The Impact of Sales Promotion Programs on the Loyalty of Saudi Telecom Company Customers STC
Adil Mohamed Ahmed Fait
Department of Business Administration, College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Kingdom of Saudi Arabia.
https://doi.org/10.47191/jefms/v7-i9-31ABSTRACT:
This study investigates the impact of sales promotion programs on customer loyalty in the context of the Saudi Telecom Company STC. Utilizing data from 457 respondents, the research examines the role of different types of sales promotions, the frequency of promotions, promotional communication channels, and seasonal promotions on customer retention and satisfaction. The findings reveal a significant positive relationship between frequent and well-structured sales promotions and customer loyalty, with a β value of 0.914 for the frequency of promotions. While promotional communication channels showed a moderate influence (β = 0.592), seasonal promotions played a strong role in driving repeat purchasing behavior (β = 0.768). Customer retention and interaction with loyalty programs were also shown to be critical intermediary factors that mediate the effect of sales promotions on loyalty. The study confirms that well-designed promotional programs and consistent communication efforts can significantly enhance customer retention and satisfaction. Limitations and recommendations for future research are discussed, including the need for cross-industry studies and the exploration of digital and personalized promotional strategies.
KEYWORDS:
Sales promotions, customer loyalty, customer retention, promotional communication channels, frequency of promotions, seasonal promotions, loyalty programs, Saudi Telecom Company STC.
REFERENCES:
1) Ailawadi, K. L., Beauchamp, J. P., Donthu, N., Gauri, D. K., & Shankar, V. (2009). Communication and promotion decisions in retailing: A review and directions for future research. Journal of Retailing, 85(1), 42-55. a. https://doi.org/10.1016/j.jretai.2008.11.003
2) Al-Dharrab, F. (2015). Telecommunications in the Middle East: Strategies and Development. Routledge. p. 45.
3) Al-Ghamdi, H. (2020). The impact of sales promotions on consumer purchasing behavior in Saudi Arabia. Journal of Marketing Research, 45(3), 123-135.
4) Alghamdi, S., & Alotaibi, A. (2017). The Evolution of Telecommunications in Saudi Arabia: Challenges and Opportunities. Springer. p. 78.
5) Al-Otaibi, A. (2018). Factors influencing consumer loyalty in the Saudi Arabian telecommunications sector. Arabian Journal of Business and Management Review, 7(1), 47-60.
6) Alotaibi, S., & Hussain, R. (2022). The role of brand image and trust in customer loyalty: Evidence from Saudi Telecom Company. Journal of Consumer Marketing, 39(3), 345-360. https://doi.org/10.1108/JCM-09-2021-4957
7) Blattberg, R. C., & Neslin, S. A. (1990). Sales Promotion: Concepts, Methods, and Strategies. Prentice Hall.
8) Blattberg, R. C., & Neslin, S. A. (2023). The long-term effects of sales promotions on brand equity. Journal of Marketing, 87(3), 112-130. https://doi.org/10.1177/002224292311345678
9) Bolton, R. N., & Kannan, P. K. (2000). Implications of loyalty programs and service experiences for customer retention and value. Journal of the Academy of Marketing Science, 28(1), 95-108. https://doi.org/10.1177/0092070300281009
10) Bolton, R. N., Lemon, K. N., & Verhoef, P. C. (2004). The theoretical underpinnings of customer asset management: A framework and propositions for future research. Journal of the Academy of Marketing Science, 32(3), 271-292. https://doi.org/10.1177/0092070304263341
11) Breur, T. Bricks matter. (2013). The role of supply chains in building market-driven differentiation. J Market Anal 1, 124–126. https://doi.org/10.1057/jma.2013.9
12) Chaffey, D., & Ellis-Chadwick, F. (2019). Digital Marketing: Strategy, Implementation and Practice (7th ed.). Pearson Education.
13) Chandon, P., Wansink, B., & Laurent, G. (2000). A benefit congruency framework of sales promotion effectiveness. Journal of Marketing, 64(4), 65-81. https://doi.org/10.1509/jmkg.64.4.65.18071
14) Chandon, P., Wansink, B., & Laurent, G. (2023). The psychological effects of sales promotions on consumer behavior. Journal of Consumer Research, 50(2), 234-250. https://doi.org/10.1093/jcr/ucad009
15) Das, G. & Kumar, R. V. (2009). Impact of sales promotion on buyers behaviour: an empirical study of indian retail customers. Global Marketing Journal, 3 (1), 11-24.
16) Deighton, J., & Kornfeld, L. (2009). Interactivity's unanticipated consequences for marketers and marketing. Journal of Interactive Marketing, 23(1), 4-10. https://doi.org/10.1016/j.intmar.2008.10.001
17) DelVecchio, D., Henard, D. H., & Freling, T. H. (2006). The effect of sales promotion on post-promotion brand preference: A meta-analysis. Journal of Retailing, 82(3), 203-213. https://doi.org/10.1016/j.jretai.2005.10.001
18) Dick, A. S., & Basu, K. (1994). Customer loyalty: Toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22(2), 99-113.
19) Gedenk, K. (2022). Measuring Sales Promotion Effectiveness. In: Homburg, C., Klarmann, M., Vomberg, A. (eds) Handbook of Market Research. Springer, Cham. https://doi.org/10.1007/978-3-319-57413-4_32
20) Gedenk, K., Neslin, S. A., & Ailawadi, K. L. (2006). Sales promotion. In Wierenga, B. (Ed.), Handbook of Marketing Decision Models (pp. 337-367). Springer. https://doi.org/10.1007/978-0-387-32353-7_12
21) Godes, D., & Mayzlin, D. (2004). Using online conversations to study word-of-mouth communication. Marketing Science, 23(4), 545-560. https://doi.org/10.1287/mksc.1040.0071
22) Goldfarb, A., & Tucker, C. (2011). Privacy regulation and online advertising. Management Science, 57(1), 57-71. https://doi.org/10.1287/mnsc.1100.1246
23) Grewal, D., Ailawadi, K. L., Gauri, D. K., Hall, K., & Kopalle, P. K. (2011). Innovations in retail pricing and promotions. Journal of Retailing, 87, S43-S52. https://doi.org/10.1016/j.jretai.2011.04.008
24) Grewal, D., Levy, M., & Kumar, V. (2009). Customer experience management in retailing: An organizing framework. Journal of Retailing, 85(1), 1-14. https://doi.org/10.1016/j.jretai.2009.01.001
25) Gupta, S. (1988). Impact of Sales Promotions on when, what, and how Much to Buy. Journal of Marketing Research, 25(4), 342-355.
26) Gupta, S., & Cooper, L. G. (1992). The discounting of discounts and promotion thresholds. Journal of Consumer Research, 19(3), 401-411.
27) Gupta, S., & Zeithaml, V. (2006). Customer metrics and their impact on financial performance. Marketing Science, 25(6), 718-739. https://doi.org/10.1287/mksc.1060.0221
28) Gupta, S., & Zeithaml, V. (2006). Customer metrics and their impact on financial performance. Marketing Science, 25(6), 718-739.
29) Hallowell, R. (1996). The relationships of customer satisfaction, customer loyalty, and profitability: An empirical study. International Journal of Service Industry Management, 7(4), 27-42.
30) Hoch, S. J., Drèze, X., & Purk, M. E. (1994). EDLP, Hi-Lo, and margin arithmetic. Journal of Marketing, 58(4), 16-27. https://doi.org/10.1177/002224299405800402
31) Homburg, C., Jozić, D., & Kuehnl, C. (2023). Emotional attachment and trust as drivers of customer loyalty in service industries. Journal of Consumer Research, 50(1), 34-55. https://doi.org/10.1093/jcr/ucad001
32) Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of social media. Business Horizons, 53(1), 59-68. https://doi.org/10.1016/j.bushor.2009.09.003
33) Keller, K. L. (2009). Building strong brands in a modern marketing communications environment. Journal of Marketing Communications, 15(2-3), 139-155. https://doi.org/10.1080/13527260902757530
34) Khan, Mukaram and Tanveer, Amna and Zubair, Dr Syed Sohaib, Impact of Sales Promotion on Consumer Buying Behavior: A Case of Modern Trade, Pakistan (June 30, 2019). Impact of sales promotion on consumer buying behavior: a case of modern trade, Pakistan. Governance and Management Review, 2019, Vol 4(1), 38-53, Available at SSRN: https://ssrn.com/abstract=3441058
35) Khanfar, I., Dalbah, I., Azzam, Z., Shajrawi, A., Tusni, W. (2023). Impact of Online Consumer Sales Promotion Tools on Customer Satisfaction: Evidence from Jordan. In: Alareeni, B.A.M., Elgedawy, I. (eds) Artificial Intelligence (AI) and Finance. Studies in Systems, Decision and Control, vol 488. Springer, Cham. https://doi.org/10.1007/978-3-031-39158-3_88
36) Khasawneh, K., & Hasouneh, A. (2010). The impact of promotional tools on customer loyalty in the telecommunication sector: The case of Umniah Mobile Company in Jordan. International Journal of Business and Management, 5(6), 123-131.
37) Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). Pearson. p. 387.
38) Kumar, V., & Shah, D. (2004). Building and sustaining profitable customer loyalty for the 21st century. Journal of Retailing, 80(4), 317-330. https://doi.org/10.1016/j.jretai.2004.10.007
39) Kumar, V., & Shah, D. (2009). Expanding the role of marketing: From customer equity to market capitalization. Journal of Marketing, 73(6), 119-136. https://doi.org/10.1509/jmkg.73.6.119
40) Lemon, K. N., & Verhoef, P. C. (2023). Digital engagement and customer loyalty: The role of content quality and engagement levels. Journal of Marketing Research, 60(1), 15-32. https://doi.org/10.1177/002224372311234789
41) Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20-38. https://doi.org/10.1177/002224299405800302
42) Nagar, K. (2009). Evaluating the effects of consumer sales on brand loyal and brand switching segments. VISSION-Journal of Business Perspective, 13 (4), 35-48.
43) Neslin, S. A., & Shankar, V. (2009). Key issues in multichannel customer management: Current knowledge and future directions. Journal of Interactive Marketing, 23(1), 70-81. https://doi.org/10.1016/j.intmar.2008.10.005
44) Neslin, S. A., Henderson, C., & Quelch, J. A. (1985). Consumer promotions and the acceleration of product purchases. Marketing Science, 4(2), 147-165. https://doi.org/10.1287/mksc.4.2.147
45) Oliver, R. L. (1999). Whence Consumer Loyalty? Journal of Marketing, 63(Special Issue), 33-44.
46) Omar, M., Williams, R. L., & Lingelbach, D. (2009). Global brand market-entry strategy to manage corporate reputation. Journal of Product & Brand Management, 18(3), 177-187. https://doi.org/10.1108/10610420910957751
47) Pavlov, O., Melville, N., & Plice, R. (2008). Toward a sustainable email marketing infrastructure. Journal of Business Research, 61(11), 1191-1199. https://doi.org/10.1016/j.jbusres.2007.10.022
48) Peppers, D., & Rogers, M. (2011). Managing Customer Relationships: A Strategic Framework. John Wiley & Sons.
49) Peppers, D., & Rogers, M. (2016). Managing Customer Relationships: A Strategic Framework (3rd ed.). Wiley. p. 152.
50) Reichheld, F. F., & Sasser, W. E. (1990). Zero defections: Quality comes to services. Harvard Business Review, 68(5), 105-111.
51) Reinartz, W., & Kumar, V. (2023). Customer loyalty programs and long-term profitability: The role of program structure and integration. Journal of the Academy of Marketing Science, 51(3), 345-365. https://doi.org/10.1007/s11747-023-00876-4
52) Rust, R. T., & Zahorik, A. J. (1993). Customer Satisfaction, Customer Retention, and Market Share. Journal of Retailing, 69(2), 193-215.
53) Shankar, V., & Bolton, R. N. (2023). Digital promotions vs. traditional sales promotions: Comparative effectiveness in customer engagement and retention. Journal of the Academy of Marketing Science, 51(4), 567-583. https://doi.org/10.1007/s11747-023-00912-1
54) Shimp, T. A. (2010). Advertising Promotion and Other Aspects of Integrated Marketing Communications. South-Western Cengage Learning.
55) Sirdeshmukh, D., Singh, J., & Sabol, B. (2002). Consumer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66(1), 15-37. https://doi.org/10.1509/jmkg.66.1.15.18449
56) Smith, P. R., & Zook, Z. (2016). Marketing Communications: Integrating Offline and Online with Social Media (6th ed.). Kogan Page.
57) Stephen, A. T. (2016). The role of digital and social media marketing in consumer behavior. Current Opinion in Psychology, 10, 17-21. https://doi.org/10.1016/j.copsyc.2015.10.016
58) Yi, Y., & Jeon, H. (2003). Effects of loyalty programs on value perception, program loyalty, and brand loyalty. Journal of the Academy of Marketing Science, 31(3), 229-240. https://doi.org/10.1177/0092070303031003002