Methods in Business Research (MKT404-B)

Consumer Switching Behaviour on Cellular Service Sector

Final Report

Instructor:

Miss Nazia Saeed

Submitted by:

Ali Ladha (17065)

Sana Khan (16273)

ACKNOWLEDGEMENT:
Ma’am Nazia Saeed
Lecturer
Institute of Business Management (IOBM)
Karachi, Pakistan.

We are pleased to submit a comprehensive research report on a consumer switching behavior in

cellular service sector requirement of the course Methods in Business Research at Institute of
Business Management (IoBM).

During all the phases and stages of report research, writing and analyzing the report, we gained
useful and practical knowledge about the course.

We as a group have tried out level best to cover the targeted aspects of our course and hope that
this report will serve its purpose. All rules and regulations for the preparation of the formal report
have been taken into consideration.

We would sincerely like to thank you for the faith you showed in our capabilities and the
encouragement you gave us when assigning us the report. If there is anything else you wish to
know, we will be glad to assist. Please accept our report contentedly and without any regrets.

Thanks,

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Contents
ABSTRACT....................................................................................................................................................ii
Purpose........................................................................................................................................................ii
Methodology...............................................................................................................................................ii
CHAPTER 1: INTRODUCTION................................................................................................................3
BACKGROUND.........................................................................................................................................3
Factors affecting Switching Behavior...........................................................................................................3
Price Package...........................................................................................................................................3
Network Coverage...................................................................................................................................3
Promotional Activities.............................................................................................................................3
Scope...........................................................................................................................................................3
Research Objectives....................................................................................................................................4
Problem Statement......................................................................................................................................4
Research Questions.....................................................................................................................................4
Hypothesis...................................................................................................................................................4
Problem Statement......................................................................................................................................4
Research Objectives.....................................................................................................................................4
Research Questions.....................................................................................................................................5
Literature Review.........................................................................................................................................5
Conceptual Framework...............................................................................................................................8
Theoretical Framework................................................................................................................................9
Methodology...............................................................................................................................................9
Research Design..........................................................................................................................................9
Population...................................................................................................................................................9
Sample Size..................................................................................................................................................9
Data Analysis...............................................................................................................................................9
Descriptive Analysis...................................................................................................................................11
Realibility...................................................................................................................................................12
Price...........................................................................................................................................................12
Promotions............................................................................................................................................13

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 Switching Behavior................................................................................................................................13
EFA.............................................................................................................................................................15
Regression.................................................................................................................................................15
Limitations.................................................................................................................................................17
Discussion..................................................................................................................................................17

ABSTRACT
This research was conducted to find out what is the most popular cellular network used by
consumers and to check what the factors are influencing the consumer’s behavior to change their
network. Primary data was collected through Questionnaire and a total of 150 responses were
made out of it. The participants were general public who were between the age group of 18-70..
The data was collected according to age, gender, income, etc. The data was conducted on IBM
SPSS and the results obtained tells us that price, promotion, network coverage doesn’t influence
the consumer’s behavior that much. The sig value of price is 0.000 which means null hypothesis
is rejected. Another factor, network coverage has a sig value of 0.000 which means null
hypothesis is rejected. Another factor promotion has a sig value of 0.000 which means the null
hypothesis is rejected.

Purpose
The study shows the effects of network coverage, prices, and promotions on the consumers
switching behavior of their telecom company and how the consumer is influenced by these
variables when switching to other network.

Methodology
This is a primary research and data was collected by floating questionnaires. The target
population was people from age group 18-70 The questionnaires was administered to around 150
participants and IBM Software SPSS was used for data analysis.

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 CHAPTER 1: INTRODUCTION

BACKGROUND

Consumer switching behavior tells us that consumer is no longer interested in using the current product
and wants to change it due to being Product out of its favor, we tried to find out the consumer behavior
on cellular switching network.

Factors affecting Switching Behavior

Price Package: It refers to the cost of usage i.e. price. It includes the cost of buying the SIM
card, call rates per minute, the rate text messages bundles, charges of data etc. These all costs
play a very important role in customers loyalty towards the brand if he or she is not satisfied they
tend to change their network.

Network Coverage: It refers to the signal strength of a network. Customers wants their
network to be available at any time, People especially in rural areas tends to get the signals
problem, That’s why they prefer the network with the highest signal strength. If they do not get
the signals they want they may want to change their network.

Promotional Activities: Promotional activities often plays a very important role in getting
consumers attention, it includes the all type of promotions such as advertisement, door to door,
social media. Promotional activities have on brand switching behavior.

Scope

 This research will be restricted to students in Karachi for convenience and limited time frame
to conduct the research.
 The scope is particular in nature since only four variables are chosen in order to narrow down
the scope of research.

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 The results can come in handy to the existing and potential marketers of the respective
industry. Moreover, this study can be extended to other geographical regions, focusing on a
particular cellular network as well.

Research Objectives

 Search out the most suitable network which provide better service.
 Highlighting which determinant(s) influences switching patterns the most in Karachi.

Problem Statement

Consumers have a multitude of cellular networks to choose from. However, it is not perceptible
as to what compels them to switch their functioning network provider to another one.

Research Questions

1. What is the most preferred cellular service provider?

2. What are the key variables that provoke consumers to switch their cellular service provider?

Hypothesis

H0: Impact of consumer switching behavior on cellular service sector.

H1: Price has impact on changing behavior.
H2: Network coverage has impact on changing behavior.
H3: Promotion has impact on changing behavior

Problem Statement
Consumers have a choice of cellular networks to choose from. However, it is not perceptible as
to what make them to switch their current network provider to another one

Research Objectives
 Search out the best network which provide better service.

 Highlighting which determinant influences the changing of network the most.

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Research Questions

What is the most preferred cellular service provider?

What are the key variables that make consumers to switch their cellular service?

Literature Review

Shah, Gul, Shakir and Qureshi, (2013) carried out research that would dispense to the marketing
manager huge implications in the attitude of consumer in cost switching. Six elements are taken
to be the major sources of the cost of switching and their correlation with variables that are
separate and really tested. For the growth of policy in the telecom industry, real life experiences
are taken into account. As the research will demonstrate, the manager's concentration should be
directed to such features that are stressing on that area which has a significant effect on cost of
switching. This investigation will exhibit that the customer will refrain from switching of cost if
they perceive the aspired quality from their telecom service provider.

Ayesha, Nazia, Adnan, (2011) declares that the current marketing literature reveals the main
focus of the experts and a number of research inquiries on the withholding of customers, given
that the economic victory of any company depends upon how successfully they can retain their
customers. To maintain customers the firm must make sure to dispense quality service to
customers so they can be retained and not switch to any other provider. Aiming at switching and
the reasons for switching, the current studies show different ventures of researchers. An
investigation carried out in West (2000) has shown that the features that can predict switching,
are the external factors of network, cost of switching and the psychological factor.

Gupta, (2004) deduced that the searching for price, insight of risk in channel, time to wait and
attempt to assess have a significant effect on switching. This research is being carried out while
concentrating on the various norms, traditions and insight of the Pakistani people. It is centered
on the promise what you perceived, cost, standard and the forecast is done by anger incident
which explains switching attitude.

Kim, Jeong (2004) carried out an investigation and the major focus of this inquiry is to find out
what policies are followed by cellular industries in Korea in order to maintain customer loyalty.

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In this research it is explained that what the deciding factors that affect consumers are and what
is the extent of contentment and faithfulness and how to create a barrier for switching as it can
direct to an incessant relationship between customer and the organization. While cellular
industries have been working since some years on the clarity of call and coverage of network,
they should still work on providing better services to withhold the customers. They should
concentrate on attraction programs for customers like discounts and free coverage of network. As
the switching barrier was revealed to have an impact to adjust between the faithfulness and the
satisfaction of the customer.

Kumar, (2011) outlined that switching of brand is the process in which a customer shifts from
one organization to another, both of the same variety. The customers usually also switch to other
brands even though they are satisfied with the present. As with passing time the cell phone has
become an essential gadget, because a person can make phone calls, send texts, listen to radio,
music, watch video clips, can browse the internet, and can capture pictures and videos, it can be
used as a navigator, and for various personal uses. There are important factors that enable one to
shift to another company, but switching always is not a simple thing. Rivals try to produce
impactful advertisements and marketing to make customers switch to their brand and they the
make customers think that if they switch to their brand, they will get more advantages; mostly it
is the cost that encourages the customer to shift to another brand. Obviously, it’s not always the
price that encourages switching, standard also matters.

Satish, (2011). Concluded that there is a connection between service provider, the terrible
network coverage or continuous problems in network, and the great calling rates.

Zhang, (2009) shows that there are various effects of relationship marketing strategies that
conclude in rise of customer loyalty. The four factors that are inspected as having an impact on
customer faithfulness are relationship importance, contentment, trustworthiness and reputation.
The essential factors to assess the impact of networks operator charge for customer switching
among companies are service providers, price to acquire customer, altering service provider’s
price and editing level.

Cost, standard, service and presence of product is important in consumer’s switching attitude. As
a producer, all three of these should be taken into consideration and they should please the

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consumers. If two networks are providing best service and best quality but the cost of one
network is lesser than the second, the consumer will always prefer to purchase the second
network. Price is the variable that can withhold or lose a costumer. Another variable that is
significant is the provision of internet service. Lately, people need best standard of internet
service and if the providers fail to supply it, the consumer will never purchase that network.
Another essential factor is the practice of changing cellular network. A customer will always
change to a different network if he/she is habitual of switching network. He will never stay on
one network.

The study has shown to be important for designing marketing policies. Customers focus more on
price instead of CSR. Customers want the network which provides more and improved packages.
Customers do not care if it will have an impact on society or not. The consumers do not continue
firm and long-term relations with organizations, but tend to purchase those networks that supply
more and superior packages.

This investigation has centered on several variables of customer contentment and human
retention. First of all, the research displays the connection between consumer contentment and
price reasonability. The service providers are forced to reduce the cost of their product to
withhold customers. Another major part is also played by the clarity if the call. If a consumer
buys a network of low cost but does not find signal or voice clarity, he will eventually shift to a
different organization. The inquiry also shows that as customer contentment increases, the
customer loyalty also improves.

Correct and authentic research about purchasing attitude of consumers can assist the service
providers to apply fresh ideas on their product. They can design their product exactly like what
the customers want. Improved features in a network will acquire a larger number of customers.
The most essential part is the customer satisfaction. If the customer is pleased with costs,
charges, different packages, and the internet service, he will never change his network. Customer
retention will produce brand faithfulness of the product.

The main aim of the research is to find out about the different strategies implemented by
different network companies. The providers of service of cellular network must fulfill consumer
wishes. As the happiness of consumer increases, the customer will be encouraged to stay. Social

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relationships should be made for growth and expansion of market. In a mature market, social
relationships assist to produce service of the highest quality.

Muhammad (2012) The investigations have displayed that when the buyer is pleased, he
becomes a faithful consumer of that product by purchasing it repeatedly. For inspecting the
correlation of consumer contentment and withholding, marketers normally improve their services
to both; the present and the new customers. It shows that diversity of services improves the
satisfaction of consumers and thus retains consumers.

Serkan (2005). By the pre-buying and post-buying attitude of the consumer, the extent of
satisfaction can be generalized. What a customer aspired from your service and what he got in
reality is called customer perceived value. If a customer is content, faithfulness and customer
retention can be acquired. Trust plays a great part for this reason; if a customer trusts an
organization, it generates a good impact and exposure. An increment in interpreted cost can lose
the trust and the loyalty of the customer, and cause him to switch to a different network.
Therefore, cost of switching is greatly influenced by allotment of price and hence it satisfies the
customers, and earns their loyalty

(Cristina Calvo- Mangin) (2015). Several studies are conducted to get knowledge about variables
and different deciding factors that may encourage customers to stay on one network or to switch
to other network. The inspection of consumer satisfaction and their switching attitude has also
been done by collating conventional and virtual mobile services. Image of corporate and
importance of service has been proven as a huge factor that encourages consumers to switch to
different networks.

Switching Intentions: (Siddiqui 2011) Its either partial or completely (Stewart, 1998 Colgate
and Hedge,2001). Total defections are easily noted due to its size although little or partial is
harder to be defined.

(Weinger and verhoef,2007) Price, product and quality of the service are the controllable
determinants. Switching costs and are significant determinants but relation quality is also
important

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Fairness of Price: Kotler and Armstrong (2010) product service given charges some of cash
which we call price

Stanton, and Bruce (1994) define cost as the sum of cash that is requires to get other products.

Customers switching behavior depends on the level of their satisfaction and dissatisfaction.
Different studies within different demography have several factors those affect customers
satisfaction level but from the Perspective of Pakistan, conclusions of factors affecting are almost
identical to other locations.

Ali et al (2010) price, service value and coverage of network are most significant determinant in
the customers satisfaction level.

Conceptual Framework

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Theoretical Framework.
The concept of conducting a research is that how the selected variables are affecting consumers
switching behavior. To check the relationship between the variables. Changes in price may cause
consumers to switch Influence from family members Available substitutes

Methodology
This is a primary research and data was collected by floating questionnaires

The target population was adults with the age group about 18 to 70.

The questionnaires were administered to around 150 participants.

The data was segmented according to various individual characteristics such as age, income,
occupation, and current cellular service provider.

Research Design
Quantitative approach is used here, Questionnaires were distributed for the data collection.

The statistical techniques used for data analysis was convenience sampling and the software used was
IBM SPSS.

Population
The population is mainly of the age group of 18-70.

Sample Size
Sample size of 150 was selected

Data Analysis
Demographics

1 is representing Male, 2 is representing female

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1= 18-24, 2= 25-40, 3= 41-55,4=56-70

1= Student,2= Business.3=Housewife,4=Govt Employee,5 Private Co Employee

1=25000-35000, 2=40000-65000,3=70000-100000,4=100,000-150,000,5=150000 or above

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1= Zong

2= Ufone

3= Telenor

4= Mobilink

5= Warid

Ufone was the company ranked no 1 in demographics data

Descriptive Analysis

The highest skewness is of Network Coverage and the lowest is of Switching Behaviour. Since
all the data in within the construct of ±1.5, we can say that the data has a normal tendency. The
highest kurtosis is of network coverage and the lowest is of Promotion.

Reliability
Network Coverage

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Cronbach’s alpha is close to 0.6 from which we can say that the coefficient realibility is close to
acceptable

Price

Promotions

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Switching Behaviour

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Correlation values lie between -1 indicates a strong negative relationship and +1 indicates a
strong positive relationship), ,0 indicates that no correlation exists. Correlation amongst the
constructs should be between 0.20-0.90.

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EFA

KMO test is done to measure how well suited our dats is. The KMO of network coverage and promotions
are acceptable, whilw of price is good enough to avoid multi co-linearity error(EFA) is a statistical method
used to uncover the underlying structure of a relatively large set of variables. EFA is a technique within
factor analysis whose overarching goal is to identify the underlying relationships between measured
variables. [

Regression

Model Summary

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Model R R Square Adjusted R Std. Error of the
Square Estimate
a
1 .513 .264 .259 .5227
a. Predictors: (Constant), Promotion_AVG

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate

1 .377a .142 .136 .5642

a. Predictors: (Constant), Price_AVG

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate
a
1 .315 .099 .093 .5780

a. Predictors: (Constant), NetworkCoverage_AVG

Regression analysis is used to test the predictor’s (independent variable) strength or the level of
impact it might have on the dependent variable. It basically tests the relationship between

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dependent and independent variables. While ANOVA tests areused to determine whether there
are statistical significant differences between the means of three or more independent variables.

Limitations

There are several limitations with this study, which are as follows:
Mostly data was only limited to the people aging about 18- to 70
Geographical area was limited to country.
The research had less than 45% of female respondents.
The research was conducted with the help of self-made questioners with no option to add any
question for the respondent or to quit any question.
It was not possible to cater all factors that may cause a switching behavior

Results:

All Hypotheses are accepted.

Conclusion

All the hypothesis have sig value of above than 0, which implies high significance, Which
shows that the results are significant so all of the hypotheses are accepted through which
consumers are switching their companies.

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