Tuesday, August 14, 2012

Switching Intentions of Customer in Telecommunication Networks


ABSTRACT

This research study has gone through a detailed analysis of a questionnaire survey by involving all types of people particularly the youth. 30 responses were collected randomly to know the switching intentions of different mobile users with the help of four predictors i.e. anger incident, call rates, packages and outcome quality. Findings of the study showed that beside all other factors have influence on the customers’ switching intentions but the overriding factor remained the cost effectiveness. The critical role of this factor is because of the different socio / economic conditions of a developing country like Pakistan where buying power of a common man is low as compared to rich and developed countries. But generally it holds true as concluded by other research studies.




INTRODUCTION

The growing competition in the global market is showing that it is becoming increasingly important for companies to retain their existing customers. Gaining knowledge about customers' switching behavior is substantively important which can only be examined by analyzing the role of various factors affecting switching processes.

This study is based on the responses from youngsters who are also termed as innovators in marketing literature being dynamic and risk taker.  Youngsters always need change in their life and normally observed adaptive about new and advance offerings. They like creativity and innovation and move from one product to another. Therefore, preferring new and innovative product is the core attribute associated with youngsters (Stanton et al., (1994). For example, considering cell phone industry when a company offers better packages, it entices youngsters to switch to new cellular service provider irrespective of what advantages existing company is offering. Switching process results in relationship dissolution. Duck (1982) described relationship dissolution as the permanent dismember ship. It is the process of the breaking up of relationships by the voluntary activity of at least one side (Duck and Rollie, 2010). Research in relationship marketing has for some reasons argued that creating and developing relationships contributes to the success of firms. Some authors are of the view that firms can even use relationship marketing as a competitive advantage. Analyzing the dissolution process is very important in industrial markets for the long-term survival. Moreover, firms must also frequently consider terminating inefficient relationships because of their implicit costs (Anto´n et al.,2007).


There are five mobile service providers in our country. Due to the growing competition in mobile telecommunication sector, it is necessary for the companies to know the customer perception about the satisfaction on the service provided by them. In the study, attempt has been made to know the perception of the user’s about the service and some other related issues.

BACKGROUND OF THE STUDY


Some attempts have already been made to develop service categorizations that depict the special nature of electronic services in general (e.g.Angehrn, 1997; Dabholkar 1996; Meuter et al., 2000). Some categorizations of mobile services exist already. However, most mobile service categorizations tend to focus on the providers’ perspective rather than the customer or user’s perspective on the service (e.g.Hyv√∂nen and Repo 2005; Giaglis, Kourouthanassis and Tsamakos 2003; Sullivan Mort and Drennan 2005; Mitchell and Whitmore, 2003). Looking more generally at research on mobile services, some previous research emphasizes the customer perspective of mobile services. The human development index published by UNDP shows that Pakistan is yet to develop human resource sector to meet the growing need of telecommunication sector.



LITERATURE  REVIEW



Contemporary marketing literature reveals keen focus of experts and researchers on customer retention. Because retaining customers is a core factor for the economic success of a firm in long-run (Wan-Ling and Hwang, 2006). To retain customers, organizations have to satisfy them particularly in service  industry (Oyeniyi and Abiodun, 2010). If customers  are satisfied with the service, this not only
enhances repurchase intentions (Hellier et al., 2003) but also addresses the switching intentions . (Fernandes and Santos, 2007). Switching and switching intentions are considered as the most important
variable in service sector. Organizations are now deeply concerned with the factors which impetus witching intentions. Understanding switching intentions may help in retaining customers and to avoid the adverse effects that may result due to switching (Wan-Ling and Hwang, 2006). Service switching is defined as the act of replacing and exchanging the  current service provider with another that is available to the consumer in the market (Bansal, 1997). Normally customer satisfaction is found to be the most common factor impinging upon switching intentions (Fernandes and Santos, 2007). As concluded by Wen-Hua et al., (2010) if customers are satisfied with call quality, mobile device and
customer complement then it negatively affect switching intentions.

But contemporary researches show different attempts of the researchers in explaining the causes of switching and switching intentions. For example, the study of West (2000) showed that network externalities, switching costs and psychological involvement are the key factors to predict switching while according to Gupta et al., (2004) price-search intentions, channel-risk perceptions, waiting time and evaluation effort have a significant impact on consumer switching. Wen-Hua et al., (2010) claimed switching costs and attractiveness of alternatives as dominant factor affecting switching intention. Jones et al., (2003) made a different attempt by evaluating the impact of instructional manual understanding on switching intentions. Customers who understand instructions given at handbook usually face less difficulty in using the service, have higher levels of satisfaction and recommend it to others therefore have less switching intentions.

A different approach was applied by Bansal (1997) by incorporating some measures of theory of planned behavior (TPB) in predicting switching intentions. TPB posits a link between attitudes and behavior. In combination, perceived behavioral control, subjective norm and attitude toward the behavior lead towards “behavioral intention” (Ajzen, 1991). Bansal (1997) measured the impact of one's attitude towards switching behavior, perceived behavior control (termed as perceived switching costs) and satisfaction with the service provider,  with intentions to switch. Results confirmed the significant influence of all three variables on switching intentions.

Keeping in view the different culture, social norms and perceptions of people in Pakistan. This research focused on price, perceived commitment, outcome quality and anger incident as predicting variable to explain switching intentions. Previously, Anto´n et al., (2007) analyzed the predicting qualities of these variables in Spanish environment and found that poor quality, a perception of low organization commitment or interest, perceived unfair price and an anger incident can help in explaining the consumers’ intention to switch.

OBJECTIVE

The objective of the study is to identify a number of factors shaping the customers satisfaction in mobile telecommunication in Pakistan taking GSM as a case. The acceptability and the perspective of the users were measured through statistical analysis of the consumer perception and to identify whether demographic variables like age, occupation, length, type, reason, expense, location, problems are interrelated. From the satisfaction and dissatisfaction factors it aims to identify the crucial factors that are responsible in choosing the service providers. Moreover it aims to find out the reasons of the consumer dissatisfaction regarding the GSM service providers. In order to reach to some important recommendations, it attempts to find out the association among or influence on different variables through some statistical tools. The ultimate objective of this study is to provide inputs for preparing a guideline for the telecommunication service providers from the perception of the customers.




RESEARCH METHODOLOGY AND DATA SOURCE

Considerable effort was devoted to developing the appropriate sample plan. The target population of the study involves present GSM users. Therefore, the present users both male and female were considered to be the users and each user for the considered use limits was defined as the sampling unit. The extent of the study was the area of Karachi City considering their mobility to urban and rural areas. The respondents were selected from Karachi City. The survey was conducted in 14th May, 2011 with 30 respondents living in Karachi.

In this study, random sampling procedure was used to collect the data on the perception of the customers. Following guidelines were followed to select the sampling units: and (i) there should be diversification among age, sex, profession and cellular service of the respondents. To focus on mobile telecommunication sector in Pakistan a set of structured questionnaire was developed to collect the data from GSM mobile phone users. The measurement scales are based upon the level (High- Low) were included in a structured format to examine the relationship between the considered variables. A total number of 8 variables related to the personal and self-perception of the respondents are included. Secondary data were used in the study. They were collected from the website and some of the research articles. The data then was analyzed by SPSS 16.0. To test some hypotheses, correlation, regression and t-test were used as statistical tool.








DATA ANALYSIS

Data was analyzed to determine how the units covered in the research project respond to the items under investigation. Descriptive statistics, Pearson product moment correlation and multiple regression methods were used in view of hypothesis and research objectives. Figures obtained from SPSS-16.0 statistical part were interpreted to come at conclusion and implications.


Hypothesis
H1: Anger incident is positively determined with switching intentions.
H2: Call Rates is negatively determined with switching intentions.
H3: Packages is negatively determined with switching intentions.
H4: Outcome quality is positively determined with switching intentions.

     Correlation Matrix


Correlations


Anger incident
Call rates
Packages
Outcome quality
Anger incident
Pearson Correlation
1
-.113
-.159
.030
Sig. (2-tailed)

.551
.403
.874
N
30
30
30
30
Call rates
Pearson Correlation
-.113
1
.281
.244
Sig. (2-tailed)
.551

.132
.194
N
30
30
30
30
Packages
Pearson Correlation
-.159
.281
1
.079
Sig. (2-tailed)
.403
.132

.679
N
30
30
30
30
Outcome quality
Pearson Correlation
.030
.244
.079
1
Sig. (2-tailed)
.874
.194
.679

N
30
30
30
30


INTERPRETATION:

1.      The relationship between Anger incident and Call rates is -0.113, it means there is weak relation.
2.      The relationship between Anger incident and Packages is -0.159, it means there is weak relation.
3.      The relationship between Anger incident and Outcome quality is 0.030, it means there is a weak relation.

Correlation analysis determines that if we increase Call Rates by one unit then increase by Anger Incident. Results of correlation analysis show that packages and call rates are negatively correlated with Anger Incidents, where outcome quality is positively correlated. Correlation value of call rates is calculated as -0.113 is negatively correlated. Correlation value of package is calculated as -0.159 is also negatively correlated. Where correlation value of outcome quality is calculated as 0.030 is positively correlated.



        Multiple Regression Matrix


Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
1
.184a
.034
-.077
.81476
a. Predictors: (Constant), Outcome quality, Packages, Call rates

ANOVAB
Model
Sum of Squares
df
Mean Square
F
Sig.
1
Regression
.607
3
.202
.305
.822a
Residual
17.260
26
.664


Total
17.867
29



a. Predictors: (Constant), Outcome quality, Packages, Call rates

b. Dependent Variable: Anger incident





Co-efficientsa
Model
Un-standardized Coefficients
Standardized Coefficients
t
Sig.
B
Std. Error
Beta

(Constant)
3.226
.527

6.117
.000
Call rates
-.085
.196
-.090
-.434
.668
Packages
-.125
.182
-.138
-.688
.497
Outcome quality
.064
.202
.063
.317
.754


INTERPRETATION:

General Equation:  Y= Bo+B1(Call Rates)+B2(Packages)+B3 (Outcome quality)+e

                                  =3.226 – 0.085(call rates) – 0.125(packages) + 0.064(outcome quality)+e

Regression analysis was applied to know the interdependence of three variables. Results show that total 27 % of the variation in switching intentions is explained by the three predicting variables of this study. The values of coefficient are calculated as -0.113, -0.159 and 0.030 for call rates, packages and outcome quality respectively.
Significance P value is 0.000<0.05 which reject the Ho.


T-Test
                          If Calculated Value is greater than Tabled Value the when we reject Ho.

H2: Call Rates is negatively determined with switching intentions.


Ho= B1=0 
H1=B1≠0
                      Call Rates value is -0.434 > 2.048 so we will reject Ho.

H3: Packages is negatively determined with switching intentions.

Ho=B2=0
H1=B2≠0    
                      Package value is -0.688 > 2.048 so we will reject Ho.   

H4: Outcome quality is positively determined with switching intentions.

Ho=B3=0
H1=B3=0         
                      Outcome quality is 0.317 >2.048 so we will reject Ho.


     First section of the questionnaire was helped to explain the demography of respondents with the help of four (4) items. The response of the Networks of Mobilink (13%), Ufone (30%), Telenor (24%), Warid (20%) and Zong (13%). Majority of youngsters were male which is about 54% while 46% were females.  Pakistan is male dominated society therefore this was an encouraging aspect. Most of the respondents had completed education up to bachelor’s level (53%). We also come to know that 28% youngsters were using Ufone and Telenor respectively whereas subscribers of the other networks were lower than this figure. The outcome of survey further showed that 74% of youngsters were students and only 16% were employed.
RESULTS AND DISCUSSION


Demographic Characteristics of Mobile Users:

Description
Response
Percentage


Age
15-25
26-35
36-45
46-above

21%
56%
17%
6%

Gender
Male
Female
68%
32%


Profession
Student
Own Business
Employed
Unemployed
33%
7%
46%
14%



Network
Mobilink
Ufone
Telenor
Warid
Zong
13%
30%
24%
20%
13%


 DISCUSSIONS

The factors which affect the switching intentions include anger incident, call rates, packages and outcome quality. The main focus of this research study was package/call rates which showed relatively strong influence in determining switching intentions. This explanation is consistent with analogous findings that if the call rates are fair then less number of customer switch-over to the other networks.

Correlation analysis highlighted the fact that increasing call rates may increase the customer’s
switching intention. If customers feel that prices they pay for the telecom services are not good value for money then ultimately it establishes the feeling to renew their mobile network. Secondly, the correlation results between packages and switching intention validate the notion that if company is not committed to them as a customer then customers start searching for other mobile service providers.

Outcome quality also affects the customer switching intentions to some extent. It is basically the actual quality of the service provided by the networks. If the outcome quality is below the mark then the switching intention will be high. This shows that outcome quality has inverse relationship with the switching intentions. Results further show that anger incident has smaller impact on switching behavior. If the customer has a bad experience with the representative of network then it may result in future switching intentions of customers.

Regression analysis expressed that call rates, prompt customer services, and packages for customers and anger free services control the switching intentions and customers stay with their existing service providers for long time.

Results elucidate that customers are more concerned about the money they pay for the service.
They want the good quality of service in return. Minor fluctuations in the price of packages may lead to switching towards other cost effective network. So the companies should try to make the call rates fair.


 CONCLUSION AND IMPLICATIONS

This study found that subscriber Anger incident, call rates, packages and outcome quality have significant influence on user switching intentions. The two variables are negatively influence switching intentions and one variable is positively influence switching intentions.

This study validate and confirm the significant role of call rates, prompt customer services, packages for customers and anger free services in order to control switching intentions. Although we can’t ignore the role of outcome quality and anger incident but the core factors identified by the customers remained as fair price and perceptual commitment of mobile service provider with customer. Continuous technological advancements add new features in mobile sets which also tend youngsters to go for new mobile sets. However, this research study was mainly focused on investigating the factors that cause individuals to change their cellular connections particularly among youngsters which constitute the major portion of the population. In Pakistan, various companies have invested in telecom sector in anticipation of long-term growth. They are duly concerned about retaining old customers in addition to look for new. In view of the findings of this study, the organizations can take following factors into account.

1.      It is the prime duty of support staff to address the problems of their subscribers effectively and efficiently. Especially, their attitude play important role in retaining customers.
2.      Call rates should be fair enough to retain existing customers and attract new.
3.      Mobile service providers should be fully committed to their customers by maintaining a frequent and constant.
4.      Critical incidences may provide a set back to the relationship between customer and a company. An utmost effort should be made to avoid such incidences in short-term as well as in long-term.





References:


http://en.wikipedia.org/wiki/Mobile_phone









Questionnaire

A study on factors that cause mobile users to switch their mobile service

Respected Madam/Sir,

As a part of my project I would like to gather some information from you which will help me in an in depth study of my project. I would be obliged if you co-operate with me to fill the questionnaire. Since the questionnaire is being used for academic purpose, the information gathered will be strictly confidential.

(Please put a tick mark in the appropriate choice)

1.
What is your age?

1.
15-25
2.
26-35
2.
36-45
4.
46-above
2.
Gender?

1.
Male
2.
Female




3.
Profession

1.
Student
2.
Employed
3.
Unemployed
4.
Own Business
4.
Which cellular service do you use?

1.
Mobilink
2.
Ufone
3.
Warid
4.
Telenor

5.
Zong






5.
In your opinion anger incident is one of the cause of mobile user switching?
(Rate your choice)

1.
High
2.
Medium
3.
Average
4.
Low
6.
Rate your satisfaction level related to call rates of your mobile service?

1.
High
2.
Medium
3.
Average
4.
Low
7.
Rate your satisfaction level related to packages of your mobile service?

1.
High
2.
Medium
3.
Average
4.
Low
8.
Rate your satisfaction level related to quality of your mobile service?

1.
High
2.
Medium
3.
Average
4.
Low

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