19-09-2012, 02:38 PM
An analysis on the customer loyalty in telecom sector: Special reference to Bharath Sanchar Nigam limited, India
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ABSTRACT
The rationale of this paper is to explore the factors that influence customer loyalty of BSNL mobile
customers. The samples were collected from 100 consumers who have BSNL mobile services in Jaipur
city. BSNL being the pioneer in mobile sector still have a strong customer base, but over the past few
years a steady thinning is happening in the customer base. The paper investigates the reasons behind
the hard core customer loyalty even in an environment with high quality alternatives. The results
indicated that network quality, customer service along with value added services provided by BSNL
enhanced the loyalty of the customers. It is recommended that the BSNL mobile services enterprises
should work on its problems related to servers. This will further strengthen the customer satisfaction
and loyalty. The findings indicate that telecommunication service providers should look beyond price
wars to keep their customers satisfied and loyal. The paper is an attempt to analyze the variables that
influence the perception of the mobile phone users to remain loyal to their existing service providers
that is, why they are loyal to the company.
INTRODUCTION
The hasty growth and development in information
technology and mobile devices has made the Indian
mobile phone service markets more and more
competitive. In order to sustain its present growth rate in
the telecom sector, BSNL the pioneer public sector
mobile service provider in India, need to take drastic
steps not only to retain its customers but also to attract
new customers. It is assumed by all mobile service
providers that value added services increases the
customer loyalty. But does value added services fulfill all
the customer needs and is it the only factor that play a
significant role in maintaining and building up the loyalty
of the customers? On the other hand, according to Lee et
al. (2001) the mobile providers should build up customer
commitment by providing good quality service to their
customers.
LITERATURE REVIEW AND HYPOTHESES
Indian mobile sector
The usage of mobile services in India has penetrated to
almost all economic and social sectors. Penetration rate
of mobile phones in India has reached a noteworthy level.
According to the Department of Telecommunications of
India, there were 346.9 million wireless telephones in
India as of December 20081. With 35.53 million net
additions during the quarter, total wireless (GSM +
CDMA) subscriber base increased to 427.28 million at
the end of June 2009, and wireless Tele-density reached
36.642. Figure 1
Customer loyalty
Customer loyalty is the feelings or attitudes that incline a
customer either to return to a company, shop or outlet to
purchase there again, or else to re-purchase a particular
product, service or brand7. Customer loyalty is the totality
of feelings or attitudes that would incline a customer to
consider the repurchase of a particular product, service
or brand or re-visit a particular company or shop. It
affects the success and profitability of companies8.
Companies can achieve competitive advantage through
customer loyalty and it is the way to gain the best kind of
customers and thereby repeat customers9.
According to Reichheld (1996), Lee and Cunningham
(2001), perception of a customer affects his judgment
and it turns his loyalty towards the product or services.
Loyalty provides the foundation of a company's sustained
competitive edge. By developing and increasing loyalty,
companies can ensure its proper growth and economic
performance. So the marketing strategy of the companies
should be framed in such a way that they will be able to
try to retain the existing customers by increasing their
loyalty and value (Kim et al., 2004).
DATA ANALYSIS AND RESULTS
One sample t test was conducted on the responses (with
test value ‘4’ assigned to the response ‘agree’) given by
customers. t value -1.522 which is not significant at 0.05
level shows that the mean (3.92) of the responses did not
differ significantly from the test value. High significance
value (typically above 0.05) indicates that there is no
significant difference between the test value and the
observed mean. From the result it can be inferred that
majority of the customers are highly loyal to their mobile
service provider (BSNL) (Tables 1 and 2).
The paper explores to find out the factors that force the
customers to remain loyal to the services. From Table 3,
it can be infer that value added services, low premature
termination of calls, quality of customer care and the
ability to make calls even in peak hours are the striking
features that has made a remarkable impact on the customers
positive mindset towards BSNL. Factor analysis
was carried out on various customer loyalty variables, to
find out the major factors that are influencing the loyalty
of BSNL customers. The initial Kaiser-Mayer-Olkin (KMO)
was 0.532 which indicate that the analysis is middling.
Bartlett's test is significant at 0.01 level (Chi-Square =
170.505, p<0.001) and therefore factor analysis is
appropriate. Five components were extracted by rotated
component analysis.
Conclusion
The prime purpose of this paper was to investigate the
factors that influence customer loyalty of BSNL
customers. Trustworthiness, relationship, image, value
added services and inconvenience in switching phone no.
were found to the key factors that influenced the loyalty of
the BSNL customers. Even though the service provided
by BSNL is very cost effective it is still loosing its
customer base. BSNL must look away from the issue of
cost and must try to improve the network quality and the
quality of customer services as per the expectations of
the customers.