Factors affecting customer loyalty in mobile communication service in hanoi, vietnam

SUMMATION THESIS BY NGO ANH CUONG PREFACE 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 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 Subscribers starts to layoff workers because they are getting less and less number of customers to serve which showed that customers have been not loyal to their providers To develop positively and sustainably for Vietnam’s mobile market, service providers need to find ways to maintain valuable and loyal customer Chapter INTRODUCTION 1.1 Background of the study 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 Research result will provide information for management to formulate effective strategy for the use of telecommunications 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 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 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; 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 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 Objectvie of the dissertation will be: The dissertation will identify factors affecting customer loyalt 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 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 Factors affecting customer loyalty is mentioned in this study as follows:demographics; quality services, switching barriers, etc 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), mobile communication services provider, mrepaid subscriber, postpaid subscriber, call quality, value – added service, monvenience in procedures, price structure, customer services support, loss cost, adapting cost, move – in cost, , attractiveness of other providers, customer relationship Chapter REVIEW OF RELATED LITERATURES AND STUDIES 2.1 Mobile telecommunication services Mobile telecommunication services are clearly exhibiting signs of an abrupt industry paradigm change and symptoms of a market in transition Bolstered by the rapid development of information and communication technologies (ICT) and high demand from customers, the paradigm of mobile telecommunication services is now shifting from voice-centered communication to a combination of high-speed data communication and multimedia Factors such as the growth of the wireless Internet contribute to emphasize the appearance of a transition period in the mobile telecommunication services market This change of paradigm and the symptoms of a market in transition are driving the industry’s restructuring efforts and intensifying competition between companies Mobile carriers are coming to a full realization of the importance of a customer-oriented business strategy as a condition for sustaining their competitive edge and maintaining a stable profit level, and, indeed, for their very survival When the number of subscribers has reached its saturation point, creating and securing new customers is not only difficult but also costly in terms of marketing Hence, it is becoming an industry-wide belief that the best core marketing strategy for the future is to try to retain existing customers by heightening customer loyalty and customer value 2.2 Hanoi mobile communication services In 2012, there were six providers about mobile communication service in Hanoi with big three providers (Vinaphone, Viettel and Mobifone) and small three providers (Gtel, Sfone and Vietnammobile) * Viet Nam Telecom Services Company (Vinaphone) As a member unit of Vietnam Post and Telecommunications Corporation (VNPT), Currently VinaPhone provides services with prefix numbers (091, 094, 0123, 0125, 0127, 0129) for about over 36 million of real subscribers * Viettel telecom company (Viettel) Viettel Telecom Company (Viettel Telecom) is affiliated companies of the Viettel telecom military corporation Early in 2012, EVN Telecom has been merged by Viettel, so Viettel has became a mobile communications provider with the largest market share in Vietnam Currently, Viettel is one of the leading mobile communications suppliers in Vietnam with 10 subscriber numbers (098, 097, 096, 0163, 0164, 0165, 0166, 0167, 0168, 0169) and over 47,4 million subscribers * Viet Nam Mobile Telecom Services Company (VMS - Mobifone) Vietnam Mobile Telecom Services Company - VMS, a state-owend company under Vietnam Posts and Telecommunications Corporation Currently Mobifone provides services with prefix numbers (090, 093, 0122, 0124, 0126, 0128, 0121, 0120) for about 21 million of real subscribers * Other suppliers Other suppliers include SPT ( prefix number is 095); Gtel (prefix numbers are 099 and 0199) and Vietnamobile (prefix numbers are 092 and 0188) Three suppliers have a very low market share so they are very difficult to compete the largest suppliers Customer loyalty There are many concepts of customer loyalty Jim Novo (2011) described customer loyalty as a tendency of a customer to choose a particular brand of business or product to fulfill their needs And Reihchhed and Detricf (2003) said that Customer loyalty is astrategy that creates mutual rewards to benefit firms and customers.With loyalty customers, companies can maximize their profit because loyal customers are willing to purchase more frequently, spend money on trying new products or services, recommend products and services to others, and give companies sincere suggestions 2.4 Affecting factors to loyal customer * Customer satisfaction According to Spreng at al.1996, Customer satisfaction is the emotional state of products and services have been used Satisfaction can be obtained because of what was expected The empirical studies have shown that customer relationship and service quality are distinct concept And the customers’ own perceptions of service quality are the main factor to effect customer satisfaction And service quality is determined as the customers’ satisfaction or dissatisfaction formed by their experience of purchase and use of the service In the mobile communication service quality has been measured by call quality, pricing structure, mobile devices, value-added services, convenience in procedures, and customer support (e.g., Kim, 2000; Gerpott et al., 2001; Lee, Lee, & Freick, 2001) * Switching Barriers The switching barrier refers to the difficulty of switching to another provider that is encountered by a customer who is dissatisfied with the existing service, or to the financial, social and psychological burden felt by a customer when switching to a new carrier According to a previous study, the switching barrier is made up of switching cost, the attractiveness of alternatives, and customer relationships * Demographic factors In addition to the factors presented above, the customer loyalty may also be affected by demographic factors: age, gender, occupation, education level 2.5 Customer loyalty models * Proposed integrated model of service Loyalty Perceived Service Quality Customer Satisfaction Service Loyalty Figure 1: Proposed integrated model of service Loyalty * Switching barrier model of customer loyalty Customer loyalty Customer Satisfation Switching barrier - Switching cost - Customer relationship - Attractive provider others Figure 2: Switching barrier model of customer loyalty 2.6 Several topics related to mobilecommunication services 2.6.1 Some topics researched in Viet Nam Ky Duc Pham and Hung Nguyen Bui (2007) have has built theoretical models, test hypotheses and provide a new scale for mobile communication service market in Viet Nam According to authors, the service quality was the most important factor affecting customer loyalty And when researching about assessment of customer satisfaction towad the mobile telecom services in Hue, Thai Ha Thanh and Ton Duc Sau (2011) showed that service quality was the most important factor effecting customer satisfaction Duong Tri Thao and Nguyen Hai Bien (2011) have studied based on theoretical models of consumer loyalty and satisfaction, this study aims to consider relationship between service quality and consumer satisfaction of mobile phone service in Nha Trang city, Vietnam Results of the research show that models of consumer satisfaction fit well with the data, and consumer satisfaction of mobile phone was influenced positively by five factors including call quality; value added service; convenience; perceived price and consumer service 2.6.2 Some topics researched Overseas Figure 3: Customer loyalty about mobile communication service in American Accepting prices Perception quality Perceived value Expecting perception Customer complant s Customer satisfaction Buy back capabilities Figure 4: The model of impacting satisfaction and switching barrier to customer loyalty the mobile communication service in Korea Customer loyalty Satisfaction Add – value service Call quality Switching barrier Customer support Loss cost Move in cost Customer relationshi p Switching cost Service quality 2.7 Conceptual framework Quality services: - Call quality - Price structure -Value add services Customer satisfaction -Convenience in procedures -Customer services Customer loyalty Switching costs - Loss cost Recommendation s to improve customer loyalty in mobile communication service market in Hanoi area - Adapting costs - Move-in cost Switching barrier Attractiveness of other providers Customer relationship Figure 5: The proposed model for mobile communication service in Hanoi Source: the experimental model of customer loyalty in the communication market in Ho Chi Minh city by Pham Duc ky and Bui Nguyen Hung, (2007) Chapter METHODOLOGY 3.1 Research design The variables to determine customer loyalty were selected based from the conceptual framework at figure It includes: The quality services included: calling quality with variables; price structure with variables; value - add services with variables; convenience in procedures with variables and customer support services with variables And the switching barrier included: loss cost with variables; adapting cost with variables; move – in cost with variables; attractive offers of providers and customer relationship with variables In addition, the questionnaire also used other factors: customer satisfaction with variables; switching barrier with variables and customer loyalty with variables 3.2 Determination of sample size Dissertation uses the Slovin’s formula to difine the sample size for the survey n= N  Ne where n : sample size N: Population size that is 9.1 million mobile subscribers e: Probability of error committed due to the use of sample instead of population The error level in sample survey was chosen to be at 5% Thus, the minimum sample size to conduct the investigations would be: n= 9100000 N   399,98  400  Ne  9100000 * (0,05) (population) Thus, the sample size of the survey is 400 respondents 3.3 Sampling design and techniques The sampling method was conducted using stratified random sampling but based on several factors: the market share of service providers, demographic (gender, age group and occupation) factors, types of services (post-paid and pre- paid) 3.4 Research instrument To measure the factors that affect customer loyalty in mobile communication services, the questionnaire using the Likert scale with five levels: 5: strongly agree; 4: agree; 3: normal; 2: disagree and 1: strongly disagree The questionnaire was designed in two parts: - Part one: The customer’s demographic profile which included the information used to classify customer groups who are using mobile communication service such as: name, gender, education level, occupation, and income - Part two: This part deals on the questions that measured the customer’s loyalty using the selected variables or indicators 3.5 Data gathering procedure - Secondary data: the author collected data from the managing state agencies related to mobile communication: Ministry of Information and Communications, General Statistics Office, Hanoi Department of Information and Communication and Hanoi Post Office - Primary data: were taken from the survey results of 400 respondents who have been using the mobile communication service of providers Data processing method After information is collected, obtained were cleaned and processed using SPSS 16.0 Statistical treatment In this research, dissertation used some statistical method to analyze factors affecting customer loyalty in the mobile communication service Descriptive statistics, Chi-square test were used to analyze relationship between demographic factors with the customer loyalty For this research, linear regression analysis was used to test for the linear relationship between the variables identified in hypotheses Using correlation coefficient (r) to test relationship between variables of hypo dissertation pairs Chapter PRESENTATION ANALYSIS AND FINDINGS NTERPRETATION OF DATA 4.1 Respondents profile To gather sufficient information of 400 respondents, before importing data to prepare data synthesis process and analysis, the survey questionnaire was cleaning information, encryption Results preliminary statistics of respondents was shown as follows: Table 4.4: The summary of the distributive sample by gender, age and type of service providers Age groups The vendor Mobifone Gender Vinaphone Gender Viettel Gender Others Gender Services type Total 18-24 25-34 35-44 45-54 Over 55 Postpaid Prepaid Male 43 16 13 13 30 Female 31 12 10 22 Male 72 27 23 14 29 43 Female 53 21 17 10 21 32 Male 99 38 33 18 30 69 Female 73 29 24 13 22 51 Male 17 4 13 Female 12 2 10 400 27 154 129 75 15 130 270 Total 4.2 Scale values test The scale is a preliminary assessment through Cronbach Alpha coefficients Cronbach alpha coefficient is used to remove the waste variables Variables were excluded when the corrected Item –Total Correlation of Variables is less than 0.3 and the standard value to assess the better scale when it has reliability alpha to be 0.6 or higher (Nunnally & Burnstein 1994) 4.2.1 Services quality Cronback’s alpha of “calling quality” is 0.775 Cronbach alpha of the “Pricing structure” is 0.85 The composition of “value added services” with Cronbach alpha is 0.794 The composition of “Convenience in procedures’ with Cronbach alpha is 0.806 The composition of “customer service supports” with Cronbach alpha is 0.738 4.2.2 Switching Barriers The Cronbach’s alpha of the component “loss cost” is 0.765 The Adapting cost component with Cronbach's alpha 0.684 The Move – in cost with Cronbach’s alpha is 0.644 The Cronbach’s alpha of “attractiveness of other providers” is 0.915 The Cronbach’s alpha of the “customer relationship” is 0.852 10 4.3 Preliminary analysis of the component variables 4.3.1 Service quality The mean value of the measured variable about quality mobile communication services is considered fairly average The highest value is “the pricing structure” (mean = 3.5600) and the lowest is the “convenience in procedure” (mean = 3.2306) Mean value of variables are higher than and the Std deviation is less show that customer evaluation has high consistency However, mean value is less than means that customers not agree with service quality than customers agree 4.3.2 Switching barriers Statistical results showed that, the elements of switching barriers did not significantly affect satisfaction as well as long-term intention of customer to use mobile communication the services of suppliers The element “Loss cost” has the highest average value (mean = 3.1437) The element “Customer relationship” has the lowest average values (mean = 2.8875) shows that customers are not satisfied with the customer services care of the providers 4.4 Hypothesis test H1: Service quality has a positive effect on customer satisfaction H1.1: Increasing the call quality will increase the satisfaction level on service quality The correlation coeficient between call quality with customer satisfaction is 0.526 It shows that the relationship between the calling quality and customer satisfaction is directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H1.2: More reasonable price structure will increase the satisfaction level on service quality Statistical result showed that the correlation coeficient is 0.701 So, the ralasionship between the price structure and customer satisfaction is directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H1.3: Increasing the value - added service quality will increase the satisfaction level on service quality Statistical result showed that the correlation coeficient is 0.671 So, the relationship between the value - added service quality and customer satisfaction is directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted 11 H1.4: More convenience in procedures will increase customer satisfaction levels on service quality Statistical result showed that the correlation coefficient is 0.696 So, the relationship between the convenience in procedures and customer satisfaction is directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H1.5: Customer support service is related to customer satisfaction on service quality Statistical result showed that the correlation coefficient is 0.290 So, the ralasionship between the customer services and customer satisfaction is directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H2: Customer satisfaction has a positive effect on loyalty Statistical result showed that the correlation coefficient of “customer satisfaction” and “customer loyalty” is 0.877 So, the relasionship between customer satisfaction and the customer loyalty are directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H3: Switching barriers has a positive effect on loyalty H3.1: Loss cost affects the decision of the customer to change provider The correlation coefficient of “loss cost” and “switching barriers” is 0.609 So, the relationship between the loss costs and switching barrier are directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H3.2: Adapting cost is a switching barrier to the customer Statistical result showed that the correlation coefficient of “adapting cost” and “switching barrier” is 0.312 So, the relationship between the adapting cost and switching barrier are directly proportional The significance level is less than 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H3.3 Higher move – in cost is a switching barrier to the customer The correlation coefficient of “move – in cost” and “switching barrier” is 0.014 And, the significance level is higher than 0.05 (Sig = 0.786) to reflect between the move – in cost and switching barrier is not the relationship Thus, this hypothesis is not accepted in this study H3.4: Attractive offers of other providers are switching barrier to the customers 12 The correlation coefficient of “attractiveness of other providers” and “switching barrier” is -0.549 So, the relasionship between the adapting cost and switching barrier are inversely proportional That is mean, adapting cost is more lower and more greater switching barrier The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted H3.5: Customer relationship is a switching barrier to the customer The correlation coefficient of “customer relationship” and “switching barrier” is 0.620 So, the relasionship between” customer relationship” and the “switching barrier” are directly proportional That is mean, customer relationship is more stronger and more greater switching barrier The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, this hypothesis is accepted Statistical result showed that the correlation coefficient of “switching barrier” and “customer loyalty” is 0.675 So, the ralasionship between switching barrier and the customer loyalty are directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, the hypothesis “switching barriers has a positive effect on loyalty” is accepted 4.5 Factors affecting customer loyalty 4.5.1 Analyzing relationship between demographics factors with service providers * Gender The result of Chi-square test indicated that, there is not relationship between the gender of subscribers in choosing service providers due to the significance of the test is greater than 0.05 (Sig = 0.999 ) * Education level Result of Chi-square test showed that there was relationship between the education of subscriber in choosing service providers due to the value of the Chisquare test was less than 0.05 (Sig = 0.000) * Occupation The statistical result showed that there is not relationship between occupation of subscribers with selection of service providers due to value of Chi-square is 0.546 * Per average income The analytical results show that there is relationship between income of subscribers with service providers due to the significance of the Chi-square test is less than 0.05 (Sig = 0.000) 13 4.5.2 Relationship beween factors affecting loyalty versus demographic factors * Gender Analytical result showed that gender of subscribers have relationship with “value – add service” and “adapting costs” due to values of Chi-square test are less than 0.05 The remaining factors affecting loyalty have no relationship with the subscriber's gender due to values of Chi-square test are higher than 0.05 (Appendix 3.1) * Occupation The results of analysis showed that there are not relationship between subscriber’s occupation with factors affecting loyalty as follows: “not losing when your messages send and receive”, value – add service and move – in cost due to significance level of Chi-square tests are higher than 0.05 The remaining factors are relationship with occupational subscribers due to significane level of Chi-square tests are less than 0.05 (appendix 3.2) * Per average income The results of analysis showed that there are not relationship between subscriber’s income with factors affecting loyalty as follows: “not losing when your messages send and receive”; convenience in procedure; value –add service, customer suppot service and move – in cost due to significance level of these test are higher than 0.05 The remaining factors affecting loyalty are relationship with subscriber’s income due to significane level of Chi-square tests are less than 0.05 (appendix 3.3) * Ages The results of analysis showed that there are relationship between subscriber’s ages with assess of subscriber in adapting cost of service providers due to the significance level of Chi-square is 0.003 Remaining factors affecting loyalty are not relationship with subscriber’s ages due to significane level of Chi-square tests are higher than 0.05 (appendix 3.4) * Education level The results of analysis showed that there are relationship between subscriber’s eduacation with factors affecting loyalty (calling quality is clear, not without dropping the call when the call is done, the scope of coverage and the supplier has service packages with different charges to suitable customer demands) due to the 14 significance level of Chi-square tests are less 0.05 Remaining factors affecting loyalty are not relationship with subscriber’s education due to significane level of Chi-square tests are higher than 0.05 (appendix 3.5) 4.5.3 Analyzing the Factors that Affect Customer Loyalty The model of analysis affecting customer loyalty in mobile communication services in HaNoi is reflected as follows: CL = -0.404 + 0.173 * (CQ) + 0.163 *(PS) + 0.097 *(VAS) +0.162*CP+ 0.178 *(LC) - 0.140 * (AOP) + 0.260 *(CR) According to this model, there are factors affecting customer loyalty The impactive level of factors are explaind as follows: The regression coefficient of “customer relationship” is 0.260 (ß10 =0.260) so this factor is strongest influence to customer loyalty The “loss cost” is the second factor affecting customer loyalty (ß6=0.178) The “calling quality” is thirth factor affecting customer loyalty The regression coefficient of “pricing structure” is 0.163 so This is the fourth factor affecting customer loyalty The fifth factor is “Convenience in procedure”(ß4= 0.162) The “attractiveness of other providers” is the sixth factor affecting customer loyalty (ß9 = -0.140) However, the negative regression coefficient reflects inversely proportional relationship between “attractiveness of other providers” with customer loyalty The regression coefficient of “value – add services” is 0.097 so this factor is the weakest influence to customer loyalty Chapter SUMMARY, CONCLUSIONS AND RECOMMENDATIONS 5.1 Summary of results The Cronback’alpha of results showed that some component variables (The scope of coverage; The supplier has service packages with different charges to suitable customer demands; Quick solving problem services; The staff are always friendly with the custome) were not dissatisfaction with conditional test due to the Cronback’alpha coefficient was less than 0.6 and the “Corrected Item-Total Correlation” was less than 0.3 The component variables of the remaining factors were accepted in this research due to the the Cronback’alpha coefficient was more than 0.6 and the “Corrected Item-Total Correlation” was more than 0.3 The test results of the hypothesis pairs confirmed that the test results for the pair confirmed the hypothesis that there were positive relationship between service 15 quality with customer satisfaction; customer satisfaction with customer loyalty and switching barriers with customer loyalty However, the hypothesis “Higher move – in cost is a switching barrier to the customer” were not accepted in this research Result of linear regression analysis showed that there are factors affecting customer loyalty as follows: customer relationship, loss cost, calling quality, pricing structure, convenience in procedure, attractiveness of other providers, value – add services 5.2 Conclusions Thus, the research has shown to be factors affecting customer loyalty in mobile communication in Hanoi as follows: With service providers, there were relationships between education level and income of subscribers with choosing service providers With factors affecting loyalty, (1) gender of subscribers have relationship with “value – add service” and “adapting costs”; (2) subscriber’s occupation have relationship with factors affecting loyalty as follows: call quality, customer relationship, attractiveness of other service provider, etc; (3) income of subscribers have relationship with factors affecting loyalty as follows: call quality, lost cost, adapting cost, attractiveness of other service providers, customer relationship, etc; (4) age of subscribers are relationship with assess of subscriber in adapting cost of service providers; (5) education level of subscriber are relationship with factors affecting loyalty (calling quality is clear, not without dropping the call when the call is done, the scope of coverage and the supplier has service packages with different charges to suitable customer demands) There were seven component 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 5.3 Recommendations 5.3.1 Demographic factors 16 With small service providers, these providers should improve service quality especially expanding coverage to enhance call quality to attract these customer groups With big service providers, their service quality are better but rates of service are often higher than small service providers So, in the future these providers should be lowered rates to attract new subscribers (especially subscribers with low income, low education level and unstable occupation) In addition, service providers should have policies reasonable customer segments to increase the new subcribers and maintain old subcribers aim to achieve the highest business performance 5.3.2 Service quality Because of this, the quality service provider is constantly improving over time This is reflected in evaluating customer of the component factors of service quality are greater than However, the average point of the component elements are lower than This shows that the customer is not satisfied with the service quality of provider Therefore, service providers need to improve the quality of our services to meet the diversified demand of customers 5.3.2.1 Calling quality Analytical results of factors affecting customer loyalty to suppliers in the mobile communication market in Hanoi showed that the call quality is a factor impact directly to loyalty customers In recent years, the calling quality of the supplier has improved a lot but the disconnected phenomena, network congestion or undeliverable message still occurs when the communication needs of the client surged suddenly Therefore, service providers need to invest in facilities: network expansion and upgrade the capacity to ensure calling quality is better 5.3.2.2 Pricing structure Results of regression analysis showed that rates are the one of the factors to keep and attract customers using the services of the provider To improve customer loyalty, the small service providers should invest in infrastructure to expand the scope of coverage However, the loyalty of this client to suppliers is not high The reason is that the the scope of coverage is small so ability to connect the calls are restricted The current reality, a small number of providers still have to depend on Vinaphone provider about infrastructure Thus, they not have many advantages in infrastructure This is cause for the scope of coverage to be 17 limited Therefore, the government should have reasonable policies to they may be compete on an equal footing with the major suppliers To maintain customer loyalty, suppliers should apply trade discount for customers who paid high charges, loyal customer, longtime customer, older subscribers, etc Results showed that occupation, per average income and using time are factors that have relationship with customer loyalty So, service providers should conduct market segmentation and niche market development to attract new subscribers and maintain old subscribers For example, service providers should have suitable packages for each customer groups: staff of organizations, worker in industrial parks, students, etc 5.3.2.3 Convenience in procedures To enhance the loyalty of our customers, suppliers should improve enhance the convenience in the process provides: extended form of payment (internet, ATM, banking payment…); notification and sending bill on time; SIM Card replacement… Contracting procedures need to simplify to attract more customers using postpaid subscribers 5.3.2.4 Value – add services The needs of customers using the internet is increasing The mobile phone manufacturers have used high technology to enhance the features for mobile phones: access to high speed internet, text editor, camera and video with high picture quality next usual features of a mobile phone: listen, call and send messages, etc So, providers should often update the new added-value services to maintain subscribers old and attract new subscribers Currently, there are many type of value – add services that have been provided on the mobile communication service market by service providers However, these types of value – add services have similarities: speed of internet access, charges, content of access, etc So, service providers should make a difference and focus on value-added services which they have an advantage.he 5.3.3 Switching barrier The results of the factor analysis about customer loyalty showed that the element switching costs have three factors directly impact loyal customer as customer relationship, the attractiveness of other suppliers and loss cost 18 5.3.3.1 Customer relationship In the regression model, the factor was the most strong impact in customer loyalty for providers Results of describe statistical analysis showed that, evaluative average of customers was than This reflects that customers are not satisfied on issues customer relations of vendor Therefore, to improve customer loyalty, providers should increase the exchange of information with customers, applying information technology (sent over email) to send the list of call charges when customers have request; often organizing training courses to enhance professional and communication skills with clients to staff; public charging principles for different types of services 5.3.3.2 Attractiveness of other suppliers These factors negatively affect customer loyalty to suppliers The attractiveness of the other service providers will make up for customer loyalty to suppliers that they are using the service is reduced This factor reflects the competitiveness of suppliers To enhance the loyalty of subscribers, providers should make some solutions: improving the quality of services, building strategies specific to developing brand (advertising, identity brand through the logo and slogan of the supplier), expanding the store and the customer support center 5.3.3.3 Loss cost Results of research showed that, customers have using long time, high income, stable occupation, postpaid subscribers who usually are loyal with their service providers Result of depth interview showed that the reason of these customers get loyal their service providers so they felt inconvenience when having to replace number phone Because, when they used new number phone they would take more time and costs to inform their friends, family and their business partners Therefore, service providers should have suitable policies for these customer groups as apply preferential tariff policy for customers to use services of suppliers long time Customers have more using time and more lower charge Service providers should use information technology to customers may be easy information for related persons when these customers change phone number due to some reasons: lost old phone number, to be broken SIM, change new phone number, etc 19 Published project Ngo Anh Cuong (2013), Factors affecting customer loyalty in mobile communication service in Hanoi, Journal of Sience and Technology, ISSN 19593585, Hanoi University of Indusstry, No 16/06-2013, pages 83-87 20 [...]... calling quality, pricing structure, convenience in procedure, attractiveness of other providers, value – add services 5.2 Conclusions Thus, the research has shown to be factors affecting customer loyalty in mobile communication in Hanoi as follows: With service providers, there were relationships between education level and income of subscribers with choosing service providers With factors affecting loyalty, ... Analyzing the Factors that Affect Customer Loyalty The model of analysis affecting customer loyalty in mobile communication services in HaNoi is reflected as follows: CL = -0.404 + 0.173 * (CQ) + 0.163 *(PS) + 0.097 *(VAS) +0.162*CP+ 0.178 *(LC) - 0.140 * (AOP) + 0.260 *(CR) According to this model, there are 7 factors affecting customer loyalty The impactive level of factors are explaind as follows:... relationship between service 15 quality with customer satisfaction; customer satisfaction with customer loyalty and switching barriers with customer loyalty However, the hypothesis “Higher move – in cost is a switching barrier to the customer were not accepted in this research Result of linear regression analysis showed that there are 7 factors affecting customer loyalty as follows: customer relationship,... of customer relationship” is 0.260 (ß10 =0.260) so this factor is strongest influence to customer loyalty The “loss cost” is the second factor affecting customer loyalty (ß6=0.178) The “calling quality” is thirth factor affecting customer loyalty The regression coefficient of “pricing structure” is 0.163 so This is the fourth factor affecting customer loyalty The fifth factor is “Convenience in procedure”(ß4=... not relationship between subscriber’s income with factors affecting loyalty as follows: “not losing when your messages send and receive”; convenience in procedure; value –add service, customer suppot service and move – in cost due to significance level of these test are higher than 0.05 The remaining factors affecting loyalty are relationship with subscriber’s income due to significane level of Chi-square... subscriber in adapting cost of service providers; (5) education level of subscriber are relationship with factors affecting loyalty (calling quality is clear, not without dropping the call when the call is done, the scope of coverage and the supplier has service packages with different charges to suitable customer demands) There were seven component factors affecting customer loyalty In which, the service. .. with the service quality of provider Therefore, service providers need to improve the quality of our services to meet the diversified demand of customers 5.3.2.1 Calling quality Analytical results of factors affecting customer loyalty to suppliers in the mobile communication market in Hanoi showed that the call quality is a factor impact directly to loyalty customers In recent years, the calling quality... 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. .. “value – add service and “adapting costs”; (2) subscriber’s occupation have relationship with factors affecting loyalty as follows: call quality, customer relationship, attractiveness of other service provider, etc; (3) income of subscribers have relationship with factors affecting loyalty as follows: call quality, lost cost, adapting cost, attractiveness of other service providers, customer relationship,... barrier and the customer loyalty are directly proportional The significance level is less 0.05 (Sig = 0.000) to reflect meaningful relationships Thus, the hypothesis “switching barriers has a positive effect on loyalty is accepted 4.5 Factors affecting customer loyalty 4.5.1 Analyzing relationship between demographics factors with service providers * Gender The result of Chi-square test indicated that,