Customer Loyalty In Indian Mobile Telecommunication Services Sector Marketing Essay

Customer Loyalty In Indian spry Tele conference divine answers Sector commercialiseing EssayINTRODUCTIONService brasss in India be facing bully competitor in the worldwide market because of liberalization and globalization of the Indian economy. Hence, it is helpful for function organizations to manage the guest helper character reference perceptions in order to overcome the competitors and coax and uphold the nodes. Because of the globalization and liberalization of Indian economy, Indian answer arena has been opened for Multinational companies. In order to overcome the competition and to retain the world class do standards, Indian companies have been forced to ingest property attention programs. Nerurkar (2000) psychoanalyzed the SERVQUAL dimensions in India and concluded that wait on whole t whiz should form the basis for all client retention st posegies. run are defined as the activities, which are involved in producing intangible products as education , entertainment, food and lodging, transportation, insurance, trade , government, financial, real estate, medical, consultancy, repair and maintenance homogeneous occupation. feature has become a strategic tool for obtaining efficiency in trading operations and alter business performance (Babakus and Boller, 1992 Garvin, 1983 Phillips, Chang and Buzzell, 1983).This is dead on target for the go orbit too. several(prenominal) authors have discussed the unique importance of calibre to advantage firms and have stand for its positive relationship with profits, extendd market share, return on investment, client happiness, and futurity purchase inventions (Rust and Oliver, 1994). One obvious conclusion of these studies is that firms with superior step products outperform those marketing inferior role products.Service theatrical role butt be concisely defined as the soulal experience of the client with the profit submitr. Service theatrical role is playing an increas ingly important section in the reach environment where on that point is no further celestial orbit for the companies to variantiate themselves other than the caliber of the avail provided by them. Delivering superior help quality than the competitors is the tonality for the success of any organization. But, the companies face gruellingies in mensuration the quality of work offered to the guests. Because unlike measuring rod the quality of ripes, the measurement of the quality of serve offered by the companies is difficult due to the triad unique features of serve viz. intangibility, heterogeneity, and inseparability. Hence the only authority of measuring the quality of utility offered by the t up to(p) operate provider is the measurement of the clients perception of the quality of run they are experiencing from their run providers.Quality has been defined differently by assorted authors. few prominent definitions include conformance to requirements (Cros by, 1990), fitness for use or one that satisfies the node. According to production philosophy of Japan, quality has been defined as zero defects in the firms passs. Though initial efforts in defining and measuring improvement quality emanated largely from the goods empyrean, a solid instalation for seek work in the area was laid down in the eighties by Parasuraman, Zeithaml and Berry (1985). They were amongst the earliest interrogationers to emphatically point out that the sentiment of quality prevalent in the goods area is non extendable to the run sector. Being inherently and essentially intangible, heterogeneous, perishable and entailing simultaneity and inseparability of production and consumption, run require a distinct framework for quality explication and measurement.As against the goods sector where tangible cues exist to enable consumers to evaluate product quality, quality in the service context is explicated in cost of parameters that largely come to a lower place the humankind of experience and credence properties and are as such difficult to measure and evaluate (Parasuraman, Zeithaml and Berry, 1985). One field of operations contribution of Parasuraman, Zeithaml and Berry (1988) was to provide a terse definition of service quality. According to these authors service quality means relating the superiority of the service with the global judgement of a person close it and explicated it as involving evaluations of the outcome (i.e., what the client actually receives from service) and influence of service act (i.e., the manner in which service is delivered).In line with the propositions regulate forward by Gronroos (1984) and Parasuraman, Zeithaml and Berry (1985, 1988) posited and operationalized service quality as a difference in the midst of consumer expectations of what they want and their perceptions of what they get. Based on this conceptualization and operationalization, they proposed a service quality measurement platefu l called SERVQUAL.Quality has become a strategic tool in obtaining efficiency in operations and remedyd performance in business. This is true for two the goods and serve sectors. However, the problem with management of service quality in service firms is that quality is not tardily identifiable and measurable due to inherent characteristics of services which make them different from goods.INDIAN TELECOM SECTORIn the year 1984, one of the members of fantan stood up and said to the erstwhile telecommunication minister of religion about the woful state of affairs regarding the telecom services in our country. To the question posed, the minister replied that telephone is a luxury and not a necessity and if the revered Member of Parliament is not happy with the service then he coffin nail return the familiarity as there were a big bucks of Members of Parliament waiting to get one. Getting a telephone connection was even more difficult than acquiring Maybach (one of the costli est cars in the world). The father of telecom revolution in our country was the erstwhile Prime Minister Shri Rajiv Gandhi, wherein he called Mr. Sam Pitroda who initiated the Digital telephony revolution in our country. Advances in engineering science coupled with reforms of 1991 and the fundamental, structural and institutional changes brought about in that period were subservient in setting up the tone for future growth and development.Today, India is one of the red-hot growing telecom markets in the world with current sub-scriber standstill nearing 490 mil-lion and looking positive to flavor 500 one million million million subscribers by 2010. India, the fastest growing telecom market in world, registered a CAGR of around 34% over the last decade and has left analysts around the world on the whole in awe. Among the various segments, cellular or prompt segment has been the key contributor and specially prepaid services, with its wide offerings of services, has been hint the growth wave. With the coming(prenominal) 3G allotment, the sector is likely to grow at a good rate riding on better and possibly a whole newly rank of services.OVERVIEW OF INDIAN TELECOM SECTOR15 years back, no one had thought that India will become a country with more number of GSM subscribers than fixed line sub-scribers. With 490 million sub-scribers by 2009, teledensity has risen up to around 42%, and thus the other half is yet to be brought to the mainstream. Going by the current data, the subscriber base grew to around 494.07 million in August09, registering a growth of 42.67% over the last year. As per the estimates of depot watch the expected active subscriber base will touch around 771 million by the year 2013. Telephony services i.e. ( ready and basic) and meshing services dominate the Indian Tele-com services market. With a CAGR of 29% from 2002 to 2007 with revenues of $20 one million million million, it is expected to stabilize at 16% by 2010 with revenues i n the range of $43 billion. Over the years, wire-less services has acquired al closely 92% of the total telephony market, with State owned BSNL as the leader in the landline domain and Bharti Airtel being the leader in cellular services with other players like Reliance, Idea Cellular and Vodafone giving it a tough competition.SERVICE PROVIDERS IN SECTORThe Indian mobile services market is more or less equally divided between GSM and CDMA nodes with the former capturing around 53% of the sub-scriber base. Currently there are 11 players who are fighting tooth and savvy to increase even one single percentage point in their market share. While Bharti Airtel dominates the GSM arena, Anil Ambani led ADAGs Reliance communications has been leading the CDMA services space in mobile telephony but the good sign for the sector is that revenues of all the incumbents have increased leading to an increase in their revenues. In GSM, Bharti Airtel is given a tough competition by Vodafone and Tata Teleservices which operates Tata Indicom and in CDMA it is considerably behind Reliance communications in terms of market share. With Mobile number portability coming into the scene, the war will be fiercer in this space and there will be a great swapping of subscribers among the existing players.SERVICE PROVIDER WISE MARKET SHARE AS ON 31-03-2010Serial No.Name of Telecom CompanyMarket Share1AIRCEL6.06%2BHARTI AIRTEL22.33%3BSNL11.95%4HFCL0.06%5 bringing close together10.99%6LOOP0.50%7MTNL0.90%8RELIANCE17.72%9SISTEMA0.60%10STEL0.09%11TATA11.07%12UNINOR0.47%13VODAFONE17.27%SOURCE TRAIGROWTH PROSPECTS TELECOM IN INDIAIndian telecom industry has set an example by keen the market to an extent of around 43% in a cover of 10 years when analysts and experts were extremely sceptical about India as a market. The growth has not been rest periodricted only to the higher section of the society, instanter it is driven primarily by the arcadian market as rise and the acceptance has been in- creasing considerably over the years. On an average approximately 8 million users are added per month to the kitty thereby making India the worlds fastest growing telecom market and thus happens to be the country offering highest Return On Investment for the telecom companies. To support the growing telecom market, the government is supporting telecom manufacturing by providing tax sops as intumesce as setting up Special economic zones (SEZ) for the sector.TRENDS IN THE INDUSTRY3G spectrum will be the next growth wave in the industry and likewise the source of additional revenues for the companies. Foreign players such as ATT and NTT DoCoMo have show great interest for the same. The spectrum allotment is a major investment opportunity and is estimated to attract an investment of around US$8-10 billion during 2008-11. The state owned incumbent BSNL has successfully launched its 3G service under the proposed India-Golden 50 scheme but could not create that much of bombilation thoug h for not being aggressive in marketing the same. WiMax on the other hand promises seamless connectivity with speed of more than 4 Mbps in tough terrains also. With the growing number of smart phones entree the market coupled with buzz created by the social ne cardinalrking websites, one can surely expect a substantial amount of people victimization their mobile phones for the internet. The telecom ministry is intend to auction few slots in WiMax in near future. Value Added Services on the other hand is the constant source of revenue and a means to en-gage subscribers. The expected revenue from Value Added Services will be around US$ 4.0 billion by 2015. The concurrent developments like M-Commerce, tension on localization, availability of content in vernacular languages, availability of mobile TV are few out of many growth drivers for the vas industry. With the customer data at their disposal, telecom companies are generating knowledge and discipline by churning out this data t o serve their customers better.The future for the Indian Telecom industry looks bright with fierce competition making way for consolidation. The growth will be majorly driven by rural sector which is shortly attracting good investment not only from the players but also from the government. The biggest challenge will be to keep in touch with the rural customers as setting up customer touch points requires investment with not much tangible returns as the number of subscribers is still pretty low. As of now the penetration in rural areas is around 10% as opposed to around 30% in urban landscape. The industry currently is nicely poised with great new policy changes and new players entering the market to make it more fruitful for the consumers.THE REVIEW OF LITERATUREseveral(prenominal) studies were conducted on the issue of service quality in various countries. Some studies were consulted for proper understanding of the concepts discussed in this break down. Various vexs have been tr ue to work measure and assess the causal factors of service quality. SERVQUAL is based on the idea of a gap between expectations of the customers about service quality by service provider and their assessment of actual performance of service by service provider. Since Parsuraman et al. (1988) developed the SERVQUAL instrument many researchers have used and developed the 22-item home of measurement to scan service quality in different sectors of services industry. The early(prenominal)ime studies are consulted for the present sketchA. Parsuraman, Leonard L. Berry, and Valarie A. Zeithaml, (1988) in their weigh described about development of 22-item instrument in the assessment of service quality perceptions of customers in service and retail firms, which was called as SERVQUAL. This study was revolutionary as it didnt guess on the earlier dimension of goods quality in the manufacturing sector. The initial study based on the focus on groups yielded 10 dimensions of service quality that include access, competence, courtesy, credibility, security, tangibles, reliability, responsiveness, communication, and understanding the customer. In concluding remarks, authors proposed that SERVQUAL crustal plate can help a vast range of service and retail firms to assess the customer expectations and perceptions of service quality as it had a variety of voltage applications.Johnson, William. C, and Anuchit Sirikit (2002) conducted a study on the landline and mobile users of the Thai telecommunication industry using the SERVQUAL scale (reliability, responsiveness, assurance, empathy, and tangibles). The study was conducted with the objectives of dateing whether service quality ratings predict a war-ridden advantage among Thai telecommunication firms as indicated by future customer intentions and whether SERVQUAL reliably assesses service quality perceptions/expectations among customers in the Thai telecommunication industry.G.S.Sureshchandar, Chandrasekharan Raje ndran, and R.N.Anantharaman (2003) critically examined the service quality issues from the customers point of view. In their study conducted in a develop country, India, authors selected collar groups of banks for their study viz. Public sector, reclusive sector, and foreign banks. Authors in their study found that in terms of the customer perceptions of service quality, the technological factors appear to contribute more in differentiating the three sectors and the people-oriented factors appear to contribute less in differentiation among three sectors. In terms of performance foreign banks topped among three groups, and performance of cosmos sectors banks is even less than private sector banks.Ndubisi, Nelson Oly, and Chan Kok Wah (2005) conducted a study on the Malaysian banking sector. The study concluded by saying that banks can start out customer rapture by exhibiting trustworthy behaviour, commitment to service, communicating culture to customers efficiently and accura tely, delivering services in a competent manner, handling potential and manifest conflicts skilfully, and improving overall customer relationship quality.Najjar, Lotfollah, and Ram R. Bishus (2006) study on the US banking sector using a nondifference score of SERVQUAL scale focused on the importance of improving service quality in the banking sector. The study used statistical tools like ANOVA, Factor Analysis, and Regression to analyze the data.The final results of the service quality depth psychology showed that reliability and responsiveness were the two most critical dimensions of service quality and they are passly colligate to overall service quality. The findings of the study substantiated the findings of Berry et al. where reliability and responsiveness were shown to be important factors of service quality.Abdolreza Eshghi, Sanjit Kumar Roy, and Shirshendu Ganguly (2008) conducted an empirical study in Indian mobile telecommunication services sector and concluded that repu tation is intertwined with the perceived service quality and customer satisfaction, and with the help of exoteric relation campaigns and innovative communication strategies, positive corporate reputation can be build and maintained, which at last help to increase customer satisfaction. Study was conducted in Indian cities videlicet Delhi, Kolkata, Mumbai, and Hyderabad. 32 variables cerebrated to service quality were considered for the study, which were identified from the past literature. searching factor analysis and multiple regression analysis were used to win the conclusions. Based on time values of beta coefficients hierarchy of factors was framed. In their analysis relational quality, competitiveness, reliability, reputation and transmission quality factors emerged as significant predictors of customer satisfaction. In hierarchy of factors competitiveness, relational quality, and reliability were more important than rest factors.RESEARCH GAPAs per the literature review ed for the present study in the Indian mobile telecommunication sector no integrated study about service quality attributes, customer value, customer satisfaction, and customer verity in Indian context has been conducted. So as per the stiff competition in the market between these mobile telecommunication companies, it is important to find out whether any relationship exists among service quality attributes, customer value, customer satisfaction, and customer loyalty. Also customers have different mindset towards these companies about services provided by them. The Indian mobile telecommunication sector is vast and there are big business opportunities for service providers. With almost all the public and private companies offering the same kind of services and network coverage, the quality of service offered to the customers became one of the important differentiators for all the service probiders to maintain their competitive advantage in the market. Service quality refers to the perception of the customers of the organization regarding how well the organization is fulfilling their service needs. As said in the introduction, measuring the quality of services provided is possible only through the perception of the quality of service that the customers are experiencing from their service providers.OBJECTIVES OF THE STUDYAlthough research on the service quality of telecommunication services based on customer perceptions has been conducted widely, no novel studies have been conducted which examine the core group of the service quality dimensions on perceived value, satisfaction, and loyalty in an integrated sample in Indian context. This research attempts to examine the effect of service dimensions/attributes on perceive service quality, value, satisfaction, and service loyalty based on the research objectives which presented as follows1. Using mobile telecommunication services setting in India, what are the special attributes of service quality that influen ce customer value, and customer satisfaction.2. Using mobile telecommunication services setting in India, what are the specific predictors (service quality attributes, customer value, or customer satisfaction) which influence customer loyalty.Will the proposed path representative predict individual path relationships among service quality attributes, customer value, customer satisfaction, and customer loyalty?Research ModelResearch model for the present will be developed based on the constructs namely service quality attributes, customer value, customer satisfaction, and customer loyalty. It will include hypothesized relationships among in a higher place mentioned constructs, and statistically this model will be tried and true.Hypotheses of the studyHypotheses will be developed with support from past literature to test the relationships among the followings blood between service quality attributes and customer valueRelationship between service quality attributes and customer sati sfaction.Relationships among service quality attributes, customer value, and customer satisfaction.Relationship between customer value and customer satisfaction.Relationships among attributes of service quality, customer value, customer satisfaction, and customer loyalty.Justification of the StudyThis research is excogitationed to help both academicians and practitioners understand the extent to which service quality, customer value, and customer satisfaction relate to customer loyalty in a telecom environment. The assessment of the most important attributes in telecom services set up can provide important cues, which may be used to review characteristics of the sector as experienced by customers. These cues can be used to improve customer value and customer satisfaction, which will lead to improved customer loyalty.Finally, this study contributes to the service marketing literature by applying concept of service quality, customer value, customer satisfaction, and loyalty in a tele communication services setting in India, as one of developing country in Asia.RESEARCH DESIGNTo create a research design for the study appropriate measures and model are considered as per requirement of the research work. The focus of present research work is investigation of relationships among attributes of service quality, customervalue, customer satisfaction, and customer loyalty in Indian mobile telecommunication services sector. Since present research work will be based on primary data, which is to be collected from Indian mobile telecommunication services users with the help of structured questionnaire, a field based survey design will be used as data collection method. supposed FRAMEWORKMany researchers have conducted researches in the field of service quality and customer satisfaction such as Parasuraman et al. (1985, 1988, 1991, 1993, 1994), Zeithaml et al. (1988, 1991, 1993, 1996), Cronin and Taylor (1992, 1994), Hartline and Jones (1996), Johnston (1997), Lassar, Chris M anolis, and Winsor (2000), cronin, Brady, and Hult (2000), Caruana (2002), and Abdolreza Eshghi, Sanjit Kumar Roy, and Shirshendu Ganguly (2008).In the year 1985, open up research was conducted in the field of service quality by Parasuraman, Zeithaml, and Berry. In their research they came out with service quality dimensions, and succeed in developing five gaps of service quality model. Researchers defined service quality as gap between customers expectations and perceptions about quality of service offered by the service provider. With the help of this research they were able to develop service quality scale to measure the quality of service quantitatively, and scale was named as SERVQUAL. In 1988, Pararsuraman et al. conceptualized the dimensions of SERVQUAL scale namely Tangibility, Responsiveness, reliability, Assurance, and Empathy. For these five dimensions a total of 22 items were selected in the service quality instrument. After development of service quality instrument, ma ny researches were conducted in different service set ups by using SERVQUAL.To examine the process of delivery of service quality, customer value and their impact on behavioral intentions of customers Hartline and Jones (1996) developed a model, which included same theories and concepts as earlier taken by Bolton and Drew (1991a), Boulding et al. (1993). In their research work, they came out with strong evidences that specific performance cues of employees have significant effect on overall quality and as a result this quality had significant impact on overall customer value. Effect of overall customer value was found relatively more on behavioral intensions as compared to overall quality. Whereas effect of specific performance cues was mediated by overall customer value and overall quality.In the year 2000, Cronin, Brady, and Hult conducted research in various service industries by taking into consideration service quality, customer value, customer satisfaction, and behavioural intentions. They found in their study that service quality, customer value, and customer satisfaction have direct impact on behavioural intentions, if all these three are taken collectively, whereas indirect effects of service quality and customer value increased their impact on behavioural intentions.Caruana in 2002 developed a model showing mediation role of customer satisfaction between service quality and customer loyalty. Results of the research provided evidences for the proposed model and confirm the mediating role of customer satisfaction between service quality and customer loyalty.Many past studies have specified linkages among service quality, customer value, customer satisfaction, and behavioural intentions. However the results do not confirm which of these three variables or their combinations have direct impact on behaviour intention. In the past literature it has been found that bivariate relationship exists between behavioural intention and all three constructs. Zeit haml et al. (1996) found that service quality is an important determinant of behavioural intention, but the exact relationship was not discovered. Therefore this face of partial relationship determination may lead to omitted variable prejudice and hamper the results. To overcome this biasness, an integrative model is needed so that true relationship may be developed and can be tested in a model. Caruana (2002) suggested the role of customer value and reputation of an organization can be considered as new constructs to relate customer satisfaction with customer loyalty. The present research expands the previous researches conducted by various scholars and includes the model developed by Hesketts, Sasser, and Schlesinger (1997), popularly known as Service reach Chain. Service Profit Chain model suggests that there is positive direct relationships among profit, growth, value of products offered to the customers, customer satisfaction, customer loyalty, productivity, service quality attributes. With the use of customer friendly strategies satisfied employees deliver better quality of services and able to retain the customers for a long time for the betterment of organization. Service quality attributes and customer value directly influence customer satisfaction and customer satisfaction directly affects customer loyalty. Consequently loyalty of customers towards organization leads to phenomenal growth and finally adds to the profits of the organization.Therefore proposed research model for the present study is shown in figure belowConceptual research model of service quality attributes, customer value, customer satisfaction, and customer loyalty.