Project Abstract

Project Overview

<p> </p><p><b>INTRODUCTION</b></p><p><b>1.1 &nbsp; &nbsp; &nbsp; Background<br>to the Study</b></p><p>In the aviation industry where air travel business is<br>highly competitive, marketing activities are inevitably vital to ensure<br>competitive edge and most airlines are doing just about anything in order to<br>remain relevant and still meet the ever dynamic needs of the passengers.<br>Studies have shown that for these airlines to survive the competition in their<br>industry, they need to take their marketing very seriously (Ibidunni, 2010).<br>The global world of business today is a very dynamic one, in order to satisfy<br>the changing needs of customers, organisations must first know their needs and<br>ensure such needs are met with the services they provide (Smith and Reece,<br>2012). In the airline industry, passengers pay higher fares at airports for<br>on-spot purchases where a single carrier controls a high fraction of traffic.<br>For airlines to survive in today’s competitive market, it has to treat the<br>marketing drive of its business with top priority to ensure adequate business<br>performance.</p><p>Business<br>performance has to do with the combination of management and analytic processes<br>that allow managers of an organisation to achieve pre-determined goals in their<br>business dealings. It is often set to align with the strategic and operational<br>objectives of the organisation in question: In doing this, organisations find<br>it easy to achieve their selected goals for the period (Makhbul, 2011). Measuring<br>business performance in today’s economic environment is an important issue for<br>practicing managers. Generally speaking, business performance is the<br>operational ability to satisfy the desires of the company’s major shareholders,<br>which is often assessed to measure the accomplishment of such organisation<br>(Smith and Reece, 2012).</p><p>In<br>today’s business dealings, an organisation’s ability to succeed or fail is<br>largely a product of how best such organisation can satisfy its customers and<br>this act places enormous task and responsibility by way of marketing on any<br>organisation intending to excel at satisfying the customers and clients<br>(Ibidunni, 2010). It starts with identifying accurately the needs of the<br>customers/clients and deciding on how best to handle the products and services<br>in order to satisfy the desires of all prospective buyers and sellers as the<br>case may be. Some indicators employed in measuring business performance are<br>profitability, market share, return on investment (ROI), working capital, sales<br>growth and customer retention (Wood, 2006).</p><p>The<br>primary focus of every airline business is to make profit and this is the<br>primary duty of the marketing manager through its marketing department to<br>formulate and implement policies and plans that will maximize the profit per<br>unit of capital employed in the business (Oyekanmi, 2013). Profitability means<br>a suitable price policy which in itself is influenced by cost and market<br>situation factors. In all endeavors, consumer’s satisfaction must be seriously<br>anticipated right from the onset as posited by (Falk, 2011). Profit is the<br>result a business owner considers necessary to make running the business<br>worthwhile, it is comparable to the next-best amount an organisation could earn<br>doing another job. Apart from profitability, another factor that enhances<br>business activities of firms is market share.</p><p>The<br>market share of a business is mainly considered to be the unit or revenue of<br>the market accounted for by such business. When nearly 200 senior marketing<br>managers were surveyed, result shows that 67% affirmed they found the<br>“dollar market share” metric very useful, and 61% saw that the<br>“unit market share” as been very useful (Farris, Neil, Phillip and<br>David, 2010). Market share is often monitored for signs of change in the competitive<br>market, and it frequently drives strategic or tactical action (Farris, Neil,<br>Phillip and David, 2010). This makes market share increment one of the<br>important objectives of a business and it enhances sales growth on a long run.</p><p>Sales<br>growth composed of the amount by which the average sales volume of a company’s<br>products or services has grown, typically from year to year (Blois and Ramirez,<br>2012). The sales growth is often measured sequentially. Sequential growth deals<br>with the Comparism of recent performance of an organisation with the period<br>preceding it. For instance, when a monthly report states that an organisation<br>experienced 5% sequential sales growth, it implies that recent sales have<br>increased by 5% since the previous month (Blois and Ramirez, 2012). Also, the<br>sales growth is closely linked to the working capital of such organisation.</p><p>Working<br>capital is the financial metrics which represents operating liquidity available<br>to a business (Black, 2015). It is a part of operating capital that is often<br>calculated as current assets minus current liabilities. Working capital should<br>be positive in order to allow firms the ability to continue its operations and<br>that it has sufficient funds to satisfy both maturing short-term debt and<br>upcoming operational expenses (Black, 2015). Working capital is often managed<br>with activities such as inventories, accounts receivable and payable, and cash.</p><p>In<br>India, the airlines were responsible for a total of 79.5 million passengers on<br>scheduled services, an increase of 1.8 per cent over 2014. Among the largest<br>airline industry’s performance, Indian was among the world’s largest domestic<br>markets that had the fastest domestic passenger growth in 2015 (World Air<br>Transport Statistics (WATS), 2015). Meanwhile, airlines in Africa scored lowest<br>in global industry performance rating for year 2015, particularly in the area<br>of domestic passenger growth. A result recently released by The International<br>Air Transport Association (IATA) showed that African airlines had only 2.2 per<br>cent of the entire market share of passengers for the year under review (WATS,<br>2015).</p><p>Zografos,<br>Andreatta, and Odoni (2013) see the ability of businesses to perform viably as<br>one of the most important issues in both developed and developing countries.<br>Air transportation in Nigeria like other African countries was a very important<br>project that needed urgent establishment during the British colonial rule as<br>the need to reach out to other Colonies including Nigeria by the British<br>government became essential. However, that initial desire could not be<br>sustained over a long period of time due to poor performance in its managerial<br>roles (Akpoghomeh, 2010). Some of the challenges are increase of flight fares,<br>flight cancellations, delays, poor-onboard services, poor customer relations,<br>missing luggage’s, huge staff outlay (serving the purpose of its inception) and<br>poor equipment maintenance and breakdowns (Daramola, 2007).</p><p>With<br>reports of the varying degree of successes and failures recorded by airlines in<br>Nigeria, it is imperative to attempt to carry out a detail study of the various<br>marketing strategies being adopted by these airlines in carrying out their<br>operations with a view to establishing the place of marketing in their business<br>performances. Previous research indicates that several factors that influence<br>business performance are professional background of the owners, their<br>entrepreneurship capabilities and preferences, cultural and religious beliefs,<br>inadequate marketing strategies, marketing research, as well as the technology<br>and micro environment (Buttner, 2011; Makhbul, 2011). Marketing is one of the<br>most important aspectsof any business and airlines are not an exception.</p><p>Marketing<br>itself is an activity with a defined process used for creating, communicating,<br>delivering, and exchanging offers that have attached values for customers,<br>clients, partners, and society at large in exchange for money (American<br>Marketing Association, 2013). Marketing in business setting entails the process<br>of exchange which involves two parties, the buyer and seller. During the<br>process of exchange, value is given up by one party to the other party<br>receiving something of value as well. That is whyKotler &amp; Connor (2013)<br>defines marketing as a process by which individuals and groups obtain what they<br>need and want through creating, offering, and freely exchanging products and<br>services of value with others. According to American Marketing Association<br>(AMA) (2013), marketing is a broader concept which entails the process of<br>planning and executing the conception, pricing, promotion, and distribution of<br>ideas, goods, and services to create exchanges that satisfy individual and<br>organisational goals. The ability of marketing managers to ascertain the right<br>marketing strategy to adopt in the organisation ensures the growth of sales,<br>share and profitability of any organisation.</p><p>Marketing<br>strategy in itself is the process of adapting the marketing mix elements to<br>environmental factors (Mavondo, 2000). It evolves as a result of the interplay<br>of the marketing mix elements and the environmental factors, which impact on<br>these elements. It functions by determining the nature, strength, direction,<br>and interaction between marketing mix elements and the environmental factors in<br>a particular situation (Osuagwu, 2001). The marketing variants like the total<br>quality management are mostly concerned with satisfying clients’ needs and<br>wants beneficially. Developing and implementing efficient and effective<br>marketing strategies which adopts relevant dimensions of the marketing concept<br>involve the organic tasks of selecting a target market (customers/clients) in<br>which to operate and developing an efficient and effective marketing ingredient<br>combination. Marketing thought, with its practice, has been moving speedily<br>into the service industry (Kotler and Connor, 1997). Literature, partly,<br>centers on the discussion of whether physical product marketing is similar to,<br>or different from, the marketing of service and concludes that the differences<br>between physical product and service might be a matter of emphasis rather than<br>of nature or kind (Creveling, 2010). Marketing is one of the salient and<br>important organic functions which help to service organisations to meet their<br>business challenges and achieve set goals and objectives (Kotler and Connor,<br>1997).</p><p>Marketing<br>strategy give the avenue whereby organisations make use of their resources to<br>achieve their set goals and objectives with less stress (Waithaka, Muturi and<br>Nyabuto, 2014). Marketing strategy deals with the adapting of marketing mix<br>elements to business environmental forces which involves examination of the<br>marketing mix elements and the environmental factors (Li, Duan, Edwards and<br>Kinman, 2010). Part of the functions of marketing strategy is to determine the<br>nature, strength, direction, and interaction between the marketing mix-elements<br>and the environmental factors in a particular situation (Jain and Punj, 2014).</p><p>To<br>ensure the survival of an organisation, there must be in place a sound and<br>robust marketing commitment on the part of sales personnel, when considering<br>the subtle, unstable and seemingly hostile business environments in which<br>contemporary airline business organisations operates, it calls for targeted<br>marketing strategies which could be online, traditional, word of mouth or<br>direct marketing which are tailored to meet the objective of the organisation.<br>It becomes an important part of this study to assert that there is virtually no<br>limit to the types of marketing strategies that a business can adopt. This is<br>due to the fact that new concepts and designs are being discovered daily, and<br>the biggest problem that a business owner will face is choosing which one will<br>best suit his venture, online, offline or traditional, word-of-mouth, or direct<br>marketing (Akinyele, 2010).</p><p>Direct<br>marketing strategy is often used by several airline operators because they see<br>it as a powerful tool to attract and keep both old and new customers. It is a<br>successful way some organisations are using to generate huge sales from<br>existing and new customers (Edmund, 2011). Airlines, just like other<br>organizations, make use of direct marketing to provide physical marketing<br>materials to consumers to communicate information about a product or services<br>being marketed by the organisation (O’guinn, 2013). Direct marketing is a form<br>of advertising which allows businesses effectively communicate directly to<br>customers through several media such as, cell phone, email, website, online<br>advertisements, database marketing, fliers, catalog distribution, promotional letters<br>and targeted mail (Ayyadurai, 2013).</p><p>Word<br>of mouth Marketing is seen as the most effective and powerful marketing<br>strategy any company can employ (Lang and Hyde, 2013). The benefit of this<br>strategy is that it can instantly turn a consumer into a regular paying<br>customer. This type of strategy is a by-product of the traditional and online<br>marketing strategies (Lang and Lawson, 2013). The consumers show satisfaction<br>through their word of mouth marketing to their friends on what was provided in<br>exchange for their patronage (Thomas, 2012). Because word of mouth marketing is<br>placed on the shoulders of satisfied customers who then share this satisfaction<br>with people who trust them, this trust is then transferred to the business.</p><p>Another<br>marketing strategy examined in the course of the study is traditional marketing<br>which also known as offline in marketing. In the past, traditional marketing<br>used to be the only main focus for advertisers then, but now, it is no longer<br>the same. This type of marketing strategy is seen in two groups namely; print,<br>and collectively, electronics (Armstrong and Overton, 2010). It is still highly<br>effective, relevant and consistently produces good results. Also, online<br>marketing is another strategy which is seen as the newest and sometime<br>perceived by many businesses as the most powerful, as it has opened diverse<br>types of marketing strategies that have completely changed the face of<br>marketing (Rappaport, 2009). While using online marketing, a business owner or<br>marketing manager can find numerous methods to explore a new business idea.<br>Some of these ideas include affiliate marketing, article marketing, social<br>networking, and blogging. Affiliate marketing can take a similar form as print<br>based traditional marketing by placing banner advertisements on websites, but<br>can reach so many more people. Chekitan and Don (2013) posit that article<br>marketing and blogging on the other hand allows for two strategies at the same<br>time. They can both be used to promote any product or services directly, or can<br>be used for driving traffic (customers) to a website for the same purpose.<br>Rappaport (2009) observed that social networking is the online version of word<br>of mouth marketing and has the ability to “personally touch” a huge<br>number of people instantly with basically the touch of a button (mouse).</p><p>Marketing<br>strategy development, planning and implementation process involves a lot, such<br>as, managerial experience, it has a high level of uncertainty, it requires<br>intensive business knowledge, with a broad strategic information needed for<br>success, rigorous process involving decision making by organisational managers,<br>placing emphasis on its unique strengths to ensure better customer value over a<br>long period of time (Jain and Punj, 2014). It is somehow difficult for<br>businesses to constantly realize efficient and effective marketing strategy<br>(Li, Duan, Edwards and Kinman, 2010). This could be associated with unstable<br>business environmental factors, which will then stand as a difficult task for<br>organisational marketing strategists to decide which strategy is best suitable<br>for achieving the set goal for the year. McDonald (2012) was of the opinion<br>that many factors prevent organisational managers from designing and<br>implementing efficient and effective marketing strategies. The fact is that<br>environmental factors were seen as major issues drastically affecting the<br>efficiency and effectiveness of managers in strategic marketing issues<br>(McDonald, 2012). The marketing strategies of airline operators in Nigerian<br>companies are expected to be adaptable to these environmental factors in order<br>to achieve set business performance goals and objective in a long run, though<br>it seems to have witnessed some form of corporate performance over the years<br>which can be attributed to their district level of market share and more needs<br>to be done on the adoption of effective marketing strategies to improve<br>business performance.</p><p><b>1.2 &nbsp; &nbsp; &nbsp; Statement<br>of the Problem</b></p><p>Air transport in Nigeria has been growing in relation<br>to the Gross National Product (GNP) as it accounts for a large part of<br>transport expenditure in the economy (Oyekanmi, 2013). The share of freight<br>movement on a tonne per kilometer is small compared to other modes; airlines<br>carry high value, perishable goods and provide emergency services that make<br>them an important part of the total transport system. Its transport system<br>helps to improve quality of life by broadening people’s leisure and cultural<br>experiences with a wider choice of holiday destinations around the world and an<br>affordable means to visit distant friends and relatives.</p><p>Effective<br>direct marketing strategy has been classified as one of the fundamental key for<br>the growth of any business organisation because no business can survive without<br>the marketing or sales of its products or services. Extensive marketing has<br>been recognized as the important factor for the sales growth of any business<br>and not just funding or capital should be consider as the growth of a business<br>(Waithaka, Mutiri and Nyabuto, 2014). For an enterprise to survive, it is very<br>crucial to have effective sales strategies that will win over its competitors<br>in the industry but most of the customers are cautious about the abuse of<br>direct marketing and are always worried that they may become victims of fraud<br>(Yen, Chen and Chen, 2008). Traditionally, executives in Nigeria aviation<br>industries have not been market driven, they have lagged behind in accepting<br>the marketing concept and have generally been slow in adopting promotional<br>methods, product strategy and other marketing techniques (Uhuegho, Olaniyi and Nwokocha, 2014).</p><p>Over the years the airlines industry in<br>Nigeria have been unable to grow, expand and be strong enough to attract more<br>Nigerians to travel by air, and this has contributed to excess capacity (or<br>performance below capacity) that leads to huge economic losses in terms of<br>potential turnover of air travelers not captured as passengers by the airlines<br>(Bankole, 2015). According to Asiegbu, Igwe, and Akekue-Alex (2012), many<br>airlines have suffered entropy (such as oriented, Barnax, Concorde, ADC,<br>Sossoliso airlines) and unable to provide the required service quality, some of<br>these airlines experienced low patronage and abysmal profit margin; and<br>eventually collapsed. The competitive nature of aviation industries in Nigeria<br>today is posing serious problems to various airline companies due to the<br>operations of Nigeria aviation industries in the volatile environments<br>(Olujide, 2003; Aremu, 2006). These problems have been attributed to the lack<br>of adequate implementation of direct marketing techniques.</p><p>Satisfied consumers will pass positive<br>information to others while dissatisfied consumers will pass negative<br>information about the products or services (Tucker, 2011; Vermeulen and<br>Seegers, 2009; Jalilvand, Samiei, Dini, and Manzari, 2012, Dennis, Merrilees,<br>Jayawardhena and Wright, 2009). Mouth to mouth marketing<br>communications is a major indicator to the success of a marketing strategy for<br>an organisation. For an organisation to successfully market its products or<br>services, such organisation must communicate with its customers or target<br>market (Louise van Scheers and Prinsloo, 2014). However, mouth to mouth<br>marketing might be counterproductive. On the one hand, it has been seen as an<br>influential marketing tool that might improve firm’s market share and<br>profitability (Arndt, 2009; Sheth,2000 and <br>Guillermo, 2011); On the other hand, when the message about the firms’<br>services or product is negative, it may cause worst damage to the organisational<br>objective of controlling the market, this has been seen to have greatly<br>affected the airline industry (Richins, 1983; Hogan, Lemon and Libai, 2002;<br>Guillermo, 2011).</p><p>Since the early 1990s, the delivery of a<br>high level of service quality by airline companies became a marketing requisite<br>as the competitive pressures continued to increase. Most airlines began to<br>offer various incentives, such as the frequent flyer programmes in an effort to<br>build and maintain the loyalty of customers (Miller, 2015). Thus, in order to<br>remain competitive, service providers must render quality service to their<br>customers. However, Ott (1993), in his extensive study of frequent fliers,<br>showed that despite the airlines attempts to differentiate their services,<br>consumers did not perceive any difference between one carrier and another,<br>whereas Ostrowski, O’Brien, and Gordon (1993) noted that when all airline<br>companies had comparable fares and matching frequent flyer programmes,<br>companies with better perceived services drew customers from other carriers. Oghojafor and Alaneme (2014) added<br>that Nigerian aviation industry is fraught with poor customer service and<br>compensation for wronged and deserving customers. It has been observed that<br>there is a need for more competition in the industry to give customers a wider<br>range of choices in case their chosen carrier disappoints in any way (Udoh,<br>2013). In terms of customer satisfaction with the way the airlines handle the<br>comfort of their passengers, there is little to reflect the Category one (CAT<br>one) certification. In view of the challenge, much attention has been given to<br>the role of mouth-to-mouth marketing. The lack of mouth-to-mouth marketing<br>strategy negatively affects market share of the airline service providers in<br>Nigeria (Udo, 2013). Bassey and Anyadighibe (2014) further explained that<br>airline companies have not enjoyed the power of mouth-mouth marketing. Hence, the needs to further investigate how<br>best effective marketing like mouth-to-mouth marketing could be used to enhance<br>their business performance.</p><p>It<br>is obvious that online marketing and its relevance in tourism industry,<br>manufacturing industry, banking industry etc have engrossed the attention of<br>many authors in developed, emerging and developing nations. Many scholars have<br>examined the relationship between online marketing and business performance and<br>yet general conclusion on the effect of online marketing on business<br>performance are yet to be reached. Past studies present conflicting findings as<br>some found a positive effect between the two (Sunny, Kim and Jeong, 2004;<br>Ulhas, 2007; Salwani, Marthandan, Norzaidi and Chong, 2009 and among others)<br>and some found no effect (Kirvijavi and Saarinen, 1995; Powell and<br>Dent-Micallef, 1997; Lo and Darma, 2000; Singh and Pandey, 2008; Shin, 2006;<br>Matikiti and Afolabi, 2012 and among others). This indicates that the effect of<br>online marketing on business performance is still debatable.</p><p>The aviation industry has not been left behind in<br>adopting e-marketing, as it is evident from numerous airline firms that have<br>established their presence on the Internet. <br>However, it is not yet clear whether the spread and utilization of<br>Internet marketing has improved the profitability of the airlines firms in<br>Nigeria (IATA, 2007). </p><p>A study<br>carried out by Uhuegho, Olaniyi and Nwokocha (2014) revealed that most airlines<br>operators in Nigeria are facing financial exigencies as a result of inability<br>to locate target customers and secure passengers’ loyalty, the global trade<br>trends, consumer protection and passenger rights, lack of online marketing<br>amongst others. All these have impacted negatively on the nature of airline<br>operations and their profitability. The study further showed that the Nigerian aviation industry was<br>heavily indebted because of losses caused by low fares, high interest rates,<br>and rising fuel costs. In 2010 alone, Nigerian airlines owed a combined $59.5<br>million to Federal Airport Authority of Nigeria (FAAN) as at when the Central<br>Bank of Nigeria (CBN) announced a $1.2 billion bail-out for domestic carriers.<br>In 2011, the airlines owed $66.7 million (10 billion naira) to Nigerian<br>aviation agencies. Of the 150 active Nigerian airlines in 2001, the number<br>declined to 19 in 2011 and 8 in 2016 mainly due to financial mismanagement and<br>airline failures to meet industry policies. It is apparent that<br>Nigerian airline firms are adopting online marketing but it is not yet clear<br>whether the spread and utilization of online marketing has improved the<br>profitability of airline firms in the Nigeria aviation industry.</p><p>Marketing is the connection between<br>the satisfaction of the need of a society and its industrial activities which<br>then support a firm to survive within its competitive environment. The airline industry is considered to be of<br>strategic importance in every nation and it requires appropriate positioning to<br>ensure its sustainability. Across the world, for instance, over 2.1 billion<br>passengers travelled by air in 2006 (IATA, 2007). In Africa, the airlines<br>generated 6.7 million jobs and contributed US$67.8 billion to the GDP (Air Transport<br>Action Group, 2010). The Nigerian aviation industry is confronted by<br>myriad of challenges in terms of traditional marketing which have threatened<br>the day to day working capital and sales revenue of the firms. The airline industry in Nigeria has been<br>having some traditional marketing challenges in the light of upsurge in<br>competition and the dynamics in the global and local business environments (Air<br>Transport Action Group, 2010). According to Adeniran, Egwuonwu and Egwuonwu<br>(2015), most of the airlines in Nigeria do not have clearly stated positioning<br>statements to differentiate their market offerings, and attract customers. This<br>situation has resulted in high working capital and rates of airlines’<br>insolvency. Also, Nthiga (2008) noted that most firms do not use<br>marketing to improve their organisational working capital. In the context of<br>working capital it has been pragmatic that the difference of current assets and<br>liabilities, organisational savings, and lack of legal structure are the major<br>indicators to determine working capital of an organisationon the significant<br>impact of traditional marketing in improving the day to day sales revenue of<br>the organisation. Based on these problems, it is important to establish the<br>relationship that exist between traditional marketing, transactional marketing,<br>marketing strategies and selected performance indices of airline firms in<br>Nigerian aviation industry</p><p>Based<br>on the foregoing, the present study examined marketing strategies and business<br>performance of selected airlines in Nigerian Aviation Industry.</p><p><b>1.3 &nbsp; &nbsp; &nbsp; Objective<br>of the Study</b></p><p>The<br>general objective of the study was to examine the relationship between<br>marketing strategies and business performance of the selected airlines in<br>Nigerian Aviation Industry. The specific objectives are to:</p><ol><li>determine the relationship between<br>direct marketing and sales growth of selected airlines in Nigerian<br>Aviation Industry;</li><li>examine the relationship between<br>mouth-to-mouth marketing and market share of the selected airlines in<br>Nigerian Aviation Industry;</li><li>assess the influence of online<br>marketing on the profitability of the selected airlines in Nigerian<br>Aviation Industry;</li><li>aascertain the effect of traditional<br>marketing on working capital of the selected airlines in Nigerian Aviation<br>Industry;</li><li>examine the influence of transaction<br>marketing on customers’ satisfaction of the selected airline firms in<br>Nigerian aviation industry and</li><li>evaluate the influence of marketing<br>strategies and business performance of the selected airline firms in Nigerian<br>aviation industry;</li></ol><p><b>1.4 &nbsp; &nbsp; &nbsp; Research<br>Questions</b></p><p>To<br>guide the conduct of this research the following questions were raised:</p><ol><li>What is the relationship between<br>direct marketing and sales growth of the selected airlines in Nigerian<br>Aviation Industry?</li><li>What is the relationship between<br>mouth-to-mouth marketing and market share of the selected airlines in Nigerian<br>Aviation Industry?</li><li>How does online marketing influence<br>the profitability of the selected airlines in Nigerian Aviation Industry?</li><li>In what way will traditional marketing<br>affect working capital of the selected airlines in Nigerian Aviation<br>Industry?</li><li>What influence does transaction<br>marketing have on customers’ satisfaction of the selected airline firms in<br>Nigerian aviation industry?</li><li>How do marketing strategies influence<br>business performance of the selected airline firms in Nigerian aviation<br>industry?</li></ol><p><b>1.5 &nbsp; &nbsp; &nbsp; Hypotheses</b></p><p>The<br>following hypotheses were propounded and tested at 0.05 level significant:</p><p><b>Hypothesis One</b></p><p>H01: There is no significant<br>relationship between direct marketing and sales growth of the selected airlines<br>in Nigerian Aviation Industry.</p><p><b>Hypothesis Two</b></p><p>H02: There is no significant<br>relationship between mouth-to-mouth marketing and market share of the selected<br>airlines in Nigerian Aviation Industry.</p><p><b>Hypothesis Three</b></p><p>H03: Online marketing has no<br>significant influence on the profitability of the selected airlines in Nigerian<br>Aviation Industry.</p><p><b>Hypothesis Four</b></p><p>H04: Traditional marketing has<br>no significant effect on working capital of the selected airlines in Nigerian<br>Aviation Industry.</p><p><b>Hypothesis Five</b></p><p>H05: Transaction marketing does<br>not significantly influence customers’ satisfaction of the selected airline<br>firms in Nigerian aviation industry.</p><p><b>Hypothesis Six</b></p><p>H06: Marketing strategies<br>do not significantly influence business performance of the selected airline<br>firms in Nigerian aviation industry.</p><p><b>Rationale for Hypotheses</b></p><p><b>H01: </b><b>There is no significant relationship<br>between direct marketing and sales growth of the domestic airlines in the<br>development of Nigerian Aviation Industry.</b></p><p>Direct marketing is a form of advertising<br>which allows businesses and nonprofit organisations to communicate directly to<br>customers through a variety of media including cell phonetext messaging,<br>email, websites, online adverts, database marketing, fliers, catalog<br>distribution, promotional letters and targeted television, newspaper and<br>magazine advertisements as well as outdoor advertising. Among practitioners, it<br>is also known as <i>direct response</i>. Direct marketing is attractive to many<br>marketers<br>because its positive results can be measured directly. While many marketers<br>recognize the financial benefits of increasing targeted awareness, some direct<br>marketing efforts using particular media have been criticized for generating<br>poor quality leads, either due to poor message strategy or because of poorly<br>compiled demographic databases. Through conducting an empirical research, Gustafsson<br>(2006) confirm that direct marketing has a significant positive effect on<br>patronage of airline service firms in China and is essential for the successful<br>delivery of customer services.</p><p>Chang<br>and Yeh (2012) found that direct marketing is necessary for evaluating<br>airlines’ services. By collecting surveys from inbound air passengers at Macao<br>International Airport, Chan, Wang, Li, Liu, and Lam (2014) have employed the<br>SERVQUAL model in completing a comparative study of different competitive<br>advantages between traditional and low-cost airlines. Their findings clearly<br>show that different marketing and service delivery strategies should be applied<br>by different airlines (traditional vs. low-cost) in order for them to<br>respectively and satisfactorily meet their different service quality<br>dimensional needs of customers. Lázaro (2016) asserts that airlines that have<br>introduced direct marketing can offer products and services calibrated to<br>passengers’ needs. Norm (2011) found out that direct marketing has greater implication<br>on sales growth and it is a sales channel through which customers are offered<br>products and services. Bellman, Potter, Hassard, Robinson and Varan (2011)<br>agree that direct marketing is a promotional tool for generating notoriety and<br>a positive brand image.</p><p>However,<br>authors such as MMA (2011) and García (2012) did not find positive relationship<br>between direct marketing and sales revenue. They found that some direct<br>marketing tools could not contribute value to user management, information, and<br>resolution in an automatic and interactive manner. Costa, Barragáns and Rey<br>(2012) do not see direct marketing as a sales outlet, where distribution is the<br>entrance door that allows for the sale of business products and services. In<br>the light of these previous findings, this study hypothesize that there is no<br>significant relationship between direct marketing and sales growth of selected<br>airlines in Nigerian Aviation Industry.</p><p><b>H02: </b><b>There is no significant relationship<br>between mouth-to-mouth marketing and market share of thedomestic airlines in<br>Nigerian Aviation Industry</b></p><p>Passengers<br>essentially need information about an airline company and its services to<br>choose it. They always collect information from the mass media including<br>television, radio, internet, etc. Although the mentioned resources provide<br>valuable information, passengers prefer to receive a huge part of their<br>information from informal resources such as their relatives, their friends,<br>their acquaintances and other people (Silverman, 2001). Since they are not<br>interested people, they are more noticed by the passengers. It must be<br>mentioned that the formation of positive words of mouth about a service company<br>can be due to different factors and will also have remarkable outcomes. In an<br>environment where there has been a <br>reduction in consumer’s trust as <br>well as a decrease in <br>television, radio and <br>outdoor advertising, word of<br>mouth offers a way to obtain a significant competitive advantage (International Word of Mouth Marketing<br>Conference, 2005).</p><p>&nbsp;Recent studies in the field of different<br>service industries have proved positive and negative effects of words of mouth<br>on purchasing the services provided by service companies in different<br>industries. Most airlines began to offer various incentives, such as the<br>frequent flyer programmes, in an effort to build and maintain the loyalty of<br>customers (Miller, 2015). Yasvari, Ghassemi, and Rahrovy (2012) assert that<br>word of mouth is more important in final stages of the purchase process,<br>because it assures the consumer. Alire (2007) in a study empirically found out<br>that 90% of people trust the products or services confirmed by one of the<br>family members, friends or colleagues, because they are not sure of any<br>benefit. A study by Bughin, Doogan, and Vetvik (2010) suggest that word of<br>mouth is the primary factor behind 20 to 50% of all purchasing decisions and<br>generates more than twice the sales of paid advertising.</p><p>Cronin<br>and Taylor (2012) found empirical support for the idea that mouth-to-mouth<br>marketing led to increased market share and argued that service quality was<br>actually an antecedent of market share. O‘Neill, Palmer, and Charters (2012)<br>conducted a study about airlines services in Australia and found that when the<br>belief leaders returned back to their country, they talked about their<br>experiences and their verbal recommendations led to the increase in the sale of<br>local airline services. Conducting a study in the US, Litvin, Blose, and Laird<br>(2011) found that choosing airline by tourists was affected by verbal recommendations<br>of the belief leaders and interestingly, a number of these choices were<br>affected by the formal media. Brown, Barry, Dacin, and Gunst (2015) in their<br>empirical study on word of mouth facets in restaurants confirmed that there is<br>a strong relationship between word of mouth and customer’s loyalty. The<br>researchers found out that positive word of mouth was directly correlated to<br>customer’s repeated purchase which transformed into higher market share. They<br>also discovered that the effect of positive or negative word of mouth on market<br>share differed substantially from industry to industry.</p><p>Mackinsey<br>group in 2009 reported that in the airline industry, the pass on rates for the<br>key positive and negative word of mouth can reduce a firm’s market share by<br>20%, all other things being equal. Heriyati and Siek (2011) study showed that<br>market share of low cost carriers did not significantly improve after receiving<br>information through WOM channel because passengers find it difficult to make a<br>decision about choices of services or when they are about to travel. From these<br>arguments and findings, it is hypothesize that there is no significant<br>relationship between mouth-to-mouth marketing and market share of selected<br>airlines in Nigerian Aviation Industry.</p><p><b>H03: </b><b>Online marketing has no significant<br>influence on the profitability of the selected airlines in Nigerian Aviation<br>Industry</b></p><p>According<br>to Lerrthaitrakul and Panjakajornsak (2014), the aviation industries play a<br>significant role in generating new marketing and business across the world. In<br>order to survive in the modern marketplace, air-travel businesses need to give<br>consumers what they want, which is low prices and a wide choice. Online<br>marketing affords them a way to do that. Through the online platform, Airlines<br>enhance their relationship with their passengers who will book directly with<br>the airline rather than through travel agents. In addition, airlines increase<br>their revenues through sales of optional services such as baggage, seat<br>assignments and also ancillary services such as car-hire, hotels and insurance.<br>Online marketing enables airlines to offer more services to customers, more<br>channels to deliver their business, more intelligence to understand their<br>business, greater efficiency and lower cost. De Alarcon, Molina, and Feliz<br>(2005) in a study found that the actual cost per transaction goes down<br>considerably with online marketing as opposed to traditional marketing.</p><p>Stroehle<br>(2008) revealed that the application of online marketing in the airline industry<br>is influential on the improvement of the effectiveness of marketing activities.<br>Eid (2011) studied the use of online marketing in business management and<br>concluded that the use of online marketing mechanisms is effective on market<br>share and profitability of the companies. Jawabreh, Allahham, Alrjoub, and<br>Ahmad (2012) explored the impact of Information Technology on Profitability of<br>Airlines Industry on Royal Jordanian Airlines. The data were collected from the<br>financial statements of Royal Jordanian Airlines and analyzed by using<br>financial and statistical tools. From this study, it showed that some ratios<br>showed good results and the airline still had the opportunity to improve<br>effectively its financial performance and long term and short term solvency in<br>future.</p><p>However,<br>some studies have found no relationship between online marketing and firm’s<br>profitability (Ozituran &amp; Roney, 2003; Shin, 2006). Wen (2009) pointed out<br>that the Internet had negative impacts on the industry, namely online pricing<br>transparency, price competition and a decrease in customer loyalty. Xiang,<br>Wang, O’Leary and Fesenmaier (2015) found that there has been no significant<br>change from 2007 to 2012 in the percentage of American travellers who used the<br>Internet as a source of information for trip planning. This situation clearly<br>indicates that some people regard the Internet as having barriers that are<br>difficult for them to overcome (Minghetti &amp; Buhalis, 2010). On the other<br>hand, people prefer to use a travel agent for a variety of reasons. The most<br>recent figures of the Travel Weekly’s Consumer Trends (Tunney, 2014: C10)<br>indicate that 45% of travellers have used a travel agent to book a trip with a<br>large proportion of these travelers stating that they use a travel agent<br>because they were looking for expert advice. The figure of 45% clearly<br>indicates the relevance of travel agents in the travel and tourism today. Pan<br>and Fesenmaier (2006) revealed that travel-related websites are not as<br>user-friendly as they could be. Stoltz (2009) argue that users often get<br>frustrated when trying to book online, even CEOs of online travel portal<br>companies. In the light of these previous findings, this study proposes that<br>online marketing has no significant influence on the profitability of selected<br>airlines in Nigerian Aviation Industry.</p> <br><p></p>