“A study on factors influencing customer loyalty in Pakistan Telecommunication”
Submitted to:
Mr. Shafqat Ullah
Submitted By:
Shabbir Ahmed
Submission Date:
25 th Sep. 2011
APPROVAL SHEET
This research study has been examined and passed for partial fulfillment of the
requirements for the degree of Masters in Business Administration (Marketing). This
study is approved by the examiner on oral examination with the grade of __________.
______________________
Shafqat Ullah
Examiner
APPROVAL SHEET
This research is entitled “A study on factors influencing customer loyalty in Pakistan
Telecommunication.” Prepared by Shabbir Ahmed is accepted in partial fulfillment for the
award of Master’s degree of Business Administration (Marketing).
____________________
Shafqat Ullah
Examiner
LETTER OF TRANSMITTAL
To,
Mr. Shafqat Ullah
Course: Final marketing thesis
25th Sep., 2011
Dear Sir,
Enclosed is a copy of “A study on factors influencing customer loyalty in Pakistan
Telecommunication.” This report is about the research made during the 4 months of time
period and effort, based on the need of the study, research methodology, findings,
limitations and future need.
This research gives useful information regarding the factors involved in customer
loyalty in Pakistan telecom. Although this research is made for academic purpose, but the
importance of the study cannot be ignored.
I hope that this report is acceptable to the Newports Institute of Communication
and Economics and to you, while keeping in view the scope of my limited knowledge.
The project was very interesting and challenging, this was throughout a learning
experience. At the end say thank to you for giving me the opportunity to extend my
knowledge and ability to look things in a different way.
Yours sincerely
Shabbir Ahmed
TABLE OF CONTENT
Serial No
Description Page No
1. Acknowledgement2. Abstract3. List of table4. List of figures5. Chapter 1 : Introduction
1.1 Overview 1.2 Problem Statement 1 1.3 Hypothesis 1.4 Outline of the studies 1.5 Definitions 1
6. Chapter 2: Literature Review 17. Chapter 3: Research Method 2
3.1 Method of Data collection 2 3.2 Sampling Technique 2 3.3 Sample Size 2 3.4 Instrument of Data Collection 2 3.5 Statistical Technique 2
8. Chapter 4: Results 2 4.1 Findings and interpretation of results 2 4.2 Hypothesis assessment Summary 2
9. Chapter 5: Discussion, Implications, Future Results, & Conclusions
3
10. References 311. Appendix 3
1- ACKNOWLEDGMENTS
This dissertation would not have been possible without the guidance and the help of my
teacher sir ShafqatUllah, who one way or another contributed and extended their valuable
assistance in the preparation and completion of this study.
Lastly, I offer my regards and blessings to all of those who supported me in any respect
during the completion of the project.
2- ABSTRACT
Telecom services in Pakistan are clearly changing and growing. Due to rapid development
of communication technologies in past few years and changing demand of customers, the
paradigm of mobile telecommunication services is now moving from simple voice-
centered communication to a combination of high speed data communication and
multimedia. With all this, the perceptions, believes and anticipations are changing. It is
very important to identify all of these things.
Secondly the service provider in Pakistan are working in a very tough competition.
All of the service provider are providing more or less equal services. So it is very critical
to know the exact best service provider. But still there are some factors that can make a
service provider the best in the market. in this research paper total eight of the factors were
studied, however the all of the variables were studied before, although not in Pakistan.
Moreover all these variables were not studied in any single research in Pakistan or may
not be disclosed.
Latter in this research, relationship of the service quality, corporate image,
perceived value and trust with the customer loyalty is discussed, where limitations and
implications are discussed.
5 – CHAPTER 1
INTRODUCTION
1.1 OVERVIEWPakistani mobile telecommunication services are clearly exhibiting signs of an
abrupt industry paradigm change and symptoms of a market in transition. Due to rapid
development of information and communication technologies in past years and increasing
demand from customers, the paradigm of mobile telecommunication services is now
moving from simple voice-centered communication to a combination of high speed data
communication and multimedia. Some other factors such as the growth of the wireless
internet, and the use of different packages in corporate world all contribute to emphasize
the appearance of aa transition period in the mobile telecommunication services market.
Also, a stagnation rate of diffusion, indicated by a fall in the rate of increase in subscriber
numbers, suggests that the market may have now reached maturity.
If we talk about the few past years, telecommunication in Pakistan describes
the overall environment for the growing mobile telecommunications, telephone, and
internet markets. In 2008 Pakistan was the world’s thirst fastest growing
telecommunications market. Pakistan’s telecom infrastructure is improving with foreign
and domestic investments into fixed-line and mobile networks; fiber systems are being
constructed throughout the country to aid in network growth.
Mobile Telecommunications:
In January 2004 the Ministry of IT issued its Mobile Cellular Policy with
objectives to:
1. Promote efficient use of radio spectrum;
2. Increase choice for customer of cellular services at competitive and
affordable prices;
3. Encourage private investment in the cellular mobile operators;
4. Recognize of the right and obligations of mobile cellular operators;
5. Provide for fair competitions among mobile and fixed line operators;
and
6. Provide and effective and well defined regulatory regime that is
consistent with international best practices.
The mobile telecommunications sector is seeing very large year-to-year growth in
Pakistan. Approximately 90 percent of Pakistanis live within areas that have cell phone
coverage and more than half of all Pakistanis have access to a cell phone. With 108
million mobile subscribers in April 2011, Pakistan has the highest mobile penetration rate
in the South Asian region.
According to the Pakistan Telecommunication Authority (PTA), Mobilink
continues to lead the market with 32.9 million subscribers, followed by Telenor with 26.1
million, Ufone with 20.4 million, Warid Telecom with 18.1 million, and Zong with 10.3
million, according to Telecom Indicators; by PTA 3 June 2011. All telecom companies
are working to broaden their networks in the Azad Jammu and Kashmir and Northern
Areas, which were largely ignored until recently. Five of the seven Agencies of the tribal
areas have mobile coverage.
1.2– PROBLEM STATEMENT
Brief Overview
The change of paradigm and the symptoms of a market in transition are driving
the industry’s restructuring efforts and intensifying completions between companies.
Pakistani mobile carriers are aware of importance of a customer-oriented business strategy
as a condition for sustaining their competitive edge and maintain a stable profit level, and
off course for their survival. As the numbers of subscribers has reached its almost
saturation level, creating new and securing new customer is not only difficult but also
costly in terms of marketing. Hence, it is becoming an industry-wide belief that the best
core marketing strategy for the future is to try to retain existing customers by heightening
customer loyalty and customer value.
Purpose of Research
Previous studies tell that, the companies which grow with the time passing are developing
and increasing customer loyalty (Lee & Cunningham, 2001; Reichheld, 1996). This paper
analyses the antecedents of customer loyalty and the structural relationship between these
factors in the Pakistani mobile telecommunication services industry. As researcher’s
knowledge no such previous research was made in Pakistan telecom, or may be made but
was not disclosed. It was very interesting for researcher to study the customer loyalty
factors in Pakistan telecom because there is very tough competition between the service
Call QualityTrust Value Added Services
Convenience In Procedures
Corporate Image
Customer Support
Perceived Value
Pricing Structure
Customer Loyalty
providers. So in such tight environment customers are free to make a choice. Study was
made to know those factors, which are considered by the customer in such an
environment.
Graphical Model
1.3- HYPOTHESIS
According to Andreassen (1999), corporate image has significant positive impact on
customer loyalty.
RQ1: What is the impact of corporate image on customer loyalty?
H1: Corporate image has significant impact on customer loyalty.
Trust is said to be the believe that firm is fulfilling the commitments. There is a
strong effect of trust on customer loyalty in telecommunication sector (Corbitt,
Thanasankit, & Yi, 2003)
RQ2: What is the impact of trust on customer loyalty?
H2: Trust has significant impact on customer loyalty.
According to Lin and Wang (2006) there is a positive relationship in perceived
value and customer loyalty.
RQ3: What is the impact of perceived value on customer loyalty?
H3: Perceived value has significant effect on customer loyalty.
Finally Lee and Ulgado (1997) find out that, consistent quality affect U.S. consumer
loyalty. Service quality has been measured by call quality, pricing structure, value-added
services, convenience in procedures, and customer support (Kim 2000; Gerpott et al.,
2001; Lee, Lee, &Freick, 2001). In the previous researches it is proved that service quality
is the antecedent of customer satisfaction (Bedi, 2010; Lee and Hwan, 2005). According
to Yee (2010) has a positive influence on customer satisfaction.,
As already stated that service quality is measure of call quality, pricing structure,
value added services, convenience in procedures and customer support, that is why
following are the supporting hypotheses of service quality;
RQ4: What is the impact of call quality, pricing structure, value-added services,
convenience in procedure and customer support on customer loyalty?
H4: Call quality has significant impact on customer satisfaction.
H5: Pricing structure has positive impact on customer satisfaction.
H6: Value added services have significant impact on customer satisfaction.
H7: Convenience in procedures has significant impact on customer satisfaction.
H8: Customer support has significant impact on customer satisfaction.
OUTLINE OF THE STUDY
Chapter #1
In chapter 1 describes the brief history of telecommunication in Pakistan, its major service
providers and Pakistan Telecommunication Authority rules in short. Purpose of the study
is also discussed, where the main contents of research are also discussed. This chapter also
covers the research hypothesis, supported by the ample references of different authors.
Key terms and definitions are also described in this chapter.
Chapter #2
In depth review of the literature is described in chapter 2. Research is based on the service
quality, Switching barriers, customer satisfaction and customer loyalty. This chapter
includes the in depth overview of the above given variables. Variables are taken from the
journals which were previously proved by the other researchers, supporting tags are given
at each variable support.
Chapter #3
Chapter 3 includes methods used for data collection and reason to use them. What are the
sampling techniques used and why they are used? This chapter also defines sample size
taken for research, instruments used for data collection, research model development and
them the statistical technique used in the research, which is Chai-square technique. All the
methods and techniques are supported by the references and solid reasons, which were
accepted in the previous research studies.
Chapter #4
Chapter 4 defines the research results and their interpretations. The overall research
hypotheses and their results summary is given, which gives the clear understanding of
research purpose, hypothesis and their results, proving rejected or accepted and further
interpretation of the research hypothesis.
Chapter #5
Chapter 5 is closing chapter, where research is discussed briefly implications of the
reaseach are also discussed in the chapter. Need of future research and its importance is
also given.
1.5 – DEFINITIONS
Keywords: Customer loyalty, value, Pakistan mobile telecom service, service quality, corporate image.
Customer Loyalty
The term customer loyalty is used to define the behavior of repeat customers, as
well as those who offer good ratings, reviews or testimonials. Loyal customers do the
favorable word of mouth publicity regarding a product or service. These customers are the
assets for the company. In this report the loyalty of customers is measured by the time
they are with the existing service provider. It means they are fully loyal if they are using
their current network for more than four years.
Value
Value is marketing terminology, which means that a consumer makes what value
of a product or service in mental estimation. It can be said to be the relationship between
the perceived benefits against the perceived costs of receiving it.Value is totals benefits
perceived per unit cost.
Pakistan Mobile Telecom Service
Although mobile voice, wireless data, wimax, wireless local loop and VOIP are
included in Pakistan Telecommunication providers. Here in this research, only mobile
voice data providers are meant. Mobile service providers are Mobilink, Ufone, Telenor,
Warid and Zong. These operators are operating in whole Pakistan, but the research is only
conducted in the city Karachi, that is why this research only tells the customer loyalty,
switching barrier and customer satisfaction of Karachi city. Both prepaid and postpaid
customers are taken in the research.
Service Quality
Service quality is a comparison of customer expectations with performance of
service delivered. It is the measure of how well delivered service matches the buyer’s
expectations. In telecom the service quality ingredients are call quality, pricing structure,
mobile devices, value-added services, convenience in procedures, and customer support.
Corporate Image
Corporate image is the perception in consumer’s mind about the corporate entity
behind a brand. For example Unilever, behind its every brand has a good impact on
consumers due to its credibility in the market. Positive corporate images can greatly
increase the speed of new product adoption because of credibility of the manufacturer’s
claims.
CHAPTER #2
LITERATURE REVIEW
2- LITERATURE REVIEW
In earlier studies on movile telecommunication services, service quality ahs been
measured by call quality, pricing structure, mobile devices, value-added services,
convenience in procedures, and customer support (Kim 2000; Gerpott et al., 2001; Lee,
Lee, &Freick, 2001). As the earlier researches revealed that service quality is a kind of
attitude that is formed by the difference between customer’s expectations (Parasuraman,
Zeithaml, & Mitchell, 1990). In this context call quality there is the difference between the
pricing structure of different service providers, although the value added services,
procedures and customer support are more or like same. According to the previous
researches made in telecommunication suggest that service quality is not only the factor
influencing the customer loyalty, as in German mobile communication consumers find
service price, phone number portability and benefit most effective loyalty (Grepott, 2001).
Korean study tells that switching costs, brand image and perceived service quality are the
ingredients of customer loyalty. So there is difference in perceptions of people due to
different strengths of relationship across cultures.
The number of service quality dimensions varies from industry to industry
(Asubonteng, McCleary, & Swan, 1996).According to Btner and Hubert (1994) service
quality is customer’s evaluation judgment, where the degree of superiority of performance
with respect to the product.
This report choses the conceptualization of Kims (2000), Grepott et al., (2001), Lee
et al., (2001), where service quality is measured by call quality, pricing structure, value
added services, convenience in procedures and customer support.
Value
According to Kims, Park and Jeong (2004) it is very important to develop maketing
strategies that extend profitability by retaining the existing customers through customer
loyalty and value. Previous researches have revealed that only the high service quality is
not the reason to buy it (Olshavsky, 1985). That is why this study aims to determine the
value perception of the customers, and to give understanding to service providers. By this
study we will come to know that, how much important is the value perception, and how to
manage the value in customers.
According to Bob Weybright (2004) “one must look carefully at their product and
service. Marketers need to assess the competitive climate in the region, country, and world
to determine how it might affect the value of what they have to offer; learn to identify
what the purchaser needs to see or experience that supports their sense of value while
satisfying the needs that drove the purchase initially; and finally, apply what is learned
when making a decision as to where products or services are to be sold, who… to sell to,
and at what price”
Trust
Many of the studies focused the connection between loyalty and trust.Morgannad
Hunt define trust as one’s confidence in an exchange of value. According to Reichheld
and Schefter (2000) customer trust is the primary factor for customer commitment and
loyalty.
Concept of trust from previous researches is in various of ways. In e commerce
trusting beliefs, according to Mayer et al. (1995) are perceptions of attributes of e
commerce, including ability, integrity and knowledge. In telecom trust is trustworthiness
including extent to which service is provided, ability to fulfill the commitments.
Corporate Image
Corporate image is one of the important factors in service evaluation (Bitner, 1991;
Gronroos, 1988). Corporate image also affects customer loyalty. In service sector
Andreassen and Lindertad (1998) examined the role of corporate image in formation of
customer loyalty. The study of Andreasen and Lindestad was replicated by Hart and
Rosenberger (2004) in Australia.
Corporate image reflects the company’s overall reputation and prestige. According
to Aydin and Ozer (2005) corporate image emerges from a customer’s net consumption
experience and also the perceived service quality affect corporate image. There is a link
between corporate image and customer loyalty (Erdem and Swait, 2004).
Customer Loyalty
According to Oliver (1999) loyalty is a deeply held commitment to rebuy, reuse a
preferred product or service consistently in future. One discovery by Xerox changed the
conventional wisdom, because the Xerox totally satisfied customer were six times more
likely to repurchase Xerox products over the next 18 months than satisfied customers.
Customers who have freedom to choices is not enough to make them loyal. The only way
is loyal customers are totally satisfied customers (Frederik F. Reichheld and W. Earl
Sasser, Jr., HBR, 1990). There are three approaches of customer loyalty, the behavioral
approach, the attitudinal approach and the integrated approach (Oh, 1995).
In mobile communication service sector, it would be important to develop
marketing strategies that promote profitability by retaining existing customers through
customer loyalty and value (Kim, Park and Jeong, 2004).
Many researches find that high service quality relatesrelatively high customer
satisfaction (Cronin et al, 2000) which further leads to loyalty (Ennew and Binks, 1999;
Lai et al, 2009).
Chapter #3
Research Methods
3.1- METHOD OF DATA COLLECTION
Structured questionnaire was used to collect the data, which was comprised of fire scales
taken from the previous researches. For all the variables the author have used 5 scale point
Likert scale. The Likert scale started from Totally disagree to Totally Agree.
3.2- SAMPLING TECHNIQUE
Convenient Sampling
Author is conducting the academic research, where the research like a professionals do, is
very difficult. That is why the convenient sampling technique was adopted. But researcher
is intended to collect data from every required area, so that the significance of the study
cannot be denied. Sample was taken from the Karachi city, through email, and through
getting hard copies filled.
3.3- SAMPLE SIZE
Keeping the variables in view, which were 9 in total, almost 200 research questionnaires
were distributed, only 102 questionnaires were collected or only these were valid for our
research. Response was 51%. Male respondents were 73.5 %, while female respondents
were 26.5 %. Breakup of percentages of respondents with respect to service provider is
10.85, 30.4%, 35.3%, 11.8%, 11.8% for Telenor, Mobilink, Ufone, Warid and Zong
respectively.
3.4- INSTRUMENT FOR DATA COLLECTION
Questionnaire is a research instrument consists a series of questions for gathering required
information from respondents. Francis Galton was first one who used the questionnaire.
Structured questionnaire is used in this research paper as research instrument. The
questionnaire was covering 9 variables; service quality- call quality, convenience in
procedure, pricing structure, value added services, customer support, perceived value,
corporate image and trust. One question from each of the variable was chosen, so the
percentage of variables in questionnaire was equal. Five pontLikert scale was used with
close ended options; rating from 1 to 5 point having option Totally disagree to Totally
Agree.
3.5- STATISTICAL TECHNIQUE
Chi Square technique
Pearson’s chi-square is the best tools for assessing the comparison tests of test of
independence, which assess whether paired observations are independent of each other.
CHAPTER 4:
RESULTS
4.1- FINDINGS AND INTERPRETATION OF RESULTS
In this research nine variables are included, in which customer loyalty is only
dependent variable, and it was assumed that customer loyalty depends upon all of the eight
variables. Hypothesis against each variable is tested and discussed below.
Importance of call quality in customer loyalty
Cross tabulation between the two variables is given below;
Call Quality * Customer loyalty Crosstabulation
Count
Customer loyalty
TotalAbove 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
C
all Q
ual
ity
Strongly disagree 0 0 0 1 1 2
Partially Disagree 0 2 4 0 3 9
Uncertain 0 4 2 5 5 16
Partially Agree 1 1 7 6 13 28
Strongly Agree 1 2 8 7 29 47
Total 2 9 21 19 51 102
This table shows the frequencies of each choice with respect to the period of using the
existing network. Total disagreement was 1.9 %, 9 % people were partially disagreeing.
People who were in midway were 15.69 %. Partial agreement was 27.45% while strong
agreement was 46.08%. If we take a look on results, call quality is an important factor
among telecommunication users and its importance cannot be ignored. If we talk about the
Call Quality, all network providers are provider more or less equal coverage as research
was conducted in Karachi. All providers have more or less equal network coverage in
Karachi.
Importance of pricing structure in customer loyalty
Pricing structure * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
Above 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
Pri
cin
g
Str
uct
ure
Partially Disagree 0 1 1 0 2 4
Uncertain 0 2 5 2 7 16
Partially Agree 2 5 11 6 10 34
Strongly Agree 0 1 4 11 32 48
Total 2 9 21 19 51 102
Strongly agreed respondents are 47 %, Partially Agreed 33.33%, uncertain are 15.6% and
a very low percentage of Partially Disagreed respondents are. This shows that the large
percentage of respondents wants a reasonable pricing structure. Due to competition in
Pakistan Telecommunication companies, the entire service providers are working on the
very low profits. Above all it is very important factor in Pakistan telecommunication.
Importance of value added service in customer loyalty
Value added services * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
Above 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
Val
ue
add
ed
serv
ices
Partially Disagree 0 1 0 1 1 3
Uncertain 0 4 9 4 5 22
Partially Agree 1 3 8 9 13 34
Strongly Agree 1 1 4 5 32 43
Total 2 9 21 19 51 102
It is seen that respondents who are using their current network from more than 4 years and
are Strongly agreed are 32, while Partially Agreed respondents are 13, this large number
of Strongly Agreed and Partially Agreed respondents lays in the period of above 4 years,
which show that that it is meant a lot by value added services.
Importance of trust in customer loyalty.
Trust of company in mind of customers * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
Above 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
Tru
st
Partially Disagree 0 1 0 0 0 1
Uncertain 1 5 3 2 8 19
Partially Agree 1 1 9 8 11 30
Strongly Agree 0 2 9 9 32 52
Total 2 9 21 19 51 102
50.98% respondents are strongly Agree that they trust their service provider, Partially
Agree were 29.4%, uncertain response was 18.63%. Above table show that a large pool of
respondents lie in quadrant where people are using their current network above four years.
The table shows that when consumers have trust on a service provider, they continue the
use of that service provider.
Convenience in Procedures verses Customer Loyalty
Convenience in procedures * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
Above 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
Co
nve
nie
nc
e in
pro
ced
ure
s
Strongly disagree 0 0 0 1 0 1
Partially Disagree 1 1 0 1 4 7
Uncertain 0 3 2 0 10 15
Partially Agree 0 1 10 8 13 32
Strongly Agree 1 4 9 9 24 47
Total 2 9 21 19 51 102
The above table shows that the Strongly Agree respondents are 46.8% out of 102
respondents, but it can be observed that large percentage of response was in terms of
Partially Agree and Uncertain, which is 31.37% and 14.71% respectively, which lies in
column of respondents using mobile more than 4 years. It means that people who are
using current network more than 4 years may also not be continuing due to convenience in
procedure.
Importance of customer service in customer loyalty
Customer service and support * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
Above 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
Cu
sto
mer
serv
ice
and
sup
po
rt
Partially Disagree 1 0 2 1 1 5
Uncertain 1 4 7 5 4 21
Partially Agree 0 2 6 6 25 39
Strongly Agree 0 3 6 7 21 37
Total 2 9 21 19 51 102
In the above table Strongly Agree respondents are 36.27% while 38.24% respondents are
Partially Agree. So the ratio of agreed response is very high which is almost 75%. This
table shows the importance of customer support. It is direct interaction with the service
provider. So people take into account and continue or discontinue using the service
provider.
Importance of perceived value in customer loyalty
Perceived Value * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
Above 6
months
Above 1
year
Above 2
years
Above 3
years
Above 4
years
Per
ceiv
ed
Val
ue
Partially Disagree 0 0 0 0 2 2
Uncertain 0 1 5 1 6 13
Partially Agree 2 7 10 12 11 42
Strongly Agree 0 1 6 6 32 45
Total 2 9 21 19 51 102
In the above table most of the respondents are Strongly Agree 44.12% and Partially Agree
41.18%. This large number of responses show that value is very important, which is
perceived by customers.
Importance of corporate image in customer loyalty
Corporate Image * Customer loyalty Crosstabulation
Count
Customer loyalty
Total
above 6
months
above 1
year
above 2
years
above 3
years
above 4
years
Co
rpo
rate
Imag
e
Uncertain 1 3 3 1 3 11
Partially Agree 0 5 13 11 13 42
Strongly Agree 1 1 5 7 35 49
Total 2 9 21 19 51 102
In the above table strong agreement was seen. Company image is very important for the
customer and hence they are influenced by the company reputation, so that the Strongly
Agree respondents were 48% while Partially Agree was 41.1%.
4.2- HYPOTHESIS ASSESSMENT SUMMARYEvery hypothesis is tested against the dependent variable Customer Loyalty. Using
the Chi-Square, some results were obtained which are given in detail one by one,
According to our first hypothesis;
H1: Corporate image has significant impact on customer loyalty.
Table 4.2.1
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 26.930a 8 .001
Likelihood Ratio 26.463 8 .001
Linear-by-Linear Association 17.692 1 .000
N of Valid Cases 102
a. 8 cells (53.3%) have expected count less than 5. The minimum expected
count is .22.
In the above table, taking Pearson Chi-Square results, the sig. value is 0.001 <0.05 ,which
show that the null hypotheses is rejected which states that there is no relationship between
Corporate Image and Customer Loyalty. Actually there is positive relationship between
the Corporate Image and Customer Loyalty.
This result shows that consumer is conscious about the overall reputation of the service
provider, and this perception becomes strong as time passes between the relationship of
consumer and service provider. Hence our hypothesis H1 is accepted;
Corporate image has significant impact on customer loyalty.
H2: Trust has significant impact on customer loyalty.
Table 4.2.2
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 27.994a 12 .006
Likelihood Ratio 21.461 12 .044
Linear-by-Linear Association 10.435 1 .001
N of Valid Cases 102
a. 13 cells (65.0%) have expected count less than 5. The minimum expected
count is .02.
Table 4.2.2 shows that the sig. value is 0.006 <0.05, which show that null hypothesis is
rejected which shows that there is no relationship between Trust and Customer Loyalty, so
that our hypothesis H2 is accepted. This test shows that customer loyalty is much affected
by trust. Consumer will remain loyal if trust of company has developed in his mind. In
telecommunication trust is meant by the commitments of the services provider those may
be committed call rates, time or packets. So the telecommunication companies operating
in Karachi should consider this factor and should build trust among their customers.
Finally our hypothesis H2 is accepted;
Trust has significant impact on customer loyalty.
H3: Perceived value has significant impact on customer loyalty.
Table 4.2.3
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 25.919a 12 .011
Likelihood Ratio 27.978 12 .006
Linear-by-Linear Association 5.163 1 .023
N of Valid Cases 102
a. 13 cells (65.0%) have expected count less than 5. The minimum
expected count is .04.
Using Pearson Chi-Square we obtained the sig. value 0.011 < 0.05 which means that the
null hypothesis is rejected which is, there is no relationship between Perceived Value and
Customer Loyalty, so that our hypothesis H3 is accepted which states that there is
significant impact of perceived value on customer loyalty.
This is very important factor which enables a customer to differentiate between two
services or providers. Value delivery is very important part in service delivery. Besides the
core competencies, it is very necessary to differentiate on the basis of value. According to
the results our hypothesis is;
Perceived value has significant impact on customer loyalty.
H4: Call quality has significant impact on customer loyalty.
Table 4.2.4
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 21.165a 16 .172
Likelihood Ratio 21.333 16 .166
Linear-by-Linear Association 4.517 1 .034
N of Valid Cases 102
a. 18 cells (72.0%) have expected count less than 5. The minimum
expected count is .04.
In the above table 4.2.4, using the Pearson Chi-Square the sig. value is 0.172 > 0.05,
which shows that null hypotheses, is accepted, which states that there is no relationship
between the two variables Call Quality and Customer Loyalty. So that our hypothesis is
rejected and there is no relationship between Call Quality and Customer Loyalty.
If we deeply study this, we come to know that research was conducted in Karachi only,
and in the city every network provider has good service, so people living in Karachi city
may not be able to make judgment on the basis of call quality. So people will not make
any switch to other network due to call quality, hence the loyalty remains constant. This
thing is only for Karachi city and may give different result if we conduct a research in any
other areas for example villages etc., so our actual hypothesis is;
Call quality has no impact on customer loyalty.
H5: Price Structure has significant impact on customer loyalty.
Table 4.2.5
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 23.178a 12 .026
Likelihood Ratio 25.605 12 .012
Linear-by-Linear Association 8.836 1 .003
N of Valid Cases 102
a. 13 cells (65.0%) have expected count less than 5. The minimum
expected count is .08.
In the table 4.2.5 sig. value is 0.026 which is less than 0.05. In this way null hypothesis is
rejected which states that Price and Customer Loyalty has no relationship. But our
hypothesis is accepted that both of the variables have impact on each other.
Researcher concluded that price is one of the factors influencing customer loyalty
in telecom sector in Karachi. That is the reason that telecom service providers launch
several of the bundle packages with respect to choice in price.
H6: Value added services have significant impact on customer loyalty.
Table 4.2.6
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 26.916a 12 .008
Likelihood Ratio 27.432 12 .007
Linear-by-Linear Association 14.020 1 .000
N of Valid Cases 102
a. 13 cells (65.0%) have expected count less than 5. The minimum
expected count is .06.
In the table 4.2.6 sig. value is 0.008 < 0.05 which shows that the null hypothesis is
rejected and research hypothesis h6 is accepted, which states that there is significant
impact of Value Added Services on Customer Loyalty.
In every service provision value addition is very necessary. When there is value
addition in services, the customer loyalty increases.
H7: Convenience in procedure has significant impact on customer loyalty.
Table 4.2.7
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 22.949a 16 .115
Likelihood Ratio 23.417 16 .103
Linear-by-Linear Association .081 1 .776
N of Valid Cases 102
a. 18 cells (72.0%) have expected count less than 5. The minimum
expected count is .02.
In the above table 4.2.7, sig. value is 0.115 > 0.05 which shows null hypothesis is
accepted which states that there is no relationship between Convenience in Procedures and
Customer Loyalty.
Features for all the network may be same, so the consumers feel difficulty to
differentiate between the different service provider’s procedures. So that the conclusion is;
Convenience in procedures has no impact on customer loyalty.
H8: Customer support has significant impact on customer loyalty.
Table 4.2.8
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 24.954a 12 .015
Likelihood Ratio 21.651 12 .042
Linear-by-Linear Association 9.723 1 .002
N of Valid Cases 102
a. 13 cells (65.0%) have expected count less than 5. The minimum
expected count is .10.
In the table 4.2.8, sig. value is 0.015 < 0.05, which shows that null hypothesis is rejected
which states that there is no relationship between Customer Support and Customer
Loyalty. In actual there is relationship between the two.
Customer support is the key factor to determine the customer loyalty. Usually
people make repurchases if they find after sale services better. So our hypothesis is
accepted;
Customer support has significant impact on customer loyalty.
CHAPTER 5:DISCUSSION, IMPLICATIONS,
FUTURE RESULTS & CONCLUSIONS
DISCUSSIONS AND IMPLICATIONS
The present study is notable, because as to the knowledge of the researcher no such
study has been made by others on antecedents of customer loyalty in Pakistan telecom, or
may be made but they were not published for all. As it is seen that 6 out of 8 hypotheses
were accepted, so the majority of the hypotheses are supportive. It can be said that service
quality in combine is the important antecedent of customer loyalty.
The thing is noticeable that two of the hypotheses were not supportive in
relationship with customer loyalty (Call quality and convenience in procedures). These
two factors were proved having positive impact on customer loyalty in Korea and China,
but in this research this is important that the research was made in Karachi city due to
convenience and call quality is found to be almost equal for all the networks and that may
be the reason. Secondly the procedures are more or less same for changing or subscribing
any package. So people find it difficult to switch to or remain with the existing service
provider. Service providers have to make it differentiating for their customers by
improving their call quality and convenience in procedures.
According to Sharma and Patterson (1999) trust plays an important role in
motivating the customers to remain loyal with the service provider. Although this study
also suggests that the trust is important factor because respondents found to be much
judgmental in case of trust. Corporate image also plays a vital role to make customers
loyal with the service provider. Different people have different perceptions regarding the
service provider, it is the service provider who makes credibility among consumers.
This study has some limitations. There are other factor influencing customer
loyalty, apart from the factors studied above. For example demographic characteristic,
usage patterns and life style of consumers. Future studies could focus on examining the
factors cited above.
REFERENCES
1. Luarn & Lin. “A customer loyalty model for e-service context”. Journal of Electronic Commerce Research, VOL. 4, NO. 4, 2003.
2. Boohene & Agyapong, “Analysis of the antecedents of customer loyalty of telecommunication industry in Ghana: The case of Vodafone (Ghana)” International Business Research Vol. 4, No.1: January 2011.
3. Kim and Lee “Relationship between corporate image and customer loyalty in mobile communication services markets.” Africa Journal of Business Management Vol. 4(18), pp.4035-4041, 18 December, 2010.
4. Julander & Soderlund, Effects of switching barriers on satisfaction, repurchase intentions and attitudinal loyalty” SSE/EFI Working Paper Series in Business Administration No. 2003:1.
5. Homburg, Koschate and Hoyer “Do satisfied customers really pay more? A study of relationship between customer satisfaction and willingness to pay.” Journal of Marketing vol., 69 (April 2005), 94-96.
6. Yang and Peterson, “Customer perceived value, satisfaction, and loyalty: The role of switching costs.” Psychology & Marketing, Vol. 21(10): &99-822 (October 2004).
7. Storbacka, K. Strandvik, T. and Gronroos, C. (1994) "Managing customer relationships for profit", International Journal of Service Industry Management, vol. 5, no 5, 1994, pp. 21-28.
8. Http://www.en.wikipedia.org
9. http://www.google.com
10. Baloglu, “Dimensions of customer loyalty. Separating friends from well-wishers.” Cornell Hotel and Restaurant Administration Quarterly; Feb 2002; 43, 1; ABI/INFORM Global pg. 47
APPENDIX
1- Network coverage is very good.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
2- Over all service I receive is valuable.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
3- The service provider’s overall reputation is very good.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
4- Variety of value added services is available.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
5- All the commitments of the service provider are trusted. (Trust)
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
6- Subscription and changing the package is very convenient.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
7- Customer support is very good.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
8- Price structure is very reasonable.
5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree
9- I am using the current network from.
5- More than 4- More than 3 – More than 2 – More than 1 – More than4 years 3 years 2 years 1 year 6 months