Assessing Customer Satisfaction In Telecom Industry In Pakistan Marketing Essay

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Day by day people are becoming more and more dependent on Information Technology.
Telecommunication is considered to be the one of the major industry in Pakistan as
mobile phone is a need for everyone these days. In the past few years the competition in
the market has increased especially in the mobile sector and now five big brands are
competing with each other namely Mobilink, Warid, Telenor, Zong and Ufone. These
days' mobile phones are not only meant for voice chatting but other facilities like SMS
(short messaging server), web browsing, and MMS (Multi Media Messaging) etc value a
lot to the consumers. With the increasing number of mobile phone users and its services
in the country there is a great competition between the mobile phone companies and all
of them are focusing on the strategies that how to manage their brand in order to
capture the maximum market share.
The problem at hand is basically that a single mobile phone company these days is
offering a lot of packages and the switching barrier in this industry is extremely low.
With the introduction of mobile number portability consumers can now easily switch
from one network to another. The companies should focus on the strategies that how to
retain their market share.
The scope of the study is great as the market share of the companies is changing due to
the increase in competition. Every company is trying to position its brand in the minds
of the consumers in the best form. Perception of the people about a particular brand is
changing day by day. Every company have different objectives like Mobilink was the first
company to target the corporate class by introducing the Black Berry phones while
Telenor focused on to start the operations from small towns and villages where
operations of other mobile companies were absent.

Research objectives!

 To understand the improvement and

customer preferences in Telecom Industry.
To study the Telecom service providers and
their service quality.
To study the customer satisfaction and
understand the current market scenario in
Telecom Sector.
Literature review!
The purpose of this literature review is to summarize the research that has been
conducted concerning the of customer satisfaction, the different ways according to
different researcher conducted research on customer satisfaction. Customer satisfaction
generally means customer reaction to the state of fulfillment, and customer judgment of
the fulfilled state (Oliver, 1997). The concept of customer satisfaction occupies a central
position in marketing activities and serves to link processes culminating a purchase and
consumption with post purchase phenomena such as attitude change, repeat purchase
and brand loyalty.
According to Peter J. Danaher and Rodger W. Gallaghe in there article 'Modeling
customer satisfaction in Telecom New Zealand' states that a large proportion of the
academic published work is devoted to establishing the causal link between service
quality and customer satisfaction. This research finds out how to direct a quality
improvement program with the aim of increasing customer satisfaction, given the
implied benefits of such an increase. Most managers can probably go some way towards
identifying service factors which have an influence on overall customer satisfaction.
However, to keep within a budget managers cannot (and should not) spend money
equally on all these factors. An ideal quality improvement program would isolate key
factors which would benefit most from investment.
This research describes how a quality improvement strategy was put in place on the
basis of a model which relates overall customer satisfaction to its various attributes. This
reveals that a quality improvement strategy based on improving the friendliness and
competence of the operators should produce the largest rise in overall quality.

Establishing the factors which significantly impact on overall quality gives direction to
the quality improvement strategy, helping managers to identify the key parts of their
processes.
In the second article The effects of customer satisfaction and switching barrier on
customer loyalty in Korean mobile telecommunication services by Moon-Koo Kima,
Myeong-Cheol Parkb, Dong-Heon Jeonga write that the rapid development of
information and communication technologies (ICT) and high demand from customers,
the paradigm of mobile telecommunication services is now shifting from voice-centered
communication to a combination of high-speed data communication and multimedia.
The research states that factors such as the growth of the wireless Internet, the
introduction of IMT-2000, and the upcoming introduction of mobile number portability
(MNP) all contribute to emphasize the appearance of a transition period in the mobile
telecommunication services market. Earlier studies suggest that customer loyalty
provides the foundation of a company's sustained competitive edge, and that developing
and increasing customer loyalty is a crucial factor in companies' growth and
performance (Lee & Cunningham, 2001; Reichheld, 1996).
Customers experiencing a high level of satisfaction are likely to remain with their
existing providers and maintain their subscription. However, according to some
research, customer satisfaction, while positively influencing customer loyalty, is not
always a sufficient condition, and, in some cases, fails to produce the expected effect. As
a general rule, customer satisfaction and customer loyalty are very closely related.
Customer satisfaction functions as an antecedent of customer loyalty. Mobile carriers
must, above all else, maximize customer satisfaction and the switching barrier in order
to enhance customer loyalty. In particular, mobile carriers must focus on service quality
and offer customer-oriented services to heighten customer satisfaction, among factors
establishing service quality, the factors with a significant impact on customer
satisfaction appeared to be call quality, value-added services, and customer support.

The third article Understanding customer satisfaction and loyalty: An empirical study of
mobile instant messages in China by Zhaohua Denga, Yaobin Lua, Kwok Kee Weib,
Jinlong Zhanga we examine the determinants of customer satisfaction and loyalty. The
findings confirm that trust; perceived service quality, perceived customer value,

including functional value and emotional value, contribute to generating customer

satisfaction. Most of these studies emphasize that customer loyalty and analysis of
factors affecting it are important for the success of mobile services firms. Furthermore,
they agree that customer satisfaction is the main important mediate goal for mobile
service providers on their way to obtaining economic success. Perceived service quality
and customer value are supported as drivers of customer satisfaction (Lim,Widdows, &
Park, 2006). Trust can also be seen as a critical factor for customers to build and
maintain relationships with providers (Semejin et al., 2005). Satisfaction has always
been viewed as the main input for customer loyalty. According to Sivadass and BakerPrewitt (2000), customer loyalty is the ultimate objective of customer satisfaction
measurement. It is found to be a key determinant of a brand's long-term viability
(Krishnamurthi & Raj, 1991). Moreover, compared with loyal customers, non-loyal
customers are much more influenced by negative information about the products or
services (Donio, Massari, & Passiante, 2006). Therefore, retaining existing customers
and strengthening customer loyalty appear to be very crucial for mobile service
providers to gain competitive advantage.
In this study, we measure customer loyalty as customers' behavioral intention to
continuously use mobile instant messages with their present service providers, as well
as. When a customer trusts a service provider, he or she will expect to increase
satisfaction and loyalty towards the seller. In general, if a consumer does not trust the
provider based on past experience, he or she will probably be dissatisfied with that
provider. Researchers found that trust will affect satisfaction in the long term. When a
customer's feeling of faith in the provider is satisfied, his satisfaction will be enhanced
over time.
The next article A Strategic Approach to Customer Satisfaction in the
Telecommunication Service Market by Hahm, W. Chu, and J.W. Yoon states that
customer satisfaction management in the telecommunication industry is difficult
because of the diversity of services and customer segments that exist. This diversity
makes it unlikely to have a uniform customer satisfaction questionnaire that can be
administered to all the different service/customer segment combination. The paper
explains customer satisfactions as the difference between the level of service that was
"expected" and the level of "delivered" service performance as perceived by the
customer. Thus we have

Customer Satisfaction= Expected service - Delivered service performance (as perceived

by the customer)
Another article Determinants of subscriber churn and customer loyalty in the Korean
mobile telephony market by Hee-Su Kima, Choong-Han Yoon highlight as factors such
as call quality, handset type, and brand image affect customer loyalty as measured by
the intention/non-intention to recommend the service provider to other people. The
results show that the probability a subscriber will switch carriers is significantly
dependent on the level of satisfaction with various (alternative-specific) service
attributes of that carrier (call quality, tariff level, handsets, and brand image), his
income level, and subscription duration. The factors that influence the decision of an
existing consumer on whether to switch to another mobile carrier are divided into
choice-specific factors (service attributes of mobile operator) such as call quality and
price level and individual-specific factors (demographic characteristics and phone usage
characteristics) such as income, age or subscription duration. Customer loyalty in this
paper refers to the 'willingness to recommend his company (or its service) to other
people'.
Many other services or products, mobile consumers tend to stick with the present
service provider unless they find a serious flaw or experience dissatisfaction with the
services offered by that company. And this tendency will strengthen if the act of
switching brings about additional costs such as a change in telephone number.
The sixth article for literature review is 'The relationships among service quality,
perceived value, customer satisfaction, and post-purchase intention in mobile valueadded services' by Ying-Feng Kuo, Chi-Ming Wu, and Wei-Jaw Deng. In this study,
customer satisfaction is defined as the total consumption perception of consumers when
using mobile value added services.

The purposes of this study are to construct an instrument to evaluate service quality of
mobile value added services and have a further discussion of the relationships among
service quality, perceived value, customer satisfaction. The main findings are as follows:
(1) service quality positively influences both perceived value and customer satisfaction;
(2) perceived value positively influences on both customer satisfaction and postpurchase intention; (3) customer satisfaction positively influences post-purchase

intention; (4) service quality has an indirect positive influence on post-purchase

intention through customer satisfaction or perceived value; (5) among the dimensions of
service quality, ''customer service and system reliability" is most influential on perceived
value and customer satisfaction, and the influence of 'content quality" ranks second; (6)
the proposed model is proven with the effectiveness in explaining the relationships
among service quality, perceived value, customer satisfaction, and post-purchase
intention in mobile added-value services.
The next article is 'The impact of switching costs on the customer satisfaction-loyalty
link: mobile phone service in France' by Jonathan Lee, Janghyuk Lee, Lawrence Feick.
The article state main objective of customer satisfaction programs is to increase
customer retention rates. In explaining the link between customer satisfaction and
loyalty, switching costs play an important role and provide useful insight. For example,
the presence of switching costs can mean that some seemingly loyal customers are
actually dissatisfied but do not defect because of high switching costs. Thus, the level of
switching costs moderates the link between satisfaction and loyalty. The purposes of this
paper are: to examine the moderating role of switching costs in the customer
satisfaction-loyalty link; and to identify customer segments and then analyze the
heterogeneity in the satisfaction-loyalty link among the different segments. An empirical
example based on the mobile phone service market in France indicates support for the
moderating role of switching costs. Managerial implications of the results are discussed.
Another article 'How quality, value, image, and satisfaction create loyalty at a Chinese
telecom' by Fujun Lai, Mitch Griffin, Barry J. Babin. This study proposes and tests an
integrative model to examine the relations among service quality, value, image,
satisfaction, and loyalty. The primary purpose of this research is to examine an
integrated model of loyalty. While quality, consumer satisfaction, and value are viewed
as key building blocks of customer loyalty
Anders Gustafsson, Michael D.Johnson, and Inger Roos in there article The Effects of
Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on
Customer Retention, examines the effects of customer satisfaction, affective
commitment, and calculative commitment on retention. The study examines the
potential for situational and relational trigger conditions to moderate the satisfactionretention relationship. The results support consistent effects of customer satisfaction,
calculative commitment, and prior mix on retention. Prior mix also moderates the

satisfaction-retention relationship. The results have implications for both customer

relationship managers and researchers who use satisfaction surveys to predict behavior.
Overall satisfaction has a strong positive effect on customer loyalty intentions across a
wide range of product and service categories, including telecommunications services
(Fornell 1992; Fornell et al. 1996). As an overall evaluation that is built up over time,
satisfaction typically mediates the effects of product quality, service quality, and price or
payment equity on loyalty.

Theatrical Framework
Hypothesis
Service quality positively influences customer satisfaction in telecom industry.
Perceived value positively influences customer satisfaction.
Customer satisfaction has a significant, positive effect on loyalty.