BUILDING CUSTOMER LOYALTY THROUGH SERVICE

QUALITY, CUSTOMER ENGAGEMENT AND COMMITMENT

IN THAI MOBILE NETWORK SERVICE
DARWIN DHASAN
Assumption University
Thailand
d.darwin@yahoo.com

SUWANNA KOWATHANAKUL
Assumption University
Thailand
zuwanna@gmail.com

THEINGI
Assumption University
Thailand
theingi@au.edu

Abstract: In the advent of dramatic changes in today’s marketplace, businesses face number of
difficult challenges that make customer loyalty more important than ever. This paper explores the
associations of variables; namely, service quality, customer engagement, commitment and
customer loyalty of service providers of mobile network in Thailand. The results obtained from
this research will offer necessary feedback for researchers and practitioners to understand the
factors underpinning customer loyalty. The study used a sample of 120 usable questionnaires
collected from users of different mobile network providers. Exploratory factor analysis and
correlation analysis was performed on service quality, commitment, customer engagement and
customer loyalty behavior variables to test research hypotheses. Data analysis shows that service
quality, promotional offers, commitment, customer engagement has positive association on
customer loyalty. The results indicate that service quality has relatively stronger relationship with
affective commitment and weak relationship with online engagement. The study identifies the
significant association of competitive promotional package has with customer engagement as well
as affective and calculative commitment. This research can be considered as the basis for a more
extensive research. Studies covering other geographical are warranted to accurately predict
customer loyalty and the associative factors.

Keywords: SERVICE QUALITY, CUSTOMER ENGAGEMENT, CUSTOMER

COMMITMENT, CUSTOMER LOYALTY, CUSTOMER RENTENTION, CROSS-BUYING
BEHAVIOR

1 INTRODUCTION

Today's marketing place requires organizations to differentiate service relationships (Coelho et al.,
2012; Webber et al., 2012). In an era that increasingly uses sophisticated Web 2.0, warrants better
understanding on the customer commitment outcomes and its association towards customer loyalty
in services industries (Boateng et al., 2016; Fullerton, 2014). Dynamic development in social

Electronic copy available at: https://ssrn.com/abstract=2921006

media technology positively associates the customer relationship and loyalty on a different level
while exchanging information(Morgan et al., 1994; Sashi, 2012). Voluminous literature examined
the determinants and manifestation of customer loyalty which includes positive word of mouth
(Carpenter et al., 2005), altruism, willingness to pay more, advocacy, repurchase behavior strength
of preference, key source of competitive advantage (T. Jones et al., 2007). However, research into
customer loyalty has been plagued by imprecision and inconsistency leading many researchers to
conclude that there is a need for best scientific research to find effective customer loyalty
management in the practice of marketing (Aksoy, 2013). According to our study little is known
about the association among customer engagement, promotional offers, commitment towards
customer loyalty.
Studies conducted in the past investigated the relationship between service quality and customer
loyalty in mobile network business (Aydin & Özer, 2005; A. Malhotra et al., 2013). Establishing
relationship in marketing continues to evolve beyond loyalty and commitment to seek customers
that are engaged with a brand or organization (Celuch et al., 2015). Total engagement model
provides a holistic view to achieve customer loyalty (Roberts et al., 2010). In a study, Algesheimer
et al. (2005) suggested that engagement or commitment has a positive effect on brand loyalty. In
conclusion, customer engagement enhances loyalty (Yang et al., 2014). In order to enhance
customer loyalty, customer engagement channels should be relevant, offer value and superior
customer service (M. Jones, 2010). Customer engagement may result in emotional bonds between
marketers and customers (Fliess et al., 2012). More emotionally attached customers seemed to be
more loyal to the firm (Gemmel et al., 2010) which is crucial for long term relationship. Therefore,
customer engagement has an emotional connection between a company and its customers by which
customer loyalty can be achieved (Bowden, 2009). Consumers who are engaged through social
media are active participants exchange information very rapidly (Ángeles Oviedo-García et al.,
2014). Customer’s engagement through competitive promotional packages such as electronic
coupons, e-mail newsletters, sponsored online community forums that contain special offer
increase perceived value (Pitta et al., 2006).
Similarly, commitment acts as an important driver for firms to predict customer variability in
loyalty over time (Lariviere et al., 2014), but only little understanding exists of how the multi-
dimensions of commitment influence customer loyalty in the Thai telecom context studies
(Johnson & Sirikit, 2002a; Paramaporn et al., 2014; Puriwat et al., 2014; Xavier, 2008). The
endurance of customer loyalty prevails only when a customer is highly committed to the service
provider (Bansal et al., 2004). There are variances in customer loyalty, which can be understood
through the customer commitment (Izogo, 2016; Mohammad Ahmad, 2011; Ruben Chumpitaz et
al., 2007). Therefore, the past studies are still insufficient and failed to explore the role of customer
engagement in enhancing customer loyalty.
Competition to build customer loyalty has intensified in most business sectors especially in mobile
network business. Thailand mobile environment is mature and its three major mobile service
providers (AIS, DTAC, True Move) spur competition fiercer than ever. The market-leading mobile
service provider in Thailand is Advanced Info Service plc (AIS), with an estimated subscription
market share of 45% followed by Total Access Communication (DTAC) with 29.4 % market share
and True Move with a market share of approximately 23.5% in March 2016 (see Table 1).
Moreover, mobile networks have become very important due to growing online business and in
Thailand, the smartphone is the key device for accessing most Internet services (Pornwasin, 2015).
Mobile penetration in Thailand reached 124.8% at the end of 2015. Total mobile subscriptions
have reached to 86.54 million during first quarter of 2016 is a decline of 12.3 million subscribers

Electronic copy available at: https://ssrn.com/abstract=2921006

in comparison to the year 2015 as a result of compulsory prepaid SIM registration drive. TOT
dominates the fixed-line services relies heavily on government finances; AIS is a formidable player
in the fixed-mobile market. 3G/4G subscriptions growth continues to be the key driver for
Thailand's mobile market. Today, high mobile penetration rate is not a barrier for further growth,
because of consumer demand for multiple SIMs and operators' effort to migrate customers to their
new 3G/4G networks (BMI research, 2016) . Building customer loyalty is very challenging as
customers can easily switch to another mobile network provider and all mobile network providers
offer better service with attractive promotional package. Hence, this study investigates the role of
customer engagement and customer commitment in enhancing customer loyalty among mobile
network operators in Thailand.

TABLE 1
Competitive Landscape: (as of March 2016, subscribers in ‘000)
TOTAL Prepaid Post-paid Market Share
(in ‘000) (in ‘000) (in ‘000) (%)
Total Subscribers 86,544 71,477 15,067 100%
AIS 38,928 33,852 5,412 45.0%
DTAC 25,477 21,045 4,432 29.4%
TRUE MOVE 20,359 15,298 5,061 23.5%
Others 1,780 1,282 162 2.1%
Source: BMI, Operators, Regulator Data

2 LITERATURE REVIEW

The study of Grönroos (1984) discussed two types of service quality; technical service quality and
functional service quality. Technical service quality refers to what the consumers receive as a result
of interaction with a service firm and functional quality refers to how the service employees offer
the services to customers. Johnson and Sirikit (2002a) also pointed out that service quality
dimensions (SERVQUAL) did not include “technical quality” in telecommunication sector where
network coverage, signals, speed of internet are important aspects. Hence, service quality
dimensions should be adapted to different service sectors. Regarding functional service quality,
Johnson and Sirikit (2002b) also stressed the important role of service employees to offer a
consistently high standard of service delivery. The service quality is a strong predictor that seeks
to explain both technical and functional quality as an independent variable, which measures
customer commitment (Fullerton, 2014).

Service Quality and Commitment

According to Eisingerich et al. (2007) the perceived technical quality has a greater impact on
customer relationship than functional service quality. Therefore to increase the commitment
among customers, the functional quality of the service needs should be improved (Ng et al., 2011;
Wetzels et al., 1998). Customer commitment to a seller encompasses both calculative and affective
commitment (Sashi, 2012) that arises when a customer's expectation is satisfied and the customer
realizes fair value from his/her relationship with the organization (Chung-Hoon et al., 2003). In
another study, commitment to the service organization was stronger when the customer had a
highly calculative relationship with the firm (Curth et al., 2014). Therefore, both affective and
calculative commitment contain elements of both functional and technical service quality (Lassar

Electronic copy available at: https://ssrn.com/abstract=2921006

et al., 2000). When those service quality perceived to be high will also result in high customer
satisfaction and commitment (Giovanis et al., 2016). In a study conducted by Neeru et al. (1999)
highlights the prevalence of positive relationship among technical and functional service quality
towards commitment.
In light of the preceding discussion and findings, it is hypothesized:
H1. The greater the service quality as perceived by customer, the greater the levels of
commitment towards the service provider.

The influence of Promotional Offerings on Commitment:

Competitive promotional offerings prompt as “cues” for customers in judging the service quality
in service industry. (Peattie et al., 1995). Promotional strategies and value appeals have greater
influence on customer’s commitment towards their service provider (Fatima et al., 2015; Quach
et al., 2016; Webster, 1994). Previous studies found that a positive relationship exists between
sales promotional offerings and customer commitment towards service provider in
telecommunication industry (Yeboah-Asiamah et al., 2016). Monetary and non-monetary
discriminatory promotional offerings for members have greater effect on customer commitment
(Melnyk et al., 2015). Moreover, the exploratory research on mobile network business also
showed that competitive promotional package tends to influence whether the customers will
commit to subscribe the same network provider (Theingi et al., 2016).
As a consequence, it is hypothesized that:
H2. The greater the competitive promotional packages offerings as perceived by customer, the
greater the levels of commitment towards the service provider.

Service quality and customer engagement

Customer engagement can take place in an offline or online environment (Greve, 2014; Wirtz et
al., 2013). With the specific type of customer engagement tool, firms can accrue and offer more
value to customers (Kaltcheva et al., 2014). Service providers are increasingly keen to create
customer engagement than focusing on customer acquisition. (Prahalad et al., 2004). The
companies look for innovative ways to communicate and to involve customers to actively engage
(Kandampully et al., 2015) and customers could interact with other customers and businesses
during various stages of their purchase. For example, perceived service quality leads to customers’
feedback and engagement with other customers regarding low cost airlines (Saha et al., 2009).
Moreover, service quality dimensions have an effect on customer engagement online (Quach et
al., 2016). These effects differ across communities depending on the products and services used
by the customer. Based on customer's prior experience and acquaintance in using social media
tools, service quality will have a positive association with customer engagement (Rossmann et al.,
2016). In addition, the customers are willing to share their service experience and quality with
their family and friends as well as with the service provider (Theingi et al., 2016). Hence, this
study proposes the following hypothesis,
H3. The greater the service quality as perceived by customer, the greater the levels of customer
engagement.

Competitive promotional packages and Customer Engagement

Promotional offers is one of the important factors that influences consumer’s choice in selecting
telecommunication service providers (Haque et al., 2010). An appropriately designed competitive
promotional package addresses target audience needs using advertising, direct marketing, sales
promotions (Jennifer, 1998). When firm-driven promotional communications engage customers
through social networks, purchase and Word-of-mouth referral will influence the purchase
intentions differently for online and bricks and mortar stores (Campbell et al., 2014). When a
promotional offer is relevant and properly integrated with customer engagement channels will
easily influence a shopper to significantly purchase a brand (Keylock et al., 2012). Due to the
prevalence of competitive promotional packages in mobile network business, customers are
increasingly engaged while sharing the information with their family and friends (Theingi et al.,
2016). Therefore, it is postulated that:
H4. The greater the competitive promotional packages offerings as perceived by customer, the
greater the levels of customer engagement.

Commitment and Customer Loyalty

In the telecom service sector customer commitment has strong association with customer loyalty
(Izogo et al., 2015). In the highly competitive and maturing mobile telecommunications service
market, companies should develop and reinforce marketing strategies focusing on factors such as
commitment and loyalty, which have the greatest relationship (Kaur et al., 2013). Considerable
researches in the past have supported commitment having strong relationship with customer
loyalty. The association between customers' commitment and loyalty is also well documented, still
there is little understanding of how the multi-dimensions of commitment influence customer
loyalty (Anuwichanont, 2010). Committed customers are less likely to switch than consumers who
lack commitment to the organization. And affective commitment has a greater influence on the
intent to remain in the organization (Fullerton, 2003).
Commitment plays a central role to maintain a relationship that enhances customer loyalty in
services industries. Commitment to the organization is a multidimensional construct, which can
be measured in various ways (Allen et al., 1990; Fullerton, 2003, 2014; Morgan et al., 1994; Tsao
et al., 2012; Yanamandram et al., 2010). Among the various types of commitments, affective and
calculative appear more frequently as relevant to maintain relationship (Gruen et al., 2000; Huston
et al., 1982; Mathieu et al., 1990). Therefore operationalizing commitment primarily as affective
and calculative gives opportunity to completely understand the customer value and relationship in
service industries (Fullerton, 2003).
Affective commitment has impact on loyalty in the relationship marketing studies (Fullerton, 2003;
Marshall, 2010). According to Smith et al. (1982), affective development takes place when an
individual accepts the message with strong belief linking certain attributes to a particular object.
Calculative commitment can be distinguished as positive and negative among exchange partners
(Anderson et al., 1992). Positive calculative commitment is due to good service quality and
attractive promotional package. On the other hand, negative calculative commitment results due
to the associated switching costs, penalties, sunk costs that the customers feel they are locked in
(Bansal et al., 2004; Yanamandram et al., 2010), lead to reduced advocacy intention toward the
firm (Gordon, 2005).
The key notion of commitment research is that long-term customer loyalty is more likely when a
customer is highly committed to the service provider (Bansal et al., 2004) and will maintain such
loyalty, even when customer satisfaction is lower across search, experience, and credence attribute
services (Li‐Wei, 2011). Moreover, customers with positive commitment likely cross-buy (buy
additional services) the products to broaden the relationship with firm (Marshall, 2010). Overall,
the components of customer commitment is capable to both enhance and undermine customer
loyalty (Gordon, 2005).
Therefore, this study proposes the following hypothesis:
H5. The greater the commitment as perceived by customer, the greater the levels of customer
loyalty towards the service provider.

Customer engagement and Customer Loyalty

The emerging concept of customer engagement plays a significant role in building customer
loyalty toward a brand (Lorenzo-Romero et al., 2011; So et al., 2016). Interactions with the
company, facilitates better business decisions and encourages customer loyalty (Len Tiu et al.,
2002). In the recent study conducted by Khan et al. (2016) explored the effects of online customer
engagement and its influence on customer brand loyalty. The role of online engagement experience
has greater effect to positively influence the customer loyalty toward the brand. Hence, customer
engagement plays a significant role in building customer loyalty toward a brand (Kevin Kam Fung
et al., 2016; Murray et al., 2014).
We therefore propose the following assumption:
H6. The greater the customer engagement as perceived by customer, the greater the levels of
customer loyalty towards the service provider.

FIGURE 1
Research Framework

Source: Developed for this research

3 RESEARCH METHODOLOGY

Before collecting the data, exploratory study was conducted to have better understanding of mobile
network customers and their usage behaviors by interviewing 15 customers of three network
providers (Theingi et al., 2016). Exploratory research is conducted to identify relevant information
and to gain additional insight to develop better hypotheses (N. K. Malhotra, 1999).
This study gains interesting insight by conducting exploratory study regarding the respondents’
concern for technical quality and competitive promotional packages. Moreover, insights from
exploratory study are channeled to develop questionnaire items together with previous literature.
For example, service quality was developed by interviewing service quality concerns among 15
participants (Theingi et al., 2016) and based on previous literature (Johnson & Anuchit, 2002).
Similarly, this exploratory study revealed respondents concern on competitive promotional
package. Therefore questions developed were based on the exploratory study (Theingi et al.,
2016). The questions developed for customer engagement variable also based on the previous
studies (Theingi et al., 2016; Zeithaml et al., 1996). The customer commitment to the network
providers were measured based on items used in previous study (Ranganathan et al., 2013). In
addition, the items measuring customer retention and cross-buying intention were developed using
questionnaire items from the previous studies (Tung et al., 2015; Zeithaml et al., 1996). All the
items representing constructs in the questionnaire were measured using 7 points Likert scale.

TABLE 2
Demographic characteristics of respondents
Demographic characteristics Percentage
Gender
Male 38%
Female 62%
Education
High School 33%
Bachelor’s degree 48%
Master degree or higher 19%
Monthly Personal Income
20,000 baht or less 52%
20,001 to 39,999 baht 33%
40,000 to 59,999 baht 7%
60,000 to 79,999 baht 5%
80,000 to 99,999 baht 3%
100,000 baht and above -
Age
18 -23 years old 14%
24 – 29 years old 16%
30 – 35 years old 16%
36 – 41 years old 18%
42 – 47 years old 14%
48 or older 22%
N = 120

The survey questionnaires were collected using convenience sampling by three authors and one
research assistant using convenience sampling method. Among 126 questionnaires collected, 120
were usable for further analysis. Table 2 and Table 3 show demographic characteristics of
respondents and their usage behavior of mobile network providers. The respondents were equally
divided into prepaid and postpaid users. The respondents represent 42% of AIS users, 27% of
DTAC users and 31% of True users respectively. Majority of respondents are female (62%) and
male (38%) with most of them holding bachelor degree (48%) and half of them with monthly
income of 20,000 baht or less. Regarding their usage behavior, 59% of them spent less than 30
minutes per day on phone call whereas about 70% of respondents spent more than one hour on
Internet. These findings indicate that most respondents spend longer time on Internet than phone
call. In addition, 76% of them have one SIM card and one mobile phone whereas 22% of them
have 2 SIM cards and 16% of the respondents with 2 mobile phones. Forty four percent of
respondents have switched the service provider before. Moreover, 71% of respondents use
promotional package in subscribing the mobile network service.

TABLE 3
Mobile Network Usage Behavior of respondents
Usage Behavior of respondents Percentage
Mobile network providers
AIS 42%
DTAC 27%
True 31%
SIM card ownership
One SIM card 75.8%
Two SIM cards 21.7%
More than three SIM cards 2.5%
Mobile phones ownership
One Unit 83.3%
Two Units 15.8%
Three Units 0.8%
Type of Service
Prepaid 50%
Postpaid 50%
Use of Promotional package
Yes 70.8%
No 29.2%
Past switching behavior
Yes 43.7%
No 56.3%
N= 120

Exploratory factor analysis (EFA) was performed on service quality, commitment, customer
engagement and customer loyalty behavior as part of their questionnaire items based on the
findings of exploratory study. Two constructs were emerged from service quality; technical service
quality and functional service quality with 76.7% of total variance explained. The respondents
slightly agree that technical (Mean = 5.2) and functional service quality (Mean = 5.2) offered by
network providers are good. Similarly, two constructs were resulted by running EFA on customer
engagement; offline engagement and online engagement. The results indicate that these two
constructs explained 83% of variance. The mean value shows that even though respondents engage
positively about the network providers by saying positive things and recommendation (Mean =
4.8), they do not actively engage online with network provider (Mean = 3.5). Performing EFA on
customer commitment also results in two constructs; affective engagement (Mean = 4.2) and
calculative engagement (Mean = 4.1) with 84.7% of variance explained. The mean value indicates
that customer commitment to service provider is quite neutral. The EFA result of customer loyalty
was shown as customer retention (Mean = 4.3) and cross-buying intention (Mean = 4.9)
respectively with 77.8% of total variance explained. The finding indicates that the respondents are
likely to buy additional product and service provided by network provider. Table 4 shows the
factor loadings of each construct, mean value and Cronbach’s alpha value which ranges from 0.76
to 0.9 indicating the satisfactory internal consistency reliability (Malhotra, 1999). Moreover, the
mean scores for all constructs were applied to run the test of bivariate correlation and the results
are seen in Table 5.

TABLE 4
The mean value and Cronbach’s alpha of constructs and Factor loadings of items
Construct and items (N = 120) Factor Mean Cronbach’s
loadings value alpha
Technical service quality 5.2 0.85
• Fast internet speed 0.72
• Wide range of network coverage 0.76
• Good quality of signals 0.81
• Latest technology in providing its service 0.83
Functional service quality 5.2 0.95
• Knowledgeable about product information 0.82
• Not busy to respond to customers quickly 0.83
• Willingness to help customers 0.84
• Prompt service from customer service staffs 0.84
• Politeness 0.86
• Ability to solve the problems 0.89
Offline customer engagement 4.8 0.92
• Say positive things about my network provider to other 0.86
people
• Encourage friends and relatives to subscribe my network 0.89
providers
• Recommend my network provider to someone who seeks 0.90
my advice
All the items were measured based on 7 points Likert scale. 1= strongly disagree and 7 = strongly agree.

TABLE 4 (continued).
The mean value and Cronbach’s alpha of constructs and Factor loadings of items
Construct and items (N = 120) Factor Mean Cronbach’s
loadings value alpha

Online customer engagement 3.5 0.94

Download my network provider’s stickers from LINE shop. 0.71
Visit my network provider’s Facebook 0.85
Visit my network provider’s website. 0.89
Share the information about service provider with other people 0.89
online.
Write comments on Facebook 0.89
Affective commitment 4.2 0.95
• I feel a strong sense of identification with the brand. 0.85
• I feel like a part of the family of my network provider 0.86
• The brand has a great deal of personal meaning 0.91
• I feel emotionally attached to the brand 0.93
Calculative commitment 4.1 0.89
• Some aspects of life will be affected 0.86
• Leaving would create inconvenience to me. 0.86
• Significance loss for unsubscribing the network provider 0.87
Customer retention 4.3 0.76
• Will continue using the same network provider, 0.68
• Continue with the same service provider even if it 0.85
increases the call rate.
• Use more services from the same provider in the next 0.86
few years

Cross buying intention 4.9 0.90

• I will accept the offer when my network provider 0.88
proposes new/additional services to me
• I will seriously consider the offer when my network 0.91
provider proposes new/additional products and services to me
• I will buy the new offerings of products and services in 0.91
the near future.
All the items were measured based on 7 points Likert scale. 1= strongly disagree and 7 = strongly agree.

TABLE 5
Correlation Matrix
TSQ FSQ ONE OFE CPP AC CC CBI CR
TSQ 1

FSQ 0.63** 1

ONE 0.34** 0.35** 1

OFE 0.66** 0.60** 0.61** 1

CPP 0.68** 0.65** 0.47** 0.61** 1

AC 0.51** 0.42** 0.70** 0.62** 0.47** 1

CC 0.40** 0.31** 0.47* 0.46** 0.46** 0.56** 1

CBI 0.33** 0.22* 0.31** 0.32** 0.48** 0.28** 0.25** 1

CR 0.55** 0.50** 0.52** 0.58** 0.55** 0.64** 0.46** 0.32** 1

 TSQ = Technical Service Quality, FSQ = Functional Service Quality, ONE = Online Engagement, OFE= Offline
Engagement, CPP= Competitive Promotional Package, AC = Affective Commitment, CC= Calculative
Commitment, CBI = Cross-buying Intention, CR = Customer retention
** significant at 0.01 level and * significant at 0.05 level.

According to correlation matrix in Table 5, hypothesis 1 is supported because both technical and
functional service quality have significant relationship with affective commitment as well as
calculative commitment. However, the result indicates that service quality has relatively stronger
relationship with affective commitment of customers than calculative customer commitment.
Table 5 indicates that offering competitive promotional packages have moderate and significant
relationship with both affective and calculative commitment. Hence, hypothesis 2 is supported.
Furthermore, it was found that service quality has weak and significant relationship with online
customer engagement but rather moderate relationship with offline engagement. Therefore,
hypothesis 3 is supported. The result also shows that offering competitive promotional package
has moderate and significant association with customer engagement, supporting hypothesis 4.
In addition, affective and calculative commitments have weak and significant relationship with
cross-buying intention while they have moderate and significant relationship with continuous
subscription. Therefore, hypothesis 5 is supported. Moreover, Table 5 also shows that customer
engagement has weak and significant association with cross-buying intention but has moderate
and significant relationship with continuous subscription of the same network. Hence, the higher
the customer engagement perceived by customer, the greater the levels of customer loyalty
supporting hypothesis 6.

4 SUMMARY OF FINDINGS

This section summarizes key findings:

The aim of the study was to examine the significant factors associating in the context of twenty-
first century mobile network service industry in Thailand. The summary findings of demographic
characteristics of respondents and their usage behavior of mobile network providers are as follows:
The respondents represent 42% of AIS users, 27% of DTAC users and 31% of True users
respectively. Majority of respondents are female (62%) and male (38%) with most of them holding
bachelor degree (48%) and half of them with monthly income of 20,000 baht or less. Regarding
their usage behavior, 59% of them spent less than 30 minutes per day on phone call whereas about
70% of respondents spent more than one hour on Internet. These findings indicate that most
respondents spend longer time on Internet than phone call. In addition, 76% of them have one
SIM card and one mobile phone whereas 22% of them have 2 SIM cards and 16% of the
respondents with 2 mobile phones. Forty four percent of respondents have switched the service
provider before. Moreover, 71% of respondents use promotional package in subscribing the mobile
network service.
Two constructs were emerged from service quality: technical service quality and functional service
quality. The respondents slightly agree that technical and functional service quality offered by
network providers is good. Similarly, two constructs were resulted from customer engagement
were offline engagement and online engagement. Even though respondents having positive
engagement towards the network providers by saying positive things and recommendation, they
do not actively engage online with network provider. Customer commitment resulted in two
constructs; affective engagement and calculative engagement. Customer loyalty was understood
through customer retention and cross-buying intention. The finding indicates that the respondents
are likely to buy additional product and service provided by network provider.
The results of the survey provided strong and moderate empirical support for six hypotheses.
According to correlation matrix and hypothesis analyzes, both technical and functional service
quality have significant relationship with affective commitment as well as calculative
commitment. However, the result indicates that service quality has relatively stronger relationship
with affective commitment of customers than calculative customer commitment.
Offering competitive promotional packages have moderate and significant relationship with both
affective and calculative commitment. Furthermore, it was found that service quality has weak and
significant relationship with online customer engagement than the offline engagement. The result
also shows that offering competitive promotional package has moderate and significant association
with customer engagement.
In addition, affective and calculative commitments have weak and significant relationship with
cross-buying intention while they have moderate and significant relationship with continuous
subscription. Customer engagement has weak and significant association with cross-buying
intention but has moderate and significant relationship with continuous subscription of the same
network. Hence, the higher the customer engagement perceived by customer, the greater the levels
of customer loyalty.

5 CONCLUSIONS

This study provides valuable insights into customer loyalty in the mobile network services. At a
theoretical level, the paper contributes to the understanding on customer behavior in services
industry using an ideal model to create customer loyalty. This research is prescriptive for future
research in the area of a service firm’s and its implications for customer loyalty.
Marketing discipline is in the midst of a shift from a managerial focus on allocating resources to
customers who are currently loyal to a focus on allocating resources to customers to create,
maintain, and enhance loyal behaviors. This paper proposed a research framework model that was
empirically validated and the data collected from customers of mobile network service providers
of Thailand. The results of the survey provided strong and moderate empirical support the six
hypotheses. The results confirm that the creation of customer loyalty by knowing the closely
associated factors is imperative.
This study provided a different perspective from that of other studies. Based on the finding,
particular attention should be paid to the use of promotional tools that facilitate two-way
communication with users should be developed (Vasileiou et al., 2011). In this paper we have
concluded that customer engagement and commitment are an important co-creator of customer
loyalty. Based on the theoretical model, we can further conclude that the effect of loyalty depends
on relationship of factors such as service quality, competitive promotional package, commitment
and customer engagement.

6 IMPLICATIONS FOR PRACTITIONERS

The implication of this study is that management should improve on factors such as service quality,
promotional packages, commitment, customer engagement, and customer loyalty. The study adds
to the already existing knowledge on associated variables in the telecommunications sector, more
specifically to Thailand. Although, very little practical and theoretical research has been developed
in Thailand, the results obtained in this study will assist service providers improve customer
loyalty. Moreover, in order to compete in the existing dynamic environment well designed service
quality programs must be introduced to improve customer loyalty. As shown in the study,
providers also need to build competitive promotional package and customer engagement tools to
enhance customer loyalty.
Creating and maintaining customer loyalty is critical for business success (Aksoy, 2013). Our
study suggests that firms should focus its efforts on developing relationships with customers
through better customer engagement channels, promotional offer, appropriate service quality types
to create value for its target consumers.
There is strong association of service quality with commitment. Responsiveness of technical and
customer service staff is an important determinant for customers to choose a particular Mobile
network provider. Customer service does not directly generate revenue for a company. However,
it can differentiate the company in the area of addressing and handling customers’ requests,
queries, and complaints. Superior customer service is a crucial element of a service provider’s
value proposition and a fundamental driver of differentiation (Paramaporn et al., 2014). Both
technical and functional service quality have significant relationship with affective commitment
as well as calculative commitment. However the results indicates that the service quality has
relatively stronger relationship with affective commitment of customers than calculative
commitment.
Service providers need to deliver high levels of service quality to maintain their competitive
advantage and improve customer’s perceptions of service quality as well as customer satisfaction.
In mobile telecommunication services, network quality relates to the quality of the call, network
coverage and stability and reduction of incidents such as dropped calls and break in conversations
during cellular phone calls. To increase the offered technical service quality the provider should
be concerned with the strength of the network signal. The quality also relates to the downloading
and uploading speed, and system response time. Breaks in Internet connectivity can lead to poor
perceptions of network quality in the customer perspective (Paramaporn et al., 2014).
Managers could consider setting initiatives such as reward programs like offering yearly award
with media coverage for social recognition, and retention programs like discounts, special benefits,
etc. Companies may also establish customers' club for loyal customers to mingle with the company
and strengthen the relationship with each other (Ramaseshan et al., 2013). With these efforts,
business customers will feel being treated preferentially with extra care. This will drive their
commitment, which will lead them towards loyalty. Customer loyalty factor’s association can be
understood through cross buying intention and switching intention. The more the service provider
could cross sell promoting additional products and services to existing customers could reduce the
need to spend money on customer acquisition and lead to a pricing advantage over competitors
(Ngobo, 2004). When the customer’s loyalty toward a service provider is high, then customers
switching intention to acquire a rival firm’s brand would be lower, due to the increased customer
loyalty (Aydin, Özer, et al., 2005).
This study provides practitioners with an improved understanding of the relevance of customer
loyalty. This is particularly important as service firms such as mobile service provider to
incorporate customer engagement marketing activities, such as maintaining a Facebook page, so
as to provide consumer platforms for customer-brand and customer-to-customer interactions.
Committed customers are the easiest relationships to manage. These customers prefer and are fond
of the brand, believe the advertising about the brand, and are not particularly price sensitive. If the
commitment of customers is not taken care of, their relationship with the brand can weaken. A
lack of commitment by users to a brand can originate from many sources, such as a lack of
engagement or involvement or dissatisfaction with the product or service (Terblanche, 2007).

6 RESEARCH LIMITATION

Evidently, our study is not without limitations. First, our final sample of 120 mobile users is
relatively small in the market with more than 80 million customers (mobile network subscribers)
seems to be of a concern for validity and generalizability of results. Second, the sample should
have been either stratified or limited to a particular market segment only. Lastly, this paper did
not examine the interrelationships between the service qualities, competitive promotional
packages towards customer loyalty.

7 AVENUES FOR FURTHER RESEARCH

Replications of this research in other contexts such as other countries (e.g. China, Myanmar,
Vietnam) and other services settings (e.g. retailing, banking) are also recommended to examine
the generalizability of the findings and verify the model. Future research could investigate
interrelationships between the service qualities, competitive promotional packages towards
customer loyalty. This is in order to understand more about the effects of customer loyalty based
on those constructs. A study based on “Structural Equation Modeling Approach” is desired to
enrich and empirically substantiate.

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