Factors Affecting the Switching for Cellular Service Providers in Pakistan

Published:

A Study on Factors Affecting the Switching for Cellular Service Providers in Pakistan

Abstract

Due to expansion of industry customers are shifting from one service provider to another very often. This research aims to find the reasons after the customer’s switching behaviour in cellular services sector of Pakistan. To conduct the research, we surveyed 100 respondents in Sahiwal. The survey was based on a self-administered questionnaire. Respondents were selected on ease basis. After examining the collected results, we inferred that the customer retention is highly depending on Call and SMS rates and then on network service. Companies have to focus on these factors to keep their current customers and make them dedicated enough that they could have a long retention period with the company.

Key words: Brand switching, Brand loyalty, Price, Sales promotion.

Introduction

Lady using a tablet
Lady using a tablet

Professional

Essay Writers

Lady Using Tablet

Get your grade
or your money back

using our Essay Writing Service!

Essay Writing Service

Brand switching is the process of shifting from use of one product or brand to consistent usage of a different but similar product. Mostly advertisements are aimed at encouraging brand switching among consumers, thus helping the brand to increase its market share. It is critical to collect basic information about the switching process to understand why customers shift to another brand. There can be number of factors that can affect the switching behaviour of customers like brand loyalty, price, sales promotion etc.

Brand loyalty is where a customer buys products from the same supplier again and again rather than from other suppliers. Brand is the only thing that can differentiate the goods and services from the other ones. Therefore, most of the companies spend a huge amount on the brand to make it different from others in order to develop the brand loyalty.

Sales promotion is a collection of different marketing incentives, mostly for short time period, which is planned to support a quicker and chubby consumer/customer’s purchasing on particular products (Kotler and Keller, 2009). Previous studies have reported the significance of promotion in influencing consumer behaviour. Examples consist of contests, coupons, freebies, loss leaders, point of purchase displays, premiums, prizes, and product samples.

In view of the fact that there is huge investment in cellular industry, so in return there have to be some charges for using cellular services. These charges depend on many factors like technology, services, maintenance and taxes etc; customers are keen to pay certain amount of money for using cellular services, and service providers want a profit from their share. So price can also affect the switching behaviour of consumers.

Introduction of Telecom sector in Pakistan

Cellular industry of Pakistan is very competitive and progressive market which requires new ventures to be explored by cellular operators and eventually delivered to consumers.

There were 5 million cellular subscribers in 2004, cellular subscribers jumped to 100 million in 2010. Firstly voice had been the centre of cellular operators since the inauguration of cellular mobile services in Pakistan but now the centre of attention is changing towards value added services (non-voice).

Cellular division of Pakistan is well-known for inexpensive mobile connection charges, reduced tariffs, approximately total coverage and superior mobile services for the general public all over the country.

As of Today, cellular teledensity has reached 62.5% that was just 3.3% in 2004 whereas approximately 92% of the land area and more than 10,000 cities/towns/villages are under the umbrella of by cellular services.

From only 2000 cell sites to 30,417 in just six years, cellular services have spread to every part of the country. Yet, there still exist challenges for industry in a similar way such as quality of service, intense taxation, lack of local substance on mobile phones and monetary decelerate.

Lady using a tablet
Lady using a tablet

Comprehensive

Writing Services

Lady Using Tablet

Plagiarism-free
Always on Time

Marked to Standard

Order Now

According to figures made available by telecom operators, there were 104 million cellular subscribers in Pakistan at the end of January, 2011 as compared to 99.2 million at the end of June, 2010 screening a net boost of 4.8 million subscribers over the last seven months.

Mobilink is at the top with 32.1 million subscribers followed by Telenor with 25.1 million cellular subscribers. Ufone is at third with a subscriber base of 20.4 million while Warid has 17.6 million subscribers and Zong holds 8.9 million figures till January, 2011.

Brand Switching

(Richard Lee, Jamie Murphy, University of Western Australia,2005), their study investigates determinants that cause mobile phone Customers to transit from being loyal to switching. It concluded that different factors like price and switching cost can influence the switching behaviour of customers. But, the priority is given to the price that it is the most important factor that can influence customers to switch from one brand to another.

Still, (Assael, 2004) finds your people switch companies simply because they want to try one thing emerging. He concluded in which often customer base change as they are variety seekers in addition they always would like to try something new. There is excellent role concerning brand name commitment at sustainability of brand name (Howell, 2004), the more their customers are devoted to the brand the profitability of brand name will likely to be maximum. However, brand switching can be a happen of decrease while increasing inside that brand commitment and the determination to purchase other brand is some time period decrease and augment. .

(McAlister 1982, p.142) concluded that marketing variables, like price, product design, advertising additionally circulation and situational variables can affect your switching intention associated with the customer base.

(Roos & Gustafsson, 2007) argued there are 2 different types of customer base throughout the switching process; active and passive customers. The active users are those that actively search for brand new suggestions and alternative available. These have actually more information more than a products and exactly how to compare various products. Such users often ask the new company by themselves and are aware to what they want. Passive switchers have always been customers who get influenced with a third person could stay family or even buddy and might not be aware of alternatives available inside consumers. That it cannot suggest that they don’t want to switch starting one brand inside another. (Kotler and/or Gertner, 2002) stated that users that are loyal they do not have any intent to change towards other provider, additionally (Lee and Murphy, 2006) asserted the same thing it customer loyalty actually result of customer satisfaction; the greater the clients is pleased the more they are loyal plus they have low intent of switching to different suppliers. Thus, when clients get loyal in order to a certain firm, they spend considerably money than less loyal customers and their switching intent decreases.

Selection searching intention means which regarding that behaviours concerning switching brands and shops; there are definitely fewer possibilities to purchasing the same brand at the long term. In cases where a consumer has higher range seeking purpose then there tend to be increasing possibilities to switching from a brand to another.(Kahn, 1995; Ratneshwar and Mick, 2005).

(Kim, 2009) consented which many customers that revisited the service provider are satisfied to they often come with minimal variety seeking intention, as a result of their satisfaction with this product then low selection searching purpose they've lower switching intent as compared to users whom possessed a extreme type-searching orientation. They are affected by new stimuli and additionally they had been apt to change service providers. On above results conclude which customers with low selection-looking for orientation to that pleased with a product or perhaps a service leads inside their intent in order to revisit a company.

Consumer dissatisfaction then the necessity in order to seek variants have significantly influenced regarding brand-switching decision. Product or service category characteristics do not affect brand-switching decision. The need to seek variations moderates the effects of consumer dissatisfaction and/or system characteristics category on brand-switching decision. (Junaedy Dharmmesta, 2002).

Sales marketing shows significantly affected on brand-switching decision (Nagar, 2009).

Lady using a tablet
Lady using a tablet

This Essay is

a Student's Work

Lady Using Tablet

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Examples of our work

(Oyeniyi, Omotayo* and Abiodun Abolaji Joachim, 2008), He attempts to find the connection between Customer service on Customer retention in telecommunication business in Nigeria. If retention is not managed, Customer’s respect might lost. He analyzes the potential constructs inside Customer retention through investigating that chain concerning impacts concerning retention after Customer service, satisfaction, value and/or behavioural intention. On hypotheses are supported except that a greater level of client satisfaction does not induce Customer loyalty. Customer satisfaction doesn't really lead to user’s commitment. It’s thought which as soon as the client is truly satisfied, then commitment towards their telecom company are strengthened. Their outcome, even more show it the respondents at his or her research have a positive impression towards their telecom company’s ability to meet their changing specifications.

Problem statement

Due to growth of industry customers have every chance of switching the mobile service provider.

Objectives

There are two objectives of this research which are:

  • To classify the factors that affects the consumers into switching the service provider.
  • To find the most preferred service provider in Pakistan.

Scope

This study can be extended to other geographical areas within the country. It can be extended to study the custom of mobile services of different age groups and for that reason new plans can be formulated.

Variables

Total four variables are involved: one dependent and three independent. These variables are derived from an examination of the theoretical and empirical researches relating to customer switching behaviour. Brand switching is dependent variable and brand loyalty, sales promotion and price are independent variables.

Hypothesis Development

On the basis of above literature following hypothesis are developed:

Ho: Brand Loyalty has not negative impact on brand switching decision.

H1: Brand Loyalty has negative impact on brand switching decision.

Ho: Price has negative impact on brand switching decision.

H2: Price has negative impact on brand switching decision.

Ho: Sales Promotion has positive effect on brand switching decision.

H3: Sales Promotion has positive effect on brand switching decision.

Research methodology

Research Design

The research design is Descriptive research design.

Data Collection

In this survey, the primary data was collected through structured questionnaires.

The secondary data was obtained through different literature reviews and articles.

Sampling

It is a category of non probability sampling which involves the sample being drained from that part of the population which is close to hand. We selected 100 customers from sample frame in Sahiwal based on ease. .

Research Instrument

The questionnaires consist of multiples choice questions (MCQs) with single response and multiple responses. Also five point scale of likert is used to check the reliability of variables. Data Analyses and Interpretations

As mentioned above, I took the sample of 100 users of cell phone in Sahiwal. Out of those 100 respondents, the highest frequency was for Ufone that is 28% of total sample size i.e. 28 respondents. Then the Jazz was the second largest market share that is 24% i.e. 24respondents. After this, Warid market share is 20% i.e. 20 respondents. Telenor and Zong also increase its market share 18% and 12% respectively.

On the basis of data that we collected it is also checked that how many SIMs a person is using currently. It is concluded that out of 100 respondents 54% are using only one SIM, 38% are using two SIMs and only 8% are using three SIMs.

We also collected data about the preferences of customers that either customer prefers price, service or offerings of a service provider. Out of hundred 68% of respondents prefer service, 12% prefer price and 20% prefer offerings while selecting a provider.

We also asked out the respondents that how long they have been customers of the service provider. 12 % respondents are using the network from less than one year, 32% are using from 1-3 years and 56% respondents are using from 3-5 years.

And finally respondents were asked to tell that which thing attracts them more either internet, SMS or call offerings. Out of hundred 22% responded that they are attracted by internet offerings, 54% by SMS offerings and 24% are attracted by call offerings.

Statistical Analysis

Reliability Statistics

Cronbach's Alpha

N of Items

.865

3

The value of Cronbach's Alpha is 0.865 and accepted value for data is 0.7 so data is reliable.

(George and Mallery, 2003, p.231) provide the following rules of thumb:

“_ > .9 – Excellent, _ > .8 – Good, _ > .7 – Acceptable, _ > .6 – Questionable, _ > .5 – Poor, and

_ < .5 – Unacceptable”.

Descriptive Statistics

N

Range

Minimum

Maximum

Mean

Std. Deviation

Skewness

Statistic

Statistic

Statistic

Statistic

Statistic

Statistic

Statistic

Std. Error

BLtotal

100

2.67

2.33

5.00

3.9533

.67340

-.495

.241

SPtotal

100

3.00

2.00

5.00

3.8600

.59963

-.536

.241

Ptotal

100

3.33

1.67

5.00

3.8133

.73446

-.727

.241

Valid N (listwise)

100

The minimum values of brand loyalty, price and sales promotions are 2.33, 2 and 1.67 respectively. The maximum value of brand loyalty, price and sales promotion is 5. The average mean of variables is 3.87553. Standard deviations of brand loyalty, price and sales promotions are 0.67340, 0.59963 and 0.73446 respectively.

Correlation Analysis

Correlations

BLtotal

Ptotal

SPtotal

BLtotal

Pearson Correlation

1

.708**

.623**

Sig. (2-tailed)

.000

.000

N

100

100

100

Ptotal

Pearson Correlation

.708**

1

.725**

Sig. (2-tailed)

.000

.000

N

100

100

100

SPtotal

Pearson Correlation

.623**

.725**

1

Sig. (2-tailed)

.000

.000

N

100

100

100

**. Correlation is significant at the 0.01 level (2-tailed).

The relationship between brand loyalty and price is strong. The relationship between brand loyalty and sales promotion is moderate and the relationship between price and sales promotion is strong.

Findings:

  • From this research author found that Ufone is most preferred network in Sahiwal.
  • Also this research reveals that most of the customers in Sahiwal are using two networks.
  • Most of the customers in Sahiwal gave preference to service rather than price and offerings.
  • In this research we also found that customers are mostly attracted by the SMS offerings of service provider.
  • This research also supported our hypothesis that brand loyalty, price and sales promotions are the factors that affect the switching behaviour of customers.

Conclusion

From the above research author concluded that the telecom industry of Pakistan is growing day by day and becoming more competitive. Customers have every chance of switching the service provider. In order to retain the customers company should focused on their service and offerings. Brand loyalty, sales promotion and price have an effect on brand switching decision so companies should focus in these areas in order to retain the customers. Most of the customers are concerned with the services that are offered by the company to them rather than price, so companies should focus on improving its services.

References

1. http://propakistani.pk/2011/05/20/cellular-sector-of-pakistan-overview/

2. Roos, I., Edvardsson, B. & Gustafsson, A. (2004). Customer Switching Patterns in Competitive and Non- competitive Service Industries. Journal of Service research, 6, 1-16.

3. Lee, Richard and Murphy, Jamie (2005) "From Loyalty to Switching: Exploring Determinants in the Transition," ANZMAC 2005, Perth, Australia, December.

4. Nagar, K. (2009). "Evaluating the Effect of Consumer Sales Promotions on Brand Loyal and Brand Switching Segments," Journal of Business Perspective (October-December) No. 4. Vol. 13, 35-48.

5. Assael, H. (2004). 'Consumer Behavior and Marketing Action,' 6th Ed, Cincinnati OH; South Western College Publishing.

6. Kotler, P. & Keller, K. L. (2009). Marketing Management 13th Ed. Upper Saddle River, New Jersey: Pearson Education, Inc.

7. Junaedy, S. & Dharmmesta, B. S. (2002). 'The Influence of Consumer Dissatisfaction, Characteristics Product Category, and Variety Seeking on Brand Switching,' Journal of Economics and Business Indonesia Vol. 17 No. 17(1), 91-104.

8. Howell, D. (2004), “Today’s consumers more open to try new brands”, DSN Retailing Today.

9. McAlister, L. (1982). “A Dynamic Attribute Satiation Model of Variety-Seeking Behavior”.

Journal of Consumer Research, Vol.9, September, pp.141-150.

10. George, D., & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and

reference. 11.0 update(4thed.). Boston: Allyn & Bacon.