you English in exchange for you
teaching me about graphic design.
 Price is the easiest marketing variable to change and also the easiest to copy.

Even though the question, “How much? ” could be phrased as “How much does it cost? ” price
and cost are two different things. Whereas the price of a product is what you, the consumer must
pay to obtain it, the cost is what the business pays to make it. When you ask about the cost of a
good or service, you’re really asking how much will you have to give up to get it.

A customer can either be the ultimate user of the finished product or a business that purchases
components of the finished product. It is the customer that seeks to satisfy a need or set of needs
through the purchase of a particular product or set of products. Consequently, the customer uses
several criteria to determine how much they are willing to expend, or the price they are willing to
pay, in order to satisfy these needs. Ideally, the customer would like to pay as little as possible.

For the business to increase value, it can either increase the perceived benefits or reduce the
perceived costs. Both of these elements should be considered elements of price.

Many of these benefits tend to overlap. For instance, a Mercedes Benz E750 is a very high-status
brand name and possesses superb quality. This makes it worth the USD 100,000 price tag.
Further, if one can negotiate a deal reducing the price by USD 15,000, that would be his
incentive to purchase. Likewise, someone living in an isolated mountain community is willing to
pay substantially more for groceries at a local store than drive 78 miles (25.53 kilometers) to the
nearest Safeway. That person is also willing to sacrifice choice for greater convenience.

Increasing these perceived benefits are represented by a recently coined term, value-added.
Providing value-added elements to the product has become a popular strategic alternative.
Perceived costs include the actual dollar amount printed on the product, plus a host of additional
factors. As noted, perceived costs are the mirror-opposite of the benefits. When finding a gas
station that is selling its highest grade for USD 0.06 less per gallon, the customer must consider
the 16 mile (25.75 kilometer) drive to get there, the long line, the fact that the middle grade is not
available, and heavy traffic. Therefore, inconvenience, limited choice, and poor service are
possible perceived costs. Other common perceived costs include risk of making a mistake,
related costs, lost opportunity, and unexpected consequences.

Ultimately, it is beneficial to view price from the customer’s perspective because it helps define
value — the most important basis for creating a competitive advantage.

The price of an item is also called the price point, especially where it refers to stores that set a
limited number of price points.

For example, Dollar General is a general store or “five and dime” store that sets price points only
at even amounts, such as exactly one, two, three, five, or ten dollars (among others). Other stores
will have a policy of setting most of their prices ending in 99 cents or pence. Other stores (such
as dollar stores, pound stores, euro stores, 100-yen stores, and so forth) only have a single price
point ($1, £1, 1€, ¥100), though in some cases this price may purchase more than one of some
very small items. Price is relatively less than the cost price.

Charge

When someone wants to know the price of a service, they may ask, “How much do you charge?
” In this context, the word “charge” is a synonym for price.

Value

From a customer’s point of view, value is the sole justification for price. Many times customers
lack an understanding of the cost of materials and other costs that go into the making of a
product. But those customers can understand what that product does for them in the way of
providing value. It is on this basis that customers make decisions about the purchase of a
product.

2.1.2 SENSITIVITY

Price sensitivity is defined as the relative change in consumers' purchase likelihood or

willingness to pay after a price change (Wakefield and Inman 2003). Price sensitivity can be
lowered by investing heavily in advertising (Mela, Gupta, and Lehmann 1997), building brand
credibility (Erdem, Swait, and Louviere 2002), or fostering brand loyalty (Krishnamurthi and Raj
1991). ...
... Price sensitivity refers to the degree to which consumers' purchasing behavior is affected by
the price changes of a product.High-price sensitivity indicates that a slight change in price will
have a substantial effect on consumers' purchase behavior. Price is often a key component of the
product positioning of a company.

As purchase power and consumption knowledge increase, consumers gradually demand safer
and healthier products. In addition, consumers focus greater attention on organic food. purchase
intention with the mediating roles of perceived food quality and price sensitivity. consumers in
different food retailers in China, empirical results show that environmental consciousness has a
positive impact on organic food purchase intention. Perceived food quality has a mediating effect
on the link between environmental consciousness and organic food purchase intention. Price
sensitivity moderates the relationship between perceived food quality and organic food purchase
intention. Furthermore, price sensitivity moderates the indirect effect of environmental
consciousness on organic food purchase intention through perceived food quality.

... A price increase can play an important role in consumers' purchase decisions (Dodds et al.,
1991). Price sensitivity can be defined as the degree to which consumers' purchase likelihood or
purchase quantity is affected by an increase in the price of the product or service (Wakefield and
Inman, 2003). The purchase likelihood and purchase quantity is minimally affected among
consumers with low price sensitivity after an increase in price compared to those with high price
sensitivity

2.1.3 CONSUMER

Consumers are people or organizations that purchase products or services. The term also refers to
hiring goods and services. They are humans or other economic entities that use a good or service.
Furthermore, they do not sell on that item that they bought.

They are the end users in the distribution chain of goods and services. In fact, sometimes the
consumer might not be the buyer.

For example, young children are the end users of toys, but their parents buy them. Therefore, in
the market for toys, the buyer and consumer are often different people.

Marketing professionals spend their lives studying people who consume. What drives them to
buy something? Why did they chose their company’s or a rival’s product. We call the study of
the process of buying and then discarding goods consumer behavior.

Consumer goods are goods that we buy for our own consumption. We do not buy them to make
other goods that we sell.

In the marketplace, consumers are people or economic entities that purchase or hire products.
They do this for personal use. In other words, they do not buy them for manufacture or resale.

When the non-business media talk about consumers, they usually refer to people. Specifically,
people engaged in evaluating, acquiring, and using products to satisfy their needs and wants.
Consumers are key figures in the marketplace. In fact, all the activities of the makers and sellers
of goods are focused on consumers.

We often use the terms ‘consumers’ and ‘customers’ interchangeably. However, they do not
always have the same meaning. A customer is not always the consumer.

Customers purchase things, but consumers use them.

For example, the customers of a company that sells pet food are mostly adults. However, the
consumers are dogs or cats.

The difference between consumers and customers impacts how businesses market their products.
Customers buy toys, for example, if consumers – children – demand them.

Therefore, toy companies should target children in their marketing efforts. Children will
subsequently react to the marketing efforts by influencing what adults buy.

Of course, in many cases, consumers and customers are the same people. A ladies’ clothing store
will sell mainly to the end users.

2.1.4 PURCHASE DECISION

Purchase decision is the thought process that leads a consumer from identifying a need,
generating options, and choosing a specific product and brand. Some purchase decisions are
minor, like buying toothpaste, while other purchases are major, like buying a house. The more
major the purchase decision, the more effort is typically put into the process.

The Consumer Decision Processes (also known as Buyer Decision Processes) refer to the
decision-making stages that a consumer undergoes before, during, and after they purchase a
product or service.

Abraham Harold Maslow was an American Psychology professor who created Maslow’s
Hierarchy of Needs.

This now iconic pyramid frequently depicts the spectrum of human needs, both physical and
psychological, as accompaniment to articles describing Maslow’s needs theory and may give the
impression that the Hierarchy of Needs is a fixed and rigid sequence of progression. Yet, starting
with the first publication of his theory in 1943, Maslow described human needs as being
relatively fluid—with many needs being present in a person simultaneously.

According to Maslow’s theory, when a human being ascends the levels of the hierarchy having
fulfilled the needs in the hierarchy, one may eventually achieve self-actualization. Maslow
eventually concluded that self-actualization was not an automatic outcome of satisfying the other
human needs. Human needs as identified by Maslow:

 At the bottom of the hierarchy are the “Basic needs or Physiological needs” of a human
being: food, water, sleep and sex.

 The next level is “Safety Needs: Security, Order, and Stability”. These two steps are
important to the physical survival of the person.
 Once individuals have basic nutrition, shelter and safety, they attempt to accomplish
more. The third level of need is “Love and Belonging”, which are psychological needs;
when individuals have taken care of themselves physically, they are ready to share
themselves with others, such as with family and friends.

 The fourth level is achieved when individuals feel comfortable with what they have
accomplished. This is the “Esteem” level, the need to be competent and recognized, such
as through status and level of success.

 Then fifth is the “Cognitive” level, where individuals intellectually stimulate themselves
and explore.

 Finally, there is the “Aesthetic” level, which is the need for harmony, order and beauty.

At the top of the pyramid, “Need for Self-actualization” occurs when individuals reach a state of
harmony and understanding because they are engaged in achieving their full potential.

2.2 EMPERICAL STUDIES

2.2.1 PERCIEVED BENEFITS AND PRICE SENSITIVITY

Most of the literatures suggest that consumers’ evaluation of the value of a

good or service is based on their perceptions that what they actually receive and what
they expected of having it (Monroe 1990; Zeithaml 1998). Therefore, perceived value,
usually defined in the literature as the ratio of the perceived benefits of the goods or
services to the perceived sacrifice in acquiring them (Monroe, 1990). This is positively
influenced by benefits and negatively influenced by price (Dodds, Monroe and
Grewal, 1991; Monroe, 1990; Woodruff, 1997; Zeithaml, 1988). Consumers might
perceive the benefits of a good or service from different angles, such as functional,
social, emotional, and conditional (Sheth, Newman and Gross, 1991; Sweeney and
Soutar, 2001). For instance, functional benefits come from the instrumental
usefulness of the good or its ability for delivering functional, utilitarian, or physical
role.
To know about customers’ price sensitivity is really a crucial part for a
company because price affects company’s profitability. Marketing executives make
decision considering the supremacy of the customers who can pull the company to its
success.

Based on their evaluations, attitudes, and purchase intention towards global, local, or glocal
brands, this article provides and understanding of different consumer segments, in an emerging
economy, suggesting theoretical, and practical implications for marketers and provides additional
contributions to the literature on this area. The results of two surveys conducted in Mexico,
suggest that the profile of “global brand lovers” is high consumer cosmopolitanism, low
ethnocentrism, young, and low price sensitive. However, “local brand lovers” also have a higher
level of cosmopolitanism than ethnocentrism. Finally, we empirically identified that materialism
is the dominant consumer attitudinal disposition among “glocal brand lovers

2.2.2 SERVICE QUALITY AND PRICE SENSITIVITY

From the viewpoint of business administration, service quality is an achievement in customer

service.It reflects at each service encounter. Customers form service expectations from past
experiences, word of mouth and marketing communications.In general, customers compare
perceived service with expected service, and if the former falls short of the latter the customers
are disappointed.

Service quality is generally viewed as the output of the service delivery system, especially in the
case of pure service systems. Moreover, service quality is linked to consumer satisfaction.

Although there is no consensus in the research community about the direction of causality
relating quality and satisfaction, the common assumption is that service quality leads to satisfied
customers.

For example – customers leaving a restaurant or hotel are asked if they were satisfied with the
service they received. If they answer “no,” one tends to assume that service was poor.

It is a combination of two words, Service and Quality where we find emphasis on the availability
of quality services to the ultimate users. The term quality focuses on standard or specification
that a service generating organisation promises. We can’t have a clear-cut boundary for quality.
Sky is the limit for quality generation. Scientific inventions and innovations make the ways for
the generation of quality. More frequency in innovations, less gap in the process of quality up-
gradation.
A customer's expectation of a particular service is determined by factors such as
recommendations, personal needs and past experiences. The expected service and the perceived
service sometimes may not be equal, thus leaving a gap.

Historically, scholars have treated service quality as very difficult to define and measure, due to
the inherent intangible nature of services, which are often experienced subjectively.[8]

One of the earliest attempts to grapple with the service quality concept came from the so-called
Nordic School. In this approach, service quality was seen as having two basic dimensions:[9]

Technical quality: What the customer receives as a result of interactions with the service
firm (e.g. a meal in a restaurant, a bed in a hotel)
Functional quality: How the customer receives the service; the expressive nature of the
service delivery (e.g. courtesy, attentiveness, promptness)
The technical quality is relatively objective and therefore easy to measure. However, difficulties
arise when trying to evaluate functional quality.

Objective processes may be subdivided into primary processes and secondary processes. During
primary processes, silent customers create test episodes of service or the service episodes of
normal customers are observed. In secondary processes, quantifiable factors such as numbers of
customer complaints or numbers of returned goods are analysed in order to make inferences
about service quality.

Subjective processes can be assessed in characteristics (assessed be the SERVQUAL method); in

incidents (assessed in Critical Incident Theory) and in problems (assessed by Frequenz Relevanz
Analyse a German term. The most important and most used method with which to measure
subjective elements of service quality is the Servqual method

Measuring service quality may involve both subjective and objective processes. In both cases, it
is often some aspect of customer satisfaction which is being assessed. However, customer
satisfaction is an indirect measure of service quality. Research has also indicated that the
presence of service quality leads to several outcomes including changes in perceived value,
customer satisfaction and loyalty intentions with consumers.

It is expedient for organizations to improve the quality of their services. When a customer is
satisfied with the quality of the service rendered by the firm or organization, he/she will respond
less to prices and will also become a marketer of that same service.

2.2.3 LOYALTY AND PRICE SENSITIVITY

Although brands offer different kinds of rewards through their loyalty programs, little is known
about how they can impact consumer–brand relationships and brand attitude. How do loyalty
program rewards influence the consumer–brand relationship? And which kinds of rewards
establish or maintain closer relationships between consumers and brands than others? To answer
these questions, the present research makes use of self‐expansion theory (Aron & Aron, 1986)
and two experiments that manipulate the extraordinary character of rewards offered to
consumers. Our findings show that special rewards produce higher self‐expansion than mundane
rewards. Moreover, the positive effect of the rewards’ extraordinary character on brand
evaluation, recommendation, and identification is sequentially and fully mediated by self‐brand
inclusion and self‐expansion. Finally, we show that consumer satisfaction moderates the impact
of special and mundane rewards on self‐brand inclusion.

`When customers are satisfied with the products or services, they buy the
product again and again. These customers become loyal to the company as well as its
brand. Loyal customers are very necessary for a company to build brand equity and to
survive in the market by holding a good portion of market share. Loyal customers are
price insensitive to the price changes while non-loyal customers are sensitive in
making decision about a brand (Kanghyun and Thanh, 2011). Their findings also give
us the idea about the loyal customers. According to research, neither 99.9 percent not
0 percent cutoff level is optimal in segmenting the market into loyal and non-loyal
consumers assuming that the market consists of two kinds of consumers i.e. loyal and
non-loyal. Some other literatures also support that loyal consumers are price
insensitive and non-loyal consumers are sensitive to the price changes when they
make decision to purchase (Brown, 1974;Webster, 1965; Krisnamurthi and Raj, 1991;
Massy and Frank, 1965; Wernerfelt, 1991). In the loyal segment, some consumers aim
to purchase the same brand repeatedly because of its nonmonetary features, whereas
others do the same in response to the attractive promotional offers. As an example,
Ailawadi, Neslin, and Gedenk (2001) illustrate that the first type of loyal consumers—
namely, value conscious loyals—pursue specific brands because of their unique values
and features. Chan, Narasimhan, and Zhang (2008) find that some brand loyals
respond to price promotion by stockpiling. Eventually, Krishna (1994) and Sun,
Neslin, and Srinivasan (2003) show that loyal consumers are more likely to accelerate
purchase timing decision than disloyal. Their findings suggest that loyal consumers
might show value-conscious as well as deal-prone loyal behaviors.

2.2.4 ONLINE CUSTOMERS AND PRICE SENSITIVITY

Advances in technologies and communication have influenced the retail sector across both online
and offline channels. Many retailers have switched to multi-channel to meet consumers’ need.
Multiple experiments have examined the price thresholds of different channels and conditions at
different price levels. The results indicate a statistically significant difference between online and
offline channels when applying the promotional price formats. Also, price sensitivity differs
between online and offline channels for the same retailer.
For the last twenty years, the Internet extends from digital spheres into the physical world
through applications such as smart homes, smart cities, and Industry Although this technological
revolution of the Internet of Things (IoT) brings many benefits to its users, such as increased
energy efficiency, optimized and automated processes, and enhanced comfort, it also introduces
new security and privacy concerns. In the first part of this thesis, we examine three novel IoT
security and privacy threats from a technical perspective. Manufacturers are not willing to invest
into comprehensive security designs as consumers cannot distinguish them from insufficient
security measures. To tackle the asymmetric information barrier, we propose so-called security
update labels. Focusing on the delivering of security updates as an important aspect of enforcing
IoT security, these labels transform the asymmetric information about the manufacturers'
willingness to provide future security updates into an attribute that can be considered during
buying decisions. The proposed labels are intuitively understood by consumers, considerably
influence their buying decisions, and therefore have the potential to establish incentives for
manufacturers to provide sustainable security support.

The internet has given birth to the new industry called online retailing, which involves vend via
the internet. It is hot and fastest-growing industries and can grab the attention of retailers as well
as customers. Despite this tremendous attention, the success rate did not meet the expectations.
The association between e-service quality (E-SQ) and customer loyalty (CL) has remained
ambiguous due to contradictory empirical results and how the relationship between these two
variables get affected when e-satisfaction (E-S) and perceived switching costs (PSCs) also comes
into the picture. There is such study which talks about the moderated mediation effect of PSC
and E-S between E-SQ and CL. Data collected from 242 respondents who entertain him/her self-
shopping over the internet. The results exhibited that all three constructs have strong association
along with the mediating effect of E-S, but we did not find the moderating role of PSC.
Implication, limitation and future study have explained in this investigation.

In recent times, the increasing accessibility of mobile technology has led to changes in
consumers' purchasing behavior. Despite the gloom and doom hearsay about how electronic
commerce is threatening the existence of brick-and-mortar stores, by some indications, however,
web rooming (i.e., the practice of researching items online, and then buying them offline) may be
an even more common practice among shoppers

2.2.5 SITUATIONAL PRICE SENSITIVITY

Price becomes less sensitive for hedonic products or services that are
consumed in hedonic occasion. In addition, high income leads to less price sensitivity
for hedonic goods or services, compared to functional goods or services (Wakefield,
and Inman, 2003). The more hedonic the perceived product or consumption
occasion for, the less the price sensitivity. Research suggests that consumers are likely
to respond differently to price changes in different product categories (Gardner, 1971;
Monroe, 1973). For instance, in Tellis (1988) found that price elasticity varied
substantially across product categories.

Therefore, building a desirable self-image through face-building or face-saving behaviors may

determine acquaintances' assessments. Wakefield and Inman (2003) propose that consumers are
less likely to select a lower priced alternative in the presence of colleagues, out of fear of
negative connotations, such as being perceived as cheap or unable to afford higher priced
alternatives. However, with a close friend, shared experiences should produce feelings of
comfort and acceptance; because image and status perceptions already should have formed, there
is less need to engage in face-saving behavior (Brown & Garland, 1971)

Both categories should differ significantly in their perceived security risk.Both categories should
be similar concerning other central product attitudes and their purchase intentions: Attitude
towards product category (in terms of favor, likability, pleasure) involvement with product
category (in terms of, e.g., fascination, excitement) consumption motive (hedonistic or
utilitarian) desirability to possess products of this product category and purchase intention for
products of this product category.

Thus, consumers seeking social differentiation through innovation will be much less sensitive to
price and will be more prone to pay a premium for these products. Originality/value The main
contribution of this article is to show that integrating and emphasizing a new technological
attribute can increase consumers’ WTP a premium beyond that of the attribute’s functional
value. Thus, new technological attributes will decrease the price sensitivity of consumers high in
social innovativeness and increase their WTP a premium for the product, because they consider
it as a means to stand out from others.

2.3    THEORITICAL FRAMEWORK

Michael Porter’s 5 forces model are the five renown forces initiated by Michael Porter
that give a simplified framework and ideology for assessing and analysing the
competitive strength and position of a corporation or business organization.
Porter divided the forces into two i.e. Three forces from Horizontal competition and
two forces form Vertical Competition.
Michael Porter’s 5 Forces is part of this research because it vividly provides the basic
ground of analyzing competition within a given industry and bring into light the
attractiveness in terms of profitability.
The three forces from Horizontal competition include Threat of substitute products,
Threat of established Rivals and Threat of new entrants while the two forces from
Vertical competition includes Bargaining power of Suppliers and Bargaining power of
customers.
Airtel (Nig.) Ltd can utilize Michael Porter’s Model to get its competitive advantage and
we decided to concentrate on two forces out of five i.e Threat of New Entrants and
Competitive Rivalry

2.3.1 THREATS OF NEW ENTRANCE

Michael porter identified Threat of new entrants as a force in his model because taking a look at
highly performing firms and industries, markets that captivate high and positive trend profits will
invite more new firms to join the business. As many firms join the industry, the market share is
reduced from the dominant companies which eventually lower the profitability levels of the
firms in the industry .Thus, upholding firms should come up with ideas and techniques to block
the new entrants so as to limit and control their threat.
The following are some ways Airtel (Nig.) Ltd can utilize Michael porter’s model of threat
of new entrants to block new firms from entry.
 Diverse services taking care of all classes of people which will pose barriers for
new firms.
Originally, Airtel (Nig.) Ltd was for the rich who were termed as corporate clients who
were looked at as special and outreached.
However, Airtel narrowed down to take care of the other users. Airtel being one of the
oldest telecommunications networks in Tanzania; it can undertake the idea of seeing a
big picture of narrowing down the services to cater for all classes of people staring from
the corporate world to the common man.
Taking a look at the under 25 age, Tanzania has 9679554 of those aged between 15-24
who area active mobile users but are students and mainly unemployed .This number
caters for 19.5% of the total population.
Thus, Airtel should take into consideration the idea of tapping the least available market
though extra tailored services so as to concentrate the market and put barriers for new
entrants into the same market.
• Diverse in Investment Capital.
Airtel (Nig.) Ltd initially invested 30 Million Dollars in 2001 so as to have its offices and
operations widened. However, Airtel needs to increase its investment capital to upstand
the uprising competition. Airtel (Nig.) Ltd was less by 40% investment capital as
compared to its direct competitors Vodacom who had an initial investment capital of 42
Million Dollars.
The higher the Investment capital mixed with great management takes the business to
greater heights.
In a stable competitive environment, Airtel ltd needs to increase its investment capital
so as to get its Competitive advantage over its rivals and thus holding the top position
and blocking new firms from penetrating the industry
• Economies of Capital
Airtel started with a simple office operation in Dar es Salaam taking care of the few
customers it started with.
However, as time moved on, Airtel after 10 years experienced a growth rate of 40% as
seen by the increment in its number of customers currently at 7,504,511 which is 27%
of the total number of mobile users in Tanzania and as well a vivid increment in the
number of customer supportive branches and employees
Thus Airtel can enjoy the economies of scale through the many established branches all
over the country acquired over time to penetrate further to the different markets and as
well take advantage of existing customers to attract more though referencing and cause
vivid impact which will block new entrants into the industry.
• Product Differentiation
Airtel (Nig.) Ltd entered the market only initially offering mobile communication services
in year 2001. However, as time went on, Airtel (Nig.) Ltd introduced more products like
Airtel internet, Airtel money, and more.
However Airtel can furtherly offer better differentiation services that will make a
greater impact into the customers and have Airtel Ltd stamped in their minds.
Thus, with product differentiation, Airtel can modify and make better tailored products
at average prices that will capture the market availability and put a barrier on new
entrants.
• Access to Distribution Centers
Airtel (Nig.) Ltd being a large company taking care of 7,504,511 clients offering various
services like Mobile Communication Internet, Airtel money and as well network
connected phones has managed to move widely. Being a large company, Airtel (Nig.) Ltd
can highly take advantage of access to distribution center of its products so as to enable
them reach far and block external supply which will block new entrants.
• Customer Loyalty
Airtel (Nig.) Ltd having offered great services for over a period of ten years capturing a
great market share of 27%f of both the young and old clients, Airtel (Nig.) Ltd can
exclusively take advantage of customer Loyalty acquired through constant closeness
with customers.
Customer Loyalty carries an advantage of reference and denial of shift to other
competitors of the same services. Thus, Airtel can highly maintain customer loyalty
through best service provision and handling customers as individuals rather than groups
and creating in them a feeling of company ownership which will eventually block the
new entrants into the firm due to the resistance that they will come across.

2.3.2 COMPETITIVE RIVARY     

Michael porter identified Competitive Rivalry as a force in his model because in a

profitable market where there exist various suppliers and providers in the same industry,
there must exist competitive rivalry due to the fight or share of market .The more the
competitors providing different products and services ,the more undesired and
unattractive the market is. Rivalry among firms always up rages when a rival takes
actions that falls against a counter response by other firms. The cause of this could be
the desire by a firm to gain an advantage.
The following are some ways Airtel (Nig.) Ltd can utilize Michael porter’s model of
Competitive Rivalry to pursue and undertake an advantage over its rivals.
Looking at the size of Airtel and available number of other firms in the same industry,
Airtel (Nig.) Ltd carries a greater ground to out beat its customers
• Advertising
With a wide capital base of over 30 million Dollars employing over 300 employees both
local nationalities and experts from abroad, Airtel (Nig.) Ltd occupies space into service
and product provision where in comparison with the number of firms that exist in the
same industry, Airtel (Nig.) Ltd using its large size can highly get its competitive
advantage through extra investment and advertising which in the end will acquire a
positive push over its competitors. Excessive advertisement though intensive use of
visual effects Like televisions and bill boards and as well paper advertisements could
be one of a kind to attract attention and desire of customers to be involved. This will
highly put Airtel (Nig.) Ltd on a higher competitive edge as compared to its competitors.
• Deeper Expansion
Looking generally at the industry size and trends, Tanzania has 5 mobile
Telecommunication networks that have come into solid establishment in the 15 year
gap. Tanzania has a communication increment of 32 % which means there exist a new
telecommunication provider entering the market every 4 years .Through this ,there exist
a show that there are untapped markets due to the increasing trend of introduction of
new service providers as compared to still low size of the industry thus Airtel can
utilize this opportunity to move deeper and expand its horizons so as to out beat
competition of the already existing firms and as well the new firms planning to get into
the market. Airtel should embark on the plan of distant expansion and move further into
the abandoned villages and tap whole available markets so as to gain a competitive
advantage over its rivals.
• Service Improvement
Customer have increasing change in demand and tend to get tired of the same product
and in the end desire an improved product of the same specie or a different one by the
same manufacturer.
Thus through this, Airtel (Nig.) Ltd can come up with ideas of improving the already
existing products in the market and as well come up with new products so as to capture
more market. Airtel (Nig.) Ltd can improve on the nature of its calls by providing video
calls at a cheap rate and making the service easily available and simple to use for all.
This will enable the customers to get stuck into the company and fail to have migration
minds to other firms.
Airtel now offers Airtel mobile connected phones cheaply to customers however , the
phones offered are not of high technology and thus bought by a few .In this aspect
,Airtel could improve and offer high Tech android phones so as to capture the whole
market that is interested in the phone market.
Airtel can as well come up with Wi-Fi easy band other than the regular use of modems
in homes and small offices. This could highly help Airtel get hold of its Competitive
rivalry

2.4     SUMMARY                 

It can be said undoubtedly that there are a lot of studies about price

sensitivity. But, most of the researches are related with the products not with the

services. We recommend that researchers should emphasize on the service sectors,

such as banking, money transfer or remittance, medical or clinical service (doctor and

nurse), legal service (advocacy), air services, etc. Hopefully, this deprived service
sector will be the emerging sector for the researchers because customers are still

switching from one alternative to other alternatives brands or service institutions.