USING MARKET PENETRATION STRATEGY TO IMPROVE MARKET SHARE OF MCN...

MARKET PENETRATION STRATEGY TO IMPROVE MARKET SHARE OF
MULTICHOICE, LAGOS, NIGERIA.
BY
AKINTOYE AFOLABI AKAMOH
Channels Development Unit
Plot 1381 Tiamiyu savage street,Victoria Island, Lagos. Nigeria.
(akintoye.akamoh@ng.multichoice.com; +234-8141380841)
Dissertation submitted in partial fulfillment of the requirements for the degree
MASTER OF BUSINESS ADMINISTRATION
AT
BUSINESS SCHOOL NETHERLANDS.
Internal Examiner: Dr. Ayotunde Adebayo.
Set Advisor: Jide Ogunbanjo.
Set: Ikeja 10.
Submission Date: June 23,2015.

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DECLARATION OFAUTHENTICITY
I, Akintoye Afolabi Akamoh hereby declare that this dissertation is my personal work.
It is being submitted in partial fulfillment of the requirements for the degree Master of Business
Administration (MBA) to Business School Netherlands.
It has not been previously submitted for any degree or any examination at any other
University.

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ACKNOWLEDGEMENTS
Foremost, I give thanks to the Almighty God for making it possible for me to finish this MBA
dissertation work.
I will like to use this opportunity to thank my Parents, Mr. and Mrs. Akamoh and my lovely sisters
for their support and encouragement throughout this part of life journey and in the process of this
MBA programme and particularly in the course of writing this dissertation.
I will like to thank the entire staff of Multichoice Nigeria Limited (MCN) for their support and
cooperation in the process of carrying out this research work.
I will like to thank the entire BSN Nigeria team, most especially Mr. Lere Baale, Dr. Tunde Adebayo,
Mr. Jide Ogunbanjo and Morenike Adeyeye for their support and guidance throughout the MBA
programme and in the course of this dissertation. I am indeed grateful to you all.
Lastly, my sincere appreciation goes to IKeja 10 set for their support, contributions and motivation
towards the successfulcompletion of this dissertation work.

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ABSTRACT
This study examined market penetration strategy as a growth strategy for improving the market
share of Multichoice Nigeria (MCN). MCN market share has been on the decline due to the
ineffective marketing strategy that neglects loyalty programs and marketing campaigns aimed at
broadening the distribution channels and improving the quality of the content to attract
competitor’s customers. The objectives of the study were to examine the marketing strategy
adopted by MCN, evaluate the drawbacks facing MCN in the implementation of the marketing
strategy and to identify the benefits of market penetration strategy in the Pay-Tv industry.
Descriptive Survey method of research was used, and primary data were obtained by the
utilization of a structured questionnaire, in-depth interviews were conducted and observations
were made with the aid of an observation checklist. The framework of the study was anchored on
the Ansoff growth matrix which suggests that companies can grow the business via existing and
new products, in existing and new markets. The sample size for the study was made up of 83
respondents who were top management staff, middle management staff and lower management
staff at MCN. A Stratified Sampling Technique was employed in the selection of the sample size.
Data obtained were analyzed by the use of Frequency Distribution Analytical method and the
results were represented using tables, charts, interview responses and observations were
transcribed. In agreement with the purpose of the study, deterministic decision-making matrix
model that enables the researcher to choose the most appropriate option out of the four probable
strategic options identified to improve the market share of MCN from the costs and benefits
perspective by using numeric criteria was used. The findings suggest that penetration strategy
that has the highest payoff with the lowest risk and cost be adopted to improve the market share
of MCN. The study also indicates that loyalty programs, effective distribution channels, free
preview and discount pricing strategy have a significant influence in attracting competitors’
customers. Therefore, it is recommended that relatively low-cost penetration strategy that ties
customers to products through a dialogue approach be implemented to improve the market share
of MCN. The findings from the research work revealed that MCN will not only retain its market
share and gain competitive advantage in a mature market like Pay-Tv industry through market
penetration strategy but attract competitors’ customers thereby improving its market share.
Keywords: Market Penetration,Market Share, Pricing Strategy, Competitive Advantage.

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TABLE OF CONTENT
Declaration----------------------------------------------------------------------------------------------------- II
Acknowledgement…………………………………………………………………………………III
Abstract…………………………………………………………………………………………….IV
Table of Content……………………………………………………………………………………V
List of figures/list of tables and annexures………………………………………………………..VIII
Acronyms ------------------------------------------------------------------------------------------------------.XI
CHAPTER ONE………………………….........……………….…………………………………...1
1.1 Background of study………………………………………………………………………1
1.2 Statement of problem……………………………………………………………………..14
1.3 Purpose of study…………………………………………………………………………..14
1.4 Objectives of the study …………………………………………………………………..14
1.5 Research questions…………………………………………………..…………….……...14
1.6 Theoretical framework……………………………………………………………………15
1.7 Significance of the study………………………………………………………….............16
1.8 Scope and limitation of the study……………………………………………….…..….....17
1.9 Research process………………………….………………................................................17
1.10 Definition of terms……………………………………………………..…………............18
1.11 Conclusion………………………………………………………………………………...19
CHAPTER TWO………..…………………………………………………………………………..20
2.1 Introduction………………………………………………………………………………..20
2.2 Theoretical framework ………………................................................................................20
2.3 Concept of marketing ……………………………...……..………….…………………....22
2.4 Elements of marketing.……………………………….……......…….................................23
2.5 Forms of marketing………………….......………………………………………………...24

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2.6 Competitive marketing strategy..........................…………………..……....………….….27
2.7 Market share.......................................................................................................................34
2.8 Market share change...........................……………....……………………………………35
2.9 Growth strategy…………………………..........................………………………………36
2.10 Relationship between growth strategy and market share………………………………...44
2.11 Market penetration strategy in Pay-Tv…...........................................................................46
2.12 Marketing strategies implemented by MCN…………………………..............................50
2.13 Summary of literature review........………………............................................................52
2.14 Conclusion.........................................................................................................................52
CHAPTER THREE……………..……………………………………………….…..……………53
3.1 Introduction…………………………………………………………………….……......53
3.2 Research design…………………………………………..…………………….………..53
3.3 Population of study………………………...………………………..……………….......54
3.4 Sample size and techniques……………………………………………………………...54
3.5 Research instruments……………………………………………………...…….…….…55
3.6 Validation of research instruments…………………………………………..........……...56
3.7 Reliability of research instrument..............…………………….....……………………...56
3.8 Procedure for administration of instrument....………………………………...……...….57
3.9 Statistical tools for data analysis.....…………….....……………………………………..57
3.10 Conclusion…………………………………………………………………………….….58
CHAPTER FOUR…………….…………………………………………………….......................59
4.1 Introduction……………………………………………………………………………….59
4.2 Presentation of respondents demographic data......….…………………….……..…….....59
4.3 Opinion of respondents on the research questions..….………………….…………….....64
4.4 Summary of findings from data analysis………….………………………………..…....85
4.5 Conclusion.........................................................................................................................86

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CHAPTER FIVE ……………………………………...……………….……………………….....87
5.1 Introduction………………………………………………………………………..…….87
5.2 Analysis of options………………………………………………………………….…...87
5.3 Selection and evaluation of options………..………………………………...………......95
5.4 Conclusion……………………………………………………………………….……....95
CHAPTER SIX…………………………………………………….……..……..…………………96
6.1 Introduction………………………………………………………………………………96
6.2 Conclusion.…………………………………………………………………………….....96
6.3 Implementation plan……………………………………………………..……………….97
6.4 Challenges and problems………………..……………………………………..…….......101
6.5 Input control measures.......................................................................................................102
6.6 Critical success factors.......................................................................................................103
6.7 Conclusion..........................................................................................................................104
CHAPTER SEVEN…………….………………………………………………..……………........105
BIBLOGRAPHY……………………………………………………………………….…………..107
APPENDICES.……………………………………………………………………..……....…........117

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List ofFigures
1.1 MCN organogram…..……………………………..………………………………………….5
2.1 Ansoff growth matrix…………………………………………….………………………….16
2.2 Micheal porter’s generic strategy options………..............……………...............…………..28
2.3 Micheal porter’s five forces model….....................................................................................30
2.4 Approaches to market penetration strategy………………...........................…………….…39
2.5 BCG matrix……………………………………………………………………………........45
3.1 A chart showing gender respondents................…………………………….......…………..60
3.2 A chart showing qualification of respondents..............……………………………..………61
3.3 A chart showing respondents age...................................................................................……62
3.4 A chart showing Years of Experience....................................................................................63
List ofTables
1.1 SWOT analysis of MCN…………………………………................................................…9
1.2 Brand mapping of MCN………………………………………………………........………11
1.3 MCN market Situation…………………………..…….........................…….....…………...12
3.1 Sampling distribution table...………………………………………......................……..…54
4.1 Gender distribution table………………………….................……………………………..59

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4.2 Educational qualification…………………………………………….……………...............60
4.3 Respondents age distribution…………………………………………….................……….61
4.4 Years of experience in the organization.................................................................................63
4.5 Questionnaire item 5 response table.......................................................................................64
4.10 Questionnaire item 10 response table...................................................................................68

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5.1 Unweighted assessment option table......................................................................................94
5.2 Weighted assessment option table..........................................................................................94
6.1 Implementation plan table.......................................................................................................98
Appendix
Appendix I – MCN staff questionnaire…………………………………………………….........117
Appendix II – MCN staff interview guide…..……….…………………………………………..121
Appendix III – MCN observation checklist…..……….…………………………………………123

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ACRONYMS
IPTV: Internet Protocol Television.
DTT: Digital Terrestrial Television.
BCG: Boston Consulting Group.
PWYW: Pay What You Want.
DSTV: Digital Satellite Television.
DSD: Digital Satellite Decoder.
TV: Television.
BSN: Business School Netherlands.
MCN: Multichoice Nigeria Limited.
FTA: Free To Air.

MBA DISSERTATION BY AKINTOYEAKAMOH(2015) –BSN NIGERIA.
1
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In the business world, growth is a crucial performance criterion and success scale for firms. Organizations
have traditionally emphasized either profitability or market share growth as their guiding orientations.
Armstrong and Kesten (2007: 116) noted that business performance and economic profit of the company can
be summarized in market share. One of the most important aims of businesses is to improve market share to
accomplish larger scale in operations and increase profitability. Although companies are sensitive to market
share, the factors that affect market share are still not clear (Armstrong and Kesten, 2007). Market share
retorts to elements of marketing strategy and two of the important items that influences market share is
marketing strategy and marketing mix. The capability to use the successful marketing tactics in market
competition is crucial for a firm’s performance (Slater, Hult, & Olson, 2010).
One of the primary objectives of marketing strategy is to enhance the long-term financial performance of a
firm. As such competitive marketing strategy serves to improve financial performance and market share of
the company through sustainable competitive advantages. Marketing strategy entails companies reacting to
situations of competitive market and forces of market or responding to environment forces and internal
forces to enable the firms achieve its objective in the target market (Lee & Griffith, 2004). Traditionally,
marketing strategy is a plan for pursuing the company’s goal or how the company is going to obtain its
marketing goals within a particular market segment (Kotler, 2010).
In the developing country like Nigeria, due to the powerful effect of competition, businesses develop by
initiating new products, adding additional values to existing products or acquiring new markets. Aderemi
(2003) observed that in Nigeria business environment, organizations are influenced by Intra-type
competition, competition among firms in the same type of business and Intertype competition, market
competition among firms in different kinds of activities but which sell the same product. Hence, sustaining
the existence and advancing within the unpredictable competitive environment are possible for companies if

2
they can take the appropriate opportunities for them. Hence, the ability to successfully adopt competitive
marketing strategy is vital for a company’s profitability and market share performance.
Multichoice Nigeria (MCN) is a limited liability company registered in Nigeria, backed by the expertise of
holding company MIH and its parent company Naspers. MCN is one of the most prominent businesses in
the global MIH stable. MCN was founded two decades ago with the objective to provide television
broadcast service via digital satellite Pay-Tv service to interested subscribers. MCN enriches the lives of
customers through world-class Pay-Tv services, development of local production industries and dealerships.
MCN drives its sales majorly via the value chain management which comprises of channel partners such as
dealers, retailers and vendors (Moms and Pops).
The Researcher occupies the position of Channels Development District Manager for Lagos/Ogun regions.
The researcher works at the channel development unit, with the Channels Development Country Manager as
the immediate supervisor. The unit is responsible for accelerating business development and accreditation
growth of channel partners, who help drive sales. The researcher is entrusted with the responsibility of
channel development activities such as identifying new market opportunities and prospective entrepreneurs
that can trade the company’s products and provide services to new and existing customers.
MCN vision and mission.
VISION – To be Africa’s first choice and leading Pay entertainment destination anytime, anywhere.
MISSION – To own and manage interactive platforms that bring digital media entertainment, content and
services to multiple devices, for which users pay a monthly subscription
(www.multichoice.co.za/multichoice/action/media/downloadFile?media_fileid=105 accessed on 20th
May,
2015).
Products and services

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MCN owns the following exciting brands:
DSTV (provides Digital Satellite Television service)
Mnet (delivers thematic channels and exclusive contents to DSTV subscribers)
Supersport (provides comprehensive coverage of both local and global sports contents)
DSTV Media Sales (commercial airtime sales and air sponsorship)
DSTV Mobile (provides mobile television contents and services)
DSTV online (delivering entertainment content and services from the MCN family to customers via
breakthrough technologies).
GOTV (provides Digital Terrestrial Television service)
Services offered include;
1. Promoting pay television Services.
2. Entering into a contract negotiation with various content providers, ensuring excellent packaging of
best contents in our different bouquets for MCN subscribers.
3. Providing programmed guide (both printed and electronic) to subscribers.
4. Operating a subscriber care call center.
5. Receiving subscriber payments and managing subscriber’s accounts.
6. Coordinating the supply, sales and servicing of decoders for subscribers mainly via the value chain.
7. Conducting in – depth market research.
The market situation of today has changed such that the customers have taken control of the market. The
customers determine the product and service they require which shall be fulfilled by the producer/service
provider. The number of products in Pay-Tv market not only increases the number of competitors, but also
creates variation in competition. Any Pay-Tv company expecting to win this competition should provide the
best quality at affordable price, easy access to the products and at the same time, establishing closeness with

4
customer by recognizing the people who are being served and finding out the types of products and services
they require. The way of marketing in Pay-Tv has undergone a substantial change for the last three decades.
With the emergence of new high-capacity platforms such as digital terrestrial television (DTT), Internet
Protocol TV (IPTV) and wireless broadband, there is definite potential for greater competition in Pay-Tv
markets, which in theory should stimulate innovation and produce greater economic efficiency and
improved consumer welfare. Hence, technological abundance has opened the door for new entrants. Selling
products is not enough nowadays; retaining customers is the prevailing phenomenon of the 21st century
marketing strategy. Successful companies have already moved from the obsession of selling product to the
philosophy of customer service. Organizations have also traditionally emphasized either profitability or
market share (growth) as their guiding orientations. As the fundamental responsibility of any organization is
to maximize shareholder value, such an orientation should be done along with a very high emphasis on
products. Consumer behavior in buying products have changed significantly in recent years, and further with
increasing competition and market saturation, the Pay-Tv industry has become very competitive.
CORE VALUES OF MCN
The following are core values of MCN:
INTEGRITY
MUTUAL RESPECT
OWNERSHIP AND ACCOUNTABILITY
INNOVATION
TEAMWORK
CUSTOMER FOCUS

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LEGEND
Fig. 1.1: MCN ORGANOGRAM
Source: Adapted from MCN HR Manual Workbook.
DSTV GOTV MULTICHOICE

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ANALYSIS OF MCN MARKETING UNIT.
Firms seek competitive advantage and synergy through a well-integrated program of marketing
mix elements (Walker, 2011). Brodrechtova (2008) explained that marketing strategy is a
roadmap of how a firm assigns its resources and relates to its environment and achieves a
corporate objective in order to generate economic value and keep the business ahead of its
competitors. The marketing strategies have a significant impact on the efficiency and cost
structure of an enterprise. Hence, Marketing activities of MCN include promotions, brand
management, public relations, market research and market survey. The division is made up of
three units; DSTV marketing unit, GOTV marketing unit and corporate communications unit.
According to Kolter (2005), Marketing mix is a combination of tools, grouped into four
categories (4P’s), implemented by the companies to achieve the business goals of the market.
Additionally, People, as the 5th P, can be added in the case of businesses offering services. The
Marketing mix of MCN is as the following:
Product: A product could be seen as anything that we bring to a market to satisfy a need. Lee and
Griffith, (2004) noted that better firm performance can be obtained by adapting the product to
meet requirements of customers. MCN offers Pay-Tv services as explained earlier. The MCN
product development team offer innovative products that bring families together with the aid of
quality entertainment contents which are viewed via the devices such as DSTV mobile (television
on the go), GOTV decoder (plug and play device), DSTV decoder (Direct to Home)and DSTV
catch up (Online Series). The MCN product development team designs these innovative products,
according to customers’ needs and target market niche.

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Price: Lages & Montgomery (2005) noted that price is one of the most important items in market
share increasing. In organizations, the requirement of the right price has become an important
matter because the price might ultimately influence whether the buyer decides to buy a particular
product or not. In MCN price ranges are quite justifiable for the target market niche, which allows
consumers get value for their money. MCN has designed reasonable subscription rates to suit
consumer’s pocket, thereby creating a market niche for both high and low-income earners to
enjoy quality entertainment contents. However, Eusebio (2007) emphasized that price is not only
the dominant strategy for companies in the market rather that low-cost advantage had a positive
relation with a share market.
Place: In a competitive environment where there is the similarity of services, the place strategy is
a good strategy for differentiation (Griffith, 2004). This aspect looks at the distribution channels
for the organization’s products and services. The process ensures products and services are
readily available in all regions thereby making products and services easily accessible to final
consumers. Currently in MCN, there are about 477 Channel outlets (dealer and retailer outlets)
with 11 MCN branches nationwide for a wide coverage to service subscribers. The network of
channel outlets and branches expands as the business grows; MCN provides convenient and
conducive channel outlets nationwide for clients to experience one-stop quality service without
the stress of traveling long distances to get our products or services.
Promotion: The importance of promotion is recognized from higher sales of firms that used
sound advertising. Firms which have a greater commitment to their target market use higher level

8
of publicity rather than firms who have less responsibility that used low level of publicity (Lee &
Griffith, 2004). A good product, an attractive price and a good distribution channel are not good
enough if an organization wants to be a frontline player in its line of business. The organization
must communicate with its present and future clients. For these products to be sold correctly, the
consumers have to be well informed. The message or information that is passed across must be
clear concise to the potential clients. The message is to convince the consumer that the offer is the
most attractive as well as motivate the customer to carry out the desired act, which is purchasing
the product. In MCN, we channel our promotions via several mediums such as social media, print
media, TV and radio jingles, direct marketing (sending bulk SMS and emails) and also selling via
full branded personnel’s (canvasser) to ensure clients are drawn to the product which helps to
yield sales.
Personnel: These are employees that must sell and support the products for the organization, it is
expected that each staff works with specific targets. These targets are to be based on the company
and the market position that the business desires. Personnel’s in MCN are chosen based on
proficiency and are regularly trained to deliver at all times. Personnel works as a team and are
given targets to achieve the company’s goal. Staff incentives are reviewed once they meet their
target to encourage them to do more.
MCN SWOT ANALYSIS
SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is a strategic evaluation
tool that marketers use for assessing the strategic organizational position. The main purpose of
SWOT is to provide meaningful insights to marketers about organizational key competencies

9
after evaluating data gathered through marketing intelligence and to enable them in making best
use of that data in utilizing opportunities, linking those with organization’s strengths, identifying
major threats, and minimizing weaknesses (Nasri, 2011). The best strategy is one that fits
organization's strengths to opportunities in the environment. SWOT analysis is a way of assessing
the organization’s current capabilities. Benchmarking systematically compares performance
measures such as efficiency, effectiveness or outcomes of an organization. It is by evaluating the
organization’s current capabilities with other organizations that can help identify a gap. In this
way, the organization can adapt to the best practices to improve organizational performance
(Bose, 2008).
Table 1.1: TABLE SHOWING THE SWOT ANALYSIS OF MCN.
STRENGTHS WEAKNESS
 Effective supply/distribution
network.
 Early penetration into the market.
 Certified International and local
TV content.
 Continuous innovation e.g. DSTV
mobile that allows you watch TV
on the go.
 Flexible and reasonable
subscription plan.
 Reliable value chain that has a
wide coverage of channel partners
nationwide.
 Strong value proposition.
 Strong intellectual base of staff.
 Exclusivity on foreign content such
as English Premiership League.
 The high purchase price for the
hardware with additional monthly
subscription fees.
 Only offers a television
subscription without data service.
 Poor turnaround time which
hinders quality service delivery.
 Inadequate transmitters which
limits signal coverage.
 Lack of proper managerial skill
amongst technical supervisors
/managers.
 Delay in project implementation
 Lack of strong competitive
strategy.
 30% market share.

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OPPORTUNITIES THREATS
 Low penetration in the rural areas.
 Growing population.
 High demand for digital services.
 Government backing with Digital
migration in 2015, where no one
can view any TV content without a
decoder.
 Value chain expansion, thereby
accrediting new channel partners to
join the value chain.
 Possible increase in subscriber’s
base from other distressed Pay-
TVs.
 Intense competition.
 Increasing regulatory controls.
 Piracy.
 Price war.
 Lack of basic infrastructure such
as power supply, good roads,
security etc.
 Multiple Taxation.
 Effects of Xenophobic attacks.
Source: Adapted from Akamoh, Organizational Analysis of MCN, 2014.
The most important conclusions that can be made of the MCN SWOT analysis is that it shows
that there are lots of opportunities. MCN’s strengths demonstrate that the company has a reliable
product that offers lots of benefits for the consumer. This combined with the opportunities;
provide strong points that can encourage further growth. The most important strong point that can
be built on and realize further growth is that there is a high demand for digital services thereby
presenting the opportunity for interactive options combined with Smart/Connected televisions.
This proof useful, due to the growing consumers with connected televisions, increasing Internet
access speeds, growing the broadband access market and increasing IPTV subscribers. Also, with
young consumers becoming increasingly connected and technologically savvy, form active and
significant opportunity that can be seized to achieve further growth.
However, MCN marketing strategy is not competitive enough to retain or gain market share from
the competitors in the Pay-Tv industry. Presented below is the brand mapping showing the

11
current marketing strategy of Multichoice Nigeria and where the company aims to be vis-a-vis
other companies in the Pay-Tv industry in Nigeria.
Table 1.2: Brand mapping vis-à-vis other Pay-TVs in the industry.
Elements ofmarketing
strategies(brand
differentiators).
MCN STAR TIME CONSAT
Service and Support
(personnel)
7 9 6
Communication with the
customer (promotion)
7 8 3
Product Price 7 9 4
Product Development 8 8 5
Speed of Delivery
(distribution network)
6 9 6
MARKET SHARE 30% 50% 20%
Source: Survey data, 2015.
From the researcher’s observation based on the experience in the industry, the above table
indicates the elements of marketing strategy employed by MCN which includes service and
support, communication with the customer, product price, product development and speed of

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delivery allocating 10 to the highest standard and 1 to the least standard. Hence, the table reveals
that the marketing strategy of MCN is poor compared to other Pay-TVs in the industry.
Furthermore, in Multichoice Nigeria Limited (MCN) the identified opportunities have not been
harnessed as there is lack of well-conceived marketing strategies and campaigns that push brands
forward in the consciousness of audience and lead to lasting adoption, advocacy and, over time,
increase expectation of the company. Besides, there is no workable customer loyalty program that
is aimed at rewarding loyal customers. Loyalty programs are designed to develop and maintain
customer relationships over a sustained period by rewarding them for every interaction with the
brand. Ineffective loyalty programs have resulted in the loss of market share to competitors. For
example, a new product launch in MCN is most times without any great budget aiming to make
the product become a household name within a few weeks of the strategy implementation. A
situation like this renders marketing strategy unrealistic regardless of the proposition of the
marketing campaign. Secondly, an established brand lacks a good idea of its audience through
traditional marketing efforts in practice at MCN. One of the benefits of market penetration
strategy is the opportunity to segment activity into different spheres and places directly targeted
to the location of the audience. Targeting activities in this way can be used to reduce cost while
increasing efficiency and message for each of the channels based at these locations. Also,
monologue marketing strategy at MCN instead of dialogue approach does not engage audiences
directly. All of these lapses result in the consistent decline of the company’s market share. Hence,
there has been a steady drop in MCN market share from 2011 to 2014 which points to the fact
that there is an underlying problem beyond the marketing aspect of the business. Below is a table
showing the market situation figures from 2011 to 2014.

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Table 1.3: TABLE SHOWING MCN MARKET SITUATION
YEAR
SALES
Customers
Serviced
Industry Sales
Forecast
Market Share
(Million) (Million) ( Million) In percentage
2011 11.6 1.2 33 35%
2012 11.4 2.6 33.8 34%
2013 11 3 34.5 32%
2014 10.5 3.2 35 30%
Source: MCN Sales Record, 2011-2014.
Note: Market Share = Annual Sales/Industry Sales forecast*100
As seen from the table 1.3 above, the company’s present market share in 2014 was in decline as
compared to previous years. The reduction in market share is therefore, a major challenge for the
organization which requires growth strategy to improve market share.
Successfully executing customer centricity strategy means clearly differentiating brand on the
basis of product assortment, price range, information availability, service, as well as the
personalized promotional offer. Ability to consistently deliver the best all-around value and most
satisfying experience for customers depends on the ability to deeply understand the customers. In
a world of many choices, stretched budgets, and too little time, it becomes imperative that MCN
makes customers believe that the brand offered is the single most convenient, efficient, pleasant
way to acquire what they want at an acceptable price. Unless customers understand that the brand
offered by MCN is uniquely able to consistently deliver results, the goodwill won through

14
personalized engagement can fade quickly. This study therefore, examines market penetration
strategy as a means of improving consistently declining market share of MCN.
1.2 Statement ofthe problem
MCN market share has been on the decline due to the ineffective marketing strategy that neglects
loyalty programs and marketing campaigns aimed at broadening the distribution channel and
improving the quality of the content to attract competitor’s customers.
1.3 Purpose ofthe study
The purpose of this study is to identify effective market penetration strategy and provide tactical
actions to the improve market share of MCN.
1.4 Objectives ofthe study
The objectives of this study are to:
1. Obtain the socio-demographic data of employees in MCN.
2. Examine the marketing strategy that is adopted by MCN.
3. Evaluate the drawbacks facing MCN in the implementation of the marketing strategy.
4. Examine the approaches to market penetration strategy in the MCN.
5. Identify the benefits of market penetration strategy in the Pay-Tv industry.

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1.5 Research questions
From the objectives of the study, the following are the research questions:
1. What are the socio-demographic data of employees in MCN?
2. What is the marketing strategy that is adopted in MCN?
3. What are the challenges that hinder increase in market share in MCN?
4. What are the approaches to market penetration strategy that can be adopted in MCN?
5. What are the benefits of market penetration strategy in the Pay-Tv industry?
1.6 Theoretical framework
This study is grounded on Ansoff (1987) Growth Matrix, which was created by Igor Ansoff,
American Planning Expert. Ansoff Matrix is a strategic planning tool that links an organization’s
marketing strategy with its general strategic direction. This matrix represents four alternative
growth strategies namely market penetration, product development, market development and
diversification. For the purpose of this study, market penetration entails selling existing products
or services to existing markets to achieve growth in market share. In addition, Kotler, Keller,
Brady, Goodman and Hansen’s (2009) four approaches to market penetration namely: increase in
market share, dominating growth market, driving out competitors and increase in existing
customer usage are integrated into the framework. This study examines MCN marketing strategy
in relation with Ansoff Matrix model to establish standards upon which effective market
penetration strategy is adopted. Presented below is Ansoff Growth Matrix:

16
Fig. 2.1: Ansoffgrowth matrix
Source: Adapted from Corporate Strategy. (Ansoff, 1998).
1.7 Significance ofthe study
The study seeks to improve market share in Multichoice Nigeria limited using market penetration
strategy. Moreover, the study will be useful to Business Development Managers, marketing and
field executives, students, practitioners, marketing consultants and academics etc. For instance,
Business Development Managers in the industry would find this research work very relevant by
having a clear understanding of conditions necessary for application of market penetration
strategy. It shall also provide them with a framework within which they can evaluate the best
marketing strategy.
The findings in this study would assists marketing executive in developing appropriate marketing
tactics to adopt while out in the field. To the Marketing Research Experts/Consultants findings in

17
this research work serves as an important source of knowledge that is capable of assisting them in
providing qualitative consultancy services as it will provide them with various ideas on issues
concerning marketing strategies and market share gains.
To the Advertising / Public Relations Practitioners, this research shall expose this category of
stakeholders to other generic strategic options to enhance growth.
1.8 Scope and limitation of the study
Every research work is only effective and useful at drawing reliable conclusions if it concentrates
on its objectives. This study will be limited to market penetration strategy as an approach to
improving market share in MCN. Respondents to the study will be restricted to the Top
management staff, Middle management staff and Lower management staff in the marketing
department of MCN. This is because the Top management staff, Middle management staff and
Lower management staff have immeasurable experience in the marketing of company’s products.
In addition, there are few constraints that are envisaged in the course of this study. These
constraints are difficulties in gaining the respondents audience in the process of administering
questionnaire and interviews. Also, the results of this study cannot be generalized to the entire
Pay-Tv industry because the research is only limited to Top management staff, Middle
management staff and Lower management staff of MCN.
1.9 Research process
The research instrument used for this research is a combination of observation checklist, in-depth
interviews and structured questionnaires (Triangulation). A stratified sampling technique is to be

18
adopted in choosing the respondents. The sample size will be calculated using a sample size
calculator from www.surverysystem.com/sscalc.htm. Questionnaire items will be mapped to
research questions and research objectives to validate content. In order to ensure instrument
reliability and scale validity, the questionnaire items and its scale will be checked and moderated,
a pilot study will be held using a few members of the identified sample size which will be
supervised by the internal examiner.
1.10 Definition ofterms
Marketing strategy: It is the goal of increasing sales and achieving a sustainable competitive
advantage.
Market penetration: This is the activity of increasing the market share of an existing product, or
promoting a new product, via strategies such as volume discounts, lower prices, advertising and
bundling.
Market share: This is a measure of the percentage of sales volume of an existing product or
business achieves in relation to the competition.
Growth strategy: Tactic used in marketing management to expand the consumer market for a
company’s product.

19
1.11 Conclusion
This chapter, having examined the market situation of MCN vis-a-vis other Pay-TVs and clarified
the need for MCN to improve its market share which is on the decline as revealed above, the next
chapter (chapter two) shall review marketing strategy with emphasis on penetration strategy to
improve market share. Subsequent chapters (chapters three and four) will focus on the methods that
are used to collect and analyze data for the study, analysis of the questionnaire items and
interviews, evaluation and presentation of results. In chapter five of this study, the findings will be
used to generate options from a cost and benefit perspective and implement the best optimal
strategy option using deterministic decision matrix model that will address the consistent market
share decline in MCN. The implementation of the preferred strategy option and the conclusion of
the study will be presented in chapter six. Finally, chapter seven of this study will dwell on the
researcher’s reflection of the entire research process.

20
CHAPTER TWO
LITERATURE REVIEW
2.1 Introduction
The aim of this chapter is to review market penetration strategy regarding some relevant theories
(http://www.eric.ed.gov/?id=ED304830/ accessed on 18th
June, 2015). Emphasis will be on the
Independent Variable (market penetration strategy) and Dependent Variable (market share) with
the aim of identifying standards, against which current conditions can be compared
(http://www.interesjournals.org/full-articles/evaluation-of-reading-proficiency-of-learners-with-
low-vision-while-using-low-vision-devices.pdf?view=inline/ accessed on 18th
June, 2015). The
researcher made use of several scholarly materials searched from the EBSCO website and other
appropriate origins of information like articles, books and thesis from various authors and
scholars that are experienced in the area of marketing strategy and pricing strategy as an effective
way to improve market share. For the purpose of this study, this chapter discussed Ansoff’s
Growth Matrix model, the concept of marketing strategy, market share, market penetration and
dimensions, market development among other relevant sub-topics relevant to the research topic.
2.2 Theoretical framework
The framework of this study is based on the Growth Matrix by Ansoff (1987) which suggests that
companies can grow the business via existing and new products, in existing and new markets.
Ansoff presented a corporate growth strategy matrix that focused on the firm’s present and
potential products and markets. By considering methods to develop via current products and new
products, and in current markets and new markets

21
(http://www.quickmba.com/strategy/matrix/ansoff/ accessed on 18th
June, 2015), there are four
probable product-market combinations; market penetration, market development, product
development and diversification (Ansoff, 1987). According to Drucker (1974) in Hollensen
(2007), growth will continue to be a desirable and indeed a necessary business objective. Indeed,
a company that does not grow will decline. Thus, there is even more need for a strategy that
enables management to plan for growth and to manage growth. Drucker (1974) stated that it is
not enough for management to say ‘‘we want growth’’, Management needs a rational growth
policy with both minimum and optimum objectives.
The strategy is important in practice. Decisions are clearly strategic and crucial to the growth of
the organization, have a broad scope, create added value, and have consequences for many jobs
and activities within the organization. The strategy is always built on knowledge of the actual
strength and weaknesses of an organization. The strategy should set out a general course, a
perspective for the longer term. It serves as a compass, a tool for sense making in the longer term
(Pearce, Robinson & Mital, 2010). Growth strategy is a multi-faceted phenomenon that is usually
related to firm survival, accomplishment of business goals and success or the scaling up of
accomplishments (Storey, 1994). Thompson and Strickland (2003) stated that developing the
business can be taken to mean creating and employing strategies that will bring revenue to the
business, appealing and pleasing customers, competing successfully with other contenders in the
industry, conducting operations and increasing the company’s financial and market performance
(http://business.uonbi.ac.ke/sites/default/files/chss/business/business/CHALLENGES%20OF%20
IMPLEMENTATION%20OF%20GROWTH%20STRATEGIES%20AT%20THE%20UNIVERS
ITY%20OF%20NAIROBI.pdf/ accessed on 18th
June, 2015).
Crosby (2012:12) characterized the strategies in Ansoff matrix in terms of risks. He defined
market penetration strategy as “least risk”, market and production growth strategy as “moderate

22
risk” and diversification strategy as “high risk”. See Fig 2.1 for Ansoff Growth Matrix
illustration.
Ansoff Growth Matrix provides a valuable means of identifying the scope and direction for
strategic development at the business level.
2.3 Concept ofmarketing strategy
According to Rajan (2010), marketing strategy refers to an organization’s incorporated pattern
of decisions that specify its critical choices regarding markets to serve and market segments to
target, marketing activities to accomplish and the method of performance of these activities, and
the apportionment of marketing resources among markets, market segments and marketing
activities toward the establishment, communication and/or delivery of a product that provides
value to customers in exchange with the organization and thereby empowers the organization to
accomplish specific goals. Hence, organizations are faced with the need to address issues relating
to “how to compete” on an on-going basis.
According to Benjamin, (2002) marketing strategy in communication consists of “the continuous
sharing of information concepts and meanings by the source and the receiver about the products
and services and the organizations that sells them" David and Nagel, (2001) on the other hand
argued that "it is the term indicating description or relevant communication techniques used for a
marketing purpose in a long and continuous term".
Marketing strategy in communication has also been explained based on promotional activities.
The main objectives of communication networks are to inform and persuade their existing and
prospective customers. There is a saying that customers must recognize that a product exists;

23
otherwise they may not comprehend how the product can meet their needs. Therefore, the first
aim of communication in marketing is to disseminate information to create a strong awareness of
their services and products. However, customers may decline to make an exchange because they
will want to be guaranteed that the product can fulfill their needs. Henceforth, some coaxing is
required to reassure the consumers to purchase these products.
Strategic marketing involves critical decision-makings that will determine the sales growth of the
organization, to strengthen the profitability of the organization through an enhanced sales force
and effective business operations. Although several scholars have attempted to explain successes
and failures of strategic marketing in advanced educational institutions, scholars disagree in their
opinions. As a result, there is no accord on major elements of strategic marketing’s success.
However, Aaker (2004) suggested that critical decision-making that influences sales growth of
the organization involves a set of interrelated elements of marketing strategy.
2.4 Elements ofmarketing strategy
Marketing strategy is made of several interrelated elements. The first and most vital is the market
selection (Brown, & Sommers, 1982 in Aaker, 2004) which is directly linked to selecting the
markets to be served. Product planning involves the exact products the company sells, the
makeup of the product line, and the design of distinct offerings in the line. Another element is the
distribution system: the wholesale and retail channels through which the product travels to the
people who eventually buy it and use it. The general communications plan uses advertising to tell
probable customers about the product through radio, television, direct mail, and public print and
personal selling to organize a sales force to call on prospective consumers, urge them to purchase,
and take orders. Finally, pricing, is a vital element of any marketing program and is one of the
most focused marketing elements in the establishment of value for shareholders (Doyle, 2000).

24
The company must set the product prices that different classes of consumers will pay and control
the margins or commissions to reimburse agents, wholesalers, and retailers for conveying the
product to final users. Kotler (2003) explained that the concept of marketing strategy extensively
embraces marketing mix elements, which consists of product, price, distribution and promotion
referred to as forms of marketing strategy.
2.5 Forms ofmarketing strategy
1. Pricing strategy
Although customers are not always aware of the exact prices of products, price making in
marketing plays a vital role in the final sale of a product. Involved in the many facets of
making pricing decisions are various forces – the pricing organization, costs, demand, legal
factors, both the firm’s objectives and the personal objectives of the executives making such
decisions (Bryson,2004).
Pricing policies are set at the top, but the tendency is for large companies to allow the various
divisions to set prices. However, price making must be made with the objectives of the firm
clearly in mind. Sometimes the personal goals of executives may conflict with the overall
company objectives. Businessmen set prices based on their judgment of demand. Pricing in
most areas of business is company controlled and not market controlled completely by supply
and demand. Thus, a firm is free to charge a penny or more per product because of some
differentiating factor, whereas in a purely competitive market the price is set by market forces
(Brentani, 2006). The determinants of demand are usually considered to be the price of the
product, the number of customers, the preferences of these customers, the level of family
income, and the competitive products available. In determining the price of a product, Kotler

25
(2009) noted that one must consider whether the demand is elastic or inelastic. Demand is not
the only consideration in determining price; a firm must also consider the role of supply,
which is governed by the costs of manufacturing and distributing a product.
In addition, Klaus, Martin and Robert (2014) lead a study on Pay What You Want (PWYW) as a
Marketing Strategy in a Competitive Market and establish that PWYW can be attractive for
companies that want to make best use of unit sales. Klaus et al. (2014) suggested that PWYW can
be used as a competitive strategy. PWYW successfully destabilizes all contending sellers using
posted prices and thus threatens to push them out of the market. Moreover, when only PWYW
sellers remain in the market, the rivalry is lenient because sellers do not, by definition, contend on
price. On the other hand, contending sellers using posted prices could negatively affect the
profitability of PWYW. These posted prices could form superior bound on the prices that
consumers are willing to pay freely (Gneezy, Nelson, Brown, 2010). Pricing strategy also appeals
to vendors who want to promote a complementary product, principally if the (traditional) sale of
the complementary product is highly lucrative. For example, for the British rock band Radio
Head, some debate that proposing its album “Rainbows” on the internet by using the PWYW
mechanism melodramatically enhanced the popularity of the album and thereby improved the
revenues from the (traditional) sale of the Compact Disc (CD) and the concert tour. Also,
exploiting sales may appeal to a vendor who wants to enter a new market, examine the new
product, generate network effects,or comprehend learning-by-doing effects.
PWYW seems to be the best strategy for maximizing market penetration. Of course, one can also
achieve utmost market penetration by merely giving away the product for free. In fact, this is
what lots of companies do (Klaus, Martin, Robert, 2014). The advantage of PWYW is that it
makes the product available to every class of the economy free of charge, but it also generates
positive revenues if some buyers pay positive prices voluntarily.
2. Promotion strategy (communicating with the customer)

26
All the efforts put forth by a company to communicate its product and service to the public are
called Promotion, Promotion includes advertising, personal selling, publicity and other activities
that are loosely referred to as involving sales promotion. The latter includes such activities as
store display, trade show exhibits, contests and other similar activities.
Firms vary in the usage of each promotional technique. As a general rule, when the product is
non-technical, firms tend to spend more on advertising. In firms where the cost of contacting an
individual customer is high and the potential return to the company is also high, the firm would
tend to rely on personal selling (Bone and Kurty, 2012). One of the problems with promotional
activities is that it is difficult to measure or estimate their future impact. To overcome this,
many firms rely on experiments and testing. Advertising does not guarantee success nor does it
indicate that a firm will eventually monopolize an industry. It is, however, a major means used
by most firms to communicate with their markets. One of the most important parts of the firm's
total mix is the planned strategy that goes into the firm’s means of communicating its products
and services to the consumer. All these efforts are called Promotion.
3. Distribution strategy
Physical distribution in marketing is concerned with the movement of the manufacturer’s goods
to the place where they can be sold to the final seller or directly to the consumer. One aspect of
physical distribution is the logistics problems connected with the sale, that is, the most profitable
mode of transportation to the place or person of sale. At one period of time the physical
distribution function was only the concern of those interested in cost-cutting procedures in
shipping both finished goods and raw materials from one place to another, without any direct
relationship with the marketing departments. In recent years, however, a change in attitude has
occurred that has integrated the distribution of the product with the marketing mix. In effect, the
physical distribution mix is an integral part of the total marketing mix and stand on the side of
promotion, pricing, and the product with equal status (Adeleye, 2003).

27
Also to the marketing strategies mentioned above, Kotler and Keller (2012) suggested that for
any organization to out-perform competitors in the same industry, such organization must adopt
competitive marketing strategies.
2.6 Competitive marketing strategies
According to Kotler and Keller (2012), competitive advantage can be defined as an organization’s
capability to perform in one or more methods that competitors cannot and will not match. Haag
and Cumming (2013) understands competitive advantage as the act of offering a product or
service in a manner that consumers value it more than what other competitors can offer (Haag and
Cummings, 2013: 19). Competitive advantage can also be understood as accomplishments that
create superiority value over competitors and can be gained by providing customers better values
than other contenders such as providing quality services, providing lower prices and other
benefits that validates higher price.
Generic competitive strategies proposed by Michael Porter (1980:34) suggested three potentially
successfulapproaches to outshine other firms in an industry. These approaches include:
1. Overall cost leadership
2. Differentiation
3. Focus

28
Fig. 2.2: Micheal porter’s generic strategy options
Source: http://www.2012books.lardbuckets.org/ accessed on 20th
March,2015.
These strategies are defined as generic because they can be adopted by several businesses within
the same industry or strategic group. However, if several businesses espouse alike strategies, built
on the same elements, they may become parallel and compromise the viability of all of the
businesses, changing the price into the key factor in the purchase.
Overall cost: The strategy here is to achieve the lowest of production and distribution so that it
can afford to price lower than the competitors thus winning a larger market share. Overall cost
leadership requires that a firm be in the position of being the lowest cost producer in its
competitive environment to offer its product or service at a lower price than its competitors.
Differentiation: In differentiation, the firm’s repute as a quality or technology trailblazer,
resilient cooperation from channels, superb marketing skills, product engineering and basic

29
research are crucial (Porter, 1980). Differentiation entails firm building a particular brand image
that differentiates itself from its competitors.
Focus: This approach on one (or few) segment(s) allows the firm to concentrate its action and
choose the approach of differentiation, cost leadership or a combination of both, for such
segment(s).
Thus, the business can better serve consumers that were not properly served by businesses in the
broad market. Achumba (2000) however added that focus imposes some limitations on the
achievable market share as it involves a trade-off between profitability and sales volume.
Whereas cost strategy requires skills in monitoring the raw materials, power, components, labor,
machinery or storage space, as well as a huge investment in training to help decrease the costs of
scrap and reworking, product differentiation requires a irrefutable skill that predisposes a business
to a deeper understanding of its consumers’ requirements than could be done by its contenders
(Bowman, 1990). A product differentiation strategy thus requires a great degree of capability in a
wide area of management, organization and labor force that is greatly trained, experienced, self-
motivated and able to work together as a team. People are the main resource in this organization
and are thus expensive. Although cost leadership requires extensive effort to increase the
efficiency of the business, the quality of the products or services carries greater emphasis under a
differentiation strategy.
In addition to Porter’s generic strategy options for gaining market share in a competitive market,
there are five forces that shape the competitive ability of a firm in every industry (Porter, 1998 in
Riley, 2012).

30
Fig. 2.3: Micheal porter’s five forces model
Source: Adapted from Five Competitive Forces That Shape Strategy. M.E. Porter,1985. (Harvard
Business Review, 2008).
The threat ofentrance by prospective newcompetitors
The threat of new entrants refers to the probability that the returns of established companies in the
industry may be eroded by new contenders. The magnitude of the threat depends on current

31
barriers to entry and the combined reactions from current contenders. If entry barriers are high or
the new-comer anticipates a sharp retaliation from established competitors (Porter, 1998), the
threat of entry becomes low. The circumstances discourage new competitors. The major barriers
to new entries are many including patents and brand identification (Bateman & Snell, 2004).
The case of Pay-Tv
In Pay-Tv industry, first to enter the television market, start-up costs is needed. Developing
technology is expensive and takes time. Established Pay-Tv already has the technology that is
new and different than the regular IPTV providers. Pay-Tv technology is also difficult to copy.
There are economic scale benefits for major television providers. The benefits are in distribution,
content delivery, purchasing hardware. Competitors will protect their market shares by trying to
compete with new Pay-Tv. Also, consumers have to purchase new hardware when switching to a
new competitor in the industry. All these pose barriers to new entrants in the industry.
Bargaining power ofbuyers
Buyers may threaten an industry by forcing down prices, bargaining for higher quality or more
services and playing competitors against each other. This consequently reduces profitability. The
power of each buyer group depends on the attributes of the market situation and the significance
of purchases from that group compared with the overall business (Alkhafaji, 2003).
The case of Pay-Tv
Buyers are not concentrated and, therefore, have a positive impact on the television industry. Pay-
Tv offers the consumers lots of innovative and extra options that are different than the

32
competitors. Products that are being offered by the competitors do not differ a lot from each other
and are usually the same offering a few new services.
Bargaining power ofsuppliers
Suppliers can pressurize an industry through price increments or quality reduction of the
purchased products. Powerful suppliers can squeeze the profitability of an industry so far that
they can't recover the costs of raw material inputs. They are companies that supply raw materials,
equipment, machinery, associated services,and labor.
The case of Pay-Tv
Many television channel stations are relatively unimportant channels. The television channel
stations with high market shares are the ones that are powerfully loaded with premium contents
and significantly latest contents. These television channels are not easily prepared to offer their
channels to Pay-Tv providers unless the Pay-Tv providers are rated top-notch. Established Pay-
Tv like MCN has built lots of relationships and contacts with different television channel stations.
MCN also has a huge network of international and local television channels.
Threat of substitute products
All products within an industry compete with industries producing substitute products and
services because substitutes reduce the probable returns of an industry by employing a top limit
on the prices those businesses in that industry can profitably charge. Finding substitute products

33
involves probing for other products or services that can perform the same purpose as the
industry’s products (Riley, 2012).
The case of Pay-Tv
Pay-Tv is unique and innovative. Pay-Tv has unique software that decodes signals transmitted
from the satellite and will continue to grow and develop staying ahead of the competitors in terms
of differentiation. Pirated Satellite television such as Dream-box is popular because it’s free.
People who watch Pirated Satellite television can watch most channels free-to-air (FTA) without
being charged payment for a subscription. Ordinarily, Pay-Tv has a relatively high purchase price
for the hardware,and a monthly subscription is required.
Rivalry among established firms
The rivalry is the competitive struggle between firms in an industry to gain market share from
each other (Hill & Jones, 2007). The competitor is the first to be dealt with in competitive
environment (Bateman & Snell, 2004).
The case of Pay-Tv
Pay-Tv industry offers the consumers lots of innovative options that are different from
competitors. Low levels of product differentiation are associated with higher levels of rivalry.
The industry focuses on Brand identification, awareness, and knowledge. This tends to constrain
rivalry. However, Pay-Tv market is growing has a lot of potential customers that are beginning to
key into the Pay-Tv Culture. This is beneficial because, in a growing market, companies can
improve revenue. In a small market, companies have to compete for market share. Rivalry
increases in a small market where many competitors compete for available market share.

34
Conclusively, Porter’s five forces model, as it applies to Pay-Tv industry, shows that the
television market is attractive, offering lots of opportunities. But similarly, it is very difficult with
the high powers of the buyers, substitute and the rivalry to consider. Most of the threat comes
from the buyer inclination to substitutes and the price. These substitutes are Pirated Satellite
television such as Dream-box, Star Times, and Consat. As for the high power buyers, this power
comes due to buyers not being concentrated. Buyers can choose freely and choose the best
product suitable for them. Also buyers are price sensitive, and the advantage of free television
channels affects the purchase of a new hardware because, to switch to a new Pay-Tv, buyers have
to purchase new hardware.
The degree of rivalry shows that most Pay-Tv offer the consumers lots of innovative and extra
options that are different from one firm to another. In the Pay-Tv industry, there is a difference in
the competitors’ technology offering. This is good because low levels of product differentiation
are associated with higher levels of rivalry. Still, Pay-Tv industry does have some competitors to
be concerned about and because all these competitors are competing for the same consumers, the
rivalry increases. To increase market share in the television market, MCN has to distinguish itself
from the competitors.
2.7 Market share
Gaining or building market share is an offensive or attack strategy aimed at trying to increase
market position at the expense of competitors. According to Szymanski, Bharadwaj, Varadarajan
(1993), a firm builds market share by stealing it from others. There is a conspicuous sense of a
battle. The quest of competitor-oriented goals is constant with the long-held belief that business
is like warfare. In the late 19th century, it was prevalent for executives to endeavor for revenue
growth. To measure their performance, they compared themselves to their contenders in the

35
industry. Judging from Lanzillotti (1958) in Kotler and Keller (2006), competitor-oriented goals
typically articulated in terms of market share were commonly utilized by large businesses well
before the 1950s.
The market-share analysis should provide the managers with much needed information on the
structure of the market and competition and the influence of marketing actions on brand
performance all of which are indispensable for them to be able to establish viable marketing
strategies. The market-share analysis is profit-oriented in the sense that every firm is interested in
not only market-share movement, but also its profit consequences. One might talk about a plan to
expand the market share for a firm’s product/brand by improving quality, reducing the price,
advertising more, employing more sales personnel, etc.
2.8 Market share change
According to Khalid, Lewis, Inder and Rajiv (2011) market share change is as a result of market
forces, business competitive position and marketing efforts. Although there is a wide range of
market share change forces occurring in any given market, market share change is based on the
collective influences of these forces that shape market share change. Market forces that shape
market share change are generally beyond the control of a business. Market growth, the size of
shares and competitor entry all create market forces that tend to lower market share whereas
competitor exit contributes to market share gains (Armstrong and Green, 2007). Hence, Porters
(2008) five forces analysis shapes the market share of a company. The five forces framework,
which constitutes an industry structure, was developed as a tool for evaluating the profit potential
or attractiveness of different industries and sectors (Johnson, Scholes, & Whittington, 2008: 59).
According to Harvard Business Review (2008), Porter’s five forces have shaped a generation of
academic and business practice. These forces include buyer’s power, suppliers’ power, the threat

36
of substitution, the threat of new entrants and rivalry among existing competitors. As a result,
passive strategic market plan with respect to either improved competitive position or marketing
effort is likely to result in share loss. To grow market share a business needs to enhance
competitive position or intensify marketing effort. Each of the factors that affect a competitive
business position also indirectly affects market share. Hence, improving a product quality about
competitors’ products would increase market share. Marketing efforts also affects market share
change (Szymanski, Bharadwaj, and Varadarajan, 1993:1-18). In a growing market with more
customers and competitors entering the market, a business needs to expand its marketing effort to
protect or gain share.
2.9 Growth strategy
According to Moeller (2008), Firm’s growth is an integrated approach affecting every functional
area and strategy within the organization. Organization’s growth is concerned with how the
organization is executing fundamental changes whether the organization is small or large and
private or public. It is essential to note that successful enterprise development is likely to require
substantial investments in skills, organizational processes, and technology. Enterprise
development initiatives may be driven by external opportunities that will force the evolution of
strategies such as targeted market, value plan, product/service offering and contenders’ initiatives
(Moeller, 2008).
Growth can be promoted internally by investing in expansion or externally by procuring
additional business divisions. Internal development can include the growth of new or changed
products. External development usually involves diversification which means the acquirement of
businesses that are associated to existing product lines or that take the corporation into new
regions (Daft, 2008). Moeller (2008) indicated that to reinforce one’s company development

37
potential, the creation of new businesses and new market space, businesses might concentrate on
a new set of client need or consumer segments or they might introduce new forms of delivering
value. The strategy ultimately requires achievement of a fit between the external situation and
internal capabilities (Mintzberg, Bruce and Joseph, 2005). The external situation that constitutes
risks and opportunities include influences from political, social, economic and technological
arena. The internal environment, on the other hand, constitutes internal competencies including
the strengths and weaknesses of the organization systems, policies, resource capacity and the
organization culture (Koigi, 2002). Ansoff (1987) presented a corporate growth strategies matrix
that focused on the firm’s present and potential products and markets. By considering ways to
develop via current products and new products, and in current markets and new markets, there are
four probable product-market combinations; market penetration, market development, product
development and diversification (Ansoff, 1987).
1. Market penetration strategy
Market penetration is defined as a firm’s development in the current market with its current
products (Kotler, 2003). This strategy urges customers to buy frequently and buy more products
at every purchasing (Kotler, 2003:73). The strategy depends on forecasting whether a firm can get
a larger market share in the current market with its current products. Success in market
penetration depends on current consumers’ purchasing more products more frequently, gaining
rival business’s consumers and persuading prospective consumers who have not purchased from
that firm yet to do some buying (Kotler, 2000:75). If companies can form strong relationships
with consumers, consumers’ buying frequency and the amount can be improved. Also, current
consumers’ endorsing the business and its products to their locality, new consumers can be
acquired at no cost (Şener & Behdioğlu, 2013:167). Market penetration strategy facilitates right
of entry to such local resources as distribution grids in the target market, local businesses, and

38
authorities (Meyer & Tran, 2006:179). However, growing distribution markets might also cause
businesses to bear more marketing costs if not properly managed (Arkolakis, 2008: 31).
Kourdi (2009) also noted that Market Penetration is a strategy through which a firm seeks
development by growing sales of its existing products to consumers in its existing market
segments without changing the product. It means company selling more of the existing products
in existing markets. This can be achieved by taking a share from the competitors or by attracting
nonusers. The company can also develop new products for the existing markets (product
development) or enter new markets (segments) with present products (market development). In
Pay-Tv industry, offering customers a wider selection of TV channels and their recording on the
tablet is seen as a product development strategy, something believed to be a strength compared to
other offerings in the market. Also, Multiscreen has become a competitive dynamic in advanced
markets. The main benefit of this strategy is that the firm should be very familiar with both the
products and the market segments.
Approaches to market penetration strategy.
Kotler, Keller, Brady, Goodman and Hansen (2009) opined that market penetration strategy can
adopt the following approaches namely:
1. Increase or retain of market share
2. Growth market domination
3. Driving out competitors
4. Increase in customer usage
These four approaches as represented in fig 2.4 can be adopted by a firm when implementing
penetration strategy.

39
Fig.2.4: Approaches to market penetration strategy
Source: http://free-management-ebook.com/ accessed on 24th
March,2015.
Retain or increase marketshare:
This approach entails adopting a strategy that consist of competitive pricing strategies,
advertising, and sales promotion and focusing on the areas of sales and marketing that can attract
competitor’s customers. Many business owners naturally begin to consider tactical actions that
are focused on immediate sales. Ordinarily, Price discounting is an obvious example that may
provide a spike in demand for product or service in this approach.
Dominate growth markets:
Although marketing penetration involves selling existing product or service to existing customers,
a new segment of customers can be identified. Hence, growth can only occur if the strategy is
altered in that route to belligerently market the identified groups. It may be invaluable to initiate a

40
promotional campaign that notifies consumers of the features, benefits or even just the
accessibility of product or service. Many times people are simply unaware of the product or
service and how it is relevant to their situation.
Drive out competitors:
Operating with the lowest mutable costs in the industry is an advantage that can be leveraged to
accelerate sales while establishing a barrier to entry. Many companies with superior technology
or unique processes have lower variable costs than competitors and, therefore, higher gross
margins per unit sold. Rather than lowering price to gain market share, it may make sense to
spend money on the introduction of loyalty campaigns, loyalty programs, and promotional
campaigns competing for market share through customer loyalty programs. This approach is
predominant in the Pay-Tv industry where the larger players now dominate because the market is
drenched, and the only approach to attaining market share is to take it from competitors.
Increase existing customer usage:
As a substitute to growing market share, a business can use market penetration strategy to
increase product usage by introducing small changes to the business. Strategies that can induce
existing customers to use product or service frequently include loyalty schemes, adding value or
making alterations to the existing product and the use of seasoned technologies that are customer
friendly. Increasing product usage also involves taking some time to consider how the customers
use the product and the situations that prevent increased usage to address barriers that customers
experience.
However, Vikas (2011) tacitly stated that penetration pricing strategy is one of the most effective
marketing strategies available to a business that can be used to achieve the above approaches to
market penetration strategy. This strategy includes setting a reduced entry price for a new product

41
or brand to achieve a breakthrough in a highly competitive market. The strategy can also be
employed when launching a completely unique product in the market or when tapping a new
market segment for a current product (Vikas, 2011). A firm uses penetration pricing with the
anticipation that eventually the price will be elevated once the preliminary marketing goals are
fulfilled. Its purpose is to attract the consumers to try the firm’s product. By keeping the price
deliberately lower than confirmed contenders, the business targets to compromise current brand
loyalties of the consumers. The vital goal of this strategy is not to maximize revenues, but to
permit a new product or brand to gain traction in the marketplace (Vikas, 2011).
2. Market development strategy
A firm follows a market development strategy for an existing brand when it grows the
prospective market through new users (Kumar, 2010). This can be done through spreading out to
new geographic segments, new demographic segments, new institutional segments or new
psychographic segments. Another method is to grow sales through new uses for the product.
Market development strategy depends on the detail that consumers prefer buying a firm’s current
products in new markets rather than the competitor products (Kumar, 2010:96). Market
development increases sales by gaining access to new segments and converting nonusers into
consumers of the business. Therefore, new geographic areas, fresh influential markets or market
departments with fresh life forms might be among the objectives of a firm. Businesses are in
quest of new users for their current products. The core hazard in this strategy is that the brand
might flop because it hasn’t understood consumer physiognomies, needs and demands effectively
and evidently (Schultz, 2004:7-9). The market development method requires more extensive
assessment of the market system. Determining the contenders in the market, their strengths and
their roles in the value chain is essential. Also, assessment of the prospective new contenders in

42
the market is essential during decision making. Assessment of current and prospective contenders
is the basis for market-oriented solutions and decisions of business (Lusby, 2006:341-343).
Implementation of the tactic will rely on the nature of the knowledge, technology, and
competence resources available to the enterprise. The implementation of strategies will be
constrained by the need to make the best use of the available resources to meet financial
obligation, and to ensure survival in the face of increasingly harsh demands of competitive
international trading environments or performance–oriented public sector decision-makers
(Morden, 2007).
Having the capability to respond rapidly to the external environment with new products and
services is an advantage of being a privately-owned business. Enterprise permits employees to
make decisions at a local level and has fashioned an entrepreneurial spirit within the organization.
This means that strategies are regularly reviewed to ensure that Enterprise remains the market
spearhead. New possibilities of business are explored and researched. Underlying all of these
modifications are Enterprise’s founding values. The main peril facing a firm following a market
development strategy for a brand is that it could fail to effectively comprehend the new consumer
base.
3. Product development strategy
Product development strategies have helped enterprise to develop services in a market where it is
already an established and profitable business. This is deliberated to be the intermediate risk
strategy. Examples of Enterprise’s product development include its unique ‘Pick-up’ service. This
helps to lead the market in this product offering. When a firm alters its product in some way with
the expectation of improving sales to existing consumers, that strategy is known as product

43
development (Bagozzi, Richard, Rosa, Celly and Coronel, 1998). There are three major methods
that this can be done according to Bagozzi et al.(1998) depending on whether a fresh brand name
is used for the fresh product or not:
• New feature,quality or technology, but no new brand name
• New brand name as a brand extension
• New brand name with distinct identity
The product development strategy also entails asking whether there are any segments of the
current customer base in the market that could be served better with a new product or brand.
4. Diversification strategy
Diversification means the departure from company’s resources and key competencies (Dewitt &
Meyer, 2007). It means resigning from effects of synergy in a company’s portfolio. In fact, as it
happens in conglomerate diversification, the only synergy may sometimes be the so-called
financial synergy (Dewitt & Meyer, 2007). Pure diversification would necessitate acquiring new
competencies by a company. It seems that the departure from company’s resources required by
diversification, explains why this strategy is not so popular in a real world.
Any alteration of an existing product that serves to expand the prospective market implies that the
firm is following a strategy of product diversification (Kerin, Roger, Eric, Steven and William,
2003). The product diversification strategy is dissimilar from product development in that it
entails creating a new consumer base, which by definition develops the market potential of the
original product. This is almost always done through brand extensions or new brands, but in some

44
cases the product alteration may "create" a new market by crafting new uses for the product
(Kerin et al., 2003).
2.10 Relationship between growth strategy and market share
Market share by definition refers to company sales divided by the total sales of all firms for a
specified product in a given market over a given period (Cravens and Piercy, 2006:90). In this
research, market share was viewed from the “Marketing concept” which defines the marketing
management philosophy, which holds that accomplishing organizational objectives depends on
determining the needs, and wants of objective and delivering the desired fulfillment more
effectively and efficiently than contenders. According to Kotler et al. (2005:914), one of the
ways in which success of any strategy implemented in any company can easily be identified is
from its profits and market share. In this study, concentration is on the market share/turnover to
assess the efficiency of strategies adopted by MCN as “the ultimate test to assess the company’s
marketing strategy. As Rugman and Verbeke (2004:335) noted, the level of accomplishment of a
marketing strategy can be seen in terms of market share, and the Boston Consulting Group (BCG)
matrix is always suitable for use.
The BCG matrix: The BCG matrix indicates the balance of a portfolio of the business in a
relationship between market share and market development (Johnson, Scholes and Whittington,
2006:249). The context of which this BCG matrix is used has excluded the idea of balance of
matrix and only considers the relationship between the market share and market growth.

45
Fig 2.5: BCG MATRIX
Source: Adapted from The growth share (or BCG) matrix. (Johnson, Scholes and Whittington,
2006:250).
Cash cows are businesses with a high market share in mature markets (low market growth with
stable conditions). This type of business does not need heavy investment in marketing but
maintain unit cost lower than competitors, and they are known as cash providers.
A star represents a business with a high market share in a growing market and much is being
spent to gain market share,but this cost reduces faster than that of competitors over time.
Dogs, on the other hand, have a low market share in static or declining markets, and they are cash
drains as a huge amount of company time and resources are spent on them. As the market growth
rate is important for a business or company seeking to dominate the market, it is appropriate for

46
that company to be a star. This is explained by the idea that higher profit levels often come from
product or business with high market share in more stable markets.
Question marks (problem children): Low market share and high market growth. These are the
opportunities that no one knows how to handle. ‘Questions mark’ is a business in a growing
market but without a low market share. They aren’t yielding much income right now, because of
they lack great market share. But they’re in high-growth markets, so they could become Stars or
even Cash Cows if market share is developed. However, if market share cannot be improved,
Question Marks could engross a lot of effort with little return.
2.11 Market penetration strategy in Pay-Tv
First, the cost of acquiring and installing Pay-Tv facilities is always considered by a potential
subscriber that serves as a market strategy (pricing strategy) to the companies in the industry.
Also, content plays a central role in Pay-Tv competition. In choosing between firm’s
products/contents, consumers base their choice largely on the programming available from each
one (Armstrong, 1999). In particular, highly attractive programming, especially live coverage of
popular sports events and recent movies drive consumer choice (Armstrong, 2000). By making
such content available exclusively to subscribers, it helps a firm to gain market share from its
rivals and serves as a necessary competitive strategy (Armstrong, 2000). Access to premium
content has been major competition concerns in the Pay-Tv sector in some countries. In
developing countries like Nigeria, premium content is often monopolized at the source (e.g.
sports coverage) or becomes fixated in the hands of a single Pay-Tv operator. Companies in Pay-
Tv industry differentiate products both in the means of delivery and in the content of the
programming packages offered. Products of “basic” programming are also obtainable which
must be viewed by all subscribers who can then buy “premium” programming, usually key sports

47
events and movies which attract payment of additional monthly fees. Obviously, marketing
strategy in Pay-Tv today has adopted the following dimensions.
Consumer centric
Market penetration strategy in Pay-Tv today emphasizes that the business should put the
consumers’ satisfaction in the first place, in a way that, the product provides for the consumers’
demand with a reduced purchasing cost for consumers. When developing a new product, buying
power needs to be considered. Moreover, business should provide convenience to customers
when they are buying. Finally, business should have efficient consumer-oriented communication
with their clients. This includes Customer’s needs and wants, Cost and Value to satisfy
consumer's needs and wants, Convenience to buy and Communication with the consumer (Chen,
& Zhang, 2001).
Industrial chain
The Pay-Tv industry of the 21st
Century entails developing an industrial chain including
distributors, integrated operator, wired network operator and users. Pay-Tv depend on reputable
chain of distribution in order to convey content to the ultimate user and this chain of content
delivery ranges from the channel partners, the retail outlets and the wired network operators who
finally convey them to the users’ home through local wired network or via Digital Satellite
Decoders (DSD). In this Chain, integration of operators plays a very important role in the content
delivery. Its main responsibility is to deliver pay Channels to local network company and have
relative agent marketing.

48
Social media marketing
The marketing of pay channels is also conducted via the Internet on smartphones and social
media, with swiftness of communication, minimal operational cost, flexibility, and interactivity.
The emergence social media application brings opportunity to the development of mobile TV.
Provision offree preview to expand the scope ofpublicity.
The publicity of pay channel has always been the weakest sector. Up till now, except for digital
Pay-Tv occasionally cited in the news, it rarely appears in any publicity of communication media.
Also, being as the sale access, local wired network firms rarely propagate pay channels. In this
highly competitive business environment, the situation is beginning to improve; Pay-Tv
companies are giving publicity in different ways that include delivery of free preview to enlarge
the scope of publicity, letting audience know more about them. Only in this manner can they
grow better and attract more audience. Winning the trust of the audience demands positive
attitude, good service, and variable choices. For Pay-Tv, a free preview is the best method of
publicity. Pay-Tv in the foreign country regularly uses this method to attract consumers. Free
preview frequently used in the wired television offers a period for the audience to view the pay
channels for free (Chen & Zhang, 2001).
Lowcharging fee
Currently the pay channels have made a breakthrough and their income model does not rely on
TV fee only, but extends to the other aspects, including the followings: First is the TV Fee:
Acting as a program content integrators and program content provider, pay channel shares
incomes with all-level network companies. This is the key part of their income. Secondly, the
sales income of the TV programs: The TV programs of pay channels have a great degree of
specialization, and they can have secondary growth being vended to other broadcast platforms.

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