10th Operations Research Society Of Eastern Africa (ORSEA) Conference 2014- Nairobi, KENYA

Factors Influencing Customer Switching Behavior among Mobile Phone Service Providers: Case of University

Students

J. R.M. Philemon and M. E.S. MngulwiUNIVERSITY OF DAR-ES-SALAAM BUSINESS

SCHOOL

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OUTLINE

• Introduction

• Problem statement

•Model of customer switching behavior

•Methodology

• Findings

• Conclusions

• Recommendations

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IntroductionIn 2012, the global mobile market grew strongly to nearly 7 billion

connections, representing a growth rate of 13.7% p.a. since 2008. 2013 was a landmark year, with for the first time more SIMs active than

the world population. Market for the mobile telecommunications is expected to grow over the

years, with annual growth rate of 7.6% expected between 2012 and 2017.

This increasing popularity of mobile technologies has led to the dramatic use of mobile phones among college students. WHY?

Communications and access to academic resources on their mobile devices (Hung & Zhang, 2011).

Mobile phones open up new avenues for extending the scope, scale and quality of education (Mishra, 2011).

This view is premised on the decline in the price of mobile handsets and usage costs, which makes mobile phones increasingly ubiquitous, especially in poorer communities (Taxler, 2009).

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Introduction (cont’d)Africa has been a key source of mobile industry growth and

the growth is set to continue. Tanzania telecommunication industry has also witnessed a

dramatic growth and the rapid expansion of mobile phone usage in Tanzania has been triggered by a highly competitive market and service diversification. The competitive environment has resulted into customers switching between mobile service providers.

Operators(VODACOM, AIRTEL, ZANTEL, SASATEL, SMART, TIGO) are now providing different mobile phone services such as voice and message transmission, data services, paging as well as internet services (Hassan and Semkwiji, 2011).

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Problem Statement

Some researchers postulate that consumers’ switching behavior poses a serious threat to long-term relationships (Ganesh & Reynolds, 2000). Despite the fact that many studies have been done on the factors influencing customer switching , very few studies have been done in developing countries such as Tanzania and more specifically on university students. The objective of this study was to determine the causes of students switching behavior among mobile phone service providers.

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Model of Customer Switching BehaviorKEAVENEY

Figure1: Model of Customer Switching Behavior

Service Failure (Service Mistakes, Billing Errors, Service Catastrophe

Rates (High Pricing, Price Increases, Unfair Pricing, Deceptive Pricing)

Service Encounter Failure (Uncaring, Impolite, Unresponsive, Unknowledgeable)

Response Failure (Negative Response, No Response, Reluctant Response

Competition (Found Better Service)

ETHICAL factors (Cheating, Hard Selling, Unsafe, Conflict Of Interest

Involuntary Switching (Customer Moved, Provider Moved

Customer Switching

Behaviour

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Methodology Population: Students of the University of Dar-es-

salaam (17,000 students) and Tumaini University (Dar-es-salaam College)-2,100

Why Students?: University students constitute a large and growing market for the mobile phone services.

Data collection: 4 point Likert scale questionnaire Sample Size: Krejcie and Morgan (1970) 384

students. Analysis: Descriptive (Frequencies, Percentages,

Means and Standard Deviations); t-test Reliability: Cronbach's alpha: Variables showed

acceptable values (above 0.7).

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Profile of the Respondents

Categories Frequency(n) Percent (%) University Tumaini University 61 35.9 University of Dar es Salaam 109 64.1 Program Undergraduate 120 70.6 Postgraduate 49 28.8 Course of specialization Business 74 43.5 Law 22 12.9 Engineering 18 10.6 Education 32 18.8 Others 24 14.1 Gender Male 113 66.5 Female 57 33.5 Age of respondents Below 20 5 2.9 21-30 136 80.0 31-40 22 12.9 41-50 6 3.5 51 and above 1 .6 Av. monthly income (Tanzania shillings ) Below 100,000 60 35.3 100,001-300,000 64 37.6 300,001-500,000 19 11.2 500,001-1,000,000 16 9.4 1,000,000 and above 11 6.5 Residence Temeke 28 16.5 Ilala 28 16.5 Kinondoni 114 67.1

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First Mobile Phone Subscription

Mobile phone service providers Frequency (n) Percent (%) TIGO 65 38.2 VODACOM 80 47.1 TRITEL 2 1.2 AIRTEL 23 13.5 Total 170 100.0

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Factors Influencing Switching Behavior(Descriptive Results)

N Mean Std. Deviation Std. Error Mean

COMPETIT 169 2.6154 1.31385 .10107

RATE 169 2.3333 .94631 .07279

SERVICEF 169 2.2643 .97174 .07475

RESPFAIL 169 2.2032 .96507 .07424

ENCOFAIL 169 1.9201 .99977 .07691

INVOLUNT 169 1.8491 1.18874 .09144

ETHICAL 169 1.7618 .88465 .06805

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T-Test: Factors Influencing Switching Behavior-1

  Test Value =2.5          

  t df Sig. (2-tailed)

Mean Difference 95% Confidence Interval of the Difference

 

        Lower Upper

RATE -2.290 168 .023 -.1667 -.3104 -.0230

SERVICEF -3.153 168 .002 -.2357 -.3833 -.0881

ENCOFAIL -7.540 168 .000 -.5799 -.7317 -.4281

RESPFAIL -3.999 168 .000 -.2968 -.4434 -.1503

COMPETIT 1.142 168 .255 .1154 -.0841 .3149

ETHICAL -10.847 168 .000 -.7382 -.8725 -.6038

INVOLUNT -7.118 168 .000 -.6509 -.8314 -.4704

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T-Test: Factors Influencing Switching Behavior-2The seven main factors were further analyzed using t-tests to determine their influence on university students switching behaviors. In assessing the factors a one sample t-test was performed. The value of 2.5 served in demarcating agreement with the statements (above 2.5) and those disagreeing with the statements (below 2.5). The t-values are presented on Table 3. All the factors with the exception of competition [COMPETIT] have negative t-values and are significant at either 0.05 or 0.01.

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Recommendations -1

Offer services at relatively cheaper rates so as to woo

university students to their side.

Avoid service failures.

Establish effective service recovery strategies in case of

inevitable failure. Studies have shown that resolving customer

problems effectively has a strong impact on customer loyalty.

To innovatively be ahead of competition at any point in time. 10th

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Recommendations-2

Invest many resources in maintaining current subscribers

while attracting new ones.

Keeping track of the reasons for university students

switching of service providers as the reasons may not be

static but dynamic.

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THANK YOU VERY MUCH

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