marketing thesis on telecommunication in pakistan

“A study on factors influencing customer loyalty in Pakistan Telecommunication”

Submitted to:

Mr. Shafqat Ullah

Submitted By:

Shabbir Ahmed

Submission Date:

25 th Sep. 2011

APPROVAL SHEET

This research study has been examined and passed for partial fulfillment of the

requirements for the degree of Masters in Business Administration (Marketing). This

study is approved by the examiner on oral examination with the grade of __________.

______________________

Shafqat Ullah

Examiner

APPROVAL SHEET

This research is entitled “A study on factors influencing customer loyalty in Pakistan

Telecommunication.” Prepared by Shabbir Ahmed is accepted in partial fulfillment for the

award of Master’s degree of Business Administration (Marketing).

____________________

Shafqat Ullah

Examiner

LETTER OF TRANSMITTAL

To,

Mr. Shafqat Ullah

Course: Final marketing thesis

25th Sep., 2011

Dear Sir,

Enclosed is a copy of “A study on factors influencing customer loyalty in Pakistan

Telecommunication.” This report is about the research made during the 4 months of time

period and effort, based on the need of the study, research methodology, findings,

limitations and future need.

This research gives useful information regarding the factors involved in customer

loyalty in Pakistan telecom. Although this research is made for academic purpose, but the

importance of the study cannot be ignored.

I hope that this report is acceptable to the Newports Institute of Communication

and Economics and to you, while keeping in view the scope of my limited knowledge.

The project was very interesting and challenging, this was throughout a learning

experience. At the end say thank to you for giving me the opportunity to extend my

knowledge and ability to look things in a different way.

Yours sincerely

Shabbir Ahmed

TABLE OF CONTENT

Serial No

Description Page No

1. Acknowledgement2. Abstract3. List of table4. List of figures5. Chapter 1 : Introduction

1.1 Overview 1.2 Problem Statement 1 1.3 Hypothesis 1.4 Outline of the studies 1.5 Definitions 1

6. Chapter 2: Literature Review 17. Chapter 3: Research Method 2

3.1 Method of Data collection 2 3.2 Sampling Technique 2 3.3 Sample Size 2 3.4 Instrument of Data Collection 2 3.5 Statistical Technique 2

8. Chapter 4: Results 2 4.1 Findings and interpretation of results 2 4.2 Hypothesis assessment Summary 2

9. Chapter 5: Discussion, Implications, Future Results, & Conclusions

3

10. References 311. Appendix 3

1- ACKNOWLEDGMENTS

This dissertation would not have been possible without the guidance and the help of my

teacher sir ShafqatUllah, who one way or another contributed and extended their valuable

assistance in the preparation and completion of this study.

Lastly, I offer my regards and blessings to all of those who supported me in any respect

during the completion of the project.

2- ABSTRACT

Telecom services in Pakistan are clearly changing and growing. Due to rapid development

of communication technologies in past few years and changing demand of customers, the

paradigm of mobile telecommunication services is now moving from simple voice-

centered communication to a combination of high speed data communication and

multimedia. With all this, the perceptions, believes and anticipations are changing. It is

very important to identify all of these things.

Secondly the service provider in Pakistan are working in a very tough competition.

All of the service provider are providing more or less equal services. So it is very critical

to know the exact best service provider. But still there are some factors that can make a

service provider the best in the market. in this research paper total eight of the factors were

studied, however the all of the variables were studied before, although not in Pakistan.

Moreover all these variables were not studied in any single research in Pakistan or may

not be disclosed.

Latter in this research, relationship of the service quality, corporate image,

perceived value and trust with the customer loyalty is discussed, where limitations and

implications are discussed.

5 – CHAPTER 1

INTRODUCTION

1.1 OVERVIEWPakistani mobile telecommunication services are clearly exhibiting signs of an

abrupt industry paradigm change and symptoms of a market in transition. Due to rapid

development of information and communication technologies in past years and increasing

demand from customers, the paradigm of mobile telecommunication services is now

moving from simple voice-centered communication to a combination of high speed data

communication and multimedia. Some other factors such as the growth of the wireless

internet, and the use of different packages in corporate world all contribute to emphasize

the appearance of aa transition period in the mobile telecommunication services market.

Also, a stagnation rate of diffusion, indicated by a fall in the rate of increase in subscriber

numbers, suggests that the market may have now reached maturity.

If we talk about the few past years, telecommunication in Pakistan describes

the overall environment for the growing mobile telecommunications, telephone, and

internet markets. In 2008 Pakistan was the world’s thirst fastest growing

telecommunications market. Pakistan’s telecom infrastructure is improving with foreign

and domestic investments into fixed-line and mobile networks; fiber systems are being

constructed throughout the country to aid in network growth.

Mobile Telecommunications:

In January 2004 the Ministry of IT issued its Mobile Cellular Policy with

objectives to:

1. Promote efficient use of radio spectrum;

2. Increase choice for customer of cellular services at competitive and

affordable prices;

3. Encourage private investment in the cellular mobile operators;

4. Recognize of the right and obligations of mobile cellular operators;

5. Provide for fair competitions among mobile and fixed line operators;

and

6. Provide and effective and well defined regulatory regime that is

consistent with international best practices.

The mobile telecommunications sector is seeing very large year-to-year growth in

Pakistan. Approximately 90 percent of Pakistanis live within areas that have cell phone

coverage and more than half of all Pakistanis have access to a cell phone. With 108

million mobile subscribers in April 2011, Pakistan has the highest mobile penetration rate

in the South Asian region.

According to the Pakistan Telecommunication Authority (PTA), Mobilink

continues to lead the market with 32.9 million subscribers, followed by Telenor with 26.1

million, Ufone with 20.4 million, Warid Telecom with 18.1 million, and Zong with 10.3

million, according to Telecom Indicators; by PTA 3 June 2011. All telecom companies

are working to broaden their networks in the Azad Jammu and Kashmir and Northern

Areas, which were largely ignored until recently. Five of the seven Agencies of the tribal

areas have mobile coverage.

1.2– PROBLEM STATEMENT

Brief Overview

The change of paradigm and the symptoms of a market in transition are driving

the industry’s restructuring efforts and intensifying completions between companies.

Pakistani mobile carriers are aware of importance of a customer-oriented business strategy

as a condition for sustaining their competitive edge and maintain a stable profit level, and

off course for their survival. As the numbers of subscribers has reached its almost

saturation level, creating new and securing new customer is not only difficult but also

costly in terms of marketing. Hence, it is becoming an industry-wide belief that the best

core marketing strategy for the future is to try to retain existing customers by heightening

customer loyalty and customer value.

Purpose of Research

Previous studies tell that, the companies which grow with the time passing are developing

and increasing customer loyalty (Lee & Cunningham, 2001; Reichheld, 1996). This paper

analyses the antecedents of customer loyalty and the structural relationship between these

factors in the Pakistani mobile telecommunication services industry. As researcher’s

knowledge no such previous research was made in Pakistan telecom, or may be made but

was not disclosed. It was very interesting for researcher to study the customer loyalty

factors in Pakistan telecom because there is very tough competition between the service

Call QualityTrust Value Added Services

Convenience In Procedures

Corporate Image

Customer Support

Perceived Value

Pricing Structure

Customer Loyalty

providers. So in such tight environment customers are free to make a choice. Study was

made to know those factors, which are considered by the customer in such an

environment.

Graphical Model

1.3- HYPOTHESIS

According to Andreassen (1999), corporate image has significant positive impact on

customer loyalty.

RQ1: What is the impact of corporate image on customer loyalty?

H1: Corporate image has significant impact on customer loyalty.

Trust is said to be the believe that firm is fulfilling the commitments. There is a

strong effect of trust on customer loyalty in telecommunication sector (Corbitt,

Thanasankit, & Yi, 2003)

RQ2: What is the impact of trust on customer loyalty?

H2: Trust has significant impact on customer loyalty.

According to Lin and Wang (2006) there is a positive relationship in perceived

value and customer loyalty.

RQ3: What is the impact of perceived value on customer loyalty?

H3: Perceived value has significant effect on customer loyalty.

Finally Lee and Ulgado (1997) find out that, consistent quality affect U.S. consumer

loyalty. Service quality has been measured by call quality, pricing structure, value-added

services, convenience in procedures, and customer support (Kim 2000; Gerpott et al.,

2001; Lee, Lee, &Freick, 2001). In the previous researches it is proved that service quality

is the antecedent of customer satisfaction (Bedi, 2010; Lee and Hwan, 2005). According

to Yee (2010) has a positive influence on customer satisfaction.,

As already stated that service quality is measure of call quality, pricing structure,

value added services, convenience in procedures and customer support, that is why

following are the supporting hypotheses of service quality;

RQ4: What is the impact of call quality, pricing structure, value-added services,

convenience in procedure and customer support on customer loyalty?

H4: Call quality has significant impact on customer satisfaction.

H5: Pricing structure has positive impact on customer satisfaction.

H6: Value added services have significant impact on customer satisfaction.

H7: Convenience in procedures has significant impact on customer satisfaction.

H8: Customer support has significant impact on customer satisfaction.

OUTLINE OF THE STUDY

Chapter #1

In chapter 1 describes the brief history of telecommunication in Pakistan, its major service

providers and Pakistan Telecommunication Authority rules in short. Purpose of the study

is also discussed, where the main contents of research are also discussed. This chapter also

covers the research hypothesis, supported by the ample references of different authors.

Key terms and definitions are also described in this chapter.

Chapter #2

In depth review of the literature is described in chapter 2. Research is based on the service

quality, Switching barriers, customer satisfaction and customer loyalty. This chapter

includes the in depth overview of the above given variables. Variables are taken from the

journals which were previously proved by the other researchers, supporting tags are given

at each variable support.

Chapter #3

Chapter 3 includes methods used for data collection and reason to use them. What are the

sampling techniques used and why they are used? This chapter also defines sample size

taken for research, instruments used for data collection, research model development and

them the statistical technique used in the research, which is Chai-square technique. All the

methods and techniques are supported by the references and solid reasons, which were

accepted in the previous research studies.

Chapter #4

Chapter 4 defines the research results and their interpretations. The overall research

hypotheses and their results summary is given, which gives the clear understanding of

research purpose, hypothesis and their results, proving rejected or accepted and further

interpretation of the research hypothesis.

Chapter #5

Chapter 5 is closing chapter, where research is discussed briefly implications of the

reaseach are also discussed in the chapter. Need of future research and its importance is

also given.

1.5 – DEFINITIONS

Keywords: Customer loyalty, value, Pakistan mobile telecom service, service quality, corporate image.

Customer Loyalty

The term customer loyalty is used to define the behavior of repeat customers, as

well as those who offer good ratings, reviews or testimonials. Loyal customers do the

favorable word of mouth publicity regarding a product or service. These customers are the

assets for the company. In this report the loyalty of customers is measured by the time

they are with the existing service provider. It means they are fully loyal if they are using

their current network for more than four years.

Value

Value is marketing terminology, which means that a consumer makes what value

of a product or service in mental estimation. It can be said to be the relationship between

the perceived benefits against the perceived costs of receiving it.Value is totals benefits

perceived per unit cost.

Pakistan Mobile Telecom Service

Although mobile voice, wireless data, wimax, wireless local loop and VOIP are

included in Pakistan Telecommunication providers. Here in this research, only mobile

voice data providers are meant. Mobile service providers are Mobilink, Ufone, Telenor,

Warid and Zong. These operators are operating in whole Pakistan, but the research is only

conducted in the city Karachi, that is why this research only tells the customer loyalty,

switching barrier and customer satisfaction of Karachi city. Both prepaid and postpaid

customers are taken in the research.

Service Quality

Service quality is a comparison of customer expectations with performance of

service delivered. It is the measure of how well delivered service matches the buyer’s

expectations. In telecom the service quality ingredients are call quality, pricing structure,

mobile devices, value-added services, convenience in procedures, and customer support.

Corporate Image

Corporate image is the perception in consumer’s mind about the corporate entity

behind a brand. For example Unilever, behind its every brand has a good impact on

consumers due to its credibility in the market. Positive corporate images can greatly

increase the speed of new product adoption because of credibility of the manufacturer’s

claims.

CHAPTER #2

LITERATURE REVIEW

2- LITERATURE REVIEW

In earlier studies on movile telecommunication services, service quality ahs been

measured by call quality, pricing structure, mobile devices, value-added services,

convenience in procedures, and customer support (Kim 2000; Gerpott et al., 2001; Lee,

Lee, &Freick, 2001). As the earlier researches revealed that service quality is a kind of

attitude that is formed by the difference between customer’s expectations (Parasuraman,

Zeithaml, & Mitchell, 1990). In this context call quality there is the difference between the

pricing structure of different service providers, although the value added services,

procedures and customer support are more or like same. According to the previous

researches made in telecommunication suggest that service quality is not only the factor

influencing the customer loyalty, as in German mobile communication consumers find

service price, phone number portability and benefit most effective loyalty (Grepott, 2001).

Korean study tells that switching costs, brand image and perceived service quality are the

ingredients of customer loyalty. So there is difference in perceptions of people due to

different strengths of relationship across cultures.

The number of service quality dimensions varies from industry to industry

(Asubonteng, McCleary, & Swan, 1996).According to Btner and Hubert (1994) service

quality is customer’s evaluation judgment, where the degree of superiority of performance

with respect to the product.

This report choses the conceptualization of Kims (2000), Grepott et al., (2001), Lee

et al., (2001), where service quality is measured by call quality, pricing structure, value

added services, convenience in procedures and customer support.

Value

According to Kims, Park and Jeong (2004) it is very important to develop maketing

strategies that extend profitability by retaining the existing customers through customer

loyalty and value. Previous researches have revealed that only the high service quality is

not the reason to buy it (Olshavsky, 1985). That is why this study aims to determine the

value perception of the customers, and to give understanding to service providers. By this

study we will come to know that, how much important is the value perception, and how to

manage the value in customers.

According to Bob Weybright (2004) “one must look carefully at their product and

service. Marketers need to assess the competitive climate in the region, country, and world

to determine how it might affect the value of what they have to offer; learn to identify

what the purchaser needs to see or experience that supports their sense of value while

satisfying the needs that drove the purchase initially; and finally, apply what is learned

when making a decision as to where products or services are to be sold, who… to sell to,

and at what price”

Trust

Many of the studies focused the connection between loyalty and trust.Morgannad

Hunt define trust as one’s confidence in an exchange of value. According to Reichheld

and Schefter (2000) customer trust is the primary factor for customer commitment and

loyalty.

Concept of trust from previous researches is in various of ways. In e commerce

trusting beliefs, according to Mayer et al. (1995) are perceptions of attributes of e

commerce, including ability, integrity and knowledge. In telecom trust is trustworthiness

including extent to which service is provided, ability to fulfill the commitments.

Corporate Image

Corporate image is one of the important factors in service evaluation (Bitner, 1991;

Gronroos, 1988). Corporate image also affects customer loyalty. In service sector

Andreassen and Lindertad (1998) examined the role of corporate image in formation of

customer loyalty. The study of Andreasen and Lindestad was replicated by Hart and

Rosenberger (2004) in Australia.

Corporate image reflects the company’s overall reputation and prestige. According

to Aydin and Ozer (2005) corporate image emerges from a customer’s net consumption

experience and also the perceived service quality affect corporate image. There is a link

between corporate image and customer loyalty (Erdem and Swait, 2004).

Customer Loyalty

According to Oliver (1999) loyalty is a deeply held commitment to rebuy, reuse a

preferred product or service consistently in future. One discovery by Xerox changed the

conventional wisdom, because the Xerox totally satisfied customer were six times more

likely to repurchase Xerox products over the next 18 months than satisfied customers.

Customers who have freedom to choices is not enough to make them loyal. The only way

is loyal customers are totally satisfied customers (Frederik F. Reichheld and W. Earl

Sasser, Jr., HBR, 1990). There are three approaches of customer loyalty, the behavioral

approach, the attitudinal approach and the integrated approach (Oh, 1995).

In mobile communication service sector, it would be important to develop

marketing strategies that promote profitability by retaining existing customers through

customer loyalty and value (Kim, Park and Jeong, 2004).

Many researches find that high service quality relatesrelatively high customer

satisfaction (Cronin et al, 2000) which further leads to loyalty (Ennew and Binks, 1999;

Lai et al, 2009).

Chapter #3

Research Methods

3.1- METHOD OF DATA COLLECTION

Structured questionnaire was used to collect the data, which was comprised of fire scales

taken from the previous researches. For all the variables the author have used 5 scale point

Likert scale. The Likert scale started from Totally disagree to Totally Agree.

3.2- SAMPLING TECHNIQUE

Convenient Sampling

Author is conducting the academic research, where the research like a professionals do, is

very difficult. That is why the convenient sampling technique was adopted. But researcher

is intended to collect data from every required area, so that the significance of the study

cannot be denied. Sample was taken from the Karachi city, through email, and through

getting hard copies filled.

3.3- SAMPLE SIZE

Keeping the variables in view, which were 9 in total, almost 200 research questionnaires

were distributed, only 102 questionnaires were collected or only these were valid for our

research. Response was 51%. Male respondents were 73.5 %, while female respondents

were 26.5 %. Breakup of percentages of respondents with respect to service provider is

10.85, 30.4%, 35.3%, 11.8%, 11.8% for Telenor, Mobilink, Ufone, Warid and Zong

respectively.

3.4- INSTRUMENT FOR DATA COLLECTION

Questionnaire is a research instrument consists a series of questions for gathering required

information from respondents. Francis Galton was first one who used the questionnaire.

Structured questionnaire is used in this research paper as research instrument. The

questionnaire was covering 9 variables; service quality- call quality, convenience in

procedure, pricing structure, value added services, customer support, perceived value,

corporate image and trust. One question from each of the variable was chosen, so the

percentage of variables in questionnaire was equal. Five pontLikert scale was used with

close ended options; rating from 1 to 5 point having option Totally disagree to Totally

Agree.

3.5- STATISTICAL TECHNIQUE

Chi Square technique

Pearson’s chi-square is the best tools for assessing the comparison tests of test of

independence, which assess whether paired observations are independent of each other.

CHAPTER 4:

RESULTS

4.1- FINDINGS AND INTERPRETATION OF RESULTS

In this research nine variables are included, in which customer loyalty is only

dependent variable, and it was assumed that customer loyalty depends upon all of the eight

variables. Hypothesis against each variable is tested and discussed below.

Importance of call quality in customer loyalty

Cross tabulation between the two variables is given below;

Call Quality * Customer loyalty Crosstabulation

Count

Customer loyalty

TotalAbove 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

C

all Q

ual

ity

Strongly disagree 0 0 0 1 1 2

Partially Disagree 0 2 4 0 3 9

Uncertain 0 4 2 5 5 16

Partially Agree 1 1 7 6 13 28

Strongly Agree 1 2 8 7 29 47

Total 2 9 21 19 51 102

This table shows the frequencies of each choice with respect to the period of using the

existing network. Total disagreement was 1.9 %, 9 % people were partially disagreeing.

People who were in midway were 15.69 %. Partial agreement was 27.45% while strong

agreement was 46.08%. If we take a look on results, call quality is an important factor

among telecommunication users and its importance cannot be ignored. If we talk about the

Call Quality, all network providers are provider more or less equal coverage as research

was conducted in Karachi. All providers have more or less equal network coverage in

Karachi.

Importance of pricing structure in customer loyalty

Pricing structure * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

Above 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

Pri

cin

g

Str

uct

ure





Total 2 9 21 19 51 102

Strongly agreed respondents are 47 %, Partially Agreed 33.33%, uncertain are 15.6% and

a very low percentage of Partially Disagreed respondents are. This shows that the large

percentage of respondents wants a reasonable pricing structure. Due to competition in

Pakistan Telecommunication companies, the entire service providers are working on the

very low profits. Above all it is very important factor in Pakistan telecommunication.

Importance of value added service in customer loyalty

Value added services * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

Above 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

Val

ue

add

ed

serv

ices





Total 2 9 21 19 51 102

It is seen that respondents who are using their current network from more than 4 years and

are Strongly agreed are 32, while Partially Agreed respondents are 13, this large number

of Strongly Agreed and Partially Agreed respondents lays in the period of above 4 years,

which show that that it is meant a lot by value added services.

Importance of trust in customer loyalty.

Trust of company in mind of customers * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

Above 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

Tru

st





Total 2 9 21 19 51 102

50.98% respondents are strongly Agree that they trust their service provider, Partially

Agree were 29.4%, uncertain response was 18.63%. Above table show that a large pool of

respondents lie in quadrant where people are using their current network above four years.

The table shows that when consumers have trust on a service provider, they continue the

use of that service provider.

Convenience in Procedures verses Customer Loyalty

Convenience in procedures * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

Above 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

Co

nve

nie

nc

e in

pro

ced

ure

s

Strongly disagree 0 0 0 1 0 1


Uncertain 0 3 2 0 10 15



Total 2 9 21 19 51 102

The above table shows that the Strongly Agree respondents are 46.8% out of 102

respondents, but it can be observed that large percentage of response was in terms of

Partially Agree and Uncertain, which is 31.37% and 14.71% respectively, which lies in

column of respondents using mobile more than 4 years. It means that people who are

using current network more than 4 years may also not be continuing due to convenience in

procedure.

Importance of customer service in customer loyalty

Customer service and support * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

Above 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

Cu

sto

mer

serv

ice

and

sup

po

rt





Total 2 9 21 19 51 102

In the above table Strongly Agree respondents are 36.27% while 38.24% respondents are

Partially Agree. So the ratio of agreed response is very high which is almost 75%. This

table shows the importance of customer support. It is direct interaction with the service

provider. So people take into account and continue or discontinue using the service

provider.

Importance of perceived value in customer loyalty

Perceived Value * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

Above 6

months

Above 1

year

Above 2

years

Above 3

years

Above 4

years

Per

ceiv

ed

Val

ue





Total 2 9 21 19 51 102

In the above table most of the respondents are Strongly Agree 44.12% and Partially Agree

41.18%. This large number of responses show that value is very important, which is

perceived by customers.

Importance of corporate image in customer loyalty

Corporate Image * Customer loyalty Crosstabulation

Count

Customer loyalty

Total

above 6

months

above 1

year

above 2

years

above 3

years

above 4

years

Co

rpo

rate

Imag

e




Total 2 9 21 19 51 102

In the above table strong agreement was seen. Company image is very important for the

customer and hence they are influenced by the company reputation, so that the Strongly

Agree respondents were 48% while Partially Agree was 41.1%.

4.2- HYPOTHESIS ASSESSMENT SUMMARYEvery hypothesis is tested against the dependent variable Customer Loyalty. Using

the Chi-Square, some results were obtained which are given in detail one by one,

According to our first hypothesis;

H1: Corporate image has significant impact on customer loyalty.

Table 4.2.1

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 26.930a 8 .001

Likelihood Ratio 26.463 8 .001

Linear-by-Linear Association 17.692 1 .000

N of Valid Cases 102

a. 8 cells (53.3%) have expected count less than 5. The minimum expected

count is .22.

In the above table, taking Pearson Chi-Square results, the sig. value is 0.001 <0.05 ,which

show that the null hypotheses is rejected which states that there is no relationship between

Corporate Image and Customer Loyalty. Actually there is positive relationship between

the Corporate Image and Customer Loyalty.

This result shows that consumer is conscious about the overall reputation of the service

provider, and this perception becomes strong as time passes between the relationship of

consumer and service provider. Hence our hypothesis H1 is accepted;

Corporate image has significant impact on customer loyalty.

H2: Trust has significant impact on customer loyalty.

Table 4.2.2

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)





a. 13 cells (65.0%) have expected count less than 5. The minimum expected

count is .02.

Table 4.2.2 shows that the sig. value is 0.006 <0.05, which show that null hypothesis is

rejected which shows that there is no relationship between Trust and Customer Loyalty, so

that our hypothesis H2 is accepted. This test shows that customer loyalty is much affected

by trust. Consumer will remain loyal if trust of company has developed in his mind. In

telecommunication trust is meant by the commitments of the services provider those may

be committed call rates, time or packets. So the telecommunication companies operating

in Karachi should consider this factor and should build trust among their customers.

Finally our hypothesis H2 is accepted;

Trust has significant impact on customer loyalty.

H3: Perceived value has significant impact on customer loyalty.

Table 4.2.3

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)





a. 13 cells (65.0%) have expected count less than 5. The minimum

expected count is .04.

Using Pearson Chi-Square we obtained the sig. value 0.011 < 0.05 which means that the

null hypothesis is rejected which is, there is no relationship between Perceived Value and

Customer Loyalty, so that our hypothesis H3 is accepted which states that there is

significant impact of perceived value on customer loyalty.

This is very important factor which enables a customer to differentiate between two

services or providers. Value delivery is very important part in service delivery. Besides the

core competencies, it is very necessary to differentiate on the basis of value. According to

the results our hypothesis is;

Perceived value has significant impact on customer loyalty.

H4: Call quality has significant impact on customer loyalty.

Table 4.2.4

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)







In the above table 4.2.4, using the Pearson Chi-Square the sig. value is 0.172 > 0.05,

which shows that null hypotheses, is accepted, which states that there is no relationship

between the two variables Call Quality and Customer Loyalty. So that our hypothesis is

rejected and there is no relationship between Call Quality and Customer Loyalty.

If we deeply study this, we come to know that research was conducted in Karachi only,

and in the city every network provider has good service, so people living in Karachi city

may not be able to make judgment on the basis of call quality. So people will not make

any switch to other network due to call quality, hence the loyalty remains constant. This

thing is only for Karachi city and may give different result if we conduct a research in any

other areas for example villages etc., so our actual hypothesis is;

Call quality has no impact on customer loyalty.

H5: Price Structure has significant impact on customer loyalty.

Table 4.2.5

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)







In the table 4.2.5 sig. value is 0.026 which is less than 0.05. In this way null hypothesis is

rejected which states that Price and Customer Loyalty has no relationship. But our

hypothesis is accepted that both of the variables have impact on each other.

Researcher concluded that price is one of the factors influencing customer loyalty

in telecom sector in Karachi. That is the reason that telecom service providers launch

several of the bundle packages with respect to choice in price.

H6: Value added services have significant impact on customer loyalty.

Table 4.2.6

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)







In the table 4.2.6 sig. value is 0.008 < 0.05 which shows that the null hypothesis is

rejected and research hypothesis h6 is accepted, which states that there is significant

impact of Value Added Services on Customer Loyalty.

In every service provision value addition is very necessary. When there is value

addition in services, the customer loyalty increases.

H7: Convenience in procedure has significant impact on customer loyalty.

Table 4.2.7

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)



Linear-by-Linear Association .081 1 .776




In the above table 4.2.7, sig. value is 0.115 > 0.05 which shows null hypothesis is

accepted which states that there is no relationship between Convenience in Procedures and

Customer Loyalty.

Features for all the network may be same, so the consumers feel difficulty to

differentiate between the different service provider’s procedures. So that the conclusion is;

Convenience in procedures has no impact on customer loyalty.

H8: Customer support has significant impact on customer loyalty.

Table 4.2.8

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)







In the table 4.2.8, sig. value is 0.015 < 0.05, which shows that null hypothesis is rejected

which states that there is no relationship between Customer Support and Customer

Loyalty. In actual there is relationship between the two.

Customer support is the key factor to determine the customer loyalty. Usually

people make repurchases if they find after sale services better. So our hypothesis is

accepted;

Customer support has significant impact on customer loyalty.

CHAPTER 5:DISCUSSION, IMPLICATIONS,

FUTURE RESULTS & CONCLUSIONS

DISCUSSIONS AND IMPLICATIONS

The present study is notable, because as to the knowledge of the researcher no such

study has been made by others on antecedents of customer loyalty in Pakistan telecom, or

may be made but they were not published for all. As it is seen that 6 out of 8 hypotheses

were accepted, so the majority of the hypotheses are supportive. It can be said that service

quality in combine is the important antecedent of customer loyalty.

The thing is noticeable that two of the hypotheses were not supportive in

relationship with customer loyalty (Call quality and convenience in procedures). These

two factors were proved having positive impact on customer loyalty in Korea and China,

but in this research this is important that the research was made in Karachi city due to

convenience and call quality is found to be almost equal for all the networks and that may

be the reason. Secondly the procedures are more or less same for changing or subscribing

any package. So people find it difficult to switch to or remain with the existing service

provider. Service providers have to make it differentiating for their customers by

improving their call quality and convenience in procedures.

According to Sharma and Patterson (1999) trust plays an important role in

motivating the customers to remain loyal with the service provider. Although this study

also suggests that the trust is important factor because respondents found to be much

judgmental in case of trust. Corporate image also plays a vital role to make customers

loyal with the service provider. Different people have different perceptions regarding the

service provider, it is the service provider who makes credibility among consumers.

This study has some limitations. There are other factor influencing customer

loyalty, apart from the factors studied above. For example demographic characteristic,

usage patterns and life style of consumers. Future studies could focus on examining the

factors cited above.

REFERENCES

1. Luarn & Lin. “A customer loyalty model for e-service context”. Journal of Electronic Commerce Research, VOL. 4, NO. 4, 2003.

2. Boohene & Agyapong, “Analysis of the antecedents of customer loyalty of telecommunication industry in Ghana: The case of Vodafone (Ghana)” International Business Research Vol. 4, No.1: January 2011.

3. Kim and Lee “Relationship between corporate image and customer loyalty in mobile communication services markets.” Africa Journal of Business Management Vol. 4(18), pp.4035-4041, 18 December, 2010.

4. Julander & Soderlund, Effects of switching barriers on satisfaction, repurchase intentions and attitudinal loyalty” SSE/EFI Working Paper Series in Business Administration No. 2003:1.

5. Homburg, Koschate and Hoyer “Do satisfied customers really pay more? A study of relationship between customer satisfaction and willingness to pay.” Journal of Marketing vol., 69 (April 2005), 94-96.

6. Yang and Peterson, “Customer perceived value, satisfaction, and loyalty: The role of switching costs.” Psychology & Marketing, Vol. 21(10): &99-822 (October 2004).

7. Storbacka, K. Strandvik, T. and Gronroos, C. (1994) "Managing customer relationships for profit", International Journal of Service Industry Management, vol. 5, no 5, 1994, pp. 21-28.

8. Http://www.en.wikipedia.org

9. http://www.google.com

10. Baloglu, “Dimensions of customer loyalty. Separating friends from well-wishers.” Cornell Hotel and Restaurant Administration Quarterly; Feb 2002; 43, 1; ABI/INFORM Global pg. 47

APPENDIX

1- Network coverage is very good.

5- Totally 4- Partially 3 – Uncertain 2 – Partially 1 - TotallyAgree Agree Disagree Disagree

2- Over all service I receive is valuable.


3- The service provider’s overall reputation is very good.


4- Variety of value added services is available.


5- All the commitments of the service provider are trusted. (Trust)


6- Subscription and changing the package is very convenient.


http://www.google.com/

http://www.en.wikipedia.org/

7- Customer support is very good.


8- Price structure is very reasonable.


9- I am using the current network from.

5- More than 4- More than 3 – More than 2 – More than 1 – More than4 years 3 years 2 years 1 year 6 months

marketing thesis on telecommunication in pakistan

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