JBMCR Vol-I,No.

-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

CUSTOMER SATISFACTION AND BRAND LOYALTY IN CELLUALR SERVICES: A STUDY ON USERS OF MOBILE PHONE
BY

Sunil Kumar Jena

Faculty of Commerce, Ravenshaw Junior college, Cuttack-753003

ABSTRACT
Cellular sector has witnessed a huge increase in subscriber base, up from less than 2 million in 1999 to 893.84 million in December, 2011 which made it one of the major key drivers of telecom growth in the country. The upward growth trajectory continues both in urban and rural areas and the segment witnessed a substantial year-on-year growth rate of 19.92 per cent over the last year ended December, 2010, but the figure is lowest ever in the last decade. In terms of average monthly subscriber additions also, the year 2011 witnessed an ever lowest figure during last four years. Whereas the urban India crossed the teledensity of 160 in mobile telephony, the rural sector has yet to cross a fourth of the urban one. Indian urban sector has come to a point of stagnation while the vast market of rural and semi urban segment is still untapped. Going forward, according to a PricewaterhouseCoopers report, the mobile segment is expected to show robust growth for the next three to five years, driven by high subscriber additions in mostly non-urban areas. The need of the hour is rural penetration by the effective implementation of a well organised strategy. Value added services, broadband / internet connectivity, 3G services, wide network coverage even low tariff would be the thrust area in non-urban mobile telephony.. But, consumers are not very much committed to a brand or provider here customer satisfaction have also been studied through CRM practices of MSPs. Thus MSPs in India are struggling with low profit margins and increased competition. This analysis points out the presence of brand loyalty of cellular users & customer satisfaction.

KEYWORDS: cellular, satisfaction, CRM, brand

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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

INTRODUCTION: Indian economy has experiencing successive doses of liberalisation, privatisation and globalisation since the early 1990s. This has given impetus for the Indian economy in terms of growth of industrial and service sector. As countries continues to shift from agricultural base to services orientation, the demand for more and varied services further holds huge potential. Additional factors contributing to the growth of service sector are higher per capita income, increased time pressure, advances in product technology, spiraling competition, rise of individualism, technological advances, globalisation, greater life expectancy, cost effectiveness drives, growth of telecom service networks and service quality movement, etc. Services sector in the Indian economy is presently witnessing the fastest growth both qualitatively and quantitatively. The state of Odisha through a backward economy is also attracting unprecedented industrial investment; both domestic and foreign. Increase in the industrial base has given rise for the growth of service sector in a manifold basis. This has further led to fast growth of the information technology sector to meet the global challenges and stiff competition. Tremendous growth of the telecom service sector in the last decade implies the role of marketing in terms of vast opportunities and implications. BACKDROP : In Indian telecom sector, mobile service is called as sunrise industry. It is one of the fastest growing industries in the country with a rapid growth of subscriber base, teledensity and traffic. Indian telecom sector holds huge potential for growth because of following reasons. Liberalisation and privatisation has brought 15 cellular operators in both GSM and CDMA segments and about 190 internet and broadband service providers. With intense competition, companies try to woo and retain customers for longer period of time, for which, consumer satisfaction are key variables to maximise the average revenue per user (ARPU). Impact of advanced cellular technology i.e. 3G and 4G. Heavy inflow of FDI in to the telecom sector. Companies are spending heavily on acquisition and retention of both pre paid and post-paid subscribers.
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Customer satisfaction and brand loyalty in cellular services: A study on users of ..

To what extent, different telecom services providers are able to build consumer satisfaction with both prepaid and post-paid require further analysis. Against such a backdrop, this research endeavour intends to explore the buying behavioural pattern including post-purchase behavior and brand loyalty of the customers in the cellular service sector. It encompasses an analysis of the customers taste, preference, decision making process, expectation vis-a-vis experience of the cellular service providers. In short, it is an exposition to glean into the inner world of cellular customers. The telecom revolution witnessed by the country in voice is set to be replicated in data services. 3G enabled data services were rolled out in 2010-11 and these networks would be enhanced in 2012-13 along with 4G service roll-out. As a result cellular service industry is growing at a faster pace. Competition is hotting up each day among the market players. Cellular service providers continuously rewrite their game plan with the entry of each new player or launching of new package by the existing players. In the cellular service, the fight is not only confined to the new market but also to grab the existing customer base of the rivals / competitors. In fact, cellular marketers are hawking each others customer base. Moreover, launching of mobile number portability (MNP) encourages the mobile operators to snatch each others subscriber by delivering value to the consumers. Thus, it is no more brand allegiance, on the contrary brand switching is the name of the game in the cellular world. Mobile phone users prefer a particular cellular service because of various reasons. In order to have a firm grip over their prospective customers, marketers try to dissect customers perception, purchasing behavior, and thereby to ascertain the motivating factors which goad their cellular service purchase decision making process. Therefore, what induces / motivates the consumer into buying a cellular service is the most important question that the cellular service providers are frequently confronted with. GSM services continued to dominate the wireless market. As of December 2011 the GSM subscriber base stood at 785.97 million, accounting for 87.93 per cent of the total wireless subscriber market. The CDMA segment had a total of 107.88 million subscribers and a market share of 12.07 per cent for the above period. Bharti Airtel, with a subscriber base of 175.65 million, led the wireless market with a 22.35 per cent market share in GSM segment. Among CDMA operators, Reliance Communications maintained its lead position with a subscriber base of 55.36 million, accounting for a 51.32 per cent market share.
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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

LITERATURE REIVIEW : Rayport and Bernard, (2004), have explained the importance of customer interface as competitive advantage in the era of shorter product cycles and fast commoditisation of products. Failing to manage these interfaces to the firms advantage will affect its profits. Lack of proper management of touch points can cause a churn among the firms existing customers. A study of 700 mobile service customers in Cochin, Kerala reveals that 70 per cent of the customers switched over to other mobile service because of poor customer service and lack of proper complaint handling. Mitra, K., (2005), analysed various factors contributing to competition in Indian Telecom Industry. Besides lowering of prices, increased efficiency, greater innovation, high tech industry and better quality services are some of the reasons which are boosting competition amongst various telecom service providers. Raja, Sharma and Shashikala, (2006), have identified product quality, service support, product distribution, service personnel, information services and corporate brand equality as the underlying factors of customer satisfaction. The article examined the customer satisfaction of mobile handset end users in India. It is important that technological models of the supply side need to be supplemented with the views and impact of perceptions from the demand ride of mobile end users. It ranks the mobile handset users on the basis of various factors and identifies homogenous subgroups among the end users. Harish B., (2006), has discussed the importance of company to identify the customer touch points and manage those touch points effectively. Companies spend millions of dollars for acquiring customers but after they behave miserly when managing those critical touch points. For example, while customer interactions at the point of sale are usually initiated by company, complaints and queries are initiated by the customers. It is important to understand that customer oriented interfaces are more personal in nature and have more impact on customer satisfaction than company initiated interfaces. Hence, the voice integrated services, internet enabled services and customer query response services should be treated with greater importance. Teneja, G., and Kaushik, N., (2007), conducted a study on Customers Perception towards Mobile Service Providers: An Analytical Study in order to deduce the factors that customers perceive to be the most important while utilising the services of a mobile service provider.
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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

Seth, A., (2007), in his study on Quality of Service Parameters in Cellular Mobile Communication developed a model of service quality and a set of dimensions for comparative evaluation which could provide useful directions to regulators and service providers. Seth et al (2008), in their study titled Managing the Customer Perceived Service Quality for Cellular Mobile Telephone: An Empirical Investigation analysed that there is relative importance of service quality attributes and showed that responsiveness is the most important dimension followed by reliability, customer perceived network quality, assurance, convenience, empathy and tangibles. This would enable the service providers to focus their resources in the areas of importance. The research resulted in the development of a reliable and valid instrument for assessing customer perceived service quality for cellular mobile services. Rick (2008), in his study he has found that companies with sound customer strategies can use loyalty programme as a differentiator in an increasingly muddled market. In an increasingly competitive market, customer loyalty efforts can play a major part in the attraction of new customers and the retention of current ones. As consumers choices expand, the importance of a sound customer relationship strategy becomes more and more important for the success of the company. Ganguli, S., (2008), conducted a study on Drivers of Customer Satisfaction in Indian Cellular Services Market in which he discussed the impact of service quality and features on customer satisfaction from the cellular users view point. Power, J.D., (2009), conducted a study on Customers increasingly want telecom services and products to be bundled based on responses collected from 11,911 customers nationwide and examined the overall customer satisfaction on six factors customer service, reliability, billing, brand image, cost of service, and offers & promotions. SCOPE AND OBJECTIVES OF THE STUDY Telecom service sector is the fastest growing segment as compared to other major sectors in the economy. The growth of Indian cellular service over the past few years is truly astounding. The Indian mobile services industry is moving in full swing,
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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

be it investment, subscriber base, technology or value added services (VAS). Cutthroat competition among the mobile service providers both in terms of advanced technology roll-out and increase in customer base has benefited the ultimate consumer. Cellular operators are continuously developing strategies and rewriting their game plan to attract the new customers as well as the customers of other competitors. Against such a backdrop, the scope of the present study extends over a wide canvas, examining the mobile consumers satisfaction level in the state of Odisha. It covers an analysis of different factors associated with the service providers as well as consumer satisfaction.Such an endeavour would bring to the fore the factor contributing to consumer satisfaction which would throw more light on the existing literature on mobile consumers as well as service providers, particularly in the Indian cellular marketing environment. The overall objective of the present study is to analyse the cellular services marketing by the Mobile Service Providers (MSPs) and satisfaction of the consumers of all the rural areas and urban towns of Odisha. Thus, the main objective of the present study is to peep deep into the complexities associated with the mobile services and its using pattern by the consumers. The present study also emphasises on the consumers taste, preference, decision making process, expectation and perception and post-purchase behaviour. Against this broad objective, the study seeks to pursue the following specific objectives: I. II. III. to find out the impact of customer service parameters on mobile service marketing for customer satisfaction to examine the associated factors of Brand Loyalty to suggest managerial implications of consumer satisfaction in Indian telecom sector

RESEARCH DESIGN This outlines the nature of the information that is needed for the purpose of analysis, the method of data collection, the techniques used for the analysis and interpretation of the data for the study. Further, the hypotheses set for the study also find a place in this section.
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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

Nature of Information The Present study basically depended on the questionnaire survey method to collect the primary data and study required the following areas: i) selection of random samples of mobile users from twenty four districts of the state of Odisha ii) the level of education, income range, age group, profession, personal philosophy, place of domicile of the sample respondents along with other relevant information in connection with their mobile service satisfaction level. The Data In order to achieve the objectives of the present study, the primary data as well as secondary data have been used. The primary data for this research was collected with the help of a structured and pretested questionnaire to elicit necessary information from the mobile user respondents. The secondary data was collected from various research papers, published reports of RBI, TRAI, COAI, Economic surveys, Journals, Books, Magazines, Newspapers and the Websites. Keeping in view the problem and scope of the study random and purposive sampling method of choosing mobile phone subscribers was adopted to select the sample respondents in twenty four districts of Odisha to represent an overall picture of the State. Though the universe of the study comprised mobile users of the state of Odisha, limitation of time and resources accounted for the geographic concentration of the sample to twenty four districts of the State excepting the districts of Boudh, Deogarh, Jharsuguda, Malkangiri, Nabarangpur and Sonepur for the simple reason of convenience. The questionnaire designed specifically for the present study, was administered amongst the samples in the rural, semi-urban and urban areas of twenty four districts to encompass a broad spectrum of the mobile consumers in the State. However, the retrieval of the questionnaires, after they were answered, left us with a final and full-fledged response of 962 from the twenty four districts of Odisha taken together. The final sample, however, has been chosen keeping in view the representativeness of the classified categories on the basis of sex, age, income, occupation, place of domicile, education and personal philosophy since mobile using pattern and level of satisfaction of different sex, age, income, occupation, place of
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Customer satisfaction and brand loyalty in cellular services: A study on users of ..

domicile, education and personal philosophy group is bound to vary from one another. In sum, every possible effort was made to include a cross section of the population in the sample. Customer satisfaction: The present study examines the various variables influencing consumer satisfaction as regards to mobile services are concerned. In the process, the correlation existing between the variables have also been examined through present CRM practices of the Cellular operators in India . CUSTOMER RELATIONSHIP MANAGEMENT (CRM) One of the ongoing challenges usually encountered by the successful businesses is optimiasation of customer satisfaction and developing Customer Relationship Management (CRM). CRM plays a vital role not only in bringing the customers close to the company, but also in identifying the changing behavioral pattern of the customers. In technology-driven markets like telecom, an efficient CRM system is essential, as well as crucial since the customer attrition is high due to the presence of close substitutes. To be precise, CRM maintains a balance between customer expectations and customer satisfaction. Further, it also helps in retaining the customers for long-run sustainability. Hypothesis -1: Mobile users normally expect warm and courteous behaviour from their service providers Table 1 Communalities of CRM Practices Extraction Values .998 .987 .992

Mobile service providers staff are warm and courteous in their behaviour, Official staff of the mobile service company are attentive to customers Mobile service providers take feedback from the customers regularly. Extraction Method: Principal Component Analysis.
(Source: Own compilation) Initial values of the three components are 1.00 in all cases

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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

Table 1 indicates communalities of factors, which indicate the proportion of the variance in response to the factors important for the CRM practices. The extraction communalities of each variable has been accounted for. The extraction values in the communalities reveals high and indicate a good fit to the variables. So, these three components can be taken for further study to identify the best fit among all the factors within the responses. Table 2:Total Variance of CRM Practices Explained. Initial Eigen Values Component Total 1 2 3 2.991 .007 .002 % of Variance 99.700 .230 .070 Cumulative % 99.700 99.930 100.000 Extraction Sums of Squared Loadings Total 2.991 % of Variance 99.700 Cumulative % 99.700

Extraction Method: Principal Component Analysis.

(Source: Own compilation)

Table 2 indicates total variance analysis with initial Eigen values which shows the variance explained by the initial solution and sum of squared loadings. The component variance values reflected in the table in terms of Eigen values are 2.991,0.007 and 0.002, respectively. In case of only one factor (i.e. warm and courteous behaviour), the value is found to be more than 1 which implies that this factor is only positively responsible for CRM practices followed by the MSPs. The second section of the Table 2 shows the extracted components which explain more over 99 per cent of the variability in the original three variables, thus it can be deduced that only one factor is associated with satisfaction, but it remains unexplained due to lot of variations among the components. Here, the complexity of the components has been considerably reduced to only a loss of 0.3% information. Therefore the exact responsible component among all the factors from the component matrix table is to be ascertained.
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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

Table 3 Component Matrix of CRM

Component Mobile service providers staff are warm and courteous in their behaviour, Official staff of the mobile service company are attentive to customers Mobile service providers take feedback from the customers regularly. Extraction Method: Principal Component Analysis.
(Source: Own compilation)

Component Value .999 .980 .977

Table 3 reveals that component wise values are significantly correlated with satisfaction which is indicated in the matrix form. Out of three components, one component i.e. Mobile service providers staff should be warm and courteous in the behaviour has been extracted with the value i.e. 0.999. Thus, the employees of the MSPs must be very courteous and amicable to their customers. Since most of the responses correlate this factor i.e. courteous behavior with satisfaction, the service sector employees should extend warm and courteous behaviour to their customers. Testing of Hypothesis 1: The hypothesis taken here is accepted as most of the responses responded that mobile service providers staff are warm and courteous in their behaviour as per their expectations. BRAND LOYALTY Brand loyalty is the consumer's conscious or unconscious decision, expressed through intention or behaviour, to repurchase a brand continually. In order to create brand loyalty, advertisers must break consumers habits, help them to acquire new habits, and reinforce those habits by reminding consumers of the value of their purchase and encourage them to continue purchasing those products in the future. The image surrounding a company's brand is the principal source of its competitive advantage and is therefore a valuable strategic asset. Unfortunately, many companies are not adept at disseminating a strong, clear message that not only distinguishes their
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Customer satisfaction and brand loyalty in cellular services: A study on users of ..

brand from the competitors, but presents it in a memorable and positive manner. The challenge for all brands is to avoid the pitfalls of portraying a muddled or negative image, and instead, create a broad brand vision or identity that recognises a brand as something greater than a set of attributes that can be imitated or surpassed. In fact, a company should not view its brand just as a product or service, but as an overall philosophy of a company. A brand needs more than identity; in fact it needs a personality. Just like a person without attention-grabbing characteristics, a brand with no personality can easily be passed right over. A strong symbol or company logo can also help to generate brand loyalty by making it quickly identifiable. Keeping in view the significance of brand loyalty factor for the measurement of consumers perception towards the mobile service providers, three questions were asked to the respondents on brand loyalty. The questions associated with brand loyalty are, Any message from my mobile service provider should be direct and clear, Whenever occasion arises, I wish to discuss the facilities and schemes of my mobile service provider with pears and acquaintances and I will stick to my present service provider as I am satisfied with its overall services. On the basis of responses following analysis is made (Table 4, 5 and Table 6) with the help of factor analysis. Hypotheiss-2: Satisfaction of mobile users impels them to be brand loyal. Table 4 Communalities of Brand Loyalty Extraction Any message from my mobile service provider should be direct and clear Whenever occasion arises, I wish to discuss the facilities and schemes of my mobile service provider with pears and acquaintances I will stick to my present service provider as I am satisfied with its overall services Extraction Method: Principal Component Analysis. Initial values for the three components are 1.00 in all cases
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.873

.921

.961

JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

Table 4 indicates communalities of factors, on brand loyalty of customers towards service providers in the competitive environment. It indicates the proportion of the variance in response to the reliability aspect depending upon brand loyalty. The extraction communalities are reflected high, which indicates that the components represent the variables well. The values indicated in the extraction column for the three components are best fit to the responses as the values are more than 0.8 which is indicating a strong relation to the brand loyalty. Thus, there is no need to extract another component as all the values satisfy the norm. Among all the three components, (Q18) exhibits a better relationship with brand loyalty factor. Table 5 Total Variance of Brand Loyalty Explained Initial Eigen Values Component Total 1 2 3 2.755 .195 .050 % of Variance 91.825 6.507 1.668 Cumulative % 91.825 98.332 100.000 Extraction Sums of Squared Loadings Total 2.755 % of Variance 91.825 Cumulative % 91.825

Extraction Method: Principal Component Analysis. Table 5 indicates total variance analysis with initial Eigen values which shows the variance explained by the initial solution and sum of squared loadings on brand loyalty through principal component analysis. In the initial Eigen values for factors , only one factor is having the value above one and is most significantly responsible for the brand loyalty. The second section of table 5 shows the extracted components which explains more than 8 percent of the variability in the variables and suggests two latent influences are associated with brand loyalty, but that remains unexplained due to certain variations. Thus, about 8 per cent of the variation explained by the initial solution of Eigen values is lost due to the uniqueness of the factors to the original variables.
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JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

Table 6 - Component Matrix of Brand Loyalty Component Any message from my mobile service provider should be direct and clear Whenever occasion arises, I wish to discuss the facilities and schemes of my mobile service provider with pears and acquaintances I will stick to my present service provider as I am satisfied with its overall services Extraction Method: Principal Component Analysis. Table 6 reveals the component wise values correlated with brand loyalty in the matrix form. Out of three variables, one variable i.e. I will stick to my present service provider as I am satisfied with its overall services has been extracted which is having highest value i.e. 0.980 in the component column. Thus, from aforesaid findings it can be deduced that a majority sample respondents have preferred to stick to their present service provider which infers that they are indeed content with the overall activities of their service providers and hence are brand loyals. Testing of Hypothesis-2: The hypothesis stands validated as maximum number of respondents responded on sticking to their present service provider as they are satisfied with overall services. CONCLUSION AND SUGGESTIONS: Despite the explanatory nature of this research endeavour and its limited coverage, the analysis and major findings of the present study brings to the fore certain interesting and useful conclusions regarding post-purchase behaviour of mobile service consumers which is of considerable importance to the cellular operators in India. Sample responses on rating of their service providers by providing five point Likertscale options shows that a majority have quoted their service providers as better and a negligible percentage of respondents (less than 1) have negative opinion about their cellular operators. It is also observed from the classified sample, invariably all groups
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Component Value .934

.959

.980

JBMCR Vol-I,No.-1,June-2012 An International business research journal (ISSN 2278-5280)

Customer satisfaction and brand loyalty in cellular services: A study on users of ..

of age, gender, occupation and place of domicile have given a positive opinion about their MSPs. In sum, it is found that from among eighteen variables, only five variables and that to one each under five factors are significantly responsible for consumer satisfaction. Brand loyalty among all the factors plays a significant role in determination of consumer satisfaction. Obviously, higher the brand loyalty more is the level of consumer satisfaction. SUGGESTIONS: The strategic plan of the government with the combined offer of internet and broadband at a cheaper rate, the fixed line sector has the potential to spring back in the future. The need of the hour is rural penetration by the effective implementation of a well organised strategy. Value added services, broadband / internet connectivity, 3G services, wide network coverage even low tariff would be the thrust area in non-urban mobile telephony. Introduction of district level licensing in order to improve tele-density in rural area must be initiated. Cellular operators should be continuously develop strategies and rewrite their game plans by adding new features, schemes to reach the new age customers

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23. Thambiah, E., The Next Big Wave for the Sector, Tele. net., Vol. No. 13, Issue No. 2, February 2012, New Delhi, p. 50. 24. The Indian Express, 13th August, 2011. 25. TRAI, Govt. of India, Performance Indicator Report, on 13th April 2012, Annexure 1.6, p. 113. 26. Zeithamal, V. A., Gremler, D. D., Bitner, M. J. and Pandit, A. (2008), Services Marketing, TATA Mc Graw Hill, New Delhi, pp . 8-9.

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