Effect of Switching Cost, Service Quality, Customer Satisfaction on

Consumer Loyalty of Cellular Service Providers In Indian Market

Research Paper on

Source :

ICFAI university Journal of Marketing Management ,Vol. VIII ,Feb. 2009

Researchers,S.K.ChadhaDeepa Kapoor

Made by,Shreyas D LasteRoll No.-28

Objective

- In telecom Sector India has highest growth rate

- Protecting Subscriber Base is to win customer Loyalty

- Study Shows that Switching Cost, Service Quality, Customer Satisfaction have positive effect on Customer Loyalty

Introduction

- Major work is to maintain the current customer

- Highest growth rate in the world 45% in 2007

- Total 66.34 million subscriber added in 2006-07

- Annual growth rate 83.17

Theoretical Background

-Switching Cost - Cost involved in changing service from one provider to another

-Service Quality - customer retention depend upon service quality

-Customer Satisfaction - it is customer experience while getting service

-Customer Loyalty - it is favorable attitude towards particular brand

Hypothesis Of the Study

H1 : Higher is the switching cost ,higher is the Customer LoyaltyH2 : Higher is the customer perceived service quality, higher is the Customer LoyaltyH3 : Higher is the Customer Satisfaction , higher is the Customer Loyalty

Data Collection and Sample

-Data from GSM Pre-paid Subscribers in Ludhiana and Chandigarh

-Convenient Sampling method is used

-Total 300 questionnaires were distributed in both cities out of which 220 were completed(73.33%)

Research Methodology

1.Measurement Variable

i. Switching Cost - include initial set up cost, learning cost, time and effort, monetary cost, uncertainty cost - all measured on a five point Likert Scale

ii. Service Quality - include network quality, pricing structure, convenience, and value added services. - all measured on a five point Likert Scale

iii. Customer Satisfaction - include overall customer satisfaction and

conformity with pre-purchase expectation - all measured on a five point Likert Scale iv. Customer Loyalty - include repurchase intention, switching to competitors

product or service and recommended to friends and associates

- all measured on a five point Likert Scale

Contd………

2. Data Analysis and Findings

- Collected Data analyzed by SPSS 11.5 statistical tool

- Reliability Analysis - done by computing coefficient of Cronbach Alfa - it measures internal consistency of items

Sr. No. Name of the Scale Cronbach Alfa

1 Switching Cost 0.76

2 Service Quality 0.82

3 Customer Satisfaction 0.85

4 Customer Loyalty 0.79

Hypothesis Testing

Correlation analysis

Variables Std. Coefficient

t-value

Customer Satisfaction 0.693 14.351

Service Quality 0.310 4.98

Switching Cost 0.238 3.85

Regression Analysis

Correlation Switching Cost

Service Quality

Customer Satisfaction

Customer Loyalty 0.436 0.368 0.653

Conclusion

- Customer Satisfaction is most significant to Customer Loyalty

- Maximize service quality and customer satisfaction to enhance customer loyalty

- Improve network quality, price and value added services

- Also implement some reward programs

Thank you