factors behind brand switching in telecommunication industry

[i]

UNIVERSITY OF ZIMBABWE

Factors behind brand switching in Telecommunication industry: a case of Telecel

Zimbabwe

COMPILED

By

Majaji Nyasha Justice

R096483G

Submitted in partial fulfillment of the requirements of

Bachelor of Business Studies Honours Degree (Marketing)

April 2014

Faculty of Commerce

University of Zimbabwe

Dissertation Supervisor Mr. T Matanhire

[i]

Declaration

I, Majaji Nyasha Justice, do hereby declare that this dissertation is the results of my own hard

working research, except to the extent indicated in the, references and comments included in

the body of Literature and Methodology, and that this dissertation is therefore my original

work and has not been published in any other degree elsewhere

Majaji Nyasha Justice ……………………... …………………………

(Student) (Signature) (Date)

Mr. Matanhire ……………………... …………………………

(Supervisor) (Signature) (Date)

[ii]

Acknowledgements

Success cannot be self-attributed; it is a combination of our effort compounded with the help

of other people in and around us. Due credit is given to the people that have made this

dissertation a complete success. These people have managed to inspire me in many different

ways all through the research study period. The author attributes the success of this

dissertation report to the following people:

God has given me the opportunity to be able to use Telecel Zimbabwe for my research study

and through Him everything has been possible.

The author’s heartfelt gratitude also goes to Telecel staff for their support throughout my

study. They made my work lighter and more interesting. In the same manner, the author

would like to thank his fellow colleagues (fourth year marketing students) for their help in

making this document a success and their companionship at college.

Special credit goes to my wife Eve, son Tadiwanashe and the whole family at large for their

continued support and belief in me both through the past four years and during my research

study.

Lastly, the author would like to thank University of Zimbabwe (UZ) for this opportunity to

carry out a professional research study to gain experience as part of fulfillment of the studies.

It is fruitful as it equips the author with research skills and able to write winning research

papers. I am extending my gratitude to Mr Nhavira for his great work in imparting me with

the skills on how to come up with a research problem, developing research objectives and

best practices in carrying-out marketing research. It would be unfair to close this part without

mentioning Mr. Manene my lecturer in marketing research for his contribution on data

presentation and analysis using statistical software SPSS. With that in mind, I would like to

thank my dissertation supervisor Mr. Matanhire for his wise advises, guidance, and his

assessment on each chapter of this dissertation which has made this research paper a success.

It was pleasant to have you around.

Thank you sir

[iii]

Abstract

Understanding the factors that contributes towards brand switching is important in order to

gather the facts and reasons that are behind brand switching in Telecommunication industry

in Zimbabwe, particularly Telecel Zimbabwe and be able to develop strategies that will

satisfy customers. When customer’s desires, wishes and needs are fulfilled by any brands

then they will be satisfied. In case of GSM operators in Zimbabwe, factors like: trust, brand

loyalty, service quality and price have a great influence on consumer decisions of either

sticking with one mobile brand or switch to another brand. The sample of this study was

taken from Harare and the sample consists of customers and employees of Telecel

Zimbabwe. The total sample used was 100 and the respondents were selected through

convenience sampling technique. The analysis was done using Microsoft excel and SPSS. In

examined factors influencing customers to switch brands, based on the model of this study

the findings concluded that price, service quality, trust and brand loyalty impact on customers

decision to switch brands and there are other factors which contribute towards switching

brands, for instance, bonus airtime, low switching cost, better substitutes and poor network

service.

Keywords: price, trust, service quality brand loyalty and brand switching.

[iv]

LIST OF CONTENTS

Declaration.............................................................................................................. ....................i

Acknowledgement.............................................................................................................. .......ii

Abstract.................................................................................................................................... iii

Table of contents...................................................................................................................... iv

List of tables............................................................................................................................ vii

List of figures.............................................................................................................. ............. ix

Abbreviations.......................................................................................................................... xii

TABLE OF CONTENTS

CHAPTER ONE

1.1. Introduction.……………….……………………………………...………………….…1

1.1. Background of the study.…………………………………………………………….…1

1.2. Statement of research problem.…………………………………………………………1

1.3. Research objectives….……………………………………………………………….…2

1.3.1. Main objective…………………………………………………………………………..2

1.3.2. Sub objective……………………………………………………………………………2

1.4. Research questions……………………………………………………………………..2

1.5. Significance of the study……………………………………………………………….2

1.5.1. To the researcher…………………………………………………………………..……2

1.5.2. To Telecel Zimbabwe………………………………………………………..………….2

1.6. Chapter summary...……………………………………………………...……………...3

CHAPTER TWO: LITERATURE REVIEW

2.0. Introduction.…………………………………………………………………………...3

2.1. Brand switching….…………………………………………………………………….4

2.2. Brand loyalty…………………………………………………………………………..5

2.2.1. Importance of brand loyalty…..……………………………………………………….6

2.3. Price……………………………………………………………………………………6

2.4. Service quality…………………………………………………………………………9

2.5. Trust…..………………………………………………………………………………11

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2.6. Chapter summary....…………………………………………………………………...12

CHAPTER THREE: METHODOLOGY

3.0. Introduction...................................................................................................................13

3.1. Research design...................................................................................................... ........13

3.2. Data collection methods.................................................................................................14

3.3. Survey (quantitative)......................................................................................................14

3.4. Target population................................................................................................... .......15

3.5. Sampling........................................................................................................................15

3.5.1. Sample size........................................................................................................... ..........15

3.6. Research instruments....................................................................................................15

3.6.1. Questionnaire.................................................................................................................15

3.6.2. Questionnaire structure...................................................................................................16

3.6.3 Pre-test............................................................................................................................16

3.7 Data analysis.................................................................................................................17

3.8. Reliability and validity...................................................................................................17

3.9. Ethical consideration......................................................................................................17

3.10. Limitations.....................................................................................................................18

3.11. Chapter summary...........................................................................................................18

CHAPTER FOUR: PRESENTATION OF RESULTS AND ANALYSIS OF FINDINGS

4.0. Introduction....................................................................................................................19

4.1. Response rate..................................................................................................................19

4.2. Reliability test................................................................................................................19

4.2.1. Reliability statistics........................................................................................................19

4.3. Demographics.................................................................................................................20

4.3.1. Gender............................................................................................................................20

4.3.2. Age distribution..............................................................................................................20

4.3.3. Occupation distribution..................................................................................................21

4.3.4. Sample distributrion by income.....................................................................................21

4.3.5. Sample distribution by education..................................................................................22

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4.3.6. Sample distribution by location......................................................................................22

4.3.7. Relationship with Telecel...............................................................................................23

4.3.8. Mobile network connection............................................................................................23

4.3.9. Years on mobile network(s)...........................................................................................24

4.4. Brand switching factors..................................................................................................24

4.4.1. Price................................................................................................................................25

4.4.2. Trust.............................................................................................................................. .28

4.4.3. Service quality................................................................................................................30

4.4.4. Customer brand loyalty..................................................................................................32

4.4.5. Considering switching....................................................................................................34

4.4.6. Reason for switching.................................................................................................. ....35

4.5. Analysis of findings.......................................................................................................35

4.5.1. Years on mobile network(s)...........................................................................................35

4.5.2. Network(s) connection...................................................................................................36

4.6. Analysis of brand switching factors..............................................................................37

4.6.1. Price survey analysis......................................................................................................37

4.6.2. Trust survey analysis......................................................................................................38

4.6.3. Service quality survey analysis......................................................................................39

4.6.4. Customer brand loyalty survey analysis.........................................................................40

4.6.5. Chapter summary...........................................................................................................40

CHAPTER FIVE: RECOMMENDATIONS AND CONCLUSION

5.0. Introduction….………………………………………………………………………..41

5.1. Conclusion..…………………………………………………………………………...41

5.1.1. Objective one…………………………………………………………………………..41

5.1.2. Objective two.…………………………………………………………………………43

5.1.3. Objective three………………………………………………………………………...43

5.1.4. Objective four.……………………………………………………………………........44

5.2. Recommendations……………………………………………………………………..44

5.3. Areas for further research..……………………………………………….....................45

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Appendix one: References......................................................................................................46

Appendix two: Questionnaire...................................................................................................48

LIST OF TABLES

Table 1 Summary of dissertation structure.................................................................................3

Table 4.1: Reliability Testing...................................................................................................20

Table 4.2: Frequency of distribution by gender.......................................................................21

Table 4.3: Frequency of distribution by age.............................................................................21

Table 4.4: Frequency of distribution by occupation.................................................................22

Table 4.5: Frequency of distribution by income range............................................................22

Table 4.6: Frequency of distribution by education...................................................................23

Table 4.7: Frequency of distribution by location.................................................................... .23

Table 4.8: Relationship with Telecel .......................................................................................24

Table 4.9: Mobile network(s) connection................................................................................24

Table 4.10: Years on mobile network......................................................................................25

Table 4.11: Price.....................................................................................................................37

Table 4.12: Trust .....................................................................................................................38

Table 4.13: Service quality ......................................................................................................39

Table 4.14: Customer brand loyalty........................................................................................40

[viii]

LIST OF FIGURES

Figure 3.1: Research model.....................................................................................................14

Figure 4.1: Happy with price....................................................................................................25

Figure 4.2: Price is fair and reasonable....................................................................................25

Figure 4.3: Not read for high price...........................................................................................27

Figure 4.4: High price and brand switching.............................................................................28

Figure 4.5: Telecel reliability.............................................................................................. .....28

Figure 4.6: Billing system........................................................................................................29

Figure 4.7: Service processes................................................................................................ ...30

Figure 4.8: Telecel reputation..................................................................................................30

Figure 4.9: Network coverage.................................................................................................30

Figure 4.10: Quality of service.................................................................................................30

Figure 4.11: Reputation for quality..........................................................................................31

Figure 4.12: Response to customer complaints........................................................................31

Figure 4.13: Satisfaction from service.....................................................................................32

Figure 4.14: Brand switching...................................................................................................32

Figure 4.15: Stick to brand.......................................................................................................33

Figure 4.16: Satisfied with brand.............................................................................................33

Figure 4.17: Loyal to brand.................................................................................................. ....33

Figure 4.18: Brand choice........................................................................................................34

Figure 4.19: Brand recommendation........................................................................................34

Figure 4.20: Switching consideration.......................................................................................34

Figure 4.21: Reason for switching...........................................................................................35

Figure 4.22: Mobile network connection.................................................................................35

Figure 4.23: Years on mobile network.....................................................................................36

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ABBREVIATION

GDP Gross Domestic Product

GSM Group Systems of Mobile Communication

ISP Internet Service Providers

POTRAZ Postal and Telecommunications Regulatory Authority of Zimbabwe

SPSS Statistical Product and Service Solutions

UZ University of Zimbabwe

VAS Value Added Services

ZIMSTATS Zimbabwe Statistics

SERVQAUL Service Quality

[1]

CHAPTER ONE

1.0. Introduction

This paper investigate the influential factors contributing towards brand switching of

subscribers in the Telecommunication industry in Zimbabwe, particularly Telecel Zimbabwe,

and analyses the nature of effects these factors have on GSM (Group Systems of Mobile

Communication) operations in Zimbabwe. The data collected used to discuss how these

factors could be improved in order to improve the existing conditions of the industry today.

1.1. Background of the Study

Telecommunication industry is one of the fast growing industries in Zimbabwe

(techzim.co.zw).The adoption of multicurrency by the government of Zimbabwe in 2009 has

seen this industry growing to become one of the sectors providing large share of Gross

Domestic Product (GDP) (Zimstats, 2013)

Many researchers and economists agreed that countries have seen a boom in the wireless

market over the past few years. In Zimbabwe there are three major GSM operators and many

ISP (Internet Service Providers) competing for market share. This created a fierce

competition which resulted in more choices and better value for money to the consumers as

firms lure subscribers through various promotions. Consumers are a brand’s most important

assets (Laura et al, 2013). It is widely acknowledged that consumers’ retention is among the

most difficult challenges in telecom sector. The sector is experiencing rapid changes and its

products have short life due to continuous improvement and innovation

(www.techzim.co.zw). The switching of customers to competitors is costly; revenues

decrease and cost of acquiring new customers is generally higher than keeping existing

customers. Telecel Zimbabwe has been experiencing churn which is currently standing at

20% for GSM operators in Zimbabwe POTRAZ (2013) and related factors it is vital to

identify what push or pull customers to switch brands.

1.2. Statement of research problem

The study seeks to examine the impact of factors behind brand switching on

Telecommunication industry. An attempt has been made to identify the major factors

influencing the switching behavior of customers, as this has been the case in Telecom

industry in Zimbabwe in recent years. With a wide choice and awareness the customers in

http://www.techzim.co.zw/

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Zimbabwe are continuously demanding higher service quality, fair prices, from a GSM

operator, failure of which result in them switching to other brand. Telecel Zimbabwe has

been trying to respond to declining revenues through massive promotions without examining

major factors contributing to that effect; however the main aim of the study is to determine

the extent to which various factors contribute to customer behavior towards switching of

brands.

1.3. Research Objectives

1.3.1. Main objective

To examine the factors that impact/influence brand switching in Telecommunication

industry

1.3.2. Sub- objectives

To examine the factors that influences the consumers to switch to other Mobile Service

Provider.

To analyze brand switching behaviour from literature review

To examine the factors that prevents brand switching in Telecommunication industry.

To study the customer choice and preferences of GSM in Telecommunication industry

in Zimbabwe

To propose recommendations to the GSM operators for enhancing brand loyalty.

1.4. Research questions

What is meant by brand switching?

What are the factors that influence customers to switch brands?

What are the factors that influence customers to switch mobile service providers in

Zimbabwe

How best can GSM operators in Zimbabwe stop their customers to switch over to

other brands?

1.5.Significance of the study

1.5.1. To the researcher

The study equips the researcher with the necessary skills on how to carry out a

comprehensive research study and coming up with findings and well articulated conclusions.

The study will help broaden the knowledge and prepare him for the industry challenges ahead

1.5.2. To Telecel Zimbabwe

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The study fully examines the different factors which lead to brand switching. This will help

organization in predicting the churn rate; allowing management to develop ways of

improving customer retention strategies; which is a strategic issue for firm’s survival, growth

and profit maximization in this era of dynamic technology and ever increasing competition.

Dissertation Outline Table 1 illustrates the structure of the dissertation

Table 1: summary of dissertation structure

Chapter Area of focus

1 This chapter covered the background of the research, problem statement, research

objectives, limitations of the study and significant of the study.

2 In this chapter literature of other authors was reviewed

3 This chapter articulates research methodology used to carry out this study which

includes; research design, target population, sampling, research model, sample

size, data collection instruments

4 Covered on Data analysis and findings

5 This chapter concludes the research study and suggests on possible

recommendation that Telecel Zimbabwe can employ to reduce churn rate.

Source: constructed by the researcher

1.6.Chapter summary

This chapter covered the introduction to the area of study, background of the study, statement

of the problem, objectives, questions and significant of the study. This chapter is important

for the whole dissertation since the researcher was guided by the objectives in every

preceding chapter, the major focus of the study revolved around the main problem explained

under problem statement.

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CHAPTER TWO

LITERATURE REVIEW

2.0.Introduction

Customers are an important asset of the business. The innovation and the marketing efforts of

telecom companies are directed towards customers. It is widely agreed from body of

literature that a customer can either remain loyal with a particular brand or switch to another

one for various reasons. This chapter will provide insights into factors influencing customers

to switch brands. Factors influencing brand switching have been critically analyzed in the

light of previous researches on brand switching.

2.1.Brand switching

Kumar and Chaarlas (2011) define brand switching as, “the process in which consumer

switches from the usage of one product to another product but of same category.” Brand

switching is shifting from one product to another product of similar nature (Garland 2002).

There are two types of brand switching: temporary and permanent (Garland, 2002). It is not

easy to lure back customers who permanently switch brand, retaining existing customers

through various promotions and strategies is critical for company’s sustainable competitive

advantage (Edvardsson et al, 2004). Telecom industry, possess high rates of brand switching

due to intense competition in the industry (Edvardsson et al, 2004). Customers often switch

towards brands which provide them with value for money. Assel (2004) finds that the reason

why consumers switch brands is not that they are not satisfied, but because they want to try

something new. Afzal et al (2013) explained that there are many factors behind brand loyalty;

such as; price, quality, quantity and availability and it is not always easy to switch brands. To

make consumers think about switching a brand, involves Firm’s rivals applying of almost all

promotional techniques to make consumers believe that they will get extra benefits if they

switch brand; the useful method is to compare the prices and this easily hits consumers with

tight budgets (Afzal, 2013).

[5]

2.2.Brand loyalty

Jugdish and Whan, (1974) defines brand loyalty as, “a positively biased emotive, evaluative

and/or behavioural response tendency towards a branded, labeled or graded alternative or

choice by an individual in his capacity as the user, the choice maker, and/or purchasing

agent”. Jacoby (1971) proposed that brand loyalty, “is the biased (non-random) behavioural

response (purchase) expressed over time by some decision-making unit with respect to one or

more alternatives brands out of a set of brands and is a function of psychological processes.”

Brand loyalty is, “a deeply held commitment to re-buy or repatronize a preferred product or

services consistently in the future, thereby causing repetitive same brand name or brand-set

purchasing, despite situational influences and marketing efforts having potential to cause

switching behaviour” (Oliver, 1999, p34). Branding was construed to be a subset of repeat

purchase behaviour (Brown, 1952 and Cunningham, 1956) and intention to repurchase.

However (Guest, 1955 and Jacoby, 1971) argued that brand loyalty has two components:

brand loyal behaviour and brand loyal attitudes. East et al (2000), refers loyalty as customer

retention, and it signifies a preserving dimension. Keller, (1993) explained that brand loyalty

occurs when favourable beliefs and attitudes for the brand are manifested in repeat buying

behaviour. Dubois and Laurent (1999) are of the view that a consumer is loyal if he/she

decides not only to purchase the brand of choice in one shop, but when the product or service

is out of stock they will also go to another store to get it. Brand loyalty could be identified by

repurchase intention, price tolerance and recommendation to others, (Miller and Grazer,

2003). Giddens and Hofmann, (2002) postulated that brand loyalists have three mindsets:

commitment to the brand, willingness to pay a higher price for the brand over other brands

and recommending the brand to others.

In addition to that (Neal and Strauss, 2008; Dick and Basu, 1994) both agreed to the fact that

brand loyalty has attitudinal and behavioural dimensions. The attitudinal dimension describes

consumer’s overall satisfaction while the behavioural dimension is the tendency of a

consumer to purchase a particular brand repeatedly (Shah et al, 2013). It is widely

acknowledged in the literature; (Neal and Strauss, 2008; Baldinger and Robinson, 1997; and

Jacoby and Chestnut, 1978) that the majority of loyalty measure can be categorized as either

behavioural or attitudinal, which therefore implies that loyalty is a dimensional concept.

The definitions developed by many authors agreed to the fact that brand loyalty is influenced

by two major factors which are behaviour and attitude of customers. However some of the

[6]

early research focused on behaviour overlooking attitude of customers. The GSM operators

that embrace both the customer’s behavioural and attitudinal factors in promoting loyalty

stand a chance of locking in customers, building customer goodwill which in the long run

stands as competitive advantage against other firms. Most of the current marketing efforts by

the telecom firms are aimed at retaining and making customers loyal to their brands.

2.2.1. Importance of Brand Loyalty

Aaker (1991) and Reichheld (1996) suggest that brand loyalty is becoming very important

factor for marketers and consumer researchers. Studies suggest that an organization which is

having so many loyal customers will lead them to greater share and high profit (Jensen and

Hansen, 2006). Dick and Basu (1994) suggest that brand loyal customers will engage in

positive word of mouth for company and even do not accept the marketing strategies of

competitors. When customers purchase a product that they are loyal to, they will not purchase

a different brand of that product (Shulka, 2009). The loyal customer purchases same brand

that they have strong bond with and as long as this bond is not affected by switching factors

(Bolton et al, 2000). Afzal et al (2013) agree that loyal customers are advantageous to the

organisation because they reduce the marketing cost. The loyalty can be capitalized on

through strategies such as brand extension and market penetration (Dekimpe et al 1997).

Lastly brand loyalty has a direct impact on long term sustainability of a brand (Howell, 2004)

From the above it is evidenced that loyal customers act as the ambassadors of the telecom

firms, in the sense that customers through word of mouth communicate positive messages

about firm’s brands. There is certainty of return on investment and profits due to repeat

purchase and inelasticity of customers. Firm can easily fight competition and

expand/diversify when there is high customer retention. Long term planning and strategies

formulation and implementation are made easier when customers stick with a single brand for

a foreseeable future.

2.3.Price

Kotler and Armstrong (2010) price is, “the amount of money charged for a product or

service, or the sum of the values that customers exchange for the benefits of having or using

the product or service.” Shukla (2009) suggest that price is a switching mechanism between

brands. The customer can switch to any other firm who offer fair prices; this reveals that the

consumers can be held onto a brand for a long time through fair prices so: the customer

[7]

satisfaction is created by charging fair price (Malik et al, 2012). When firms offers brand at

fair and reasonable price, customer will be satisfied and loyal to that particular brand (Afzal

et al, 2013). Martin-Consuegra et al (2007) identified that customer decision to accept certain

price has a direct bearing at satisfaction level and indirectly on loyalty. Herrmann et al

(2007) concluded that customer satisfaction is directly influenced by price perceptions while

indirectly by the perception of price fairness. This indicates that price has a psychological

effect to customer, perceived price impact customer satisfaction; a satisfied customer remains

loyal to brand (lovelock, 2007). Kotler and Armstrong (2010) pointed out that price is one of

the important factors which play a critical role in brand switching.

Martin et al (2007) if service providers charge reasonable price and give the better services

then it will create customer satisfaction and less consumers will switch to another brand,

because price fairness is an extremely significant concern that leads toward satisfaction.

Imran et al (2010) noted that the reason of customer switching to any other brand is the price

reasonability from where they get it. The unreliable and unreasonable pricing policies effect

the customer satisfaction negatively (ibid). Cheng et al (2008), two ways to calculate price

perception are: Price reasonableness, which entails how the customers perceive the price

while relating to the competitors; and the good value for money that involves the comparative

position of the brand according to price. Chitty et al (2007) suggest that the services which

are of high quality are perceived to be costly than those which are of low quality. Many

customers use price as a measure of quality of the brand, especially in telecom industry where

differences between services are insignificance (Kotler, 2010; Nilson, 1998). Price serves as

the strongest loyalty brand driver (Ryan et al, 1999). Loyal customers play important role in

building businesses by buying more, paying premium prices and most importantly providing

companies with different sets of new customers through positive word of mouths (Aydin and

Ozer, 2004).

Peng and Wang (2006) identified that customer wants satisfying quality products with

reasonable and affordable prices, and if any firm provides this to them it will build long term

good relations with the customer. Price has a positive impact on brand switching. If a firm

charges high price more consumers will switch to another cheap brand (Herrmann et al,

2007). Lommeruda and Sorgard (2003) telecommunication services are like undifferentiated

products therefore, customer are not price sensitive all the time and sometimes brand loyalty

takes part in brand preferences. This is the reason why some customers remain loyal to the

old monopolists, retaining customers does not necessarily mean customers are satisfied or a

[8]

fair price is being charged. In most cases the customers may choose to remain loyal to a

certain brand by considering other factors other than price. Kim and Kramer (2006) were of

the view that price plays an important role in consumer perceptions, perceived price influence

customers choice on existing brands. Ali-shah et al (2013) identified that intense price

competition reduces customer loyalty and propelling customer retention to decrease. In the

real world customers have different needs and wants, the way they value brands differs hence

price as factor, influence to what extent they want to pay for the brand. So, for the same

brand the price perceptions are different between customers, those who perceived high prices

may affect their purchasing decisions. Customers may switch brands because of price,

(Storbacka and Nenonen, 2009; Clarke, 2001). Price may serve as a reference point for

judging quality when other product information is not available (Zeithaml, 1988).

However the price wars between firms reduce customer loyalty, customers switch from one

firm to another taking advantage of planned discounting of prices. Then the question is how

can price be used to achieve customer brand loyalty by a firm like Telecel Zimbabwe? Bolton

and Drew (1991) found out that loyalty of individual customers is affected by price

consideration. Their finding concurred with the findings of (Afzal et al, 2013; Varki and

Colgate, 2001) who find out that price positively affect overall customer satisfaction.

The above mentioned views of different authors, lead to the conclusion that price is crucial to

the success of the firms in telecom industry. When a brand’s price is fair, reasonable, and

justified customers will have no reason of switching brands. The fairness of price leads to

customer satisfaction and a satisfied customer’s switching tendencies are minimized. There

are price wars in the telecom industry, to attract bulk of customers; firms’ uses sales

promotion whereby prices are reduced to attract a large customer base. Faced with

competitive and attractive prices in a market where services and products have insignificance

difference customers’ uses prices for differentiating and purchasing decisions they are prone

to switch brands. The price elasticity of demand is a critical factor to consider when

investigating among other things as a key brand switching factor. There is need for grouping

customers in terms of how they perceive prices versus quality, in doing so will help the firms

in charging right price, at the right time and for the right customer henceforth brand switching

tendencies will be kept to a minimum.

The literature also reviewed that offering a high service quality is not sufficient enough to

attract and retain customers in the telecom industry; but high service quality offered at an

[9]

attractive and fair price is equally enough for a firm to achieve sustainable competitive

advantage. Currently price is being used by all firms in the telecom industry in Zimbabwe, as

a marketing tool to lure new subscribers and retaining existing ones. It is very difficult to

perceive any significant differences between service qualities of most if not all GSM firms;

therefore price is being used as a differentiating and competitive tool.

2.4.Service quality

Service quality is a measure of how well the service level delivered matches customer

expectations (Lewis and Booms, 1983). Delivering quality service means conforming to

customer expectations on a consistent basis, ibid. Service quality is defined as an approach to

services received by customers as compared to expectations regarding it (Parasuraman et al,

1988). Macaky and Crompton (1990) define service quality as, “the relationship between

what customer’s desires from a service and what they perceive that they receive.” Service

quality has been found to have a profound input on customer satisfaction and loyalty, and it is

the result of the comparison that customers make between their expectations about a service

and their perception after service consumption (Chumpitaz et al, 2004; Guatam and

Chandhok, 2011).

There is wide consensus in the definitions above that; service quality is based on what

customer perceived and their expectation. The customers usually experience a service first

before they can evaluate the benefits, the higher the actual experience of a service over and

above customers’ expectation the higher the service quality which will translate to

satisfaction and loyalty. Ganesh et al, (2000) reported that if a business performs a service

that exceeds customer expectations, the customer will be satisfied and likely to repeat

purchasing the brand. This implies that poor service delivery is major driver of brand

switching tendencies among consumers.

Chou and Chang (2006) found out that perceived expectations, perceived quality, perceived

value, perceived usefulness, and perceived ease of use were critical factors for customer

satisfaction with mobile services. Nimako et al (2010) identified that service quality is the

main cause of dissatisfaction among mobile subscribers. The preceding findings concurred

with the long-held assertion by SERVQUAL gurus, Parasuraman, Zeithaml, and Berry, who

concluded that if a service is provided within an acceptable quality range, a customer is likely

to be satisfied with the service and the service provider, (Parasuraman et al, 1985).

[10]

Zeithaml et al (2008) developed a conceptual model that correlates service quality, customer

satisfaction and customer loyalty. The model shows that service quality results from

reliability, assurance, responsiveness, empathy and tangibles. The model was based on the

broad determinants of service quality put forward by (Parasuraman et al, 1985). Jahanzeb and

Tasneem (2011) discussed the same five determinants under the following broad headings:

“communication guarantee, settlement service; value added service (VAS) and technology

innovation. They emphasized that communication guarantee results when the quality of

network of the firm is satisfactory and there are negligible rates of call failure. The settlement

refers to the prompt and accurate billing service that enhances customer satisfaction.

Customer satisfaction level can also be influenced by VAS, for example, teletunes, music on

demand, news updates. Technology innovation refers to the features where the service

provider rolls out new technology continuously.

The process of attracting and retaining customers has connection with forming strong

customer bonds and defined customer retention as the intent to develop stronger bonds with

the customer (Harris, 2003). Kotler et al (2006) customer retention is increasingly being seen

as an important managerial issue, especially in the context of a saturated market or lower

growth of the number of new customers. From the industrial perspective, there is growing

evidence that customer perception of service quality affects their behavioural intentions

(Johnson and Sirikit, 2002). Bolton et al (2000) suggest that service excellence enhances

customers’ intentions to buy again, to buy more, to buy other services, to become less price

sensitive, and to spread positive word of mouth to others about their positive experiences.

Service quality positively influences customer’s repurchase intentions and inclination to

recommend the brand to others (Boulding et al, 1993). Zeithaml and Bitner (2000), “the idea

of service quality influences different intentions, such as giving recommendations, doing

more business, and willingness to pay more.” Jun and Bin (2005) suggested that high quality

service is a source of creating customer loyalty. In telecom industry service quality is

identified by communication guarantee; value added services, line clarity, customer service

excellence, network coverage and technology innovations (Jun and Bin, 2005).

The above literature leads to a conclusion that, whenever the services of a firm are highly

regarded by customers, their switching tendencies will go down. The firms should rebrand its

services so that customer’s expectations are met. When these expectations are satisfied then

loyalty of customers will eventually increase. There is also a wide consensus in the literature,

that service quality affects customer’s behaviour, when service meets or exceeds customer’s

[11]

pre-service encounter expectations customers will become psychologically attached to the

brand, thus emotional attachment and social ties that bind them to a brand. Prior researches

suggest that customer decisions are influenced by the service quality, for instance,

willingness to make a repeat purchase. The provision of high quality service to customers,

results in customer satisfaction which leads to customer retention hence churn rate reduced.

2.5.Trust

Morgan and Hunt (2004) define trust as the willingness of customers to rely on an exchange

partner in whom one has confidence or confidence in an exchange partner’s reliability and

integrity. Chaudhuri and Holbrook, (2002) define brand trust as the customer’s willingness to

rely on the ability of the brand to perform its stated function. Ozer and Aydin (2005)

indicated that when a customer has trust in a brand it means customer has positive buying

behaviour towards the brand. Trust builds confidence in consumers’ mind and assure future

positive outcome from service provider (Morgan and Hunt, 1994; Sirdesmukh et al, 2002).

Berry (2007) pointed out that trust causes dedication because it reduces the costs of

negotiating agreements and lessens customers’ fear of opportunistic behaviour by the services

provider.

Trust is formed on the basis of calculation regarding benefits and cost associated with an

ongoing relationship and the expectation that such behaviour will be consistent in the future

(Aydin and Ozer, 2005; Doney and Cannon, 1997). It is about having confidence in the

competence of mobile operator to consistently produce positive outcome (reliability) and

refraining from activities that may cause damage (benevolence) to the customer (Garbarino

and Johnson, 1999; Morgan and Hunt, 1994). In social psychology trust consists of two

elements: trust in the partner’s honesty, and trust in the partner’s benevolence, honesty is the

belief that a partner stands by his word while benevolence is the belief that the partner is

interested in the customer’s welfare, and will not take actions which negatively impact on the

customer (Wetzels et al, 1998). Trust is build when a firm promise and successfully provide

the quality service to customers (Nawaz and Usman, 2011). Trust is assumed to have a direct

effect on consumer switching resistant behaviour when a brand is intangible, complex and

technical (N’Goala, 2007; Harris and Goode, 2004; Singh and Sirdesmukh, 2000; Garbarino

and Johnson, 1999)

Faced with uncertainty, customers will only respond if they believe that the service provider

is capable and willing to solve problems in their favour (Morgan and Hunt, 1994; Ganesan,

[12]

1994) and if required will ask for compensation and will not quickly consider switching

action (N’Goala, 2007). Prior studies confirmed direct relationship between trust and

switching resistant behaviour, (N’Goala, 2007; Aydin and Ozer, 2005). Trust is positively

related to switching resistance.

Literature review discussed about trust suggests that customers are less likely to switch

brands on which they have trust. If service providers assure their customers about the

fulfillment of their expectations, brand switching can be minimized. When customers believe

that, while service providers seek to maximize profits, they also have genuine concern for

customer’s needs, customer intimacy with brand increases. When customers are confident

that service provider is capable of keeping promises, commitment to brand will rise. On the

other hand if service providers fail to establish trust between customer and themselves,

customers are more likely to switch over to competitors’ brands.

2.6. Chapter summary

This chapter covered the literature on brand switching factors, for instance, brand loyalty,

service quality, price and trust. An evaluation of these factors was done and also prior

researchers work was acknowledged and their input was reviewed so as to provide a clear

insight into possible solutions to existing problem.

[13]

CHAPTER THREE

RESEARCH METHODOLODY

3.0. Introduction

Research methodology is very important for the whole result because it greatly impacts the

results of the research. This chapter presents detailed methodology which can be defined as a

body of methods, rules,and postulates employed by discipline (Berg,2009). Research

methodology is about, the collection, the comparative study, and the critique of individual

methods that are used in a given discipline or field of inquiry (Patton, 2002). This chapter

covered on research design used for this research, target population, sampling techniques,

sample size, data collection instrument and concludes with discussion on data collections

procedures, data analysis, reliabilty and validity issues with data collection and the statistical

techniques used to analyze the data.

3.1.Research design

A research design can be defined as a detailed blueprint used to guide a research study

towards its objectives (Aaker et al, 2003). Leary (2004) research design is a set of advanced

decision that makes up the master plan specifying the methods and procedures for collecting

and analysing the needed information. Research design is used to structure the research, show

how all of the major parts of the research project; the samples or groups, measures,

treatments or programs, and methods of assignment; work together to try and address the

central research questions (Robson, 1993).

For this study, a descriptive quantitative method has been chosen. Quantitative research

method involves the use of structured questions which are designed to obtain response to

some particular apsects of the respondent’s behaviour, attitudes and demographic

characteristics, which can be presented with accurate and quantifiable estimations (Ghauri

and Cateora, 2010). Quantitative research designs provide data that is objective, systematic,

valid and reliable. Descriptive research is useful, as it is easy to use when collecting a large

sample size; and the results can be easily compared as well.Conceptual framework was

developed based on theories discussed above. The following conceptual model for this

research presents the main issues and items that can lead to brand switching.

[14]

Figure 3.1: research (OWN) model

3.2.Data collection methods

In this survey, the primary data is obtained through administering structured questionnaires.

The secondary data collected through various literature reviews and articles. In examining the

factors influencing brand switching two types of data has been used, that is primary and

secondary data. Primary data is the first hand data which does not exist in earlier records.

The data is original and has not been altered or manipulated by any other researcher so its

validity and reliability is high (Saunders et al, 2009). The chances of biasness in this data are

limited because the data collection is done by the researcher for the first time, guided by the

objectives of the study and does not exchange many hands. However this requires skills,

commitment, dedication, effort and cost for collection. The other data is secondary data

which is the data that has already been published various authors. Saunders et al (2009)

pointed out that secondary data involves chances of biasness since some of statistical

operations have been performed. Literature review of this study is based on secondary data.

3.3.Survey (quantitative)

Survey research is the process of data collection by asking questions and recording responses.

Saunders and Thornhill (2004) suggested two main reasons for using survey: to estimate the

characteristics of a population survey strategy allows the use of quantitative data which can

be analyzed using inferential; the research questions and objectives are concerned with what

people do, an obvious way is to watch them do it. A survey method is cost effective when

target population is large, it covers wide area and ensures consistency and uniformity of data

Brand Loyalty

Price

Brand switching

Service Quality

Trust

[15]

collected which makes analysis and interpretation of data easier. Surveys are used to ascertain

characteristics of a large population in short time duration. A single survey can collect data

from a large population with limited resources and time. Surveys are flexible tools of

primary data collection and require less time and money (Russ and Preskill, 2001)

3.4.Target population

Sekaran (2001) defines a population as the entire group of people, events or things of interest

that the researcher wishes to investigate. The researcher randomly targeted employees and

customers of Telecel Zimbabwe who resides in Harare.

3.5.Sampling

Leary (2004) defines sampling as the process by which a researcher selects a sample of

participants for a study from the population of interest. The researcher uses convenient

sampling methods due to time limitations and cost involved with other sampling techniques

contribute to that effect.

3.5.1. Sample size

Sample size is the number of units’ representative enough for the researcher to drive

statistical decisions from it (Boston and Cravens, 1994). Aaker et al (2004) suggest that,

“sample should be large enough, so that when it is divided into groups, each group will have

a minimum sample size of 100 or more. Budgetary constraints dictate the size of the sample.

A sample size of 100 respondents is large enough considering researcher’s budgetary

constraints.

3.6.Research instruments

3.6.1. Questionnaire

A questionnaire is the instrument used in this study to collect data. Malhotra and Birks (2003)

noted that questionnaire survey approach is the most common method of primary data

collection with advantages likes simple administration and data consistency. Questionnaire

survey technique has high flexibility of data collection, high degree of diversity of questions

due to interaction and high response rate, moderate sample control, moderate quality of data,

high great potential for probing (Malhotra and Birks, 2003). The questionnaire was devised

based on two parts that consisted of questions pertaining to respondents’ demographics and

factors which lead to brand switching of customers. The respondents have been asked the

[16]

reasons which cause them to switch brands and the relative importance of those factors in

their belief. The following are the reasons why the researchers uses questionnaire as the

instrument of collecting primary data.

It permits respondents time to consider their responses carefully without interference

from the researcher.

It is cost effective since it is possible to distribute questionnaires to a large population

sample simultaneously

Uniformity: each respondent receives the identical set of questions. With closed ended

questions, responses are standardized, which can assist in interpreting from large

numbers of respondents

Questionnaires can address a large number of issues and questions of concern in a

relatively efficient way, with the possibility of a high response rate.

3.6.2. Questionnaire structure

The questionnaire employs the typical closed ended questions that require the respondents to

select from a predetermined set of answers to every question. The questionnaire employs the

likert scale non-comparative scaling technique. Albaum (1997) noted that likert scale is a

widely used rating scale which requires the respondents to indicate a degree of agreement and

disagreement with each of the series of statements or questions. This rating is easy to

construct, administer and respondents readily understands how to use the scale (Malhotra and

Birks, 2003). The research questionnaire contains two sections; (A and B). Section A

contains seven (7) individual characteristics questions and two (2) screening questions while

section B contains 21 questions on price, brand loyalty, service quality and trust and on

switching tendency and (2) on customer opinion about switching. The likert scale ranges

from one (1) to five (5) involving (strongly disagree; disagree; neutral; agree; and strongly

agree).

3.6.3. Pre-test

A questionnaire pilot testing was conducted to identify flaws in design and instruments.

Burns and Bush (2006) defined pre-test as a dry run of a questionnaire to find and repair

difficulties that respondents encounter while taking the survey. Pre-testing refers to the

testing of the questionnaire on a small sample of respondents in order to identify and

eliminate potential problem(s) (Samuel, 2006). The researcher intended to conduct a testing

[17]

to evaluate the questionnaire for clarity, bias, ambiguous questions, and relevance to the

study. Burns and Bush (2006) suggested that a pre-test of 5-10 representative respondents is

usually sufficient to identify problems with a questionnaire. The questions were developed

for pre-testing with a group of six randomly selected customers and Telecel employees; there

were no flaws and ambiguous questions as respondents answered all questions without

problems. From the results of the pre-test the final version of the questionnaire was

developed.

3.7. Data analysis

Data analysis is a process of inspecting, cleaning, transforming, and modeling data with the

goal of highlighting useful information, suggesting conclusions and supporting decision

making (Tabachnick and Fidell, 2007). Ader (2008) postulated that analysis consists of

“examining, categorizing, tabulating, or otherwise recombining the evidence to address the

initial propositions of study. The researcher uses descriptive design in this study, because this

allows him to make predictions of the market and consumer behaviour and also to describe

individual demographic characteristics. It is therefore with that in mind, that the researcher

uses statistical analysis (SPSS) and Microsoft Excel to measure the extent to which different

factors behind brand switching in telecommunication industry affect customers

3.8. Reliability and validity

Nettom (2006) reliability is the consistency or repeatability of the research measures.

Lancaster (2005) relates that validity measures the extent to which the data collection method

or research method describes or measures what it is supposed to measure. To test for validity

and reliability of data the researcher uses Cronbach Alpha version 15.

3.9.Ethical consideration

The research has been carried out guided by the ethical guidelines in that respondents’

participation should be voluntary and their output will be treated as confidential. The

researcher prioritize the following ethical behaviour

Seeking consent from participants and their permission

Participant’s responses kept as confidential and not for negative publicity.

Participants were given enough time to complete the questionnaire

[18]

The questionnaire avoids asking identity of respondents to enhance confidentiality of

the data.

3.10. Limitations

This study has been carried out in Harare only, due to time and financial constraints this may

not be the true representation of Telecel subscribers in Zimbabwe. There are three GSM

operators in Zimbabwe which are Telecel, Econet and Netone, also there are many Internet

service providers in Zimbabwe, for instance, Powetel, Yo Africa, Africom and Telone, which

offers similar products and services like those of GSM operators, but the researcher, focused

on Telecel Zimbabwe only.

3.11. Chapter summary

This chapter covered a detailed methodology used to answer research questions and achieve

the objectives stated in chapter one of this research. The emphasis was put on research

design, target population, sampling methods, sample size, research instruments and last

section looked at data analysis, reliability, validity and ethical consideration.

[19]

CHAPTER FOUR

PRESENTATION OF RESULTS AND ANALYSIS OF FINDINDS

4.0. Introduction

This chapter presents the findings after respondents have expressed their views through

questionnaire survey. The research results are presented in graphical format and charts where

necessary. Each question has been discussed using the percentages obtained from the survey.

It is from this chapter that the researcher derived the conclusions and recommendations on

how best Telecel Zimbabwe can use available resources to enhance customer retention and

reducing brand switching tendencies.

4.1.Response rate

Response rate measures the extent to which respondents willingly participate in the survey.

The response rate was 100% both male and females did managed to response to all

questions without difficulties. The customer’s views were then used to analyse the factors

that push or pull them between brands in the telecommunication industry.

4.2.Reliability test

Refers to the consistency of the research measures (Nettom, 2006). The following table

depicts the results of reliability testing. The reliability has been tested using Cronbach’s

Alpha version 15, as shown in (Table 4.1) below Cronbach Alpha is 0.970 for 30 chosen

variables is within the acceptable range recommended by various literature. The reliability

of 0.70 and above is satisfactory to conclude that there is consistency in the research

measures.

4.2.1. Reliability Statistics

Table 4.1: reliability testing

Cronbach's

Alpha

Cronbach's Alpha Based on

Standardized Items No of Items

,970 ,977 30

[20]

Individual characteristics

4.3.Demographics

The targeted sample population of 100 successfully responds to all the questions in the survey

questionnaire. Meaning that out of sample size of this study all the respondents managed to

respond to the entire questionnaire. The following is the demonstration of demographic

characteristics of respondents, consisting of 1 to 7 of the survey.

4.3.1. Gender

Table 4.2: Frequency distribution of gender

Frequency Percent Valid Percent Cumulative Percent

Valid male 60 60,0 60,0 60,0

female 40 40,0 40,0 100,0

Total 100 100,0 100,0

Table 4.2 above shows that highest respondent is male at 60% and female is 40%. This

indicates that there were more male respondents, as compared to female. There was no bias

on the survey but many female rejected to respond to the questionnaire surveys. Those who

managed were largely Telecel employees.

4.3.2. Age distribution

Table 4.3: Frequency distribution by age

Years Frequency Percent Valid Percent Cumulative Percent

Valid 21-25 25 25,0 25,0 25,0

26-30 45 45,0 45,0 70,0

31-35 25 25,0 25,0 95,0

36+ 5 5,0 5,0 100,0

Total 100 100,0 100,0

[21]

As shown in the (Table 4.3) above, majority of respondents belong to age group (26-30)

years with (45%) followed by 21-25 and 31-35 years all at (25%), age group 36 years and

above have minimum representation at (5%). This indicates that most of the respondents are

35 years and below.

4.3.3. Occupation distribution

Table 4.4: Frequency distribution by occupation


Valid Student 10 10,0 10,0 10,0

Employed 55 55,0 55,0 65,0

Self employed 25 25,0 25,0 90,0

Unemployed 10 10,0 10,0 100,0

Total 100 100,0 100,0

The occupation distribution is as follows, most respondents were employed (55%), followed

by self employed (25%), students and unemployed both have (10%).

4.3.4. Income distribution of the sample

Table 4.5: Frequency distribution by income range


Valid Below 200 20 20,0 20,0 20,0

200-400 45 45,0 45,0 65,0

400-600 10 10,0 10,0 75,0

600+ 25 25,0 25,0 100,0

Total 100 100,0 100,0

[22]

The frequency on income indicated that, most respondents (45%) income range is between

($200 and $400) , followed by $600 and above with 25%, then 20% is for the respondents

who earn below and the least is (10%) of respondents earn between $400-$600.

4.3.5. Education level

Table 4.6: Frequency distribution by education


Valid Secondary 30 30,0 30,0 30,0

Tertiary 70 70,0 70,0 100,0

Total 100 100,0 100,0

The results in (Table 4.6) revealed that majority of the respondents’ attained tertiary

education constitute 70% and secondary level have 30%

4.3.6. Sample distribution by location

Table 4.7: Frequency distribution of location


Valid Low density 20 20,0 20,0 20,0

Medium density 45 45,0 45,0 65,0

High density 35 35,0 35,0 100,0

Total 100 100,0 100,0

The distribution of the sample was as is in the (Table 4.7). Results indicate that 45% were

from medium density, 35% from high density, and 20% from low density.

[23]

4.3.7. Sample distribution by relationship with Telecel Zimbabwe

Table 4.8: Relationship with Telecel


Valid Employee 45 45,0 45,0 45,0

Customer 55 55,0 55,0 100,0

Total 100 100,0 100,0

The distribution by relationship with Telecel Zimbabwe is as shown in Table (4.8) below.

Results indicate that 55% were customers and 45% attributed to employees.

SCREENING QUESTIONS

4.3.8. Question 8 sample distributions by mobile network(s) connection

Table 4.9: Mobile network(s) connection


Valid Telecel 35 35,0 35,0 35,0

Telecel and Netone 5 5,0 5,0 40,0

All networks 15 15,0 15,0 55,0

Telecel and Econet 45 45,0 45,0 100,0

Total 100 100,0 100,0

Table 4.9 above shows sample distribution by mobile network connection. The results

indicate that 45% of respondent use Telecel and Econet, 35% use Telecel, 15% use all

networks and 5% use Telecel and Netone.

[24]

4.3.9. Question 9 Sample distribution by years on mobile network(s)

Table 4.10: Years on mobile network(s) connection


Valid below 2 20 20,0 20,0 20,0

2-6 40 40,0 40,0 60,0

7 and more 40 40,0 40,0 100,0

Total 100 100,0 100,0

The years on mobile network connection is shown in the (Table 4.10) above. The results

indicate that 40% have been connected to network(s) for 2-6 years and 7 years and above,

20% is for those who are 2 years and below on network(s).

SECTION B

4.4.Brand switching factors

This section contains closed ended questions which allow respondents to express their views

towards brand switching. The questions were grouped into four broad aspects (price, trust,

and service quality and brand loyalty). The respondents was given five options on a likert

scale with [(strongly disagree (1), disagree (2), neutral (3), agree (4) and strongly agree (5)].

Therefore the following is a presentation of findings in which pie charts and bar graphs are

used.

[25]

4.4.1. Question 10 PRICE

a) I am happy with the price i pay for services

Figure 4.1: Happy with price

The results as shown in the (figure 4.1) below indicate that 30% agree, another 30% neutral,

20% disagree, 15% strongly agree and 5% strongly disagree.

Strongly agree Agree Neutral Disagree Strongly

disagree

30

20

10

0

15%

30%

%

30%

20%

5%

Percent

[26]

b) The price i pay for my services is fair and reasonable

Figure 4.2 Price fair and reasonable

The figure 4.2 above shows the respondent’s reaction to prices of their current services. The

results indicate that 30% agree to the statement, another 30% choose to remain neutral, 20%

disagree, 15% strongly agree and 5% strongly disagree

Strongly agree Agree Neutral Disagree Strongly disagree

Percent

30

20

10

0

15%

30% 30%

% 20 %

5%

[27]

c) I am not ready to pay high price on my network.

Figure 4.3 Not ready to pay high price

The Figure 4.3 above shows respondent’s reaction when asked the statement above. The

findings indicate that 65% strongly agree to the statement, 25% agree and 10% remain

neutral.

d) A higher price will make me switch to a competitor

Strongly agree Agree Neutral

Percent

60

40

20

0

65%

25%

10%

[28]

Figure 4.4: Higher price and brand switch

The Figure (4.4) above presents the results from respondents how they react to price

increase. The findings indicate that (50%) strongly agree to the statement, (20%) agree,

(10%) remain neutral, (10%) strongly disagree and (10%) disagree

4.4.2. Question 11 Trust

a) Telecel is reliable and customer focused

Figure 4.5 Telecel Reliability

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Strongly agree Agree Neutral Disagree Strongly disagree

Percent

50

40

30

20

10

0

50%

%

20%

10% 10% 10%

%%

[29]

In Figure (4.5) above, 35% agree that mobile operator is reliable, 25% strongly disagree,

20% neutral, 15% strongly disagree and 5% disagree.

b) The billing systems of Telecel is trustworthy

Figure 4.6 Billing systems

Figure 4.6 above shows that, 45% agree, 30% remain neutral, 20% strongly agree, 5%

disagree to the statement above.

c) Telecel service processes are trustworthy

Figure 4.7 Service processes

The majority of respondents as shown in the figure above, 35% agree when asked the above

statement, 25% strongly agree, another 25% remain neutral, 10% strongly disagree and 5%

disagree.

Disgaree

Neutral

Agree

Strongly agree

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

[30]

d) Telecel reputation is trustworthy

Figure 4.8 Telecel Reputation

The Figure 4.8 above indicates that 30% of respondents either strongly agree and or agree,

another 30% remain neutral and just 10% strongly disagree when asked the above statement.

4.4.3. Question 12 Service quality

a) Telecel network is wide

Figure 4.9 Network coverage

After respondents were asked above statement, 40% agree, 35% neutral, 15% strongly agree,

5% disagree and 5% strongly disagree.

b) Telecel provide quality service

Strongly disagree

Neutral

Agree

Strongly agree

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

[31]

Figure 4.10 Quality of Service

In the Figure 4.10 above presents the reaction of respondents after asked about service

quality. The finding indicates that 55% agree to the statement, 16% neutral, 15% strongly

agree, 9% disagree and 5% strongly disagree.

c) I think Telecel has reputation for quality

Figure 4.11: Reputation for quality

Figure 4.11 above presents the distribution of responses from the targeted sample population.

Findings indicate that 45% of the respondents agree to the statement above, 25% strongly

agree, 15% neutral, 10% disagree and 5% strongly disagree.

d) Telecel respond quickly to customer complaints

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

[32]

Figure 4.12: Response to customer complaints

When respondents were asked the statement above, Figure 4.12 presents the findings. The

majority strongly agrees (30%), another 30% agree, 15% choose neutral, another 15%

disagree, and lastly 10% strongly disagree.

e) I am satisfied with the service and no intention of switching brands

Figure 4.13: Satisfaction from Service

Figure 4.13 above presents the findings on how people are satisfied with the service and their

intention of switching. The findings indicate that 40% has chosen neutral, 30% opted to

agree, 21% strongly agree and 9% strongly disagree.

4.4.4. Question 13 Customer brand loyalty

a) If I could I would rather switch brands

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Strongly disagree

Neutral

Agree

Strongly agree

[33]

Figure 4.14: Brand switching

The Figure 4.14 above shows the distribution of the sample when in response to the

statement above. The findings indicate that 50% remain neutral, 25% strongly disagree, 15%

disagree, 5% agree and another 5% strongly agree.

b) I will stick to my current brand even if new brands are introduced

Figure 4.15: Stick to Brand

As shown in the Figure 4.15 above 35% agree to the statement, 25% choose to remain

neutral, 20% disagree, 15% strongly agree, and 5% strongly disagree

c) I am satisfied with my current brand

Figure 4.16: Satisfied with Brand

Strongly disagreeDisagreeNeutralAgreeStrongly agree



[34]

Figure 4.16 above is the results of the respondents when asked the statement above. The

findings indicates that 40% of the respondents agree, 25% neutral, 20% strongly agree, 5%

disagree, another 5% strongly disagree.

I consider myself to be loyal to Telecel

Figure 4.17: Loyal to brand

In the Figure 4.17 above 35% agree to the statement, 25% neutral, another 25% strongly

agree, 10% strongly disagree, and 5% disagree.

d) Telecel is my first choice among mobile operators

Figure 4.18: Brand choice

Figure 4.18 above shows that 35% neutral, 35% agree, 20% strongly agree, 5% disagree and

another 5% strongly disagree.

e) I will recommend my brand to friends and relatives



[35]

Figure 4.19: Brand Recommendation

As shown in Figure 4.19 above 40% agree, 25% strongly agree, 20% neutral, 15% disagree.

4.4.5. Question 14: Will you consider switching from Telecel Zimbabwe for whatever

reason you experienced?

Figure 4.20: Switching Consideration

The Figure 4.20 above presents the findings on what the customers switching tendencies are.

The results indicate that 60% say NO and 40%. The findings indicate that most of the

respondents are not willing to switch while 40% considering switching. There is indication

that in as much as firms satisfies customers there is high chance 40% of respondents will

switch brands.

4.4.6. Question 15: If yes, why do you consider switching?

Figure 4.21: Reason for Switching

Disagree

Neutral

Agree

Strongly agree

No

Yes

[36]

The Figure 4.21 above shows the sample distribution grouped by reason for considering

switching. There are 30% respondents who consider switching due to decrease in airtime

bonus, another 30% switch as a result of better substitutes, 25% poor network and 15% low

switching cost. The findings indicate that apart from factors in the research model, the factors

in Figure 4.21 influence respondents to switch especially promotional bonus, better

substitutes and poor network service.

4.5. ANALYSIS OF THE FINDINGS

4.5.1. Question 8

Figure 4.22: Mobile Networks Connection

Figure 4.22 above shows the distribution of sample between network operators. The findings

indicate that the majority of respondents (45%) are connected to both Telecel and Econet,

35% of respondents are connected Telecel line only, 15% all networks, and lastly 5% Telecel

and Netone. Based on these findings, more than half of the respondents (65%) use more than

one line meaning that subscribers do not trust one mobile operator, there is also evidence that

most of the respondents have a chance of temporary switching between brands for a personal

gain. Then Telecel loyal customers constitute a mere 35% way below which is an indication

that customers are not loyal to Telecel as a brand.

Poor network

serviceBonus airtime

Better substitutes

low switching cost

Telecel

Telecel and Netone

Telecel and Econet

All networks

[37]

4.5.2. Question 9

Figure 4.23: Years on mobile network

The distribution of the sample was as is that in Figure 4.23 above. Results indicate that most

of the respondents (80%) have two or more years connected into different Networks and 20%

below 2. The results indicate that respondents are connected to networks for a long time.

4.6. ANALYSIS OF BRAND SWITCHING FACTORS

4.6.1. Price Survey Analysis

Table 4.11: Price

Respondents’ Summary On Price

Survey Questions.

Strongly

disagree

Disagree neutral agree Strongly

agree

I am happy with the price I pay for my

services

5% 20% 30% 30% 15%

The price I pay for my service is fair and

reasonable

20% 30% 25% 25%

I am not ready to pay higher price on my

network

10% 25% 65%

A higher price will make me switch to a

competitor

10% 10% 10% 20% 50%

Table 4.11 above shows results on respondent’s price reaction. As it is depicted in the (Table

4.11), 45% are happy with the price they pay which is below 50%; this is an indication that

overally respondents are not happy with price of their services as 30% remain neutral and

25% of the respondents indicates their unhappiness. The prices charged are presumably fair

as 50% agree to the statement meaning charging fair does not automatically instil happiness

Below 2 years

2-6 years

7 years and above

[38]

to respondents. In the table again, 90% of respondents agree that they are not prepared to pay

higher price meaning that any slight increase in price, respondents will definitely switch

brands. These findings, however, indicates that customers in the telecom are price sensitive,

thus being price elastic in demand. When Telecel increases price huge amount of sales are

lost through brand switching. So there is a strong positive relationship between price and

brand switching. When respondents are price elastic, increase in price will result in a large

proportion decrease in quantity demanded. The action of customers in this case shows that

there is intensive competition and wider close substitutes hence switching from one brand to

another due to increase in price of current brand is easy and cheap.

4.6.2. Trust Survey Analysis

Table 4.12: Trust

Respondents’ Summary On Trust

Survey Questions.

Strongly

disagree

Disagree Neutral Agree Strongly

agree

Telecel is reliable and customer focused 15% 5% 20% 35% 25%

The billing systems of Telecel is

trustworthy

5% 30% 45% 20%

Telecel service processes are

trustworthy

10% 5% 25% 35% 25%

Telecel reputation is trustworthy 10% 30% 30% 30%

The Table 4.12 present the results based on the survey carried out. In the first statement

respondents put trust on Telecel as they regard the firm to be reliable, about 60% view the

organisation as customer oriented and therefore reliable. These findings indicate that

customers are well vested with knowledge on Telecel’s position about their needs and wants

as from the first statement customers commended that Telecel is customer focused. In the

second statement there are 65% respondents who trust the Telecel billing systems, although

this time there is 5% disagreeing respondents to that effect. Those who remain neutral

constitute 30% this is a sign that the organisation should educate its customers on how the

billing system works .The increase in trust will bring customers closer to the organisation

(Morgan and Hunt, 1994). Another 60% of the respondents as shown in table above trust the

service process the firm provides and 15% disagree. In the last statement about 60% again

trust Telecel’s reputation, this mean that there is a bond between the firm and customers.

[39]

4.6.3. Service quality survey analysis

Table 4.13: Service Quality

Summary Of Service Quality Survey

Questions.

Strongly

disagree


agree

Telecel network is wide 5% 5% 35% 40% 15%

Telecel provide quality service 5% 9% 16% 55% 15%

I think Telecel has reputation for

quality service

5% 10% 15% 45% 25%

Telecel respond quickly to customer

complaints

10% 15% 15% 30% 30%

I am satisfied with the service and no

intention of switching brands

9% 40% 30% 21%

The first statement as shown in the Table 4.13 above indicates that, 55% views Telecel

network as wide, will 35% remain neutral and 10% disagree. This entails that the majority of

the respondents views network quality to be wide. Satisfying network coverage creates

customer bond with service providers. The findings also indicate that, there are network

problem issues in some location as is the case with the figures in the Table 4.13. Those

experiencing network problem, satisfaction will be low and may switch/ or use another

network .And that is the reason why in Figure 4.22, 65% of the respondents have more than

one line in case of network failure they use alternative line. In Figure 4.21 above, 30% of

respondents even suggest that they are experiencing network problem and they are

considering switching.

In the second statement as the results indicate, 70% agree and 14% disagree means that the

organisation is providing excellent service. When service quality is high, rate of customer

retention will be higher translating to low brand switching. When asked about Telecel

responsiveness 60% agree that the firm response quickly to customer complain. However

25% disagree and 15% neutral which is an indication that they are not satisfied and may

switch to other brands which will provide them with maximum satisfaction.

[40]

When perceived value of customers is satisfied, the customer begins to develop a sense of

belief in the operations of Telecel. In this case 70% agreed that Telecel has a reputation for

quality service. That belief will act as a vehicle for networking positive word of mouth.

The last statement show 40% of respondents who are neutral, this poses a threat for Telecel

as it is difficult to justify why they are neutral. But the results also indicate that there are 51%

of respondents who are satisfied and have no intention to switch, an indication that more than

half have no intention to switch which match the fact that service quality has been found to

have a profound input on customer satisfaction and loyalty (Chumpitaz et al, 2004). The more

the customer’s service encounter/moment of truth exceeds customer expectation the higher

the customer satisfaction and retention. When service increases brand switching decrease

meaning that there is a negative relationship between service quality and brand switching.

4.6.4. Customer Brand Loyalty Survey Analysis

Table 4.14: Brand loyalty

Summary On Customer Brand

Loyalty Survey Questions.

Strongly

disagree


agree

If I could I would rather switch brands

25% 15% 50% 5% 5%

I will stick to my brand even if new

brands are introduced

5% 20% 25% 35% 15%

I am satisfied with my current brand 5% 5% 25% 45% 20%

I consider myself to be loyal to Telecel 10% 5% 25% 35% 25%

Telecel is my first choice among

mobile operators

5% 5% 35% 35% 20%

I will recommend my brand to friends

and relatives

15% 20% 40% 25%

As shown in the Table 4.14 above, when respondents asked if they would change to other

brands 50% neutral customers poses a threat as it is difficult to ascertain their switching

behaviour. However 40% who disagree with the statement indicate their willingness to stick

with the brand. Just a mere 10% agree with the statement. There is strong indication that a

loyal customer will continue re-purchasing the same brand and stay with the current brand

[41]

and spread in positive word of mouth about their experience. The results supported the view

of (Dick and Basu, 1994) who suggests that brand loyal customers will engage in positive

word of mouth for company and even do not accept the marketing strategies of competitors.

The second statement as shown above, 40% concur with the statement, meaning they will not

switch. This implies that whenever a customer is loyal to a certain brand, convincing him/her

to try a new brand is difficult. However 25% suggest that they will switch; (Assel, 2004)

finds that the reason why consumers who switch brands is not that they are not satisfied, but

because they want to try something new. This means that even if a firm satisfies customers,

some will always switch.

When asked about satisfaction 65% agree that they are satisfied with the current brand. A

satisfied customer will not switch brands. There is a strong consensus of these findings with

various literatures cited in chapter 2. Whenever customers are satisfied they will continue to

have a deeply held commitment to repurchase / repatronize preferred service in the future

(Oliver, 1999). When customers purchase a product that they are loyal to, they will not

purchase a different brand of that product, (Shulka, 2009). The 10% disagree, means that

whenever customers are loyal to brand their switching tendencies will be close to zero.

Based on the statistics in table above, 60% of customers are loyal and 65% agreed to

recommend to others, the results concur with findings of, (Miller and Grazer, 2003) who

suggest that brand loyalty could be identified by repurchase intention, price tolerance and

recommendation to others. A loyal customer treat his/her brand as first choice as shown in the

Table 4.14 above, 52% of respondents agree to the statement.

4.6.5. Chapter summary

The chapter covered on presentation and analysis of the findings. There is strong evidence

best on the findings that brand loyalty, service quality, price and trust contribute towards

brand switching.

[42]

CHAPTER FIVE

RECOMMENDATION AND CONCLUSION

5.0.Introduction

This chapter provides insights on how best Telecel Zimbabwe can establish its brands as a

competitive force to reckon with. A list of suggested recommendation have been covered

these recommendation were based on the research finding. The chapter concludes each of the

objective in chapter one.

5.1.Conclusion

5.1.1. Objective one: To examine the factors that influence brand switching in

telecommunication industry.

The model used in this study focused on four components (price, service quality, brand

loyalty and trust) which influence customers to switch brand. As the model suggests, the

findings in chapter four (4) indicates that there is overwhelming evidence that these factors

contribute towards customer brand switching. Price for example, respondents uses price as

measure of quality, and in actual fact they are not prepared to pay high price for a unit

increase in price. Service quality on the other hand, finding suggests that poor quality service

creates a quality gap between what customers expect and the actual service or products

attributes and benefits. In order to cover that gap the respondents will either switch temporary

or permanently to other service provider. When customers switch temporary it means they

still believe that one day the service of their previous brand will soon improve. In the findings

45% of the respondents have both Econet and Telecel, as depicted in the Figure (4.22) and

5% have Telecel and Netone line and 15% have all network lines.

The statistics shows that among those interviewed only 35% use Telecel brands only. What

this implies is that customer loyalty is very low, although in each dual line categorical

percentage one have either, (Telecel and Econet), (Netone and Telecel) and all network lines.

This simply mean that the network providing higher value for money in that period have a

high chance of locking in customers. The respondents suggest that switching costs are very

low hence when an opportunity comes they don’t hesitate to go for it. The reason why

switching are regarded to be low is because the respondents have been connected to

network(s) for a longtime this is evidenced by the results on Figure (4.23 ) where 80% of

respondents have 2 years and above connected to network(s). When customers switch

[43]

permanently it means they have gone for good. On the issue of brand loyalty, respondents

loyal to a particular brand cannot easily switch, but, however not all brand loyal customers

stick with the same brand when competitive new brands has been introduced. There is

negative relationship between brand loyalty, and brand switching.

5.1.2. Objective two: to analyze brand switching behaviour from literature review.

This objective was answered in chapter two, under literature review, however linking the

literature with this study, one would say that brand switching has got many factors other than

those used in this study, but the factors used here plays a pivotal role in influencing

customers to switch brands. As indicated in Figure 4.21 respondents suggest that they can

switch brands due to promotions 30% (bonus airtime) and better substitutes (30%), poor

network service (25%) and switching cost (15%). This an indication that not only factors

included in the model contribute to customer switching tendencies but they are many factors.

A satisfied customer spread positive word of mouth and recommending to others. It may be

concluded that price, service quality, trust and brand loyalty have impact on customers

purchasing decision making and a strong emphasis on customer education and customer

involvement in service development will help alleviating brand switching problems .

5.1.3. Objective three: To examine the factors that prevent brand switching in

telecommunication industry.

Subscribers really value network quality service among other key satisfaction elements. As

shown in Table 4.9 brand with wide and trusted network coverage lock in subscribers. When

switching costs are high customers will not switch brands, they will be financially and non

financially attached to the current brand.

When customer are satisfied they will become loyal to a particular brand which in actual fact

lead to increase in sales volumes, repeat purchasing, positive word of mouth and

recommending to others. Furthermore subscribers in telecommunication industry are highly

elastic in demand Figure 4.3 show 90% of respondents indicating unwillingness to pay a

higher price, increase in price lead to brand switching. Telecel should keep cost to minimum

level, and transfer that cost effect to customer through offering quality services at a cheap,

fair and reasonable prices, doing so reduce customers brand switching tendencies. Customers

like bonuses (Figure 4.21) 30% choose to switch due to a decrease in airtime bonus. When a

customer’s expectation matches with actual service encounter/ moment of truth, that

[44]

experience will prevent them from switching. Even though one would say that it is difficult to

differentiate services, use of value addition act as barrier to entry for competitors because the

values unique to an organisation are difficult to imitate. Customer involvement in service

development phases lead them to become emotionally attached to brand hence switching cost

increase and brand switching decreases. It maybe concluded that offering quality services at

cheap price, build customer trust, satisfaction and loyalty hence prevent customers from

switching.

5.1.4. Objective four: To study the customer choice and preferences of GSM in

Telecommunication industry.

It is widely agreed that customers differs in terms of what they buy, how they buy, how much

they buy , when they buy and where they buy. These decisions are greatly influenced by

income, gender, location, and other factors as those included in the model in this study. Based

on the findings (Figure 4.9 and Figure 4.3) customers like cheap services and products,

when Telecel used to have more bonus airtime , customers were not thinking of switching, a

reduction in the bonus influence customers to consider switching. There is also a strong

indication on Table 4.11 to Table 4.14 that customers prefer quality service from reliable

source and affordable price for them to be brand loyalist. It may be concluded that customers

have varying choices and preferences, but overally customers prefer high quality service at

low/fair price from a reliable service provider. With that in mind the following paragraphs

will focus on how best Telecel Zimbabwe can do to reduce churn rate

5.2.Recommendations

Consumer education

It is essential for Telecel Zimbabwe to educate its valued subscribers on its vast product and

service offerings. Many of the subscribers in the market are unaware of how most services

work and thus need some form of education as to how the products actually work. The

findings indicate that customers will switch if price increase, meaning that for Telecel should

educate and justify the price increase. As shown in Figure 4.3 about 70% agree that they will

switch when price increase meaning that they just view price as an expense without taking

into account the benefits of brands that comes with price increase.

[45]

Improve on network coverage

Telecel has been doing a great job to improve in terms of network coverage in the country. It

has been continuing to expand however; the organization still lags behind. The rural and farm

areas represent places which have been neglected as they are deemed to be unprofitable, non-

the-less these are the areas that make the difference and build a reputation of good service to

the community. The findings on Table (4.21) 25% of the respondents switch due to poor

network service.

Involve customers in product or service development design

This will help in creating a bond between customers and their products or services.

Customer’s participation in service or product development allows them to develop

emotional connection with their creation having invested in the design, developed something

that they feel satisfies their needs. They are more likely to find the resultant product relevant,

useful and fulfilling. This also increase switching cost making it difficult for customers to

switch brand .As the findings on question 8 (Table 4.22) 45% of respondents have dual lines

Telecel and Econet, 5% have Netone and Telecel and 15% have all network lines this indicate

that there is no emotional attachment and switching cost are low.

Need for involving people in co-creation of value

At times customers just assume to be satisfied when they are not. It is because there is a

wider gap between them understanding the attributes of services and their expectation. There

is need to adopt participatory design method whereby customers have chance to brainstorm,

ideate, create, and prototype alongside designers. It is of paramount important for Telecel to

change its style of developing services and assume that every customer will like the service.

This view is supported by the results on service quality were 40% remain neutral after asked

about if they are satisfied by Telecel service

5.3.Areas for further research

Many of the respondents have dual lines, so therefore the researcher recommends

further studies on network usage, to determine loyalty in terms of usage.

Studies should be carried out on other factors that contribute to brand switching.

There is also need to investigate why a satisfied customer switch brands.

Investigation on effects of relationship marketing on customer loyalty.

[46]

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[48]

APPENDIX TWO: QUESTIONNAIRE

UNIVERSITY OF ZIMBABWE

My Name is MAJAJI NYASHA JUSTICE; I am a student at University of Zimbabwe. I am

carrying out a study to know factors that lead you to switch brands in telecom industry. I am

aware of your precious time and am requesting you to give responses to the following

questions. The project is purely academic and information shall be treated as confidential.

SECTION A: Individual Characteristic (please Tick where appropriate)

1. Gender: Male [ ] Female [ ]

2. Age: 15-20 [ ] 21-25 [ ] 26-30 [ ] 31-35 [ ] 36 and over [ ]

3. Occupation: student[ ] employed [ ] self-employed [ ] unemployed [ ]

4. Income range: below $200 [ ] $200-400 [ ] $400-600 [ ] $600+ [ ]

5. Education level: primary [ ] secondary [ ] tertiary [ ]

6. Location: low density [ ] medium density [ ] high density [ ] rural area [ ]

7. What is your relationship with Telecel? Employee [ ] customer [ ] management [ ]

other specify………………………………………………………………………………

SCREENING QUESTIONS

8. Which mobile network(s) are you connected to?

Telecel 1

Econet 2

Netone 3

9. How many years on mobile network(s) you are connected to?

Below 2 1

2-6 2

7 and more 3

SECTION B: BRAND SWITCHING FACTORS

Using a scale of 1-5 {strongly disagree(1), disagree(2), neutral(3), agree(4), strongly

agree(5)} tick were appropriate.

10. PRICE

Tick were appropriate 1 2 3 4 5

I am happy with the price I pay for my services

The price I pay for my services is fair and reasonable

I am not ready to pay higher price on my network

[49]

A higher price will make me switch to a competitor

11. TRUST


Telecel is reliable and customer focused

The billing systems of the firm is trustworthy

Telecel services process are trustworthy

The reputation of Telecel is trustworthy

12. SERVICE QUALITY


Telecel network is wide

Telecel provide quality service

I think Telecel has reputation for quality service

Telecel respond quickly to customer complaints

I am satisfied with the service and no intention of switching brands

13. CUSTOMER BRAND LOYALTY


If I could I would rather switch to other brands.

I will stick to my brand even if new brands are introduced

I am satisfied with my current brand

I consider myself to be loyal to Telecel

Telecel sis my first choice among mobile operators

I will recommend my brand to friends and relatives

14. Will you consider switching from Telecel Zimbabwe for whatever reason you

experienced?

No 1

Yes 3

15. If yes, why do you consider switching?

………………………………........................................................

**Thank you for your cooperation**