...Abolaji Abiodun 111 SWITCHING COST AND CUSTOMERS LOYALTY IN THE MOBILE PHONE MARKET: THE NIGERIAN EXPERIENCE Joseph Omotayo Oyeniyi, Joachim Abolaji Abiodun Abstract Switching cost is one of the most discussed contemporary issues in marketing in attempt to explain consumer behaviour. The present research studied switching cost and its relationships with customer retention, loyalty and satisfaction in the Nigerian telecommunication market. Based on questionnaire administered to customers in the mobile telecommunication industry; the study finds that customer satisfaction positively affects customer retention and that switching cost affects significantly the level of customer retention. However, the effect of switching barriers on retention is only significant when customers consider to exit. Oyeniyi O. J., Abiodun A. J. - Switching Cost and Customers Loyalty in the Mobile Phone Market: The Nigerian Experience 112 Business Intelligence Journal January Introduction Switching costs are costs that are incurred by buyers for terminating transaction relationships and initiating a new relation. Porter (1980) defined Switching cost as a one time cost facing a buyer wishing to switch from one service provider to another. Jackson (1985), however, defined switching cost as the psychological, physical and economic costs a customer faces in changing a supplier. Jackson’s definition reflects the multi-dimensional nature of switching cost, especially as relates to...
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...nd swFactors behind the brand switching in telecom industry The issue of Customer’s switching to other service providers have been the cause of intensive research from many years now and have given rise to many theories.Due to the increased competition in the telecommunication industry it has become extremely important for the companies to pay attention towards retaining of the customers.This research study particularly investigated the causes of customer switching behavior.A prolific way to gain the knowledge about the switching behavior of customers is basically to examine the various factors that play imtegral role in switching behavior. This qualitative research study has offered new insights by defining and identifying the customer’s rationale to switch from one service provider to another. The model is estimated using the data set on the number of switching behavior. A total of 100 respondents were surveyed to identify the factors that have a greater effect on the customer satisfaction.The data were analyzed by the Optimal Scaling (Categorical Regression)to test the hypothesis. The model identified that… CHAPTER ONE: INTRODUCTION This research tried to find out the underlying factors that made the customer to switchover to another service provider in telecom industry. The telecommunication industry is one of the most important industries of the world. In order to gain competitive advantage as competition is getting more and more intense, the companies are compelled to...
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...CUSTOMER LOYALTY : THE CASE OF MOBILE PHONE USERS IN UNIVERSITI UTARA MALAYSIA Prepared by Meguellati Achour Pn. Nor Pujawati Md. Said Dr. Ali Boerhannueddin Abstract Service quality, switching barriers, and brand image are the major antecedents of customer loyalty, and loyal customers may buy more, accept higher prices and have a positive word-of-mouth effect. Also we know that the cost of selling to new customers is much higher than the cost of selling to existing customers, also the cost of attract new customers is much higher than the cost protect existing customers ten times. Although this fact is apparent to everyone, many companies are still losing customers at a formidable rate. In this context the main aim of this research is to examine the relationships between these factors and customer loyalty in the Universiti Utara Malaysia sector. Based on the theoretical model, a comprehensive set of hypotheses were formulated and a methodology for testing them was outlined. These hypotheses were tested empirically by questionnaires to demonstrate the applicability of the theoretical model. The results indicate that service quality, switching barriers, and brand image are separate constructs that combine to determine the loyalty, with service quality and switching barriers exerting a stronger influence than brand image. Finally hypotheses H1, H2 were supported, while hypothesis...
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...company by abridge decision rules. (Bateson 1995) stated that the service quality is generally conceptualized as an attitude, the evaluation of the service offered. Quality is basically made up from a series of evaluated experiences and are usually fluctuates less comparatively than attitudes built from the satisfaction emotions. Parasuraman et al. (1988) stated that the customers judge the service quality on the basis of overall firm’s superiority and excellence. According to (Gronroos, 2000) the evaluation of service quality by customers could be judge through the interaction process that exactly happens or perceived by customers leave a critical impacts on customers. (Parasuraman et al., 1988; Aydin and Özer, 2005; Ismail et al., 2006; etc.) If service is high in quality it is regarded as a key to succeed in most competitive service markets. Many researchers have indicated that the customer satisfaction and the customer’s trust in that service firm is directly influence by the service quality being provided. The pre-purchase expectations if fulfilled with the kind of service quality being provided the customers might be satisfied. The telecom industry which is basically the service industry, the service quality is an important factor to develop the...
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...VIETNAM NATIONAL UNIVERSITY – HO CHI MINH CITY INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS CUSTOMER SWITCHING BEHAVIOR IN THE VIETNAM RETAIL BANKING INDUSTRY In Partial Fulfillment of the Requirements of the Degree of BACHELOR OF ARTS in BUSINESS ADMINISTRATION Student’s name: BÙI THỊ GIÁNG HƯƠNG Student’s ID: BAIU09043 Advisor: NGUYỄN VĂN PHƯƠNG, Ph.D Ho Chi Minh City, Vietnam 2014 CUSTOMER SWITCHING BEHAVIOR IN THE VIETNAM RETAIL BANKING INDUSTRY APPROVED BY: Advisor APPROVED BY: Committee _____________________________ ______________________________ Nguyễn Văn Phương, Ph.D. Nguyen Kim Thu, Dr., Chairman ______________________________Duong Thuy Tram Anh, MBA, Secretary ______________________________Le Phuong Thao, MBA, ______________________________ Hoanh Thanh Nhon, MBA, Thesis Committee ACKNOWLEDGMENTS During the time working on this thesis, there are plenty of difficulties that I have been through and plenty of experiences that I have learned. This thesis is finished with the valuable contributions of many people that I am very thankful to. First of all, I would like to express my deepest gratefulness to my advisor, Ph.D. Nguyen Van Phuong for his guidance, support and contribution during the whole process from the beginning of this task till the end. Especially in my first stage, his tutorials and recommendations helped me to get through the obstacles resulted from short of time and knowledge...
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...CUSTOMER LOYALTY : THE CASE OF MOBILE PHONE USERS IN UNIVERSITI UTARA MALAYSIA Prepared by Meguellati Achour Pn. Nor Pujawati Md. Said Dr. Ali Boerhannueddin Abstract Service quality, switching barriers, and brand image are the major antecedents of customer loyalty, and loyal customers may buy more, accept higher prices and have a positive word-of-mouth effect. Also we know that the cost of selling to new customers is much higher than the cost of selling to existing customers, also the cost of attract new customers is much higher than the cost protect existing customers ten times. Although this fact is apparent to everyone, many companies are still losing customers at a formidable rate. In this context the main aim of this research is to examine the relationships between these factors and customer loyalty in the Universiti Utara Malaysia sector. Based on the theoretical model, a comprehensive set of hypotheses were formulated and a methodology for testing them was outlined. These hypotheses were tested empirically by questionnaires to demonstrate the applicability of the theoretical model. The results indicate that service quality, switching barriers, and brand image are separate constructs that combine to determine the loyalty, with service quality and switching barriers exerting a stronger influence than brand image. Finally hypotheses H1, H2 were supported, while hypothesis...
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...Question 2 What are the various types of switching costs? According to (Investopedia,2015), switching cost can be defined as negative financial and non-financial impacts a customer would endure if they leave a particular brand, organisation or service that has been serving them for a period of time . This is further proven by (BusinessDictionary.com, 2015) where switching costs are costs that a customer need to face when changing to another brand or supplier especially when the previous brand has been fulfilling and satisfying the customers’ needs and wants. Thus, switching to another brand or supplier may prove to be risky as there a chances that the new brand or suppliers would not fulfil the customers’ needs, wants and characteristics. According to (Olou.L.P, 2014), there are several types of switching costs. This includes search cost, learning cost, financial cost, risk costs and etc. This is further proven by (BuyersMeetingPoint, 2015) whereby emotional costs, psychological risk, search costs and etc. are types of search costs. There are 3 types of switching costs that are related to Baskins Robins. These are emotional, social and financial costs. Emotional costs can be defined as how interacted and connected are the customers towards a particular brand (Knight.W, 2015). This may include personal experiences or word of mouth. Moreover, according to (Knight.W,2015), there are statistical evidence that customers usually completes a transaction 20% based on intellectual...
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...1 | P a g e State of the Mobile Nation Switching Attitudes and Behaviours of Mobile Phone Service Providers in Australia Final Report Dr David Gray Dr Steven D’Alessandro Dr Leanne Carter Macquarie University Department of Marketing and Management. March, 20122 | P a g e Table of Contents Executive Summary...........................................................................................6 (i) Introduction ..........................................................................................6 (ii) Objectives of the research ....................................................................6 (iii) Methodology ........................................................................................6 (iv) Key findings .........................................................................................6 (a) The performance of the mobile phone services market..........6 (b) Switching behaviour and savings achieved.............................7 (c) Consumer satisfaction with mobile carriers .............................7 (d) Major reasons for switching carriers.........................................7 (e) Switching costs..........................................................................8 (f) The role of inertia in limiting switching......................................8 (g) The reasons for not switching...................................................8 (h) Bill shock....................................................................
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...Abstract The Study of Customer Loyalty Factors in the Mobile Telecommunications Industry in China This article is a study of Chinese telecommunications service customer loyalty factors and the impact of the internal mechanism. The industry empirical study reveals the communications services industry, the impact factors of customer loyalty, and the interaction between these factors mechanism. With the increasingly fierce market competition and increase costs for customers, cultivate and maintain long-term customer loyalty is a business enterprise can be an important factor. On the one hand, enterprises have to get a good income, in addition to the core technology and improving product quality, but customer satisfaction, service quality and Enterprise Image will to some extent affect on customer loyalty, loyal customers are the main profit source. On the other hand, when supply exceeds demand in the market environment, the cost to acquire new customers than to maintain existing customer costs, but the profit contribution of new customers is far less than the original customer. Finally, the loyalty of customers through word of mouth to bring new business customers. Therefore, the development of customer loyalty strategies, research customer needs and maintain long-term two-way interaction with the customer relationship business and academia has been the focus of attention. Customer loyalty in the communications industry, more and more attention, is the communications business...
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...It can be used to explain the performance of competitors in a market • From the analysis a number of generic competitive strategies can be derived • Cost leadership • Differentiation • Focus The five forces • The ability of firms to earn an good return depends on five forces: namely the… • Threat of new entrants‐ the ability of new competitors to enter the industry • Bargaining power of suppliers • Bargaining power of customers • Threat of substitute products • Degree of competitive rivalry The five forces framework Threat of Substitute Products Bargaining Power of Suppliers Intensity of rivalry within the industry Bargaining Power of Buyers (Customers) Threat of New Entrants The threat of new entrants Threat of new entrants • If new entrants move into an industry they will gain market share, rivalry will accelerate and profits will decline • If it is difficult to enter an industry the position of existing firms will be strengthened • Impediments to the entry of new firms are known as barriers to entry • If barriers to entry are low then the threat of new entrants will be high, and vice versa Barriers to entry • Capital cost of entry • High cost will deter entry • High capital requirements might mean that only large firms can compete • Economies of scale available to existing firms • If they enjoy absolute cost advantages based on large scale then...
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...switch to other service providers. Thus, the following are hypothesized: H1: A high level of switching cost is less likely to make mobile phone users switch to other service providers; and H2: A high level of switching cost moderates the relationship between service satisfaction and service switching. This paper will discuss the results of these two hypotheses tested using linear and moderated regression analysis. Data was obtained using a sample of about 500 employees and students of five public universities and two private universities in Malaysia. Findings from this study will develop insights to better strategize and effectively implement loyalty programs and so, prevent their customers from switching. Keywords: switching behavior, service quality, consumer satisfaction, mobile phone service usage Field of research: consumer behavioral aspects of marketing, mobile phone service SERVICE SWITCHING AND SWITCHING TELECOMMUNICATIONS INDUSTRY COST IN THE MOBILE Although switching is a common scenario in most service industries (Griffin & Lowenstein, 2001), it is more prevalent in telecommunication services (Lee & Murphy 2005). For example, the annual switching rate ranges from 20% to 40% in most of the global telecommunication service companies (Berson et al., 1999; Madden et al., 1999). Until two years ago, mobile service users in Malaysia faced significant costs in switching from one service provider (SP) to another because it could cause the loss of phone number...
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...com/locate/ijinfomgt Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China Zhaohua Deng a,∗ , Yaobin Lu a , Kwok Kee Wei b , Jinlong Zhang a a b School of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Hongshan District, Wuhan, China Department of Information Systems, City University of Hong Kong, Kowloon, Hong Kong a r t i c l e Article history: i n f o a b s t r a c t With the rapid development of mobile technology and large usage rates of mobile phones, mobile instant message (MIM) services have been widely adopted in China. Although previous studies on the adoption of mobile services are quite extensive, few focus on customer satisfaction and loyalty to MIM in China. In this study, 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 with MIM. The results also show that trust, customer satisfaction and switching cost directly enhance customer loyalty. Additionally, this study finds that age, gender, and usage time have moderating effects. Finally, implications for the marketing of MIM are discussed. © 2009 Elsevier Ltd. All rights reserved. Keywords: Mobile instant message Trust Perceived customer value Perceived service quality Customer satisfaction Switching cost Customer loyalty 1. Introduction...
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...Question 5 8. 1.4 Research objectives 6 9. 1.5 Significance of study 6 10. 1.6 Scope of study 7 11. 1.7 Dissertation Outline 8 12. 2.1 Introduction 8 13. 2.2 Defining topic 9 14. 2.3 Defining element in the framework 15. 2.3.1 Customer satisfaction 12 16. 2.3.2 Customer loyalty 14 17. 2.3.3 Customer perception 15 18. 2.3.4 Switching cost 16 19. 2.4 Theories 17 20. 2.5 Proposed Framework 19 21. 3.1 Introduction 20 22. 3.2 Research hypothesis 20 23. 3.3Research Equation 20 24. 3.4 Operational Definition 21 25. 3.5 Measurement 22 26. 3.6 Data collection 25 27. 3.7 Data analysis 27 28. Conclusion 28 29. References 29 Abstract This research is to determine the factors explaining the service quality in the Islamic banking system in Malaysia. Data collection is complete by using research questionnaire. The factors that affect the services quality of Islamic banking consists of customer satisfaction, customer loyalty, customer perception and switching cost. In the research study the questionnaire will be...
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...affect a business’s ability to gain or win customers The greater the number of businesses selling a particular type of product or service the more competitive is the environment. The work of Porter can be used to analyze the competitive environment. -how the state of competition in an industry is governed by five factors called forces, and how the combined strength of these forces determines an industry’s profit potential. Porter’s 5 competitive forces: -threat of new entrants. -bargaining power of suppliers -bargaining power of buyers -threat of substitutes -level of rivalry Threat of New Entrants: Can put pressure on a business to lower prices in order to maintain sales. Alternatively, it could put pressure on a business to improve quality or invest heavily in promotion, all of which increase costs, which reduces profit margins. Barriers to entry need to be high to deter new entrants. -barriers to entry are obstacles that a business may face when trying to enter a new market. They include: -difficulty in gaining economies of scale to match the unit costs of those already in the market. -the need to invest heavily in promotion, due to existing high brand identification. -high start up costs and therefore capital requirements. Eg manufacturing industries. -difficulty accessing distribution channels. -restrictive government policy i.e. policy that limits entry into a given market, or pushes up costs, such as licensing requirements and stringent...
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...can adversely affect effective and efficient supply chain process is information distortion. Demand forecasting and ordering policies have been recognized as two key causes of bullwhip effect in supply chain management. This study explored the simulation approach in quantifying the effect of bullwhip in supply chain, using various forecasting methods. ____________________________________________________________ ______________________________ Keywords: information distortion, supply chain, simulation, quantifying bullwhip effect, forecasting methods ____________________________________________________________ ______________________________ I TRODUCTIO Supply chain is the integration of the decision of the fact that the demands of customers for products...
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