ABSTRACT
Prior to the advent of GSM in 2001, phone penetration was low to the verge of negligible. NITEL had the monopoly. But all that changed with the GSM revolution brought by the licensing of ECONET (now AIRTEL), MTEL, MTN and the later entry of GLO and 9MOBILE into the telecommunication industry. At first, all that was needed for marketing success was availability. Because the demand for phone was far more than the supply, these companies were on a roll, snapping subscribers after subscribers from phone starved State. With the fierce competition and the saturated market already, telecom operators must work hard to reduce cost, win new customers and most importantly retain the existing ones. Primary data used for this work which was sourced through questionnaire administered to customers of the four major telecommunication companies in Benin City (MTN, AIRTEL, GLOBACOM & 9MOBILE) residing in Benin City. The questions were close ended and used a 5-point Likert-scale. The sample consists of 250 mobile subscribers in Benin City, using a simple random sampling. The data obtained from the survey were analyzed using the Statistical Package for Social Sciences (SPSS), Version 22. The survey was restricted to subscribers using the four major GSM mobile phone operators. The study revealed that Brand loyal customers are prone to brand switch in response to changes in tariff of other brands and that there is a significant relationship between branding strategy and consumer loyalty in the Benin telecommunication industry. The researcher recommend that telecommunication firms should expand their network coverage, improve the quality of service their offer and provide better access to other networks within and outside Benin City. The industry should also improve their customer service and value-added
services, because the findings shows that consumers are not satisfied the quality of these factors. Telecommunication providers in Benin should be constantly involved in brand innovation and diversification, as to increase customer’s product choice. They must come up with friendly tariff in order to increase customer loyalty and reduce brand switch. Finally, that telecommunication providers in Benin must see branding strategy as a very important aspect of it marketing strategy and must be given a serious approach, because it go a long way to determines the success or failure of the brand offer to the market, the firm in question and it ability to achieve consumer loyalty.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
As the telecom companies become increasingly more customer-centric and are much interested not just on acquiring new customers, but more importantly, delighting and retaining existing customers. This has added more costs in attracting new customers than retaining existing ones. But it should be realized that, it is more profitable retaining an old customer who is more likely to repurchase or re-use a company’s products/services and recommend them to others. Therefore, retaining an existing customer becomes a product of customer loyalty and value which in turn is a function of the level of customer satisfaction or dissatisfaction (Reichheld,
1996). Since the full liberalization of the sector in 2000 (Ndukwe, 2004), the industry has witnessed a tremendous increase in subscriber growth rate for all the mobile telecom operators. This growth trend could not be attributed to customer satisfaction alone; but fundamentally to the substantial growth in investment and expansion of network access during the past years. According to Rosenberg et al. (1984), it can cost as much as six times more to win a new customer than it does to keep an existing one.
Prus and Randal (1995) then describe customer loyalty as follows: “Customer loyalty is a composite of a number of qualities. It is driven by customer satisfaction, yet it also involves a commitment on the part of the customer to make a sustained investment in an ongoing
relationship with a brand or company. Finally, customer loyalty is reflected by a combination of attitudes (intention to buy again and/or buy additional products or services from the same company, willingness to recommend the company to others, commitment to the company demonstrated by a resistance to switching to a competitor) and behaviors (repeat purchasing, purchasing more and different products or services from the same company, recommending the company to others)”.Customer loyalty is all about attracting the right customer, getting them to buy, buy often, buy in higher quantities and bring you even more customers.
Customer loyalty is when an organization receives the ultimate reward for the way it interacts with its customers. Loyal customers buy more, buy longer and tell more people that is true customer loyalty.”(Ellen Goodwright, 2010). It can also be seen as the extent of faithfulness of a consumer to a particular brand, expressed through their repeat purchases, irrespective of the marketing pressure generated by the competing brands. Customer loyalty is the continued and regular patronage of a business in the face of alternative economic activities and competitive attempts to disrupt the relationship. Customer loyalty often results in other secondary benefits to the firm such as brand advocacy, direct referrals, and price insensitivity.
Jones and Sasser (1995) identified three parts of consumer loyalty: re-buy intention, primary behavior and secondary level behavior. According to Jones and Sasser (1995) re-buy intention refers to future intention of the consumer to re-purchase the product or service. Primary behavior means the practical re-visiting behavior of a consumer; while secondary-level behavior indicates the willingness of a customer to recommend the product to others and enhances customer loyalty
through human relationship Chen, Chen and Hsieh (2007). Customer loyalty is one major thing that brands need to thrive in the market place. When customers are loyal to a brand, they become ambassadors by mouthing good stories about the brand. It is a basic truth that when customers are happy, they go to a large extent to promote a good image for the brand. Customer loyalty is all about relevance and meaning throughout every customer touch point. It is all about making the brand experience more intimate relationship with the customers. For companies in the industry to achieve brand loyalty, it must pay more attention to its’ branding strategy. Many products offered to the market have to be branded, and branding is one of the elements in the brand planning activities of a firm. It has to do with the efforts a firm makes in choosing, developing, projecting and establishing its own brand(s) of products. Branding has emerged as a t op management priority in the last decades due to the growing realization that brands are one of the most valuable intangible assets that firms have. Companies are realizing the power of good branding (brand name) to create instant consumer recognition of the company’s brand. In this highly competitive environment, branding (brand name) may be the seller’s last chance to influence buyers and also differentiate it from like brands.
1.2 Statement of the Research Problem
The advent of Global System for Mobile Communications (GSM) in 2001, phone penetration was low to the verge of negligible. NITEL had the monopoly. But all that changed with the GSM revolution brought by the licensing of ECONET now AIRTEL, MTN and the later entry of GLO and 9MOILE into the industry. At first, all that was needed for marketing success was availability.
Because the demand for phone was far more than the supply, these companies were on a roll, snapping subscribers after subscribers from phone starved State.
With the fierce competition and the saturated market already, telecom operators must work hard to reduce cost, win customers and most importantly retain the existing ones. To retain consumers in the face of this keen competition, service providers must develop marketing strategies that will not only win customers but to retain them also. Branding has been identified as one of the major tools in the hands of firms to increase consumer loyalty. Branding is a fixation of special and unique image or attribute to a particular brand which makes it to be exceptional among other brands in the eyes and minds of consumers (Ehikwe, 2005).From the above definition of branding; it means that a brand has an added value to the physical brand beyond the core product. These may be aesthetic, emotional, psychological and philosophical values that are embedded in the minds and hearts of consumers.
1.3 Research Questions
The research questions are as follows:
- Is there any relationship between reliability of a mobile telecom industry and customer loyalty to the telecom networks in Benin City?
- Is there any relationship between responsiveness to customer concerns and customer loyalty to the telecom networks in Benin City?
- Is there any relationship between values added services and customer loyalty to the telecom networks in Benin City?
1.4 Objectives of the Study
The objectives of this study are to:
assess the relationship between reliability of a mobile telecom industry and customer loyalty to the telecom networks in Benin City.
assess the relationship between responsiveness to customer concerns and customer loyalty to the telecom networks in Benin City.
assess the relationship between value added services and customer loyalty to the telecom networks in Benin City.
BRANDING STRATEGY AND CUSTOMER LOYALTY IN THE TELECOMMUNICATION INDUSTRY IN BENIN CITY
