THE IMPACT OF DIGITAL MARKETING ON BUSINESS PROFITABILITY OF
AIRTEL CONGO
BY
BAUDOUIN KASONGO YUSU
An Independent Study Submitted in Partial Fulfilment of the Requirements for the Degree of
Master of Business Administration (International Program)
Graduate School, Kasem Bundit University
2023
KBU. GS. 2023-10-00x
CHAPTER 1
INTRODUCTION
1.1. Research Rationale
1.1.1 Telecommunication industry in Democratic Republic of Congo (DRC)
The telecommunication industry plays a significant role in the development and
progress of the Democratic Republic of Congo (DRC) in various ways as it contributes to
economic growth by providing job opportunities and driving investment. Telecom companies
employ a significant number of people in various roles, from network engineers to customer
service representatives. Moreover, the industry attracts investment, stimulates competition, and
creates opportunities for related sectors such as mobile banking, e-commerce, and IT services.
Telecommunication networks provide the infrastructure for effective communication and
connectivity across the country. They enable individuals, businesses, and government entities
to communicate and exchange information, fostering social interaction, commerce, and
collaboration. Telecommunication networks play a crucial role in supporting healthcare
services, especially in remote and underserved areas. Telemedicine allows medical
professionals to remotely diagnose and treat patients, provide medical consultations, and
exchange critical health information. This improves access to healthcare, particularly for
individuals who cannot easily reach healthcare facilities (Helm & Möller et al,.2013).
Telecommunication services enable access to information and educational resources.
With internet connectivity, people in remote areas can access online educational platforms,
digital libraries, and other educational materials. This access to information helps bridge the
knowledge gap and empowers individuals with learning opportunities. Furthermore, the
telecommunication infrastructure facilitates the delivery of government services and enhances
administrative efficiency. It enables e-government initiatives, such as online portals for citizen
services, digital payments, and electronic document management systems. These initiatives
streamline processes, reduce bureaucracy, and improve public service delivery. In addition to
this, there has been Social and Cultural Development of Congo in which Telecommunication
services promote social and cultural development by connecting people, fostering cultural
exchange, and facilitating social networking. They enable individuals to communicate with
family and friends, share experiences, and participate in online communities. This connectivity
strengthens social bonds and contributes to the cultural fabric of the nation (Munshi, 2012).
The Democratic Republic of the Congo (DRC) economy has been growing rapidly in recent
years, with the economy expanding at an average rate of 6.0% per annum between 2012 and
2017. This is among the fastest growth rates in Africa, and is significantly above the average
rate for the entire African continent (3.4%). Gross domestic product (GDP) was estimated to
be $33.9 billion in 2017, the 20th highest in Africa. On the back of this economic growth, the
poverty rate in the DRC has decreased from 69.3% in 2004 to 63.9% in 2012.16 Reducing
poverty levels were supported by disinflation over the same period, as inflation dropped from
21.3% in 2005 to 1.4% in 2015.17 However, despite the economic developments made in
recent years, the DRC remains a low-income country, with GDP per capita among the lowest
in the world, at $444 in 2017 (Oxford Economics database, 2018).
According to GSMA Intelligence database (2020), the mobile market in the DRC has
expanded rapidly, but a significant share of the population remains unconnected to mobile
services due to limited network coverage and challenges around affordability. In the DRC, the
mobile industry is playing an increasingly important role in driving economic growth and
digital inclusion across the country. Thus, the Business Growth Statistic data of GSMA
Intelligence database (2020) show that the number of mobile subscribers has grown
substantially from 4.9 million in 2007 to 29.3 million in 2017, at an annual average growth rate
of 20%, increasing unique subscriber penetration from 8.2% to 35.5% over the same period.
Total mobile sector revenues were $1.1 billion in 2017; equivalent to over 3.1% of the
country’s GDP (GSMA Intelligence database, 2020).
There remains significant scope to grow the mobile sector in the coming years. There
is room to increase network coverage for both 2G (49%) and 3G services (41%),4 suggesting
that the country could benefit from further investment in the sector, particularly in rural and
low-income areas. Nonetheless, the rapid growth in mobile penetration has been impressive,
especially given the practical and economic challenges of providing mobile services in the
DRC. Initiatives to improve the DRC’s infrastructure, such as the Electricity Access & Services
Expansion (EASE) project, support the further development of the sector and the wider
economy, but a number of challenges persist which act as barriers to further mobile sector
growth. The DRC has a large and dispersed population, with low levels of education (World
Bank, 2017).
Furthermore, the mobile market in the DRC is rapidly expanding, yet almost two-thirds
of the population remain unconnected to mobile services in 2017. The mobile market in the
DRC has grown rapidly over the past decade, with the number of unique subscribers increasing
by 24.4 million between 2007 and 2017, an average annual growth rate of 20%. Mobile
telephone services are playing an increasingly important role in supporting economic growth
and social inclusion in the developing world. Mobile penetration and affordability enhance
digital connectivity by expanding internet and broadband access, which in turn facilitate the
reduction of barriers for trade, commerce, communication, service delivery and human
development. Examples of these benefits are seen in the form of financial inclusion via mobile
payment platforms, digitally enabled local entrepreneurship, innovative health and education
delivery systems and growing numbers of e-government initiatives (Deloittem=, 2016).
While growth in mobile penetration has been impressive, there is still considerable
room for expansion, as almost two-thirds of the population remain unconnected to mobile
services and a large proportion of the population are not covered by 2G networks. As shown in
Figure 9, the DRC ranks below a number of regional peers when it comes to unique subscriber
penetration. Access to mobile data services is similarly low, with just 14.2% of individuals
having access to mobile internet. This relatively low penetration reflects both limited 3G
network coverage (41%) and the lack of affordability for more advanced mobile technologies
(smartphones and 3G services). Thus, is because mobile phones have proven to be a significant
transformational technology, allowing access to innovative mobile applications and services.
Mobile technology has the ability to enable more efficient delivery of public services and to
improve access to healthcare and education services for underserved and remote populations.
Its portability, traceability and affordable computing power means mobile technology is well
positioned to deliver wide ranging and highly customisable services to large numbers of people
(Deloitte Report, 2015).
Mobile money can expand access to financial services, providing low-income
individuals with a secure, accessible and convenient method to manage their finances. Mobile
money services have the power to transform financial systems and promote a move away from
cash-based economies. They provide affordable financial services to low-income subscribers
and enable safety, security and convenience for financial transactions for those without access
to traditional financial services. The gains for public finances from working with providers to
digitise payments are potentially significant. Electronic payments can increase the transparency
of transactions, and hence reduce the level of uncollected taxes from the shadow economy,
benefiting the Government’s fiscal position (EY (2016). A recent report by the GSMA on
person-to-government payments in Kenya demonstrated how government support for mobile
money can enlarge the tax base. By digitising payments due to it from motorists, the Kenya
National Transportation Safety Authority saw an increase in monthly revenue from $1.1
million in July 2015 to $2 million in October 2016 (GSMA, 2017). In 2014, just 12% of adults
in the DRC reported having a bank account. This rate was lower for low-income individuals
(8%), individuals in rural areas (5%) and farmers (4%). There is therefore a strong opportunity
to promote financial inclusion in the DRC through the use of mobile money services (UNCDF,
2016).
Following the granting of mobile money licences to mobile operators, approximately
2.8 million customers were registered with accounts between February 2012 and December
2013, representing an activation rate of 13.3%. Over this period, the service facilitated 1.2
million transactions, worth more than $30.7 million.60 The Government’s priorities for
enhancing financial inclusion in the DRC are set out in the DRC Financial Inclusion Roadmap
2016–2021, and contains the overarching policy goal of increasing access to at least one form
of financial service from 32% in 2015 to 46% in 2021. As part of the roadmap, mobile operators
will play a key role in extending the footprint and usage of financial services through mobile
money (Cenfri, Finmark Trust & UNCDF, 2022)
1.1.2 Digital marketing of telecommunication business
The variable of digital marketing is important to business because it allows businesses
to reach a global audience. With online platforms, businesses can connect with potential
customers from different geographic locations, increasing their reach far beyond what
traditional marketing methods can achieve. This expanded reach opens up new market
opportunities and potential customer bases. Digital marketing enables businesses to target their
advertising efforts more precisely. Through various online channels and tools like search
engine marketing, social media advertising, and display ads, businesses can define their target
audience based on demographics, interests, online behaviors, and more. This targeted approach
ensures that marketing messages are delivered to the right people, increasing the chances of
conversions and maximizing the return on investment. Digital marketing often offers a more
cost-effective option compared to traditional marketing channels. Online advertising platforms
allow businesses to set budgets, control spending, and optimize campaigns based on
performance. Additionally, digital marketing channels like social media, content marketing,
and email marketing provide cost-effective ways to engage with and nurture customer
relationships, reducing the need for expensive print or broadcast advertising (Munshi, 2012).
Thus, Digital marketing helps Airtel Congo build and strengthen brand awareness among its
target audience. By utilizing various online channels such as social media, search engine
marketing, display advertising, and content marketing, Airtel Congo can reach a wide range of
potential customers, improving brand recognition and visibility. This increased awareness
translates into more customers considering Airtel Congo as their preferred telecom provider,
ultimately boosting profitability. Digital marketing allows Airtel Congo to target its advertising
efforts towards specific customer segments. Through tools like social media advertising and
search engine marketing, Airtel Congo can narrow down its target audience based on
demographics, location, interests, and online behaviors. This targeted approach ensures that
marketing messages are delivered to the most relevant individuals who are more likely to
convert into paying customers. By optimizing their advertising spend and focusing on highpotential customer segments, Airtel Congo can improve profitability by maximizing the return
on investment (Adam, & Vocino, et al, 2009).
Through online lead generation strategies, Airtel Congo can capture customer
information and convert prospects into paying customers. Additionally, by leveraging email
marketing, personalized offers, and loyalty programs, Airtel Congo can nurture customer
relationships, encourage repeat business, and reduce customer churn. Acquiring new customers
and retaining existing ones are key drivers of business profitability. Through digital channels
like social media, websites, and mobile apps, Airtel Congo can engage with customers, address
their queries and concerns, and offer customized solutions. This enhances customer
satisfaction, fosters loyalty, and increases the likelihood of upselling or cross-selling
opportunities, leading to improved profitability (Strauss, & Frost, 2014).
Digital marketing provides Airtel Congo with valuable customer data and analytics. By
analysing data related to customer behavior, preferences, and engagement, Airtel Congo can
gain insights into customer needs, preferences, and market trends. This data-driven approach
helps Airtel Congo make informed business decisions, optimize marketing strategies, and
allocate resources effectively. By aligning marketing efforts with customer demands, Airtel
Congo can drive profitability by delivering targeted and relevant offerings to its customers.
Furthermore, digital marketing often offers cost-effective alternatives to traditional
marketing channels. By utilizing digital platforms, Airtel Congo can reduce costs associated
with print advertising, broadcast media, and physical distribution. Online advertising platforms
allow for budget control and flexibility, enabling Airtel Congo to allocate resources based on
marketing objectives and track the performance of campaigns in real-time. This cost
optimization contributes to improving profitability by maximizing marketing efficiency.
1.1.3 Customer relationship management in telecommunication business
Add information
1.1.4 Purchase intention in telecommunication business
Add information
1.2. Research Objectives
1) To explore the role of digital marketing and customer relationship on brand equity and
purchase intention.
2) To indicate the level of digital marketing and customer relationship on brand equity and
purchase intention of the selected telecommunication company.
3) To provide empirical evidence of the impact of digital marketing and customer
relationship management of telecommunication business
1.3. Hypotheses
Hypothesis 1: Digital marketing has a positive impact on brand equity.
Hypothesis 2: Customer relationship…
Hypothesis 3: Brand equity…
Digital Marketing
Purchase intention
Customer relationship Management
brand equity
Digital Marketing
H1
H3
Brand Equity
Customer Relationship
Management
Purchase Intention
H2
1.4. Scope of Research
This research explores the influence of digital marketing on business profitability of Airtel
Congo. This study will collect the data from employee of Airtel Congo located on Address
South-Kivu C/d’Ibanda, AV.Du Maniema in BUKAVU city of CONGO (DRC).
researcher will collect the data during Month of July 2023.
1.5. Research Contributions
The
● This study provides empirical evidence of the impact of digital marketing on business
profitability of Airtel Congo.
● This research will extend ABC theory to the context of digital marketing on business
profitability of Airtel Congo.
● This research will provide suggestions to improve the overall business performance of
Airtel Congo.
● The research study can identify the specific digital marketing strategies and initiatives that
have a direct impact on Airtel Congo's business profitability. It can analyze various
elements of the digital marketing ecosystem, such as search engine optimization (SEO),
social media marketing, content marketing, and customer engagement tactics, to determine
which factors are most influential in driving profitability.
● The research study's findings can inform strategic decision-making processes within Airtel
Congo. The insights generated can help guide resource allocation, budgeting, and prioritysetting for future digital marketing initiatives. It enables the company to make data-driven
decisions and align its strategies with its profitability objectives.
● A research study on the impact of digital marketing on the profitability of Airtel Congo can
contribute to the broader telecommunications industry. It can serve as a reference point for
other companies seeking to understand the significance of digital marketing in driving
profitability. The study's findings and recommendations can help shape industry practices
and stimulate further research in the field.
1.6 Definitions
1.6.1. DIGITAL MARKETING
Digital marketing is the practice of promoting products, services, or brands using digital
technologies and online channels. It encompasses a range of strategies and tactics aimed at
reaching and engaging with a target audience through the internet, mobile devices, social media
platforms, search engines, email, and other digital mediums.
Social media marketing: This is a form of digital marketing that involves using social media
platforms to promote products or services, engage with the target audience, and build brand
awareness. social media marketing offers businesses a powerful tool for building brand
awareness, engaging with customers, distributing content, gaining customer insights, and
driving business growth.
Display Advertising: Display advertising refers to placing visual ads, such as banners, images,
or videos, on websites, mobile apps, or social media platforms. These ads can be targeted based
on demographics, interests, or browsing behavior. Display advertising aims to increase brand
visibility, drive traffic, and generate leads or conversions.
Website marketing: Website marketing, also known as web marketing or online marketing,
refers to the strategies and tactics used to promote a website and its offerings to a target
audience. It involves utilizing various digital marketing channels and techniques to drive
traffic, increase visibility, and achieve specific goals through a website
Search Engine Marketing (SEM): SEM involves paid advertising on search engines,
commonly known as pay-per-click (PPC) advertising. Advertisers bid on keywords and create
targeted ads that appear in search engine results when users search for those specific keywords.
Advertisers pay only when their ads are clicked.
1.6.2. BUSINESS PROFITABILITY
Business profitability refers to the ability of a company to generate profits and financial gains
from its operations. It is a measure of how effectively a business generates revenue and
manages its expenses to achieve a positive financial outcome. Profitability is a crucial aspect
of business performance and sustainability. It indicates the ability of a business to generate
returns on investment, cover costs, and create value for shareholders and stakeholders. A
profitable business can reinvest in its operations, expand, and withstand economic downturns.
Gross Profit: Gross profit represents the revenue remaining after deducting the cost of goods
sold (COGS). It measures the profitability of a company's core operations before accounting
for other expenses.
Operating Profit: Operating profit, also known as operating income or earnings before interest
and taxes (EBIT), reflects the profitability of a company's ongoing operations. It is calculated
by subtracting operating expenses (such as salaries, rent, utilities, and marketing costs) from
gross profit.
Net Profit: Net profit, also referred to as net income or earnings, is the final measure of
profitability. It represents the income remaining after deducting all expenses, including
operating expenses, interest, taxes, and any other non-operating expenses or gains.
Profit Margin: Profit margin is a profitability ratio that expresses the net profit as a percentage
of revenue. It indicates the portion of each dollar of sales that translates into profit. A higher
profit margin implies better profitability.
Gross Domestic Product (GDP): This is a widely used economic indicator that measures the
total value of all final goods and services produced within a country's borders during a specific
period. It provides a measure of the overall economic activity and size of an economy.
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