Designing a Customer Retention Framework for Telecommunication Sector
Abstract
Abstract: Telecommunication sector has grown over last decade while transforming behavioral intentions. New entrants are exploring these behavioral intentions to attract more customers. The aim of this study is to investigate the mediating effect of customer satisfaction in telecom industry on service quality, brand image and customer retention relationship. Furthermore, it identifies the key determinants of customer retention related to telecom service providers. A fully structured questionnaire survey was conducted to collect data from 310 mobile users. Non-probability sampling technique was adopted for data collection. Regression analysis and Sobel test technique were practiced to analyze the data. The result showed that customer satisfaction mediates the relationship between service quality, brand image and customer retention. Moreover, this study found that service quality, brand image and customer satisfaction are the strongest predictors of customer retention in telecom industry of Pakistan. Therefore, to gain customer loyalty, organizations should focus current-users and target-users by providing sterling service qualityDownloads
References
Aaker, D. A. (1991). Managing Brand Equity. The Free Press. New York. NY.
Ahmad, J., Hussain, M. & Rajput, A. (2015). Customer loyalty framework of telecommunication service market. International Journal of Managing Value and Supply Chains, 6(1), 83. DOI: https://doi.org/10.5121/ijmvsc.2015.6106
Ahmad, Z., Ahmed, I., Nawaz, M. M., Usman, A., Shaukat, M. Z. & Ahmad, N. (2010). Impact of Service Quality of Short Messaging Service on Customers Retention; an Empirical Study of Cellular Companies of Pakistan. International Journal of Business and Management, 5(6), 154-160. DOI: https://doi.org/10.5539/ijbm.v5n6p154
Ahmed, M. M., Nawaz, A., Usrnan, M., Shaukat, Z., Ahmed, N. & Rehman, W. (2010). A Mediation of Customer Satisfaction Relationship between Service Quality and Repurchase Intentions for the Telecom Sector in Pakistan: A Case Study of University Students. African Journal of Business Management, 4(16), 3457-3462.
Ali, J. F., Ali, I., Rehman, K., Yilmaz, A. K., Safwan, N. & Afzal, H. (2010). Determinants of Consumer Retention in Cellular Industry of Pakistan. African Journal of Business Management, 4(12), 2402-2408.
Ali, J. F., Ali, I., Waseemullah, A. I. & Akram, M. (2009). Determinants of Customer Retention In Cellular Industry In Pakistan. Proceeding 2nd CBRC.
Ba, S. & Johansson, W. C. (2008). An exploratory study of the impact of eâ€service process on online customer satisfaction. Production and Operations Management, 17(1), 107-119. DOI: https://doi.org/10.3401/poms.1070.0006
Bahia, K. & Nantel, J. (2000). A reliable and valid measurement scale for the perceived service quality of banks. International journal of bank marketing, 18(2), 84-91. DOI: https://doi.org/10.1108/02652320010322994
Baron, R. M. & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of personality and social psychology, 51(6), 1173. DOI: https://doi.org/10.1037/0022-3514.51.6.1173
Information Management and Business Review (ISSN 2220-3796)
Vol. 8, No. 5, pp. 48-60, October 2016
Bergstrom, A. J. & Bresnahan, J. M. (1996). How Banks Can Harness the Power of Branding. US Banker, 106(3), 81-82.
Boohene, R. & Agyapong, G. K. (2011). Analysis of the antecedents of customer loyalty of telecommunication industry in Ghana: The case of Vodafone (Ghana). International Business Research, 4(1), 229.
Brown, S. A. & Gulycz, M. (2001). Customer relationship management: Astrategic imperative in the world of e-business: New York: Wiley.
Brown, S. P. & Chin, W. W. (2004). Satisfying and retaining customers through independent service representatives. Decision Sciences, 35(3), 527-550. DOI: https://doi.org/10.1111/j.0011-7315.2004.02534.x
Caroline, M. & Elizabeth, M. (2014). Determinants of Customer Retention in Commercial Banks in Tanzania. Journal of Finance and Bank Management, 2(1), 09-30.
Caruana, A. (2002). Service loyalty: The effects of service quality and the mediating role of customer satisfaction. European journal of marketing, 36(7/8), 811-828. DOI: https://doi.org/10.1108/03090560210430818
Casadesus, M. (2014) .Assessing the effects of online service quality on loyalty and the mediation role of customer satisfaction and perceived value. Center for Quality 17(3), 276-340.
Cavana, R. Y., Corbett, L. M. & Lo, Y. L. (2007). Developing zones of tolerance for managing passenger rail service quality. International Journal of Quality & Reliability Management, 24(1), 7-31. DOI: https://doi.org/10.1108/02656710710720303
Chakraborty, S. & Sengupta, K. (2014). Structural equation modeling of determinants of customer satisfaction of mobile network providers: Case of Kolkata, India. IIMB Management Review, 26(4), 234-248. DOI: https://doi.org/10.1016/j.iimb.2014.10.001
Chao, R. F. (2015). The Influence of Service Quality, Brand Image, and Customer Satisfaction on Customer Loyalty for Private Karaoke Roomsin Taiwan. source: The Journal of Global Business Management, 11, 59-67.
Chiang, C. F. & Jang, S. S. C. (2007). The effects of perceived price and brand image on value and purchase intention: Leisure travelers’ attitudes toward online hotel booking. Journal of Hospitality Marketing and Management, 15(3), 49-69. DOI: https://doi.org/10.1300/J150v15n03_04
Christopher, M. (1996). From brand values to customer value. Journal of Marketing Practice: applied marketing science, 2(1), 55-66. DOI: https://doi.org/10.1108/EUM0000000000007
Comrey, A. L. & Lee, H. B. (1992). Interpretation and application of factor analytic results. Comrey AL, Lee HB. A first course in factor analysis, 2.
Cronin-Jr, J. J. & Taylor, S. A. (1992). Measuring service quality: a reexamination and extension. The journal of marketing, 2, 55-68. DOI: https://doi.org/10.1177/002224299205600304
Cronin-Jr., J. J., Brady, M. K. & Hult, G. T. M. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of Retailing, 76(2), 193-218. DOI: https://doi.org/10.1016/S0022-4359(00)00028-2
Davies, G., Chun, R., daSilva, R. & Roper, S. (2003). Corporate Reputation and Competitiveness. London: Routledge, 2(1), 55-66. Ene, S. & Özkaya, B. (2014). A study on corporate image, customer satisfaction and brand loyalty in the context of retail stores. Asian Social Science, 10(14), 52.
Eppie, Y. S. (2007). Factors Affecting Customer Retention In Internet Banking among Hong Kong Professionals and Business Practitioners. University of Newcastle, 17(3), 317-340.
Etzel, M. J., Walker, B. J. & Stanton, W. J. (2001). Marketing management (12th ed.). McGraw-Hill.
Fornell, C. (1992). A National Customer Satisfaction Barometer: The Swedish Experience. Journal of Marketing, 56(1), 6–21. DOI: https://doi.org/10.1177/002224299205600103
Fullerton, G. (2014). The moderating effect of normative commitment on the service quality-customer retention relationship. European Journal of Marketing, 48(3/4), 657-673. DOI: https://doi.org/10.1108/EJM-06-2011-0333
Gerpott, T. J., Rams, W. & Schindler, A. (2001). Customer Retention, Loyalty, and Satisfaction in the German Mobile Cellular Telecommunications Market. Telecom Policy, 25(4), 249-269. DOI: https://doi.org/10.1016/S0308-5961(00)00097-5
Ha, H. Y. (2004). Factors influencing consumer perceptions of brand trust online. Journal of Product & Brand Management, 13(5), 329-342. DOI: https://doi.org/10.1108/10610420410554412
Hafeez, S. & Hasnu, S. A. F. (2010). Customer satisfaction for cellular phones in Pakistan: A case study of Mobilink. Business and economics research journal, 1(3), 35.
Hanzaee, K. H. & Farsani, T. (2011). The Effects of Brand Image and Perceived Public Relation on Customer Loyalty. World Appl. Sci. J., 13 (2), 277-286. Henkel, D., Houchaime, N., Locatelli, N., Singh, S., Zeithaml, V. A. & Bittner, M. J. (2006). The impact of emerging WLANs on incumbent cellular service providers in the USMJ Services marketing.
Information Management and Business Review (ISSN 2220-3796)
Vol. 8, No. 5, pp. 48-60, October 2016
Holland, J. & Menzel Baker, S. (2001). Customer participation in creating site brand loyalty. Journal of Interactive Marketing, 15(4), 34-45. DOI: https://doi.org/10.1002/dir.1021
Khokhar, S. Z., Hussain, F., Qureshi, T. M., Anjurn, I., Samran, A. & Arshad, R. (2011). Only Customer Satisfaction and Customer Loyalty is Not Enough: A Study of Pakistan's Telecom Sector. African Journal of Business Management, 5(24), I 0 J 76-10181.
Kim, M. K., Park, M. C. & Jeong, D. H. (2004). The effects of customer satisfaction and switching barrier on customer loyalty in Korean mobile telecommunication services. Telecommunications policy, 28(2), 145-159. DOI: https://doi.org/10.1016/j.telpol.2003.12.003
Kouser, R., Qureshi, S., Shahzad, F. A. & Hasan, H. (2012). Factors influencing the customer’s satisfaction and switching behavior in cellular services of Pakistan. Interdisciplinary Journal of Research in Business, 2(1), 15-25.
Lai, T. L. (2004). Service Quality and Perceived Value’s Impact on Satisfaction Intention and Usage of Short Message Service (SMS). International systems Frontiers, 6(4), 353-368. DOI: https://doi.org/10.1023/B:ISFI.0000046377.32617.3d
Lee, G. G. & Lin, H. F. (2005). Customer perceptions of e-service quality in online shopping. International Journal of Retail & Distribution Management, 33(2), 161-176. DOI: https://doi.org/10.1108/09590550510581485
Lee, H., Lee, Y. & Yoo, D. (2000). The determinants of perceived service quality and its relationship with satisfaction. Journal of services marketing, 14(3), 217-231. DOI: https://doi.org/10.1108/08876040010327220
Lin, J. S. C. & Wu, C. Y. (2011). The role of expected future use in relationship-based service retention. Managing Service Quality: An International Journal, 21(5), 535-551. DOI: https://doi.org/10.1108/09604521111159816
Mansouri, S. H. & Pakia, M. M. (2015). Investigation of the Effect of Brand Image and Service Quality on trust, commitment and Behavioral Intentions. Asian Journal of Research in Marketing, 4(1), 87-99.
Mansouri, S. H. & Pakia, M. M. (2015). Investigation of the Effect of Brand Image and Service Quality on trust, commitment and Behavioral Intentions. Asian Journal of Research in Marketing, 4(1), 87-99.
Mattila, A. S. & O'Neill, J. W. (2003). Relationships between hotel room pricing, occupancy, and guest satisfaction: A longitudinal case of a midscale hotel in the United States. Journal of Hospitality & Tourism Research, 27(3), 328-341. DOI: https://doi.org/10.1177/1096348003252361
Maxham, J. G. & Neterneyer, R. G. (2002). Modeling Customer Perceptions of Complaint Handling Overtime: The Effects of Perceived Justice on Satisfaction and Intent. Journal of' Retailing, 78(4), 239-252. DOI: https://doi.org/10.1016/S0022-4359(02)00100-8
Mollah, S. A. (2015). Factors Affecting Customer Satisfaction and Its Level among the Mobile Customers in United Kingdom (UK). European Journal of Business and Management, 7(7), 122-149.
Muller, D., Judd, C. M. & Yzerbyt, V. Y. (2005). When moderation is mediated and mediation is moderated. Journal of personality and social psychology, 89(6), 852. DOI: https://doi.org/10.1037/0022-3514.89.6.852
Ngie, K. L. M. & George, A. (2014). Conference Proceeding: A New Service-Quality Model to enhance Customer Retention In the Hong Kong Fast-Food Restaurant Industry, 56(1), 6–21.
Ogba, I. E. & Tan, Z. (2009). Exploring the impact of brand image on customer loyalty and commitment in China. Journal of Technology Management in China, 4(2), 132-144. DOI: https://doi.org/10.1108/17468770910964993
Oh, H. (1999). Service quality, customer satisfaction, and customer value: A holistic perspective. International Journal of Hospitality Management, 18(1), 67-82. DOI: https://doi.org/10.1016/S0278-4319(98)00047-4
Orel, F. D. & Kara, A. (2014). Supermarket self-checkout service quality, customer satisfaction, and loyalty: Empirical evidence from an emerging market. Journal of Retailing and Consumer Services, 21(2), 118-129. DOI: https://doi.org/10.1016/j.jretconser.2013.07.002
Othman, H. A. & Amandu, Y. I. A. (2015). Components of Customer Retention Strategy in Mobile Telephone Industry in Malaysia: Structural Equation Modeling (Sem). Global Journal of Management And Business Research, 15(3).
Parasuraman, A., Zeithaml, V. & Berry, L. (1988). SERVQUAL: A Multiple-Item Scale for Measuring Consumer Perceptions of Service Quality. Journal of Retailing, 64(1), 12-40.
Parasuraman, A., Zeithaml, V. A. & Berry, L. L. (1994). Alternative scales for measuring service quality: a comparative assessment based on psychometric and diagnostic criteria. Journal of Retailing, 70(3), 201-230. DOI: https://doi.org/10.1016/0022-4359(94)90033-7
Peighambari, K. (2007). Developing and testing a model for explaining customer retention formation: Case of Iranian mobile telecommunication services.
Peng, L, W. Y. & Qing, K. (2006). Impact of Relationship Marketing Tactics (RMTs) on Switchers and Stayers in a Competitive Service Industry. Journal of Marketing Management, 2, 25-59. DOI: https://doi.org/10.1362/026725706776022263
Information Management and Business Review (ISSN 2220-3796)
Vol. 8, No. 5, pp. 48-60, October 2016 DOI: https://doi.org/10.1007/s12614-016-6233-y
Poku, K., Ansah, M. O. & Lamptey, D. I. (2014). The Impact of Service Quality Delivery on Customer Loyalty in the Telecommunication Industry: A Case Study of Expresso Telecom, Ghana. Journal of Research in Marketing, 3(1), 212-221.
Poku, K., Ansah, M. O. & Lamptey, D. I. (2014). The Impact of Service Quality Delivery on Customer Loyalty in the Telecommunication Industry: A Case Study of Expresso Telecom, Ghana. Journal of Research in Marketing, 3(1), 212-221. DOI: https://doi.org/10.17722/jorm.v3i1.70
PTA. (2014). Cell Phone Industry in Pakistan. Retrieved on 1st March 2015 <http://www.pta.gov.pk/index.php?option=com_content&task=view&id=583&catid=150&Itemid=747>
Reichheld, F. F. (1996). The quest for loyalty: creating value through partnership. Harvard Business Press.
Reimann, M., Lünemann, U. F. & Chase, R. B. (2008). Uncertainty avoidance as a moderator of the relationship between perceived service quality and customer satisfaction. Journal of Service Research, 11(1), 63-73. DOI: https://doi.org/10.1177/1094670508319093
Rust, R. & Zahorik, A. J. (1993). Customer Satisfaction, Customer Retention, and Market Share. Journal of Retailing, 69(2), 193–215 DOI: https://doi.org/10.1016/0022-4359(93)90003-2
Sahoo, A. K., Kar, B. B. & Das, S. (2015). Differentiated Service is the Success Measure: An investigation in Telecom Industry Odisha, India. Mediterranean Journal of Social Sciences, 6(4). DOI: https://doi.org/10.5901/mjss.2015.v6n4p96
Santos, J. (2003). E-service quality: a model of virtual service quality dimensions. Managing Service Quality: An International Journal, 13(3), 233-246. DOI: https://doi.org/10.1108/09604520310476490
Schiffman, L. G. & Kanuk, L. L. (2004). Consumer Behavior (10 ed.). Harlow, England: Prentice Hall Inc.
Sondoh, S. L., Omar, M. W., Wahid, N. A., Ismail, I. & Haru, A. (2007). The Effect of Brand Image on Overall Satisfaction and Loyalty Intention in the Context of Color Cosmetic. Journal Asian Academy of Management, 12(1), 83−107.
Stathopoulou, A. & Balabanis, G. (2016). The effects of loyalty programs on customer satisfaction, trust, and loyalty toward high-and low-end fashion retailers. DOI: https://doi.org/10.1016/j.jbusres.2016.04.177
Storbacka, K., Strandvik, T. & Gronroos, C. (1994). Managing customer relationships for profit: the dynamics of relationship quality. International journal of service industry management, 5(5), 21-38. DOI: https://doi.org/10.1108/09564239410074358
Sum Chau, V. & Kao, Y. Y. (2009). Bridge over troubled water or long and winding road? Gap-5 in airline service quality performance measures. Managing Service Quality: An International Journal, 19(1), 106-134. DOI: https://doi.org/10.1108/09604520910926836
Sun, B., Wilcox, R. & Zhu, T. (2014). Ignoring your best customer? An investigation of customer satisfaction, customer retention and their financial impact. Journal of Relationship Marketing, 1(6), 87-116.
Tsai, S. P. (2014). Love and satisfaction drive persistent stickiness: investigating international tourist hotel brands. International Journal of Tourism Research, 16(6), 565-577. DOI: https://doi.org/10.1002/jtr.1950
Tsoukatos, E. & Rand, G. K. (2006). Path analysis of perceived service quality, satisfaction and loyalty in Greek insurance. Managing Service Quality: An International Journal, 16(5), 501-519. DOI: https://doi.org/10.1108/09604520610686746
Verhoef, P. C. (2003). Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development. Journal of Marketing, 67, 3045. DOI: https://doi.org/10.1509/jmkg.67.4.30.18685
Westbrook, R. A. & Oliver, R. L (1987). Developing Better Measures of Consumer Satisfaction: Some Preliminary Results. In Advances in Consumer Research. Association for Consumer Research, 8(1), 94-99.
Yang, Z., Jun, M. & Peterson, R. T. (2004). Measuring customer perceived online service quality: scale development and managerial implications. International Journal of Operations & Production Management, 24(11), 1149-1174. DOI: https://doi.org/10.1108/01443570410563278
Yeh, C. H. (2014). The Impact of Store Image, Perceived Value, Sales Promotion, and Customer Satisfaction on Repurchase Intention–A Case of C Warehouse Store Customers.
Yoshida, M. & James, J. D. (2010). Customer satisfaction with game and service experiences: Antecedents and consequences. Journal of sport management, 24(3), 338-361. DOI: https://doi.org/10.1123/jsm.24.3.338
Zeitharnl, V. A. (2000). Service Quality, Profitability and the Economic Worth of Customers: What We Know and What We Need to Learn. Journal of the Academy of Marketing Science, 28(1), 67-85. DOI: https://doi.org/10.1177/0092070300281007
Copyright (c) 2016 Information Management and Business Review
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of revised paper in the light of suggestions of the reviewers, the editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
