PROJECT TOPIC- MARKETING COMMUNICATION TOOLS EMPLOYED IN THE PRIVATIZATION AND COMMERCIALIZATION OF STATE-OWNED ENTERPRISES IN NIGERIA
The study aims at assessing the marketing communication tools employed in privatization and commercialization of public enterprises. Two population sizes were established for the policy makers and the beneficiaries. The sample size for the policy makers was 100 representing
trainees, attaché, senior staff and management staff of the Bureau of Public Enterprises while the population size for the beneficiaries was 76,441,994 of which 1,111 were selected as sample size across Nigeria six geopolitical zones. The instruments used for data collection for this study were the questionnaire and the oral interview. The questionnaire was structured in three sections of close-ended, Likert rating scale and multiple responses. The use of Cronbach’s Alpha revealed 0.814 or 81% reliability of the questionnaire for the beneficiaries. The questionnaire
for the beneficiaries was administered mainly to the civil servants, labour groups, industrial suppliers, parastatal managers, journalists and students while the questionnaire for policy makers//implementers were administered staff of Bureau of public enterprise. 58 questionnaires
of the policy makers were completed while 904 of the beneficiaries’ questionnaires were completed using judgemental/purposeful sampling technique. Secondary data were obtained from review of related literature. The research design espoused was the survey method using
percentages, frequencies, averages, one-way ANOVA and Ztest with the level of significance of 0.05 and confidence level of 95%. The result of study conducted established that marketing communication tools were not utilized in creating awareness of privatization and commercialization of state-owned enterprise to stakeholders in Nigeria. Marketing communication tools were not effective in facilitating the privatization and commercialization process. Furthermore, the perceived level of effectiveness of marketing communication tools in the privatization and commercialization programme has not hindered public/stakeholders’ participation. The result also revealed that the role of marketing communication in promoting a people-participatory and acceptable privatization and commercialization is inactive. The level of public participation in privatization and commercialization is not high. The specific marketing communication tools that have so far been used by the body charged with privatization and commercialization is not rationalized. Consequently, it is advised that policy makers / implementers should reorganise the public communication unit to include marketing professionals. Policy makers should transfer the management of direct marketing to public
communication unit. Marketing professionals should be engaged to study the policy, environment and different stakeholder groups to produce marketing communication master plan. This is to ensure that government communicates policy effectively and successfully without overlooking any segment of the stakeholder groups.
1.1 Background of the Study
The basic reason for establishing public enterprises in all economies has been to enhance development. Government participation in enterprises in Nigeria dates back to the colonial era. The absence of indigenous and foreign companies with requisite capital to invest on railways, roads, bridges, water, telecommunications, electricity and ports facilities stimulated colonial government to embark on the provision of these capital–intensive infrastructural facilities (Igbuzor, 2003) while state involvement in enterprises continued significantly even after independence (Nwoye, 2010).
Reasons for Nigerian government involvement in the creating and running of public enterprises include lack of adequate resources for the private sector to provide certain goods and services, political consideration, to guide against monopoly in the provision of basic facilities, and to ensure public access to basic social menities. Other reasons as observed by Aboyade (1974) are to protect the consumer from exorbitant prices and ensure national security and accelerated development. The promulgation of Nigerian enterprises promotion decree 1972 (Nwoye, 2010) and Indigenization decree of 1973 (Chambers, 2008) enhanced the development of public enterprises in Nigeria.
Consequently, by 1985, there were over 1500 public enterprises owned by the federal, states and local governments in the area of energy, mining, banking, manufacturing, agriculture, telecommunications, transportation, commerce, Insurance among others. Thus, between 1975 and 1995, the federal government invested over $200b in state-owned enterprises (S.O.Es) across the country (Anya, 2000; Nwoye, 2010). The Nigerian economic crisis of the mid 80s and subsequent global economic recession and collapse of oil market placed the federal government in a precarious fiscal monetary policy that could no longer sustain the multiple S.O.Es in the country.
The quest to salvage the internal economic crisis, therefore, led government to seek for foreign loans from International Monetary Fund (IMF) and the World Bank. Divest of public enterprises was given by these world financial institutions as a condition for economic assistance. Consequently, structural adjustment programme (S.A.P) was adopted with fundamental objective of deregulation and privatization. S.O.Es are to be fully or partially privatized; fully or partially commercialized (FGN, 1986; Nwoye, 1997; Ibanga, 2005).
The structural adjustment programme is expected to attract substantial investment, increase employment and reduce poverty (Iyoha, 2000; Ndebbio, 2000; Jao, 1996). This is because, according to Ndebbio (2000) labour demand is directly related to industrial investment, for example, in every 10% increase in capital investment in small and medium enterprises (S.M.E); labour demand (new jobs creation) would increase by 1.97%. Anya (2000) observed that the first phase of privatization indicated a rush and consequently relieved government of the huge and growing burden of financing S.O.Es.
The programme created a large number of shareholders and broadened the Nigerian capital market from N8.9b in 1987 to N65.4b in 1994. The development increased corporate taxes significantly and considerably reduced the scope of political patronage in form of unnecessary enlargement of board appointments. In fact 280 directors relinquished their appointments after phase one privatization (Anya, 2000). Phase one also created 800,000 new shareholders raised N3.3b as proceeds and increased employment (Mahmoud, 2004; Elias, 2001; Boubakri and Cosset, 1998). During this period, marketing communication tools were not effectively employed to attract foreign investors who could provide market access, new technology, sufficient revenue and management expertise. Other countries where privatization and commercialization recorded huge successes employed marketing communication to attract foreign investment and consequently transfer technology.
Most of these successfully privatized economies have laid emphasis on educating the public through consultations and integrated marketing communication. Hence, the use of marketing communication tools is not only essential, but also crucial to the success of privatization. In fact Welch and Fremond (1998) observed that special efforts to inform institutional investors have encouraged them to participate in many privatizations. Although the bureau of public enterprise (the body charged with the responsibility of privatizing and commercializing S.O.Es) has a duty to sell state assets for their fair market values, it is expected that policy makers must balance its desire to maximize profits with other priorities, such as; broadening share ownership, deepening domestic capital market and promoting competition.
Privatization programmes should attract foreign investors and to achieve this, foreign investors should be communicated through trusted and reputable marketing communication tools as well as treated the same as domestic investors (Welch and Fremond, 1998). Hence, effective privatization requires a carefully conceived and systematic approach to communications; one that integrates communication analysis and planning at every stage of privatization formulation and implementation.
Therefore, in a situation where the B.P.E seeks to privatize critical sectors (for example, power and petroleum) in the face of sustained opposition from labour union, the role of marketing communication tools cannot be overemphasized. Effective marketing communication must be based on facts – a clear understanding of views from different stakeholder groups and strategic designed messages targeting different audience through the most appropriate marketing communication tool(s).
Now, given that opposition to privatization and commercialization is currently more vocal than its supporters, Adam Smith International (2005) stated that B.P.E urgently needs to mobilize support for privatization and to make their case more convincing about the cost of the current system and the benefit of reform. Thus, integrated marketing communication strategy could mobilize support of the consumer, civil societies, labour groups and businesses when policy makers release accurate information regarding the costs of the failed policy of investing resources in S.O.Es. Nigerian government greatest challenge in this policy reform is how to attract sufficient number of competent prospective investors who will participate in the privatisation exercise.
While B.P.E occasionally advertise transactions, the researcher believes that it lacks sufficient finance to promote Nigeria as a destination for investment, nevertheless, with proper application of marketing communication tools, B.P.E can improve the overall perception of Nigeria business climate. The researcher opines that efforts of B.P.E in various enlightenment campaign is not effective, hence, the need to adopt an effective marketing communication strategy in order to reduce opposition and avert potential delays. The researcher believes that change in marketing communication strategy will make implementation of privatization and commercialization faster and effectual.
PROJECT TOPIC- MARKETING COMMUNICATION TOOLS EMPLOYED IN THE PRIVATIZATION AND COMMERCIALIZATION OF STATE-OWNED ENTERPRISES IN NIGERIA
1.2 Statement of the Problem
The beneficiaries of privatisation who should partner with policy makers lack knowledge of the benefits of the policy reform, thus, it is difficult for beneficiaries to participate in a programme they do not understand. Marketing consultants and practitioners who should pilot the various
public enlightenment programmes by employing effective marketing strategy to reach out to these beneficiaries were relegated to the background. Similarly, staff of the bureau (BPE) who are charged with the responsibility of implementing the policy reform have little knowledge of how to employ marketing communication tools (advertising, sales promotion, public relations, personal selling and direct marketing) effectively to communicate change.
Effective communication entails designing and deploying effective message, employing the right marketing communication tools or integrated marketing communication strategy, responding to enquiries and other challenges from the public, the media and opponents. All successfully privatized economy are equipped with effective public policy communication master plan to ensure that government communicates effectively and successfully – neither overlooking a key stakeholder nor side-lining any step in the communication process.
The researcher believes that failure of Nigerian government to launch and sustain effectual marketing communication campaign in seeking supporting coalition of stakeholder groups have seriously caused the delay in full implementation of privatization and commercialization policy.
These stakeholder groups include politicians, civil servants, business people, workers and union leaders. Other stakeholders are host communities, parastatal managers, industrial suppliers, customers, journalists, investors and citizens.
Therefore, each stakeholder group has different desire or interest and each group requires different media. Consequently, the inability of B.P.E to systematically segment the market and target each stakeholder groups with suitable marketing communication tools constitute the research problem for this study, hence, the need to close the knowledge gap. The focus of this study is to access the marketing communication tools employed so far by the bureau of public enterprise (B.P.E) in privatization and commercialization of state–owned enterprises, ascertain how effectively these tools were employed and suggest the best marketing communication strategy in achieving policy objectives.
1.3 Objectives of the Study
The main objective of this study is to investigate the marketing communication tools employed in privatization and commercialization of state-owned enterprise. Specifically, this study seeks to:
1. Determine the extent to which marketing communication tools were utilized in creating awareness of privatization and commercialization of state-owned enterprise in Nigeria.
2. Determine the effectiveness of these marketing communication tools in facilitating the privatization and commercialization process.
3. Ascertain the impact of the perceived level and effectiveness of marketing communication on public/stakeholders’ participation in privatization and commercialization.
4. Determine the role marketing communication played in promoting a peopleparticipatory and acceptable privatization and commercialization programme in Nigeria.
5. Find out the level of public participation in the privatization and commercialization programme
6. Find out whether the specific marketing communication tools that have so far been used by the body charged with privatization and commercialization was rationalized
1.4 Research Questions
1. What are the Marketing communication tools utilized in creating awareness of privatization and commercialization of state-owned enterprise to stakeholders in Nigeria?
2. Were marketing communication tools effective in facilitating the privatization and commercialization process?
3. What is the impact of the perceived level of effectiveness of marketing communication tools on public/stakeholder’s participation in privatization and commercialization?
4. What is the role of marketing communication in promoting a people-participatory and acceptable privatization and commercialization in Nigeria?