Premium Essay

Switching Cost and Customers Loyalty in the Mobile Phone Market

In: Business and Management

Submitted By rucha
Words 2490
Pages 10
2009

Joseph Omotayo Oyeniyi, Joachim 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 the telecommunication industry In the telecommunication sector there are a number of critical costs that must be considered when switching. These includes the costs of informing others of the change (friends, colleagues and business associates), the cost of acquiring new lines, cost associated with breaking long standing relationships with a service...

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