The Impact of Affiliate Marketing on the Performance of Online Businesses in Nigeria
Chapter One
Research Objective
This study aimed to determine the effect of affiliate marketing on The performance of online businesses in Lagos.
- To determine the determinants of Customer patronage
- To evaluate various affiliate marketing techniques adopted by telecommunication companies in Nigeria.
- To examine people’s perception of such affiliate marketing
- To determine the overall influence of such affiliate marketing approaches on customers’ patronage of telecom services.
CHAPTER TWO
LITERATURE REVIEW
Introduction
The chapter gives the relevant literature available, main studies conducted and their results. It provides a theoretical framework for research and clearly identifies research gaps.
Theoretical Framework
Affiliate marketing and social exchange theories were adopted.
Affiliate marketing Theory
Bringing together many seemingly unrelated marketing ideas, DM is a popular concept. Customer relationship management (covered in this current study), marketing strategy, database marketing, business-to-business marketing, strategic thinking, legal relationships, business-to-business marketing, and affinity marketing. Each bringing significant benefits to both buyers and sellers (Zinkhan, 2002). DM is a multidisciplinary and integrative approach because it looks at marketing as an integrated process that integrates different functions in the organization and aims at promoting, maintaining and establishing connections in the long run (Coviello et al. 1997). A key idea in the affiliate marketing paradigm is loyalty. Keeping customers for life reduces the cost of acquiring new customers and increases profitability (Muok, 2018¬).
Customer acquisition is still the marketer’s job, but affiliate marketing focuses on the fact that in the long run, customer retention and customer development are equal and even more important to your business. From a affiliate marketing perspective, the emphasis on relationships rather than transactions suggests that customers have ongoing value over the life of the organization (Berry, 1995). For the purpose of profit and ensuring objectives of all stakeholders are reached, RM’s role is to maintain, find, establish, and strengthen connections with stakeholders. And commitments are kept by exchanging goods and services (Gronroos, 1990).RM began to evolve when it moved from viewing the marketplace as transactional to looking at it as an ongoing relationship. We focused on our relationship with our customers. In marketing, his four phases that have contributed to understanding DM include Marketing channels, service marketing, affiliate marketing, database marketing, and B2B marketing (Möller and Halinen, 2006). DM suggests that when a company provides value to its customers, it strengthens customer relationships and increases customer retention. We focus on developing approaches and strategies that generate customer patronage and break away from traditional marketing with a single selling strategy.
According to RM, sales alone cannot define a company’s success, but they view sales as the beginning of a relationship with a customer, and consider the profit from that relationship a measure of the firm’s achievement. We try to build an ongoing relationship with our customers. This can be achieved through excellent customer service or offering additional features. It talks about delivering customer value, believes customers come first and considers long-term relationships. Striving to provide robust customer service, DM understands customer expectations and promise to meet their expectations. She works on total quality control. According to RM, product pricing should be determined by negotiation and consensus, not by competitiveness (Juneja, 2015).
The theory of DM is relevant because nurturing long-term relationships with clients is probably more ideal than pursuing individual, unrelated interactions. This is a viable strategy for gaining a competitive advantage. By communicating and initiating partnerships with customers, mobile operators create opportunities to forming strong bonds with customers. This can be mutually beneficial, especially if both parties are interested in realizing long-term returns (Ganesan, 1994). DM concept can further be difficult to implement because it is not always desirable or possible to maintain close relationships with customers (Webster, 1992). Creating them can consume both time and resources. Clients may resist the company’s efforts to establish relationships for their own reasons.
Social Exchange Theory
SE is a process of exchange between people that is either rewarding or costly. The theory postulates that social behavior is the result of exchange processes aimed at maximizing gains and reducing expenses. This theory holds that individuals consider the possible advantages and disadvantages of social interactions, and if the disadvantages outweigh the advantages, individuals are more likely to terminate or depart the relationship. It is said that they try to get a lot from Individuals want to maintain relationships because they expect them to be rewarding. Homans summarizes the system of social exchange theory into three propositions: The promise of success means that when a person is compensated for their behavior, they are likely to repeat that behavior. Secondly, is the stimulus proposition which indicates that when a given stimulus has led a reward several times in the past, the more likely a person is to respond to it. Finally, deprivation suggests that each extra unit of a client’s reward gets less valuable the more recently the consumer has gotten that reward. (Homans, 1958). The social exchange theory has been shown to help explain customer patronage when based on theory.
CHAPTER THREE
RESEARCH METHODOLOGY
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Introduction
The chapter covers the procedure to be adopted in conducting the research. It will explain such items as; research design, data collection, data analysis, population of study and sample design.
Research Design
The design adopted was descriptive cross-sectional survey. Descriptive research deals with what, where, or how much of a phenomenon. In this case, researchers have some understanding of important aspects of the phenomenon, but little or no knowledge of its characteristic properties and details. The study was done at specific time and therefore further classified as cross-sectional. Descriptive cross-sectional research methods use structured tools such as questionnaires to investigate phenomena or topics, and use descriptive dimensions such as frequencies, percentages, means, standard deviations, and statistical relevance to identify distinctions. It is the main investigative process from which conclusions can be drawn. Descriptive research methods provide the basis for research, examining the relationships between variables that explore why/how/what connections are made, and the consequences of such variables, in this case affiliate marketing and customer patronage (Cooper and Schindler, 2014).
Population of Study
All customers from the five major service providers in Nigeria namely Globacom, Airtel Nigeria, MTN Nigeria communications formed the study population. The number of active mobile phone contracts (SIM cards) was 64.9 million and percentage mobile (SIM) subscription market share were Globacom PLC 64.6%, Airtel Networks 26.4%, MTN Nigeria (Sector statistics report, 2021-2023).
CHAPTER FOUR
DATA ANALYSIS, FINDINGS AND DISCUSSION
Introduction
This chapter gives a presentation of the results of the research and its analysis. The analysis is guided by the objective of the study.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Introduction
This chapter puts together findings from chapter four. It further gives conclusion and recommendations based on the research objective which in this case was to determine the effect of DM on The performance of online businesses in Lagos.
Summary of the Findings
DM is important and companies are using it to gain competitive advantage and in turn win loyal customers. Mobile telecommunications service providers in Lagos have not been left out as customers are on the lookout for the one that serves them better. The current research focused on finding out whether DM had been adopted by the mobile telecommunications service providers in Lagos. Various statements relating to determinants of DM, were posed to respondents to show level of agreement or disagreement. The results in a nut shell revealed that DM has been adopted by mobile telecommunications service providers in Lagos. This is because all responses to each statement had MS of above 3.40 except one statement under communication on whether the company makes follow ups on customer feedback that scored a MS of 3.31 meaning majority of the respondents were neutral on this. This study also aimed to find out if customers were indeed loyal to their respective service providers. Statements that related to the determinants of CP were sent out to respondents and majority scored a MS of above 3.40 indicating that they concurred with the statements. However respondents disagreed that they are not willing to pay more for services offered by their service providers with a MS of 2.60.They were neutral on whether they follow their respective service providers on social media to keep up with everything that was happening with a MS of 3.05 and on whether they were likely to move to other providers of services with a MS of 2.75.The regression analysis revealed a substantial impact of empathy, communication, reciprocity, shared value, trust, and bonding on CL. Bonding and reciprocity were found to be better predictors of CL.
Conclusion
With an objective to determine the effect of DM on The performance of online businesses in Lagos, this study has clearly revealed that there is a substantial impact of empathy, communication, reciprocity, shared value, trust and bonding, which are determinants of DM that were adopted in the current study, on CL. In as much as all these determinants have an impact on CL, bonding and reciprocity were found to better predict CL. The mobile telecommunications providers of service in Lagos have embraced DM practices and this is evident from the findings. It is important to note that there are still areas that need more focus to make it more successful.
Recommendations of the Study
Results from this study have revealed that DM has a substantial impact on CP in the mobile telecommunications service provision in Lagos. It therefore recommends that five service providers, Globacom, Airtel Nigeria, MTN Nigeria om, should be more effective in the implementation of the six determinants of DM adopted in this study. The service providers should put more effort in ensuring bonding and reciprocity are given priority as they substantially impact CL.
Telecommunications service providers should put more emphasis in following up on customer feedback. This is because it scored a mean of 3.31 meaning respondents were neutral about this. This clearly means that a lot still needs to be done to help win more loyal customers that may feel left out because of their feedback not being attended to. The study also recommends that mobile telecommunications service providers should align with their customers in terms of beliefs. This is because half of the respondents felt they did not have much in common with their service providers. It is extremely important to have common beliefs and goals.
The study recommends that mobile telecommunications service providers focus on ensuring that they give quality and exemplary services. According to the current study, most of these consumers are reluctant to pay more for services offered by their respective service providers. The only way they will do is when they feel that they are receiving premium services. This will also ensure that there is no switching behavior as most respondents also admitted they could easily switch to other available options.
The final recommendation from this study is that Mobile Telecommunication service providers should ensure that they do enough research to fully understand their customers. As much as majority concurred that research is done, a MS of 3.53 means there is still a lot to be done. Consumer research should be a continuous undertaking in everyday running of the company. This may be the only way customer needs and wants will be met and therefore gaining loyal customers.
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