Enhanced consumer welfare is manifesting itself in various forms as companies become more and more competitive by reducing prices and improving the quality of their product. Because of this intense competition, companies are embracing marketing techniques to add value to their products or services in order to achieve more customer satisfaction.
Network promotions
In the mobile telecommunication sector, the fight for an increased subscriber base has seen customers calling each other for next to nothing. Telecel triggered the competition with its Mega Airtime promotion where customers got free airtime to call Telecel lines. NetOne responded with a promotion that gave customers an hour of free calls for every dollar of airtime they bought. In response to this strong competition in the market place, Econet recently launched its Buddie Zone promotion. Buddie Zone allows registered Econet subscribers to get discounts ranging from 10 percent to 99 percent every time they made a call to an Econet line.
The only danger with this type of competition is that it can damage the established selling price when the promotion ends. The inflation rate, which has been on a steady downfall over the last few months, can also bear witness to the fact that competition is bringing prices downwards. In May, the year on year inflation was 4.03 percent. It fell down to 3.97 percent in June and again down to 3.94 percent in July. The trend continued with the number for September declining from 3.63 percent in July, to 3.24 percent. This inflation downfall is also affecting our macroeconomic environment, as we now have the lowest inflation rate in the region.
Advertising promotions
In the electronic advertising media, television and radio advertising charges have gone down significantly, due to the entrance of two radio stations, ZiFM and Star FM. Zimbabwe Broadcasting Corporation has launched the Advertising Budget Booster Promotion, where television advertising charges have been lowered by 25 percent with radio charges being lowered by 40 percent. Many customers have subscribed to this promotion, as more adverts are now being broadcast on ZTV and local radio channels. The disadvantage of a promotion of that magnitude is loss of profits when regular customers who would otherwise pay full price buy the advertising slots. Sales promotions like these cost money and can even result in losses. However, this is not the case in the print advertising media where the entrance of new publications like Daily News, NewsDay, The Patriot, Weekend Edition, H-Metro, B-Metro, in recent years, did not result in any fall in advertising costs.
According to Pilate Machadu, the past President of the Advertising Media Association and Vice Chairman of the Zimbabwe African Research Foundation, the advertising rates for the print media did not fall for two reasons. Firstly, Machadu said Zimbabwe’s print advertising charges were the lowest in the region; and secondly when new players came in, the economy was emerging from a dip, and could not afford to reduce the rates.
More creativity
The good thing about this competition is that it compels companies to be more creative and innovative in their processes. Many companies are now embracing efficient production methods to stay in the game, and employing measures to ensure cost effectiveness. The marketing concept is beginning to be seriously looked at by companies.
Players are now investigating and analysing trends in the market, communicating with consumers, and supplying what the customers want.
This is a significant change. Instead of selling what they produce, they now produce what they are confident of selling.
Companies that hold the view that the customer is the king now have better chances of having sustainable relationships with customers and locking them in. Determining the needs and wants of target markets and delivering the desired level of satisfaction more effectively and efficiently than competitors is important in this competitive business environment.
Post published in: Opinions & Analysis