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Customer Satisfaction in the Mobile Telecom Industry,


AN EMPIRICAL STUDY OF MOBILE
TELECOMMUNICATION SECTOR IN FAISALABAD
PAKISTAN.

INTRODUCTION
Customer satisfaction plays an important role for any firm, because its increase a firm products
sale. If a customer satisfied with firm products/services they buy the products again which has
an impact on increase in sale. And when customer is satisfied he/she become loyal to firm, it is
not meaningless to say that customer satisfaction has a great effect on brand loyalty (Yu-Te,
Wang, & H.C. Chang, 2012).

There is no any business firm that can survive without making its customers satisfied and brand
loyal. Like no company can develop a healthy living without fulfilling the needs of its customers.
What companies should do? They meet and serve people needs. Customer satisfaction is the
satisfaction of customer with the performance of the product to satisfy customers by fulfilling
their demands, needs, wants, and expectations (Oliver, 1997) for that first of all we should know
how can we meet customer expectations, needs, wants and demand, what a customer like?
What they dislike? Etc. As our topic related to customer satisfaction and brand loyalty in mobile
telecommunication industry in Pakistan, we should focus on providing customer our best
services as compared to competitors in mobile telecom industry in Pakistan. As giving him good
offers, packages and call rates better than all other competitors to make the customer brand
loyal. The main point is to get the competitive edge or to improve the efficiency of the company
and to acquire customer satisfaction (Leonard-Barton, 1992). Satisfaction was integrated as a
dominant factor of purchase intentions with references to brand loyalty (Spreng. Etc., 1996).
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Customer satisfaction can also be divided into two type’s i.e. transaction-specific satisfaction or
a cumulative satisfaction or post consumption satisfaction. In the last decade of 19th century
many researchers see the satisfaction as post consumption satisfaction. Satisfaction can also be
described as the combination of the customer cognition and emotions after the use of the
product we also say it the customer realization response (Olsen & Johnson, 1997).

The customer can realize the level of comfort after using product, has customer gotten the
desired level of pleasure? If he/she got then will be satisfied with product performance.
Customer satisfaction also play important role in generating consumer repurchases and
revenues for the company/firm. The purchase decisions of loyal customer may become a habit in
nature even simple and provide satisfaction with current brands as a result (Soloman, 1994).
Previous researchers also said that the satisfied customer did not revisit and repurchase the
product and also did not spread a good opinion for brand (Bowen, & Shoemaker, 2003). Some of
the reason shown behind this case is that the company fails to fulfill the customer want, need
and expectations (Roig, Garcia & Manzonias, 2006). So, it is necessary for a company to focus
and fulfill the customer needs, wants and expectations to satisfy a customer and make him
brand loyal.

From the past four decades brand loyalty has been regarded as very important in the marketing
literatures. It is known as a contributor in building and maintaining brand equity (Aaker, 1991).
Customer loyalty is one of the important paths with which customer satisfaction about product
/services received is shown. Because of this brand loyalty is at the heart of strategic marketing
(Bloamer & Kasper, 1995).
Brand loyalty means to make a customer loyal to our company brand, products and services by
fulfilling their expectations, and this is possible only by one way that is customer satisfaction.
We can define brand loyalty as choosing and using one brand again and again after using many
other brands or like one brand from a set of brands after using these brands and buying of this
brand again and again or the behavioral response shown over time, by some decision making
unit with respect to one or more different brands, out of set of such brands (Jacoby & Chestnut,
1978).
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By seeing the previous literature we can divide brand loyalty in two types i.e. true brand loyalty
and the spurious brand loyalty. The main difference between these types of brand loyalty is that
true brand loyalty is depend on the brand commitment whereas, the spurious brand loyalty is
not depend on brand commitment but this is depend on inertia (Rossiter & Percy, 1987).
A true brand loyal customer is committed to his brand because of this commitment customer
buy the same brand again the next time, he/she needs to buy the product again. A spurious
brand loyal customer is not committed to a brand. So, customer buy the same product again
next time but he/she can easily buy a different brand (Day, 1969).
The spurious customer can easily and immediately captured by the other competitor brands that
offers a better deal, better coupon. We can also see the brand loyalty under different
approaches like attitudinal approach and behavioral approach or the compound approach
(Jacoby & Chestnut, 1978).
The attitudinal loyalty depend on purchase preferences, and purchase intention of the customer
(Dekimpe, etc. 1997).
The behavioral loyalty can be determined as the purchase frequency or proportion of purchases
of brand by the customer (Brown, 1952).
The researchers believes that attitudinal approach and behavioral approach are the best
method to measure the brand loyalty.
Customer satisfaction and brand loyalty is most important things for any company
products/services sale. Because to make a customer loyal it’s necessary to fulfill his need, want
and expectations if a company does so he is succeeded to make a long time customer of his
products/services. And it is also shown that loyal customer are less price conscious and less
attracted by the competitors attack and very loyal to the company as compared to dissatisfied
customers (Dimitriades, 2006).
It is also shown from the previous researches that an old and loyal customer is 6 time less costly
as compared to attracting a new customer (Rosenberg & Czepiel, 1984). Brand loyalty is very
important for services sector, mostly for those who provide services with little differentiations
and compete in related environment as telecommunication (Santouridis & Trivellas, 2010).
There are some important drivers of the brand loyalty that are perceived risk, inertia, habit,
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involvement and mostly important trust, relationship and satisfaction (Rundle theile & Bennet,
2001). A great number of very positive encounters will increase customer satisfaction,
commitment, continuity, relationship and trust (Selnes, 1998).
The some other drivers of customer loyalty are corporate image, perceived risk quality and
customer switching costs are influential factors of brand loyalty. Moreover the results shown
that trust is one of the most important antecedents of brand loyalty (Aydin & Ozer, 2005).

Consumer satisfaction is very important thing for a long-term and successful business, and it is a
very important and one of the most researched topic in the marketing (Jones & Suh, 2000;
Pappu & Quester, 2006). Because consumer satisfaction is regarded as one of the most essential
element of long term business success, much of the researches on consumer satisfaction shows
that it has an effect on the customer which creates behavioral and attitudinal loyalty (Cooil,
Aksoy, & Hsu, 2007).
Customer satisfaction improves the reputation in the services markets, reputation partially
involve the relationship between customer satisfaction and brand loyalty and the relationship
between satisfaction and recommendation (Bontis. Etc., 2007).
One more thing is also important for a company to satisfy the customer that is relationship
between customers and the company. The traditional four P’s of marketing product, price, place
and promotion are replaced by the customer relationship management. The long term
relationships with consumers are actually a key point to be stable in an increasingly dynamic
market (Y. Wang, Y. Yang & R. Chi, 2004).
This relationship is very beneficial for the company if it is a good relation, customer become
loyal to the company because of this relationship. If the customers have good relation with the
service provider/company, there are more chances of customers to being loyal to the brand
(Javalgi & Moberg, 1997).
As relationship is important for satisfaction, similarly trust is one of the most important thing in
making a good relationship with customers. Trust is known as important factor to build a
relationship among the customers and the company. Its trust which make customers closer to
the company (Morgan & Hunt, 1994).
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Some customer also being the spread of company. As they use the products/services and if they
like these product/services of company they became the spread of the company and also refer
to their relatives, friends and other customer to use the products/services of that company.
Actually these customer became a spread of company and enhance the good will of the
company which effect the sales of company very much.

Trust is built when company promises to give service quality to customer and if company
became successful to provide them that service quality then the trust is build (Nawaz & Usman,
2011). Actually trust and satisfaction are connected on the base of concept, trust and
satisfaction have same concept (Ballester & Aleman, 2001). Like the variables that generate
commitment especially in the time of high involvement. We can also say that trust is built when
one person belief on the actions of other person which can cause of affirmative effects for
himself (Anderson & Narus, 1990).
In order to trust a brand consumer should see quality as favorable object. Trust creates positive
attitude toward the brand and commitment which leads to loyalty toward that brand (Delgado
Bullester & Munura Aleman, 2001).
Scope of this research is only limited to the Pakistan cellular networks (Jazz, Telenor, Ufone,
Warid and Zong).
Commitment is also one important factor to satisfy a customer, the main focus in commitment
should be on the complaints handling of customers, company should gave a proper response to
the customer’s complaints. There should be focus on complaint handling in service sector and
commitment, many firms have a review that well handling of customer complaints and
grievances provide a source of brand commitment and brand loyalty. Effective complaint
handling increases the customer retention rate and also improve the service quality (Tax etc.,
1998).
The organizational commitment of service customer is the indicator of organization likelihood of
developing and maintaining of customer identification with help of organizational goals and
values and retaining the service customer as an active participant the service encounter (Kelley
etc., 1990).
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Trust and commitment are not only factors but price and service quality are most important
factors that affect customer satisfaction and brand loyalty. As we know some customers are
price loving and because of price the switch from one brand to another because they want low
price of a product. One of the most important factor which plays an important role in brand
switching is price (Kotler & Armstrong, 2010).
Price is the amount which a customer pays for a product and service, while using or purchasing
of that product or service. Some customer are quality loving and price does not matter for them.
But mostly like both normal price and good quality. When service providers charge price sensible
and give the better services then it’s a cause of customer satisfaction and very less customer will
switch to another brand, because price fairness is extremely concern that is leading toward
satisfaction (Martin etc., 2007). That’s mean price has a positive impact on satisfaction and
brand loyalty. When service provider charge high price then the more customer switch from one
brand to another (Herrmann etc., 2007).
Service quality plays an important role in cementing the relationship between customers and
the company and it is a two sided flow of value. At this stage the customer drives real value
from this relationship that translate into value for company in the form of increased profitability
and sustainability for a long period of time. And service quality is defined as an approach which
can be known as services received by the customers according to expectations regarding it
(Parasuraman etc., 1988).Customer expectations and perceived performance having the direct
relationship for good experience of perceived service quality (Guatam & Chandhok, 2011).
Service quality is measured with the help of these factors:
i) Responsiveness
ii) Assurance
iii) Customer Perceived Network Quality
iv) Value Added Services

In this modern era to satisfy a customer is very difficult for the companies as there is a great
competition in telecom sector in Pakistan and the brand switching is very common. Brand
switching can define as the switching of a customer from usage of one brand to the usage of
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another brand of same category (Kumar & Charlaas, 2011). Although, it is known that loyalty is
the strongest point of the purchase behavior but there is no guarantee that loyal customer will
not switch from one brand to another (Tellis, 1988). We can see that mobile phone service
provider actually losing 2 to 4 percent of their customer monthly and these disloyal customers
are cause of loss of an amount of millions revenue and profit. For example it is found that better
prices and service delivery from the competitors might break down loyalty (Keavency, 1995).

The modern customer switch from one brand to another as they see the latest technologies and
new innovations in the brand products and services the one of the most recent example of which
is the introduction of 3G and 4G technologies in Pakistan due to which many customer changing
their mobile networks to getting advantage of these latest technologies as other network
customer moving to Zong because Zong is the only network that has 4G technology.

Therefore, companies are worried these days because customer are less interested to a certain
brand (Dekimpe, etc. 1997).
The consumer are available with so many options to choose from and so they don’t care about
to stick one particular brand. The consumer receive so many choices in price, product quality
and features that make him indecisive in choosing. So the companies should focus on making
their products stand out in market (Stephen, etc. 2007).
In competitive and highly segmented markets it is getting more and more challenging to keep
old customer and also making of new customers. Now the creation of brand loyalty has been
propounded as the universal remedy for all the companies as well as to cope with day by day
increased competition in the market, this could be generalized to telecommunication sector (Lin,
2010).
In these days in this competitive and changeable market place, the mobile phone industry is
becoming popular as mobile usage is growing very fastly, telecom marketers are making new
strategies to take the advantage of potential consumers. Mobile phone is most promising and
growth area of telecom is very high, with subscribers globally which are more than 1.7 billion
and about 80 % world population is covered by the mobile networks (A.S. Dick & K. Basu,
“journal of academy of marketing science” vol.22). Actually mobile phones are becoming
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popular as the people are leaving landline to rely totally on mobile phones primarily because of
price, mobility, safety and privacy (T. Alhaiou, March, 2000).
In telecommunication sector services, it is frequently noted that once a customer is acquiring
and connecting to the telecommunication network of a particular operator, their long term
relations with the focal operator are of great importance to the success of the organization in
competitive markets then they are in other industry sectors (Gerpott etc., 2001).
It is shown that mobile service industry in that manner, the amazing diffusion of mobile services
has better than the expectations from experts, it is become a leading sector providing
commoditized services from a little important industry. As mobile market has reached to
maturity in most of the developed countries (Negi, 2009). This is the one of the justification
about selection of telecommunication sector in broad spectrum and cellular networks provider
market in particular.
Service quality of mobile networks is described as assurance, availability, flexibility, reliability,
security and the simplicity. It is researched that GSM mobile telephony sector, the foremost
precondition of brand loyalty creating among customers is to protect the customer’s base who
have subscribed to services, this is also important requisite for the brands existence in far future.
Customer satisfaction and trust must be considered in order to achieve this goal (Aydin etc.,
2005).

In the last three decades the entire telecom industry has become dynamic service industry to
increasing competition with huge growth potential due to liberalization and privatization
(Graack, 1996). In recent years in some of the Asian countries the number of mobile phone users
even cross the number of landline subscribers (Rathindran, Fink & Matto, 2003).
Now we see the importance of telecommunication sector in Pakistan. In these days, the telecom
sector is very important in the life of every single person and all fields of life most importantly in
business field. Actually telecom services are become the necessity of every common man of this
era. People also use telecom services to connecting with relatives, family and friends. At present
time a lot of cellular service providers are available with both prepaid and postpaid packages. In
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Pakistan mostly customers are using cellular services in order to remain contacted socially with
other people, as many people make use of calls, sms, mms and some connect to web.
The start of telecom services in Pakistan can be traced back to 1947 which was followed by the
a great change in 1962 when telegraph and telephone services were move apart by the
establishment of independence of T & T and postal department. After sometime developments
were made in the provision telecom services to the consumers but from the last two decades
very important and revolutionary changes have been made with the introduction of mobile
telephone. These changes brought Pakistan telecom sector into a new era of progress and
growth. The year 2003 was a historic year in the history of telecom sector in Pakistan where,
Pakistan opened the telecom market for private operators and introduced much awaited
competition in mobile sector. From last decade telecommunication sector in Pakistan shown
very high growth as compared to other sectors which has a great contribution in national
economy.
In this millennium, Pakistan telecommunication sector has appeared as one of the most dynamic
and important business sectors in the country where mobile phones have become a household
utility with a cellular teledensity being recorded as 19.75 % (Pakistan Telecommunication
Authority, Annual report 2005).
The cellular subscriptions have rose up from 5 million in the year 2003-2004 to 15.5 million in
year 2004-2005 (PTA Annual report 2005). And the new investment is projected at US$1159 in
telecommunication sector in the year 2007-2008 making Pakistan one of the fastest growing
cellular network markets. Telecommunication sector is very fastly growing in Pakistan and is
one of the important potential sectors that is contributing largely in the GDP of country.
Telecommunication sector has contributed nearly Rs.363 billion to the national economy during
the year of 2012 which shown an increase of 5.4 percent as compared to last year (PTA, 2012).

National and international companies started their operations which create a high competition
in telecom sector. Now in present time there are five mobile operators competing in Pakistan
(Mobilink, Telenor, Ufone, Warid and Zong). According to PTA(Pakistan Telecommunication
Authority) on first spot is Mobilink GSM, who has 33,378,161 subscribers, on the second position
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is Telenor, who has 26,667,079 subscribers, The third position is kept by Ufone GSM, who has
around 20,533,787 subscribers, fourth place is for Warid, who has sold 17,387,798 SIMs, fifth
and last position is for Zong. This company has 10,927,693 users in Pakistan these figures are
according to survey of June, 2011.
Foreign research organizations consider this segment of telecommunication market lucrative
and Pakistan is recognized as a dreamland in this regard. Cellular network subscriber base has
marked up to 102.77million in Pakistan (PTA).
This figure is increasing day by day. Every company want to make their customer loyal and want
to attract new ones in Pakistan there is a recent example of which is the bidding of 4G and 3G
licenses in the Pakistan. In which the Zong Pakistan take advantage of buying 4G and 3G
licenses this is only because to attract new customers and to satisfy old customer to make them
brand loyal to company.

This research study is very significant for telecommunication sector business and with the help
of this research study we can know about the previous problems and can see drawbacks of this
sector. Then we can easily overcome these problems and drawbacks and can provide better
services. With the help of this research we can know about the consumer’s opinions that use
these services and can also know consumers wants, needs, demand and expectations, so that
we provide services according to their expectations and demands.
In this research we collect data and opinion from the population of targeted area as Pakistan,
then we analyze that data and know what the opinion of people is and what they want. In this
we collect data and take opinion of every person that using these services, therefore research is
very important to know opinion of every person. The main point of research is to know how we
can satisfy a customer and how to make him brand loyal. Actually our important point is
customer satisfaction and brand loyalty and with the help of this research we measure the
customer satisfaction and brand loyalty. For example as we know in many foreign countries the
3G and 4G services were available but was not available in Pakistan, so now the PTA (Pakistan
Telecommunication Authority) decide to provide this facility in Pakistan by also seeing the
demands of people and so, introduce 3G and 4G services in Pakistan.
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Now we discuss the major points and objectives of this research. Every study has some purposes
and objectives, why we doing this research study? What is our purpose of this study? We see
some of the questions in this and this research study is trying to answer these three major
questions:
i) Is there any effect of service quality on customer satisfaction?
ii) Is there any effect of price on customer satisfaction?
iii) Is there any relation between customer satisfaction and brand loyalty?

To answer and explain these questions we have to work on these objectives of our research that
are:

 Knowing about the effect of Product or service quality and price on customer
satisfaction.
 Knowing about relationship between customer satisfaction and brand loyalty.
 The importance of customer satisfaction in mobile telecom industry in Pakistan.
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LITERATURE REVIEW
Rab Nawaz Lodhi and Urooj Ishfaque etc. (2013) paper name “Effect of brand image on brand
loyalty and rrole of customer satisfaction in it”. The research country was Pakistan and data
range till 2012. In methodology brand image is independent variable, customer satisfaction is
moderating and brand loyalty is dependent variable. SPSS, correlation and regression test were
used. In this research study the effect of brand image and customer satisfaction shown on the
brand loyalty whereas customer satisfaction plays a moderating role in the wirless
telecommunication sector of Pakistan.

Khushboo Makwana, Nidhi Sharma and Swaranjeet Arora (2013) paper name “Factor
influencing the consumer brand switching behavior in the telecom industry: an empirical study”.
The research country was India and the data range till 2012. In methodology Poor network
coverage, price and service quality were independent variables whereas consumer behavior was
dependent variable. These tests were used Kaiser-mayer-olkin (KMO), Bartlett’s test and Mean
and T-test. We conclude that this paper was used to identifies the factor effecting consumer
brand switching behavior in telecom sector and also explore whether these factor vary among
males and females.

Sarwat Afzal and Aamir khan Chandio etc. (2013) paper name “Factor behind brand switching in
cellular networks.” The research country was Pakistan and the data range was till 2011. In
methodology the price, service quality, brand loyalty and trust were independent variables and
brand switching is dependent variable. The data collected was analyzed with the help of SPSS,
correlation and regression tests. This study was concluded to know the various factors which
influence a customer to switch from one brand to another in cellular networks the data has been
analyzed and hypothesis had been developed on the basis of grounded theories. This research
had shown the effect of different independent variables on dependent variable brand switching
and hypothesis had been tested.
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Akshaya Kumar sahoo and Dr. Uma Shankar Mishra (2013) paper name “Customer satisfaction
and loyalty: A comparative study in mobile telecom industry.” The research country was India
and data range till 2012. In methodology customer expectations and customer satisfaction are
independent variables whereas the brand loyalty is dependent variable. And the SPSS and
correlation test were used to analyze the data. In the research it is shown customer satisfaction
with the service provider by the both public and private sector mobile telecom service provider
lead to customer loyalty.

Muhammad Ehsan Malik, Basharat Naeem and Madiha Munawar (2013) paper name “How
Does Customer Satisfaction Nurture Brand Loyalty? Empirical Examination of Brand Trust as
Partial Mediator”. The research country was Pakistan and data range till 2012. In methodology
customer satisfaction and brand trust is independent variables while brand loyalty is dependent
variable. The regression, baron and Kenny analysis were used and Cronbach’s alpha test was
used to analyze data. This research study was aimed at empirically ascertaining how customer
satisfaction grow brand loyalty of mobile services users directly and indirectly through brand
trust. Results suggest that customer satisfaction and brand trust grow overall brand loyalty.
Additionally, it was found that customer satisfaction elevates trust of users on the service brand
which in turn boosts brand loyalty.

Shahzad Khan and Saima Afsheen (2012) paper name “Determinants of Customer Satisfaction in
Telecom Industry. A Study of Telecom industry Peshawar KPK Pakistan”. The research country
was Pakistan and the data range till 2012. In methodology customer service, promotion, signal
strength, sales promotion, coverage and price fairness were independent variables while the
customer satisfaction is dependent variable. In this research methodology Regression and SPSS
20 is used to analyze the data. The main purpose of this research was to find the factor
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influencing customer satisfaction in telecom industry. From this research it is concluded that
price fairness and coverage were the key factors to contributing customer satisfaction in
telecom industry.

Samraz Hafeez and Bakhtiar Muhammad (2012) paper name “The impact of service quality,
customer satisfaction and loyalty programs on customer’s loyalty: evidence from banking sector
of Pakistan”. The research country was Pakistan and data range till 2011. In methodology
service quality, customer satisfaction and loyalty programs were independent variables
whereas, customer loyalty was dependent variable. The data was analyze with SPSS, Correlation
and Regression test were used. This study was used to conclude the impact of service quality,
customer satisfaction and loyalty programs on customer’s loyalty. And research shows that
these factors are very important to increase the loyalty.

Masood ul Hassan, Ayaz Ahmad Malik and Muhammad Farooq Faiz (2012) paper name “An
Empirical Assesment of Service quality and its Relationship with customer loyalty evidence from
the telecom sector of Pakistan”. The research country was Pakistan and data range till 2012. In
methodology the service quality and relationship were independent variables while customer
loyalty is dependent variable. The SPSS, regression and correlation test were used to analyze the
data collected. This research was designed to get maximum information from the representative
sample about the customer loyalty. This research was designed to know the effect of
relationship and service quality on the customer loyalty.

Mohammed M.Almossawi (2012) paper name “customer satisfaction in mobile telecom industry
in Bahrain: Antecedents and Consequences.” The research country was Bahrain and data range
was till 2011. In methodology customer retention, innovation and service excellence were
independent variables while customer satisfaction and brand loyalty are dependent variables.
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SPSS, KMO and Bartlett’s test were used to analyze data. This research done to know about the
factor and antecedents which effect the customer satisfaction and brand loyalty.

Ali Raza and Zia Rehman (2012) paper name “Impact of Relationship Marketing Tactics on
relationship Quality and customer loyalty: A case study of telecom sector of Pakistan”. The
research country was Pakistan from which the data collected and the data range till 2010. In
methodology the relationship marketing tactics, trust and satisfaction were independent
variables while, relationship quality and customer loyalty were dependent variables. Cronbach’s
alpha, correlation and bentler-bonett test were used in this research. From this research it was
concluded that these research tactics are very important and being implemented to develop a
long term relationship between customer and company. and customer retention also becoming
more important as compared to customer development

Dr. Adepoju ADELEKE & Suraju Abiodun AMINU (2012) paper name “The determinants of
customer loyaltyin Nigeria’s GSM Market”. The research country was Nigeria and data range till
2012. In methodology service quality, price, customer service/care and corporate image were
independent variables and customer satisfaction was moderating variable and customer loyalty
was dependent variable. The correlation test used to analyze data. This research was used to
conclude the determinants effecting customer loyalty in Nigeria GSM market and four
determinants were found the effect customer loyalty.

Dr. Rehana Kouser, Saifullah Qureshi, Farasat Ali Shahzad and Hassan Hasan (2012) paper name
“Factor influencing the Customer’s satisfaction and switching behavior in cellular services of
Pakistan”. The research country was Pakistan and data range till 2010. In methodology there
are four variables 3 independent cost, inconvenience and core service failures and one
dependent variable that is customer switching behavior. The regression test was used in this
research. From this research it is clear that customer’s satisfaction is highly dependent on the
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cost. Pricing also considered a big reason due to which customer leaves from one service
provider to another. The charges like call charges and SMS charges are consider as an important
reason for switching the cellular service.

Tahir Naveed, Irum Akhtar and Khaliq Ur Rehman Cheema (2011) paper name “The impact of
innovation on customer satisfaction and brand loyalty: a study of the students of Faisalabad".
The research country was Pakistan and the data range till 2010. In methodology the innovation
was independent variable, moderating variable was customer satisfaction and brand loyalty
was dependent variable. The data was analyzed with the help of SPSS software and Correlation
and Regression test were used to analyze received data. We conclude that in this research try to
investigate the relationship of new product made by the mobile industry of Pakistan and how
the innovation effect the customer satisfaction and brand loyalty.

Nor Azila and Mohd Noor (2011) paper name “Electronic Customer Relationship Management
Performance:Its Impact on Loyalty From Customers Perspectives”. The research country was
Malaysia and the data range till 2009. In methodology Customer retention and electronic
customer relationship management were independent variables while customer loyalty was
dependent variable. The regression and correlation test were used in this research to analyze
data. This research study was done to provide some important insight to influence of electronic
customer relationship management on customer loyalty. This research also shown the impact of
electronic customer relationship management on loyalty.

Jessy john (2011) paper name “An Analysis on the customer loyalty in telecom sector: special
reference to Bharath Sanchar Nigam limited, India”. The research country was India and data
range till 2009. In methodology satisfaction, trustworthiness, image and relationship were
independent variables and customer loyalty is dependent variable. T-Test, SPSS, KMO and
Bartlett’s test were used to analyze data.the prime purpose of this study was to investigate the
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factor that influence the customer loyalty of BSNL customers. Trustworthiness, relationship,
image and value added services were found to be key factor that influence the loyalty of BSNL
customers.

Noor-Ul-Ain Nawaz and Ahmad Usman (2011) paper name “What make customer brand loyal: a
study on telecommunication sector of Pakistan”. The research country was Pakistan and data
range till 2010. In methodology Service quality, customer satisfaction, trust and commitment
are independent variables and brand loyalty is dependent variable. The correlation test and
cronbach’s Alfa (reliability test) were used. This research used to investigate the factor that
effect brand loyalty in telecom sector. The objective of this study was to provide a
comprehensive conceptual model of brand loyalty and its antecedents for this sector.

Janghyeon Nam, Yuksel Ekinci and Georgina Whyatt (2011) paper name “Brand equity, Brand
loyalty and Consumer satisfaction”. The research country was United Kingdom and data range
till 2010. In methodology the physical quality, staff behavior, ideal self-congruence, brand
identification and lifestyle-congruence are independent variables while customer satisfaction is
moderating variable and brand loyalty is dependent variable. The correlation and regression
test were used to analyze data. This research study is contribute to the growing body of
literature on consumer based brand equity and brand loyalty. This research study suggests that
physical quality, staff behavior, ideal self-congruence, brand identification and lifestyle-
congruence are key determinants of consumer based brand equity. Physical quality and staff
behavior capture the functional aspects whereas ideal self-congruence, brand identification and
lifestyle-congruence capture the symbolic aspects of brand equity.

Muzzamil Hanif, Sehrish Hafeez and Adnan Riaz (2010) paper name “Factor affecting customer
satisfaction”. The research country was Pakistan and data range till 2010. In methodology the
customer service and price fairness were independent variables which effect the customer
satisfaction which is dependent variable. The correlation, regression and SPSS 15.0 test were
used to analyze data. We conclude from this research that price fairness and customer service
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were very important factors that play important role in making customer satisfied. These
independent variables not only effect dependent variable but also complement on each other.

Olu Ojo (2010) paper name “The relationship between service quality and customer satisfaction
in the telecommunication industry: Evidence from Nigeria”. The research country was Nigeria
and the data range till 2009. In methodology Customer service and service quality were
independent variables and customer satisfaction and quality perception were dependent
variables. The cronbach Alpha (reliability test), regression and correlation test were used. We
conclude the objective of this study was to find the relationship between service quality and
customer satisfaction and also investigate strategies used by a company to deliver exceptional
service quality and customer satisfaction through customer service.

Sandra Martisiute, Gabriele Vilutyte and Dainora Grundey (2010) paper name “Product or
Brand? How Interrelationship between Customer Satisfaction and Customer Loyalty Work”. The
research country was United Kingdom and data range till 2010. In methodology the customer
satisfaction, price and brand image were independent variables while brand customer loyalty
was dependent variable. The regression and correlation test were used to analyze the data
collected. This research study was conducted to know the impact of customer satisfaction on
brand loyalty. Customers’ satisfaction is essential for customers’ loyalty. Loyalty and satisfaction
have a strong relation. Some authors claim that the relation between loyalty and satisfaction
may be replaced, others think differently.

Mohammad Muzahid Akbar and Noorjahan Parvez (2009) paper name “Impact of Service
Quality, Trust and Customer Satisfaction on Customer loyalty”. The research country was
Bangladesh and data range till 2005. In methodology the service quality, trust and customer
satisfaction were independent variables while customer loyalty is dependent variable and Amos,
SPSS 12.0, correlation and regression test were used to analyze collected data. We conclude
from this study that service quality, trust and customer satisfaction are main points that make a
customer brand loyal.
19

Amjad Iqbal, Mubashar Hassan Zia, etc. (2008) paper name “Antecedents and Outcomes of
customer satisfaction in using prepaid cellular service in Pakistan“. The research country was
Pakistan and data range was till 2007. In methodology Perceived quality, perceived value and
perceived expectation were independent variables whereas, customer satisfaction, repurchase
likelihood, customer complaints and price tolerance are dependent variables. The regression
and correlation test are used. The findings conclude that customers have a high level of
perceived expectations with cellular service provider in Pakistan. Different cellular service user
make use of services for different purposes accordingly.

Rebekah Russell-Bennett, Janet R. McColl-Kennedy and Leonard V. Coote (2007) paper name
“Involvement, satisfaction, and brand loyalty in a small business services setting”. The research
country was Australia and the data range till 2005. In methodology the involvement and
satisfaction was independent variable while the brand loyalty was dependent variable in this
research. The regression and correlation test were used to analyze the data. This research study
was conducted to know the impact of the involvement and satisfaction on the brand loyalty and
relationship between the satisfaction and loyalty. This study shows that these two factor
involvement and satisfaction play important role in the customer brand loyalty.

Sadia Jahanzeb and Sidrah Jabeen (2007) paper name “Churn management in the telecom
industry of Pakistan: A comparative study of Ufone and Telenor”. The research country was
Pakistan from which population research data was taken and the data range was 2000-2007. In
Methodology the variables are the management, voice quality, network coverage and price are
independent variables whereas, and performance is dependent variable. The correlation
analysis, levene’s test for quality of variance and T-test for equality of means are used. From this
paper we conclude that the aim of the research was to provide an insight into the rapidly
emerging issue of churn in telecom sector and state the relevant aspect of the churn
management strategies and gauge their effectiveness in customer retention.
20

Jose M.M. Bloemer and Hans D.P. kasper (1994) paper name “The impact of satisfaction on
brand loyalty: Urging on classifying Satisfaction and brand loyalty”. The research country is
Germany and data range till 1993. In methodology the customer satisfaction was independent
variables and brand loyalty was dependent variable. The correlation and regression test were
used to analyze data in this research study. The main purpose of our study was to see the
impact of customer satisfaction on true brand loyalty and expected that the relationship
between consumer satisfaction and true brand loyalty depend on the type of satisfaction.
21

METHODOLOGY
Cellular service provider of Pakistan has been selected for the research. The study is limited to
only cellular service providers like Telenor, Jazz, Ufone, Warid and Zong. This study will show the
different factors which causes customers to switch from one brand to another brand. The
research study demonstrates to describe the factors that influence customer satisfaction and
brand loyalty. This research use following research methodology.

Data source

The data is taken from the primary source with the help of structured questionnaires. With the
questionnaires we collect data from students that are using different service providers and 150
questionnaire was distributed among students. The data taken from the population of
Faisalabad Punjab Pakistan.

Sample size

The sample size of this research was not so large, the sample size were very small consist of 150
students of the Govt. College University Faisalabad. From this sample size we collect the primary
data.

Target Population

The research data was obtained from a Faisalabad university of Pakistan. This research includes
the respondent only from one university Govt. College University Faisalabad. The student of
Govt. College University Faisalabad Pakistan were taken as population for this Research study
and we collect data from 150 students. Survey was taken from subscribers using GSM mobile
phone operators like Telenor, Ufone, Jazz, Warid and Zong.

Questionnaire

For the purpose of collecting data a structured questionnaire was used as an information
instrument. The questionnaire was designed to meet the requirements of the research. A Series
of close ended questions were designed in order to get important information from respondent
students. The questionnaire is divided into two parts, the first portion is based on
22

Demographical background while the second portion is based on dependent Variable (customer
satisfaction) and Independent Variables (service quality, price, trust, relationship, promotion
and commitment). Five point Likert Scale is designed to measure the variables and the purpose
was to show those variables that can be the reason that force the customers toward any other
service provider.

Procedure

The Questionnaires were distributed among 160 students of Govt. College University Faisalabad
on random basis. The respondent student were asked to answer the close ended questions
according to their GSM service provider which they are using. From the target sample 150
questionnaires from students were received and the remaining 10 questionnaires were never
collected. This research study used 150 questionnaires for final analysis like correlation and
regression analysis and conducted descriptive statistics.

Socio-Demographic Profile

This Table 1 which is given below shows the demographical analysis of 150 respondent students.
Descriptive table which is given below shows that 50.67% of the respondent students are male
and 49.33% respondent students are female. Table 1 also shown age group as, 11% respondent
students were in the age group of 18-19, while in age ranging from 20-21, 57% of respondents.
While in age of 24-23 only 16% respondents and students having age 24 or more than 24 are
only 16 %.

This table also shown the respondent students that are using prepaid and postpaid connections.
The response shows that 87% students are using prepaid connection and only 13% students are
using postpaid connection.

Table 1: Demographical Result


23

Measures Items Frequency Percentage

Gender Male 76 50.67%


Female 74 49.33%
Age 18-19 17 11%
20-21 85 57%
22-23 24 16%
>24 24 16%

Connection type Prepaid 131 87%


Postpaid 19 13%

Time of network Less than 1 month 14 9%


experience About 6 month 21 14%
6-12 month 21 14%
More than 1 year 94 63%

Result of this study also shows that 9% of students are using their connection less than 1 month,
14% using their connection for last 6 months and 14% using their connections from 6 months to
more than 6 months whereas, 63% students using their network connections since more than 1
year.

The table 2 given below also showing the percentage of students using service providers in
GCUF Faisalabad.

Table 2: Cellular Subscribers


24

Frequency Percentage % Valid Percent Cumulative


Percent
Mobilink 17 11.3% 11.3% 11.3%

Ufone 44 29.3% 29.3% 40.6%

Telenor 49 32.7% 32.7% 73.3%

Warid 18 12% 12% 85.3%

Zong 22 14.7% 14.7% 100%

Total 150 100% 100%

The table given above represent the represent the percentage of students according to their
telecom connection. This study Discribed that 11.3% students of the study are using Mobilink.
29.3% of the students are using Ufone. Telenor network is used by 32.7% students and only 12%
students are using Warid telecom connection. While only 14.7% students are using Zong as their
mobile network.

There are five mobile telecom companies operating in Pakistan. These five companies are
Mobilink, Ufone, Telenor, Warid and Zong.

The graph given below also shown the divided portion according to the percentage of the
students that are using different mobile networks. The graph skin color portion is more than all
other portion, this skin color portion representing the Telenor mobile telecom which is selected
by the 32.7% students of GCUF. After that green color is prominent which is representing Ufone
with a 29.3% of student response. After this zong with yellow color and 14.7% of student using
this, at fourth the Warid student users of 12% with purple color. And at the last the Mobilink
25

with a student’s percentage of 11.3% and with blue color. This shows that student of GCUF
Faisalabad are mostly using the Telenor sector as compared to the other networks.

HYPOTHESIS
These research hypothesis have been drawn in this research project, an overview of these
hypothesis related to the relationship of customer satisfaction and service quality, price,
promotion, commitment and trust. In the below table five hypothesis given which relations has
been checked in analysis part of research.
26

Objectives Hypothesis
• Knowing about the effect • H1=There is a positive relation between Customer
of Product or service quality and Satisfaction and Brand Loyalty.
price on customer satisfaction. • H2= Price has an impact on customer satisfaction.
• Knowing about • H3=Service quality is positively associated with
relationship between customer satisfaction.
satisfaction and brand loyalty. • H4=Satisfaction is positively associated with brand
• The importance of loyalty.
customer satisfaction in mobile • H5=Improved service quality creates brand
telecom industry in Pakistan loyalty.

Reliability of Scale:

The table 3 that is given below state the reliability of the data collected from students. This table
describe that the data collected from mentioned sample is reliable and respondent students
answered accurately. Because the variables in this research are exceeding from 70% which is the
standard of acceptance for reliability. The below table calculations suggest that the responses
given by the students of the study are reliable we can rely on it.

Table 3: Reliability of the Scale of the study

S.No. Variables Cronbach’s Alpha


1 Customer satisfaction 0.903
2 Service quality 0.894
3 Price 0.809
4 Trust 0.729
5 Commitment 0.811
6 Relationship 0.701
7 Promotion 0.860
27

Conceptual Detail of Variables


Customer satisfaction: customer satisfaction is here dependent variable on this all the other
dependent variables effecting. Customer satisfaction means either customer are satisfied with
the firm product performance and services or not.

Service quality: service quality is one of the important independent variable that effect customer
satisfaction. This effect the satisfaction very much if the service quality is very good then
customer will satisfied and come again. We select this variable because it has a great impact on
the customers.

Price: price is also one of most important independent variables this also effect the customer
satisfaction directly. We select this variable because price is very important factor for any
product and service of a company.

Trust: trust is also independent variable which effect customer satisfaction because we have to
build customer trust in our products and services, we select this variable because this is very
important to make a customer satisfied.

Commitment: commitment is also independent variable that effect customer satisfaction if


there is strong commitment between customer and company then the customer will buy
product again and again and will satisfied with this.
28

Relationship: relationship is important independent variable because a company always want to


make good relation with the customer to satisfy the customer.

Promotion: promotion is one of the important tool of a company to attract customer toward
own company products and services. This also important independent variable because due to
this new customer attract and old customer retain for long time.

THEORITICAL FRAMEWORK
This diagram state that customer satisfaction is dependent upon six important independent
variables or dimensions. Framework of the research shows those variable that can effect
customer satisfaction in mobile telecommunication sector. In other words, customer satisfaction
can be influenced by Service quality, price, Trust, Commitment, Relationship and promotion. This
framework shows the effect of these independent variables on the dependent variable. The
more important factors that effecting the customer satisfaction are Price more importantly then
service quality and commitment.
29

SERVICE QUALITY

PRICE

TRUST

CUSTOMER
SATISFACTION

COMMITMENT

RELATIONSHIP

PROMOTION

Research framework of the study


30

DATA ANALYSIS AND RESULT


For this analysis portion of this research project SPSS 20 were used. The following results we get
after putting the multiple linear regression. After that setting multiple linear regressions, these
following results were attained. In this table 4 given below the adjusted R-square is showing
that the dependent variable (Customer satisfaction) is influenced 71.9% by independent
variables (service quality, price, trust, commitment, relationship & promotion). Since R Square is
close to the value one so it means that these independent variables can impact the customer
satisfaction in mobile telecom industry.

Table 4: MODEL SUMMAR

Model R R Square Adjusted R square Std. Error of the


Estimate
1 .874* .763 .719 .57314

*. Predictors: (Constant), SERVICE QUALITY, PRICE, TRUST, COMMITMENT, RELATIONSHIP AND


PROMOTION.

This table given below table 5 of ANOVA described that overall model was significant. Since the
sig. value is less than 0.05. So it shows that the model is statistically significant. It is clear from
the values in table that all the independent variables, that is, service quality, price, trust,
commitment, relationship and promotion are connected to the dependent variable that is
customer satisfaction.
31

Table 5: ANOVA Result

ANOVA

Model Sum Of Df Mean F Sig.


Squares Square
1 Regression 9.538 6 1.590 4.839 .000*
Residual 46.974 143 .328
Total 56.512 149

Dependent Variable: CUSTOMER SATISFACTION.* Predictors: (Constant), SERVICE QUALITY,


PRICE, TRUST, COMMITMENT, RELATIONSHIP AND PROMOTION.

Table 6: Regression Co-efficient

Coefficients*

Model Unstandardized Coefficients Standardized T Sig.


Coefficients

B Std. Error Beta

1 (Constant) 2.127 .408 5.217 .000

SERVICE QUALITY .153 .082 .160 1.869 .000

PRICE .145 .048 .240 3.008 .000

TRUST .010 .063 .012 0.157 .000

COMMITMENT .011 .004 .224 2.919 .000

RELATIONSHIP .011 .067 .013 0.171 .000

PROMOTION .078 .068 .096 1.162 .000


32

*. Dependent Variable: CUSTOMER SATISFACTION

Regression equation: Y=A+Bx1+Cx2+Dx3+Ex4+Fx5+Gx6

In this research analysis, the Regression equation for this study is customer
satisfaction=2.127+0.160(Service quality) +0.240 (price) +0.12(trust) +0.224(commitment)
+0.13(relationship) +0.096(promotion). Since the significance value is 0.00<0.05, means sig.
value is if lower than 0.05 that means these independent variables are significant for dependent
variable (customer satisfaction) we accept our hypothesis because there is a significant
relationship between dependent and independent variables. From above given table 6 it is
shown that each and every independent variable is significantly connected to customer
satisfaction. Among all variables, price is the major variable with standardized coefficient b=240
that can satisfy the consumer toward their particular service providers. While commitment is
the second important variable with a standardize coefficient of b=0.224. Furthermore with a
standardize coefficient of 0.160, service quality is the third variable that can influence customer
satisfaction in particular cellular industry. Remaining variables such as relationship (b=0.013), is
fourth and trust (b=0.012) is the fifth and promotion (b=0.096) is last are comparatively less
influenced customer satisfaction in mobile telecommunication industry.

CONCLUSION
Our main purpose and the aim of this research project was to find the factors that effect and
influencing the customer satisfaction in mobile telecom Industry. From the above given all
results and analysis following findings and conclusion is obtained. It is concluded that price and
commitment are the main key factors that are contributing towards customer satisfaction of
University students. As we having the findings of this research it is very clear that the companies
33

should always continue to emphasize on price and commitment for consumer satisfaction in
mobile telecom industry. Because these are the main and important factors and effect the
customer satisfaction very strongly and have a strong impact on customer satisfaction.

Commitment also influences the dependent variable customer satisfaction. The problem of
commitment is generally in rural area where sometime the customer not agree to commit with
the services and customers are also not able to gain services from any particular service
provider. This factor can force the customers towards switching of brand in order to get the
commitment in any particular area therefore, commitment of customers is very important with
the company because if the customer is committed this will show a positive effect on the
customer satisfaction. Furthermore, service quality is also important for the customer
satisfaction because this also have an effect. Service quality is important because the customer
see the quality of the services provided by the company if the quality is very good this will
positively affect the customer and customer will be satisfied with quality then get services again
and again and become loyal to the company services. The service quality should be good enough
to handle the customers’ complaint regarding any service. The other factor as trust is also
important because the trust of customer should be on the company services and products if the
customers have trust on services then it will be positive effect on customer satisfaction.

The relationship is also important for customer satisfaction if the customer relationship with the
company is good then it is better for the company and have a positive effect on the customer
satisfaction. The promotion is also important for the customer satisfaction the companies
promote their services and products to retain the old customer and to get the new customer and
attract them toward the company. If the promotion done be attractive for the customers then
customers satisfied and retain with the company.
34

DISCUSSION
This research study described that which independent variables are influencing customer
satisfaction in mobile telecom industry. Now these days cell phone has taken very important
place in our daily life. Every person using cell phones these days because it is now one of the
important need of everybody. Basically customer satisfaction depends upon the category of
customers in this we can divide them according to their name, age, gender, profession, status,
area etc. Normally Business class category goes for that network service provider which offers
better international and local connectivity plus value added services such as call rates, Miss
Call’s alerts, internet services, international roaming, conference call, data connectivity and
business solution such as Blackberry phone services. And more if we come to students they go
for that service provider which offer better SMS packages, internet buckets and call packages.
The students these days select better services they will select the service provider which provide
better services. These days now iPhone and other android phones are available with many
specifications and services.

Also the mobile network portability is a great success in Pakistan which is commonly known as
MNP in which customer can switch from one network to other service provider without
changing their mobile number. As customer satisfaction goes to customer loyalty therefore
cellular company should focus all those variables which can be the cause of disloyalty, network
switching and loss of business and company. It is explained from results that price, commitment
and service quality are three momentous and very important elements that can influence and
effect the customer satisfaction. Price play an important role in any network provider. Because
mostly customers are price loving. Customers will use services of any service provider for a long
time period if they offer low or fair and customer affordable charges for calls, SMS, MMS, GPRS,
and other services etc. Thus, it is proved from this research study that to be successful in
telecom sector over a longer period of time the service provider should provide fair price
35

structure for tariffs and packages, and make commitment throughout the country and provide
excellent services quality in order to get the customer satisfaction in telecommunication sector.
36

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