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Introduction Customer Loyalty

1. The document discusses factors that affect customer loyalty in the telecommunications sector in Pakistan. It outlines several objectives to determine how service quality, customer satisfaction, perceived price, and trust impact customer loyalty. 2. The telecom sector in Pakistan has become highly competitive with several companies providing cellular services. Companies allocate large budgets to customer retention strategies like loyalty programs and rewards to attract and keep customers. 3. The study aims to ascertain the effect of factors like service quality, satisfaction, price, and trust on customer loyalty. It notes limitations around sample size and time available for the research.

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Sandeep Novlani
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750 views5 pages

Introduction Customer Loyalty

1. The document discusses factors that affect customer loyalty in the telecommunications sector in Pakistan. It outlines several objectives to determine how service quality, customer satisfaction, perceived price, and trust impact customer loyalty. 2. The telecom sector in Pakistan has become highly competitive with several companies providing cellular services. Companies allocate large budgets to customer retention strategies like loyalty programs and rewards to attract and keep customers. 3. The study aims to ascertain the effect of factors like service quality, satisfaction, price, and trust on customer loyalty. It notes limitations around sample size and time available for the research.

Uploaded by

Sandeep Novlani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1 Introduction

Telecommunication sector play a vital role in the economic development of the country and it is
very much important sector and indispensable part of economic growth for all the economies.
After the independence of Pakistan this sector remain under the control of government and the
(ADELEKE, 2012) government controls this sector with the help of Pakistan telecommunication
authority (PTA).In Pakistan the telecom sector was stated as industry in2005 with different
cellular companies. As the development have been made in the country in 2000, deregulation
policy is developed which leads towards the development of the telecom sector like so many
companies have started to provide the cellular services in Pakistan like Mobilink,Ufone,Telenor,
Warid are working in wide geographical areas of Pakistan. Mobilink is a subsidiary of Orasam
telecom and started its operations in Pakistan in 1994 with a huge coverage throughout the
country. While talking about the Ufone it is a growing cellular company in Pakistani industry,
with 26 shares have an emirates telecommunication corporation (ETISALAT).
Telenor is a subsidiary of Sweden which starts its operation in 2005, with the approximately 30
millions users, with wide area users throughout the Pakistan. Warid started its operations with
ABU DHABI group with almost 12 million subscribers with 117 areas in Pakistan.
The main purpose of the business is to maximize its profit and business, so they putting hard
efforts for this they are focusing on the customer to satisfy their needs, The business is also earn
the profit from the happy and loyal customer by providing good quality product and services.
Due to competitive market companies are focusing to introducing different types of strategies to
attract the customer and make a customer loyal, for this they have allocated the huge amount of
budget to retain the customer. They offer promotional programs like, loyalty program, free
sample, after sales service program, rewards program and gift offers to attract the customer and
make the customer towards the loyal. Whatever they are offering the ultimate the main objective
is to increase the customer base by increasing the number of customer, and increasing the
companys profitability and having and retaining happy customer.

For every business it

is very much difficult to

new or established retaining its existing

customers has always been less cost effective that making new customers, because the existing
customers are not only responsible for the given sale but also responsible for the achievement of
cost saving in the marketing strategies. As we already discuss that the companies are focusing on
the different types of the strategies to make the customer loyal, so many companies have
consider the customer service program for differentiating themselves from the competitors. Due
to these differentiations companies are able to develop and generate customer loyalty with the
help of the behavioral, cultural and intellectual association with the product, either during or after
the use. Customer management also provides a sustainable competitive advantage to the
companies focusing on customer loyalty.

1.1 Background of the study


The background of the study highlights the various affects of the variables with the customer
loyalty. These variables can be categorized into service quality, trust, customer satisfaction and
perceived value.
Service quality could be define with so many definitions but the service quality can be defined
as that it is the acceptance of the customer which according to the expectations of the customer.
(Metters et al., 2003).or simply it can be defined as that it is fulfillment of the customer
expectations .According to the (Rust and Oliver, 1994) the service quality is comprises into three
dimensions environment, delivery, and product.
Price plays a vital role in the telecommunication market and especially in the mobile
telecommunication market. (Kollmann, 2000). When we are talking about the price it does not
means that we are only focusing on the price of Sim card but it may also include the all the
charges of the recharge vouchers.SMS charges and call rate and internet charges and soon.
Lowering the price means the company is able to attract huge amount of customer base and
increase its profitability. Kollmann (2000) describe that the number of calls determine the basic
commercial success for the network providers. So it is very important for the telecom companies
to focus on the pricing a strategies to capture the market. If the companies are wanted to be a
successful in the market they only to focus on the service quality but also have to focus to
offering the affordable price and attractive price, through this they are able to retain the customer
and make a loyal customer.

Trust can be define as that it is a major driver of loyalty (e.g., Chaudhuri and Holbrook, 2001;
Garbarino and Johnson, 1999). Due to strong relations between the customer and the companies
they are charging high price for the services and marketing with the word of mouth. The impact
of trust on customer loyalty becomes especially relevant when confronted with switching
decisions with a high level of perceived risk and uncertainty (Lewis, 2002).
Customer loyalty is one of the continuously discussing the topic in the marketing and the
service literature (Eshghi et al., 2007; Heskett and Sasser, 2010).. Customer loyalty becomes the
most important aspect of marketing planning. Customer can be defined as that the customer can
purchasing the same product and services repeatedly and have a continuous intension to purchase
in the future (Grossman, 1998). Loyalty can be defined as that it describe the customer
repeatedly purchase a certain product and services (Lovelock, 1996). According to Anderson and
Jacobsen ( 2000), that is a benefit maintain by the companies for the customer, through this the
companies are able to maintain good relations with customers and increase its business.
Customer loyalty plays a vital role in making a good company image and a good competitive
advantage for the companies with the help of customer loyalty the companies are able to
maintain strong relationships with the companies (Fornell, 1992).

1.2 Problem statement


Pakistan is a densely populated country, and it has huge telecom competitive market in which
companies are fighting to capture the market share in the country. The problem statement of our
research is provoked from the fact that customer loyalty is one of the key factors for telecom
companies in Pakistan to attract more customers and retain the current; companies are focusing
different types of marketing strategies to attract the customers and retain the customer. They have
increased their marketing budget for offering different offer to their customer to make them
loyal, because due to this, it will impact towards their business. So our research is based on to
determine the factor which affecting the customer loyalty. Many service providers are losing
their current customers every year due to highly competitive environment. So this study helps us
to know the various factors which affect the customer loyalty.

1.3 Research questions


During our research we would focus on the following research questions.
1
2
3
4

What is the affect of service quality on customer loyalty?


What is the affect of customer satisfaction on customer loyalty?
What is the affect of perceived price on customer loyalty?
What is the affect of trust on customer loyalty?

1.4 Objectives of the study/Purpose of the study


The following are the main objectives of the study which are as follows.
1
2
3
4
5
6
7
8

To ascertain the affect of service quality on customer loyalty?


To determine the affect of customer satisfaction on customer loyalty?
To measure the affect of perceived price on customer loyalty?
To find out the affect of trust on customer loyalty?
To verify the affect of service quality on customer loyalty?
To verify the affect of customer satisfaction on customer loyalty?
To verify the affect of perceived price on customer loyalty?
To verify the affect of trust on customer loyalty?

1.5 Limitations
During the research we would set out certain limitations which are as follows.
1

Due to limited time and financial resources we are unable to take huge number of sample

2
3

size.
Time is scare in context with the scope of research.
While this research here are new events which occurred and such events are beyond our
control.

1.6 Assumptions
During our research we have assumed that those entire participants who have participated in this
research have shared their true experience and knowledge. We have also assumed that the
information they have conveyed is correct and according to best of their knowledge.

1.7 Definitions of key terms


1.7.1 Customer loyalty
Customer loyalty can be defined as that it is commitment to repeat encouragement from a chosen
product/service consistently, due to this the customer will continue to prefer the brand and avoid
the brand switching and replacement ,in this result become the loyal customer
(1991, Krishnamurthi ).

1.7.2 Perceived price.


Perceived price can be defined as that it is price that charged by the companies for its services, or
the sum that that customers exchange for the benefits of having or using the product or service
(Kotler and Armstrong, 2010).

1.7.3 Customer satisfaction


According to Zeithaml and Bitner (2000) defined that customer satisfaction is the customer
response towards the services, whatever he receive according to their expectations. Customer
satisfaction be defined as that it is a delivering of the services according to the requirements of
the customers, its generates a positive response towards the brand. (Maiyaki et al. 2011; Rizwan
et al., 2013).

1.7.4 Service quality


It can be defined as that its main purpose is to meet the criteria of the set by the customers,
according to the requirements of the customer. (Parasuraman et al., 1988).

1.7.5 Trust
Trust can be defined as that it is believe between two parties that one party fulfill his and her
needs this is called the trust. (Errol et al., 2005). According to (Chaudhuri and Holbrook., 2001)
customer who likes the product likely associated with the product and show positive attitude
towards the product and services, and spread positive comments for the product and services
with the word of mouth. The impact of trust on customer loyalty becomes especially relevant
when confronted with switching decisions with a high level of perceived risk and uncertainty
(Lewis, 2002).

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