Tài liệu Factors affecting customer loyalty in mobile communication services in hanoi, vietnam

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FACTORS AFFECTING CUSTOMER LOYALTY IN MOBILE COMMUNICATION SERVICES IN HANOI, VIETNAM A RESEARCH DISSERTATION PRESENTED TO THE FACULTY OF GRADUATE SCHOOL SOUTHERN LUZON STATE UNIVERSITY LUCBAN, QUEZON, PHILIPPINES THAI NGUYEN UNIVERSITY S.R. VIETNAM IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE DOCTOR IN BUSINESS ADMINISTRATION Name: Ngo Anh Cuong (Smile) Thai Nguyen, 2013 ACKNOWLEDGMENT I would like to express our most sincere thanks to the Management Board of the Southern Luzon State University, Thai Nguyen University, teachers of the school have helped me facilitate the learning process throughout. I would like to express sincere gratitude and profound Dr Nelly Mendoza, enthusiastic teacher who have dedicated guidance, encouragement, spending time and exchange orientation for me during this research. I sincerely thank the Board of the University of Labor and Social affair (ULSA), colleagues in ULSA, classmates DBA1 facilitated enthusiastic help and share my experience to help complete the dissertation. Finally, I would like to thank my best friends who have encouraged to complete my dissertation. i CONTENTS ACKNOWLEDGMENT................................................................................................. i ABSTRACT ................................................................................................................... v APPROVAL SHEET .................................................................................................... xi Chapter 1: INTRODUCTION........................................................................................ 1 1.1 Background of the study ................................................................................................ 2 1.2 Statement of the problem ..................................................................................................... 3 1.3 Hypotheses ........................................................................................................................... 4 1.4. Significance of the study ..................................................................................................... 5 1.5. Scope and limitation ........................................................................................................... 6 1.6 Definition of terms ............................................................................................................... 7 Chapter 2 REVIEW OF RELATED LITERATURES AND STUDIES ..................... 10 2.1. Mobile telecommunication services.................................................................................. 10 2.2. Hanoi mobile communication services ............................................................................. 11 2. 3. Customer loyalty .............................................................................................................. 16 2.4. Affecting factors to loyal customer ................................................................................... 18 2.5. Customer loyalty models .................................................................................................. 29 2.6. Several topics related to mobilecommunication services ................................................. 31 2.6.1. Some topics researched in Viet Nam.............................................................................. 31 2.6.2 Some topics researched Overseas ................................................................................... 32 2.7. Conceptual framework ...................................................................................................... 36 Chapter 3 METHODOLOGY………………………………………...…………….39 3.1 Research design ................................................................................................................. 38 3.2 Determination of sample size............................................................................................. 40 3.3 Sampling design and techniques ........................................................................................ 41 3.4 Research instrument ........................................................................................................... 42 3.5 Data gathering procedure ................................................................................................... 43 3. 6 Data processing method ........................................................................................ 43 ii Chapter 4: PRESENTATION ANALYSIS AND FINDINGS INTERPRETATION OF DATA .................................................................................................................... 46 4.1 Respondents profile ........................................................................................................... 46 4.2 Scale values test ................................................................................................................. 48 4.2.1 Services quality ............................................................................................................... 48 4.2.2 Switching Barriers .......................................................................................................... 50 4.3 Preliminary analysis of the component variables .............................................................. 52 4.3.1 Service quality ................................................................................................................ 53 4.3.2 Switching barriers ........................................................................................................... 55 4.4 Hypothesis test ................................................................................................................... 55 4.5 Factors affecting customer loyalty ..................................................................................... 60 4.5.1 Analyzing relationship between demographics factors with service providers. ............. 60 4.5.2 Relationship beween factors affecting loyalty versus demographic factors...….67 4.5.3 Analyzing the Factors that Affect Customer Loyalty…………………………………..75 Chapter 5: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS……..84 5.1 Summary of results……………………………………………………...………..84 5.2 Conclusions ........................................................................................................................ 84 5.3 Recommendations .............................................................................................................. 86 5.3.1 Demographic factors…………………………...……………………………………….88 5.3.2 Service quality ................................................................................................................ 87 5.3.2.1 Calling quality.............................................................................................................. 87 5.3.2.2 Pricing structure ........................................................................................................... 87 5.3.2.3 Convenience in procedures .......................................................................................... 89 5.3.2.4 Value – add services .................................................................................................... 89 5.3.3 Switching barrier ............................................................................................................. 90 5.3.3.1 Customer relationship .................................................................................................. 90 5.3.3.2 Attractiveness of other suppliers .................................................................................. 90 REFERENCES……………………………..……………………………………….95 iii APPENDICES……………………………..………………………………………..99 Appendix 1: Questionnaire .......................................................................................... 97 Appendix 2: Descriptive statistics ............................................................................. 101 Appendix 3: Relationship beween factors affecting loyalty versus demographic factors ………………………………………………………………………………104 Apendix 4: Results of Regression and correlation ..................................................... 160 iv ABSTRACT Customer turns to be an important concern for management due to the increasing competition particularly in mobile telecommunication services. Customer loyalty plays a very crucial role for achieving the competitive advantage for enterprises. According to service providers, service quality - calling quality, pricing structure, value – added service, customer support services, etc, and switching barriers -loss cost, adapting cost, attractiveness of other service providers, etc, are motivational factors to maintain customer loyalty as well as an essential element for business and increasing market share. Currently, Hanoi is one of the cities in Vietnam that has a great number of mobile subscribers and suppliers. According to the Ministry of Information and Communication, in 2012, there were 9.1 million mobile subscribers in Hanoi. In which, ,market share of the service provider as follows: Vinaphone was 31.25%, Viettel was 43.03%, Mobifone was 18.5%, Vietnammobile was 2.57% , Gtel was 4.63% and SPT was 0.02%. The main tool is a questionnaire to gather information on customer loyalty for mobile service providers in Hanoi. Because the author can not have list customers of service providers. Therefore, the sampling method will be conducted random sample but based on several factors: the market share of vendors, demographic (gender, age group and occupation) factors, types of services (post paid and pre- paid). Customer were selected to intervied for this research to be 400. In addition to information about the customer, the questionnaire was designed to include 42 attributes of mobile communication services that customers usually look for the Likert scale was used to rate these attributes. In which, 5 is for strongly agree and 1 is for strongly disagree. The Subscribers , as the respondent were interviewed irrespective if they are prepaid and postpaid customers. v The study used correlation coefficients and chi-squared test to test the hypothesis and assess the relationship between factors with customer loyalty. The multiple regression model was used to evaluate the factors affecting customer loyalty in the mobile communications market in Hanoi. Results of analyzing demographic factors (occupation, per everage income, subject payment, service providrers and using time) showed that there are relationship between these factors with customer loyalty. Result of analyzing multiple regresstion model showed that there were 7 factors affecting customer loyalty. In which, the “service quality” had four component factors: calling quality, Pricing structure, value – add services and convenience in procedures. The “switching barrier” had three component factors: loss cost, attractiveness of other suppliers and customer relationship. According to Nguyen Duc Ky and Bui Nguyen Hung, the “calling quality” was the strongest influential customer loyalty. However, this factor was only thirth factor affecting customer loyalty after the “customer relationship” and the “loss cost” in this research. The “customer loyalty” was the strongest influential custome loyalty and the “value – add services” was the lowest influential customer loyalty. vi LIST OF TABLES Table 3.1 Factors affect customer loyalty in mobile communication services.. 38 Table 3.2 Subscribers using mobile communication services of Vinaphone 42 are classified by age in Hanoi, 2012………………………………... Table 4.1 The distributive sample by the gender and age…………………….. 46 Table 4.2 The distributive sample by the gender and the market share ……... 46 Table 4.3 The distributive sample by services type and the market share of 47 service providers................................................................................ Table 4.4 The summary of the distributive sample by gender, age and type of 47 service providers………………………………………………….... Table 4.5 Cronbach alpha of component services quality……………………. 48 Table 4.6 Cronbach‟s alpha of the component switching barriers …………... Table 4.7 How to calculate the average value of the variable………………... 52 Table 4.8 The mean value of Service quality………………………………… 54 Table 4.9 The mean value of switching barrier………………………………. 55 Table 4.10 Correlation coeficients of variables………………………………... 57 Table 4.11 Correlation coefficients of switching barrier and customer loyalty 60 51 variables…………………………………………………………….. Table 4.12 Relationship between gender with service providers………………. 61 Table 4.13 Relationship between education of subscribers with selection 62 pervice providers…………………………………………………… Table 4.14 Relationship between selection of service provider with occupation 63 of subscrbers………………………………………………………... Table 4.15 Relationship between selection of service provider with per 64 vii average income of subscrbers……………………………………… Table 4.16 Relationship between Value - add service with gender of 66 subscribers………………………………………………………….. Table 4.17 Relationship between “ Adapting cost” with gender of subscribers.. Table 4.18 Relationship between calling quality of service providers with 69 67 per average income of subscribers………………………………… Table 4.19 Relationship between the adapting cost with subscriber‟s ages …… 70 Table 4.20 Relationship between assessment about “the supplier has service 72 packages with different charge to suitable customer demands” with education level of subscribers……………………………………… Table 4.21 Model Summary………………………………………………......... 74 viii LIST OF FIGURES Figure 1: Proposed integrated model of service Loyalty ............................................. 29 Figure 2: Switching barrier model of customer loyalty ............................................... 31 Figure 3: Customer loyalty about mobile communication service in American ......... 34 Figure 4: The model of impacting satisfaction and switching barrier to customer loyalty the mobile communication service in Korea ................................................... 34 Figure 5: The proposed model for mobile communication service in Hanoi .............. 37 LIST OF ILLUSTRATIONS Ilustration 1-1: The market share of mobile subscribers in Hanoi, 2011 and 2012 ..... 13 ix LIST OF ACRONYMS VNPT – Post and Telecommunications Corporation VINAPHONE - Viet Nam Telecom Services Company VMS - Viet Nam Mobile Telecom Services Company (Mobifone) VIETTEL - Viettel telecom company SPT - Saigon Post & Telecommunications (Sfone) GTEL – GTel Mobile JSC (Gmobile) HANOI TELECOM: Ha noi telecom Corporation (Vietnammobile) x APPROVAL SHEET This Dissertation , entitled “FACTORS AFFECTING CUSTOMER LOYALTY IN MOBILE COMMUNICATION SERVICES IN HANOI, VIETNAM”, prepared and submitted by Ngo Anh Cuong in partial fulfillment of the requirements for the degree of Doctor in Business Administration, has been examined and recommended for acceptance and approval for FINAL EXAMINATION. NELLY MENDOZA, PhD Adviser Approved by the Committee on Oral Examination with a grade of PASSED on ......2013 Dr………………………..………………….. Member Dr………………………..………………….. Member Dr………………………..………………….. Member Dr………………………..………………….. Chairman Accepted in partial fulfillment of the requirements for the degree of Doctor in Business Administration. THAI NGUYEN UNIVERSITY Dean SOUTHERN LUZON STATE UNIVERSITY Dean xi Chapter 1 INTRODUCTION Customers are invaluable assets of the business. Customer loyalty is significant to the future development of a general company or the particular mobile service providers. It contributes to maintain stable profits when the subscriber reaches the saturation point, mature market and fierce competition. According to the Nguyen Duc Ky and Bui Nguyen Hung (2007), the developmental history of the mobile communication services market in Europe countries, the United States and some countries in the region such as China, Korea, Taiwan, India, .. and even in Vietnam showed that the general market has some notable features: When the market is new and its rapid growth is through technological innovation, the technological cycle is more and more shorter. Initially, the mobile services was a the monopolist market (monopoly technology, monopoly of scale…) and it only provided services for postpaid so customers was tied by service contract of the provider. After the market was opened, technology becomes popular, investment costs decline, new providers enter the market, competitive pricing becomes a practice, value- adding to improve service quality is included as a strategy and customers have many opportunities to select providers. Thus, in recent years the it was realized that researches have to be done on the different models about satisfaction and customer loyalty in the mobile communication services. These researches were built on the ground of the traditional relationship between service quality and satisfaction-loyalty and analyzing factors affecting to customer behavior. In addition, researches in Korea, China, Taiwan have showed that the mobile communication markets in these countries have many similarities with the market in Vietnam. 1 In Vietnam, the mobile communication market has been transforming from a monopolistic market to competitive market with participation more and more service providers. Therefore, customers have many opportunities to choose services less bound to the service provider. The change of service providers by customers becomes phenomenal and increasing. To develop positively and sustainably for Vietnam‟s mobile market, service providers need to find ways to maintain valuable and loyal customer. 1.1 Background of the study According to the suppliers of telecommunications services, service quality, with wide network coverage, network capacity and customer care are the key driving force to maintain customer loyalty. However, survey results of the Strategy Analytics with 215 suppliers who have been representing 75% of mobile subscriber worldwide poses a challenge in developing strategies to retain customers. Whereby in 2011, there are 44% of global mobile subscribers to change service providers, the highest ever, with an average churn time is 27/1. Compared with a decade ago, the time for loyal subscribers with the service provider has halved (www.vnpt.com.vn/new) So, research on factors affecting customer loyalty in mobile telecommunication services in Viet Nam is significant to discover new scale and a new theoretical model for managers. In practice, they "retain" customers, as customers become more loyal then it brings the urgency especially to the three big service providers: Vinaphone, Mobiphone, and Viettel and three small and new suppliers: Gtel, Hanoi telecom and SPT as the mobile communication market in Viet Nam is on its saturation phase. Likewise, research result will provide information for management to formulate effective strategy for the use of telecommunications 2 resources and helping suppliers of mobile telecommunication services plan and implement more effective follow-up market activities and customer care services. 1.2 Statement of the problem Nowadays, with so many interested investors joining the market, the competition in mobile communication is becoming stiff. The monopoly situation of the cellular phone market is gradually lost and was replaced by a structure where there is strong competition resulting to a battle of strategies to attract and retain customers by improving quality basic services, value – added services, advertising, promotion, pricing strategy and customer care. Each mobile communication company tries to outdo its competitor to attract more customers which eventually provides the end users various options to choose to suit their needs. As mentioned, in Viet Nam, the mobile communication market has been moving from a monopoly market - under the control of the State, to the competitive market with faster growth of the mobile technology. The technology cycle is shorter and the investment cost is decreased which has brought challenges to the new service providers when they enter this market. Before 2003, there were only two service service providers in Viet Nam‟s mobile communication service: Vinaphone and Mobifone. So, customers had paid high charge while they did not have many choices of providers. Currently, there are six service communication service: providers in Viet Nam‟s mobile Vinaphone, Mobifone, Viettel, Gtel Mobile, Sfone, and Vietnammobile. Therefore, there is great competition in attracting subscribers. The competition between service providers in the mobile communication are mainly base on tariff reduction and continuous promote programs so that it makes waves move to provider. That is the main reason why subscribers have been not loyal to the suppliers as in the monopoly market before 2003. 3 To increase the competitiveness of the service providers as well as to increase the market demand, the dissertation would like to seek answers to the following: - Identify factors and quantify by scales to analyze factors affecting to customer loyalty on mobile communication market in Hanoi. - Research and analyze the factors affecting customer loyalty by statistical methods: analyze the relationship between the different factors that affects customer loyalty; to use regression and correlation method for assessing the impact of each factor to customer loyalty; - Survey to assess the customer loyalty for the suppliers of the mobile communication services; - Based on findings, the dissertation proposes some solutions to improve customer loyalty for the mobile communication services of the supplies. 1.3 Hypotheses Mobile communication service quality is a latent variable. It cannot be measured directly but it can be determined by the following components: call quality; value – add service; price structure; convenience and customer service support. Thus, measuring customer satisfaction model is a combination of component scales in mobile communication service quality. H1: Service quality has a positive effect on customer satisfaction H1.1: Increasing the call quality will increase the satisfaction level on service quality; H1.2: More reasonable price structure will increase the satisfaction level on service quality; H1.3: Increasing the value - added service quality will increase the satisfaction level on service quality; 4 H1.4: More convenience in procedures will increase customer satisfaction levels on service quality; H1.5: Customer service is related to customer satisfaction on service quality. The concept of switching barrier is expressed by latent variables and to be measured by three component factors: switchin cost (loss cost, adapting cost, move – in cost), attractiveness of other providers and customer relationship. H2: Customer satisfaction has a positive effect on loyalty H3: Switching barriers has a positive effect on loyalty H3.1: Loss cost affects the decision of the customer to change provider; H3.2: Adapting cost is a switching barrier to the customer; H3.3: Higher move – in cost is a switching barrier to the customer; H3.4: Attractive offers of other providers are switching barrier to the customers; H3.5: Customer relationship is a switching barrier to the customer. 1.4. Significance of the study In Viet Nam, the previous research on customer loyalty has been mentioned to build customer loyalty models for mobile communication services of the providers in Viet Nam. However, these studies have been not done detailed analyses on the factors affecting loyalty of customers to the mobile providers. Although previous studies have mentioned some factors affecting customer loyalty such as service quality; customer satisfaction; switching barriers; and cultural differences but some other factors such as gender, age and occupation of the customer has not been mentioned by these research. 5 On the other hand, these do not have a research about loyal customer of the mobile communication service of the providers in Hanoi. So, objectvie of the dissertation will be: The dissertation will identify factors affecting customer loyalt. Specifically, the component factors of service quality factors and switching barrier will impact how the customer satisfaction and loyalty The dissertation conduct to analyze relationship between demographic factors with customer loyalty aims to provide practical information for administrators, new service providers who want to join or maintain their position in the mobile communication service market. Finally, the disertation result can help service suppilers to indentify key factors related to customer satisfaction and customer loyalty while helping service providers develop and implement marketing stratergies to improve customer loyalty and limited switching wave between service providers. The disdertation will also provide important information for mobile service providers so they can formulate specific strategies and plans for executing more effective marketing strategies and customer care. 1.5. Scope and limitation The scope of the study is the customers who have been using mobile in Hanoi. It includes prepaid and postpaid. So, researches of the dissertation do not reflect for other provinces in the country. That is one of the limitations of the dissertation. There is a big competition between providers in the mobile communication services market, so the findings apply only at the time of the study. It does not effectiveness of the factors affecting the customers loyalty in the mobile information services in the long term. 6 To accurately evaluate the factors that affect customer loyalty on mobile communication service market, there should be follow up studies, using data collected at different times. Progress model analysis evaluating the impact of the different factors affecting ability to provide mobile services. On the other hand, the study did not perform analysis model by customer groups or demographic profile: gender, education level and age. 1.6 Definition of terms In this research, the dissertation will present some concepts related to research content as follows: Mobile telecommunications services prepaid the ground (prepaid mobile service) is a service where users pay in advance mobile telecommunications services providers by recharging the mobile subscriber account to be assigned with a prepaid SIM card or prepaid mobile terminals (do not use SIM cards) or other similar forms. Mobile communication services provider is an enterprise to be licensed network setting, providing the ground mobile communication service by the Ministry of Information and Communication. Prepaid subscriber is individuals, representative enterprises or organizations who use prepaid mobile communication services: subscribers use prepaid mobile services and other prepaid subscribers as prescribed by the Ministry of Information and Communication. Postpaid subscriber is individuals, representative enterprises or organizations who use mobile communication services of providers but paying the charge in the end of the month. (No. 24 the Circular of the Ministry of Information and Communication, 2012). 7 Call quality depends on customer perception: call quality is clear; not without dropping the call when the call is done; not happen congestion when the call is connected; not losing when your messages send and receive; the scope of coverage. Value – added service are types of services and convennience as internet, waiting call, international roaming… and convenience of use of value-added services, value-added services are up-to-date… Convenience in procedures are subscription and change procedures as ease of subscribing and changing service and staff friendliness, when subscribing and changing. Price structure is pricing and other prices as reasonability of price, variety of price schedule and possibility of freely choosing price schedules. Customer services support are variety of customer support systems, speed of complaint processing, ease of reporting complaint and friendliness when reporting complaint. Loss cost is perception of loss in social status and performance associate with the churn of service from an existing carrier as difficulty of changing number and loss of benefits such as mileage program. Adapting cost is perception of cost of adaptation, associated with switching to a new carrier as inconvenience of having to learn a new service and need to search for information on new carrier, when switching carrier Move – in cost is perception of economic cost involved in switching to a new carrier as cost of replacing mobile device and subscription fee for new membership. Attractiveness of other providers are alternative vendor‟s reputation, image and service quality, according to the customer perception as reputation, image and overall service quality… 8
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