A THESIS
Submitted by
VANI HARIDASAN
DOCTOR OF PHILOSOPHY
SCHOOL OF MANAGEMENT
FACULTY OF ENGINEERING AND TECHNOLOGY
SRM UNIVERSITY, KATTANKULATHUR- 603 203
SEPTEMBER 2012
ii
DECLARATION
formed the basis for the award of any degree, diploma, associateship or
fellowship of similar other titles. It has not been submitted to any other
Place:
BONAFIDE CERTIFICATE
knowledge the work reported herein does not form part of any other
ACKNOWLEDGEMENT
This thesis work has received support, sacrifice and blessings of several
Venkatesh (Shanthi Maam). From the day I joined to this day, Shanthi Maam has
been a great, constant and reliable source of advice and guidance. In fact more than a
guide she has ever been a very good mentor. It had been a great learning experience
working with a person whose academic and research standards are exceedingly high
countless number of ways during the course of the research program. I am lost of
words to describe her patience in correcting my thesis and her high level of
commitment to research is an inspiration to me. I thank her for her critical evaluation
improving the quality of the thesis. I thank her for the interest she evinced in my
work and grateful to her for her timely help and assistance.
Prof. M. J Xavier, Prof. V. J Siva Kumar and Prof. U. Srinivasa Raghavan for
v
their advice, help and suggestions. They were very keen to provide me with
research in my workplace.
hypothesis. I also thank the respondents for their cooperation and patience in filling
the questionnaire.
expressed in words. I would not have attempted this doctoral study (with tons of
commitment at home) but for their love, support and infinite patience.
Above all, I thank God for his supreme grace and presence.
VANI HARIDASAN
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ABSTRACT
The Indian Telecom Industry has come a long way in achieving its dream
Faced with a growing market and increasing competition, companies in the telecom
CRM efforts aim at improving service quality and service quality is found
the behavioral aspects that play a greater role in understanding customer loyalty,
improving service quality and thereby enhancing CRM. Data collected from the
residential users of mobile services from Chennai is used for the study.
insights to the practitioners on the paths that lead to customer loyalty. The path
model uses three constructs, namely the Extended SERVQUAL Scale with seven
dimensions, SERVLOYAL Scale with seven dimensions and Loyalty Indices with 3
dimensions. Using Data Envelopment Analysis (DEA), the study uses the insights
from path model to provide a method to evaluate the effectiveness of CRM practices
of the mobile service providers so that they can refine their strategies to improve
overall service quality and service loyalty across multiple companies, the findings of
this study clearly portray the quality-loyalty relationship with reference to the Indian
service loyalty. The path models confirm the relationship between service quality,
al,1999) with a clear focus on linking perceived service quality and service loyalty
as a multi-dimensional perspective.
The insight from this study can be used in other service sectors to measure
service quality and service loyalty and develop robust CRM systems that can map
TABLE OF CONTENTS
ABSTRACT vi
LIST OF TABLES xvi
LIST OF FIGURES xix
LIST OF SYMBOLS AND ABBREVIATIONS xx
1 INTRODUCTION
1.1 STATEMENT OF THE PROBLEM 7
1.2 OBJECTIVES 9
1.3 HYPOTHESES 9
1.4 DELIVERABLES OF THE STUDY 10
1.5 SCOPE AND LIMITATIONS OF THE STUDY 11
1.6 CHAPTERISATION 11
1.7 SUMMARY 13
2 LITERATURE REVIEW
2.1 INDIAN TELECOM INDUSTRY 14
2.2 CUSTOMER RELATIONSHIP
MANAGEMENT 15
2.3 SERVICE QUALITY 17
2.3.1 Service Quality Definition based on
Functional Quality 17
2.3.2 Positive Relationship between service
quality with customer satisfaction 18
ix
3 RESEARCH METHODOLOGY
3.1 INTRODUCTION 35
3.2 RESEARCH DESIGN 35
3.2.1 Area of the Study 36
3.2.2 Instrument Development 36
3.2.2.1 Variables considered for the Study 36
3.2.2.2 Demographic Variables 36
3.2.2.3 Extended Service Quality
Dimensions 37
x
4.7.5 BSNL 91
4.7.6 Reliance 91
4.8 SUMMARY 92
5 DATA ANALYSIS
5.1 INTRODUCTION 93
5.2 PROFILE OF THE RESPONDENTS 94
5.2.1 Classification based on Service Provider 95
5.2.2 Classification based on Plan 95
5.2.3 Classification based on Age 96
5.2.4 Classification based on Length of Use 97
5.2.5 Classification based on Monthly Expenditure 97
5.2.6 Classification based on Education 98
5.2.7 Classification based on Occupation 98
5.3 DESCRIPTIVE STATISTICS 99
5.3.1 Mean and Standard Deviation 99
5.3.2 Normality 104
5.4 TEST OF RELIABILITY 104
5.4.1 Service Quality Dimensions 105
5.4.2 Service Loyalty Dimensions 107
5.4.3 Loyalty Indices 108
5.5 FACTOR ANALYSIS 109
5.6 HYPOTHESES TESTING 118
5.6.1 ANOVA 118
5.6.2 Linear Regression 125
5.7 PATH MODEL 135
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6 FINDINGS
6.1 FINDINGS FROM DESCRIPTIVE
STATISTICS 167
6.2 FINDINGS FROM ANOVA 167
6.2.1 Demographics on Service Quality 167
6.2.2 Demographics on Service Loyalty 168
6.2.3 Demographics on Loyalty Indices 168
6.3 FINDINGS FROM LINEAR REGRESSION 169
6.3.1 Relationship between Demographics
and Service Quality 169
6.3.2 Relationship between Demographics
and Service Loyalty 170
6.3.3 Relationship between Demographics
and Loyalty Indices 170
6.3.4 Relationship between Service Quality
and Service Loyalty 170
6.3.5 Relationship between Service Quality
and Loyalty Indices 171
6.3.6 Relationship between Service Loyalty
and Loyalty Indices 171
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7. DISCUSSION
7.1 INSIGHTS FROM LITERATURE AND GAPS 175
7.2 ATTEMPTS BY THIS STUDY TO
FILL THE GAPS 176
7.3 RESEARCH IMPLICATIONS 179
7.4 MANAGERIAL IMPLICATIONS 180
7.5 CONCLUSION 181
REFERENCES 183
LIST OF TABLES
LIST OF FIGURES
LIST OF ABBREVIATIONS
CHAPTER 1
INTRODUCTION
The history of the Indian Telecom sector goes way back to 1851, when
the first operational landlines were laid by the then British Government in Calcutta.
After India became an independent country in 1947, all foreign telecommunication
companies were nationalized and a monopoly organization was formed by the
Government of India, incorporating Post, Telephone and Telegraphs.
2
Originally, the telecom sector, like most other infrastructure sectors was
owned and controlled by the Government of India. The Department of
Telecommunications (DoT), reporting to the Ministry of Communications (MoC)
became the key body for policy issues and regulation, apart from being the basic
service provider for the entire country. By an act of Parliament, the Telecom
Regulatory Authority of India (TRAI) was formed to be the regulatory agency, to
monitor the activities of the telecom body.
The world began to witness the changing phase of the telecom industry
of India since 1994, when the Indian Government initiated the New Telecom Policy
(NTP), with a broad objective to enable availability of affordable means of
communication for the citizens of the country. The prime focus of the objectives of
NTP was to increase the tele-density of the country by 15 in 2010. For this the
country required an additional investment of Rs.5000 billion. In order to meet the
investment requirements and to realize the broad objectives of the telecom policy in
a phased manner, it became necessary that the government allowed private players
to operate in the industry. The government also sensed the private participation
imperatives for achieving the same in an efficient manner. Hence it was decided to
3
open the sector for private participation, simultaneously in both basic and mobile
service segments.
One of the important objectives of NTP 1999, was to separate the service
providing and regulatory functions of DoT. Subsequently, exclusive telecom service
providers were floated to deploy the restructuring strategies in the sector, complying
with the objectives laid down by NTP-1999. The policy separated the service
providing function and policymaking and licensing function of the DoT. A brief note
on the public sector telecom service providers is as follows:
4
For the metro cities of Delhi and Mumbai, the Mahanagar Telephone
Nigam Limited (MTNL) became the service provider.
With the entry of private players in the telecom segment, the sector began
to witness the collapse of monopoly on the whole. Thus, the sector that was hitherto
characterized by monopoly scenario gradually moved into competitive market
structure, with multiple players offering a variety of services.
With increasing competition and the need for increasing the subscriber
base in rural markets, the call rates are declining. This has led to decrease in ARPU.
Therefore, in spite of unprecedented growth in the mobile subscriber base, the
operator margins are declining quarter on quarter.
prepaid. This means that most of the subscribers added are from the bottom of
pyramid with low usage resulting in low ARPU.
the long-run. The players have realized the importance of constant service-quality
delivery to the customers for long-run sustainability. Customer relationship signifies
identifying the needs of the customers and stretching out ways and means to satisfy
them. To be precise, it means achieving high customer profitabilitycustomer
revenues over and above customer costs, which demands matching customer
expectations with customer satisfaction. The high cost of customer acquisition is
making todays businesses understand the importance of retaining the customers for
long-run sustainability.
This study helps the mobile service providers in determining the service
quality parameters that influence service loyalty parameters which in turn influence
loyalty indices. Previous studies have established the influence of service quality
aspects on the customer loyalty. There are some studies that reflect behavioral
aspects of the customers and the relationship on loyalty. But any such contemporary
management practices when adopted by certain industry sectors need to be
confirmed for its effectiveness.
the customers show symptoms of defection. Even though some of these aspects have
been explored by previous researchers to a great extent, it is felt that not much
attention has been drawn into measuring the effectiveness of loyalty, particularly for
sustained presence. Hence it is felt that a closer study on this aspect would be
worthwhile. The study further provides useful information and opens up new
avenues for future research.
1.2 OBJECTIVES
1.3 HYPOTHESES
Hospitality
Healthcare
and other segments where service quality plays an important role in CRM.
The study is confined only to the GSM and CDMA mobile user
segment and as such the results derived may not be applicable to the
other segments of the industry.
The study limits its applicability to Chennai city and can be extended
only to markets having similar demographic, geographic and socio-
economic characteristics.
1.6 CHAPTERISATION
Chapter 6 discusses on the findings arising from the research, which will
throw light on the significance of the path models and the findings on the
effectiveness using Data Envelopment Analysis.
1.7 SUMMARY
This chapter provides the foundation for the thesis. It provides a context
and justification for the study. The research problem and research questions
addressed in the study were introduced. The main purpose of this study is to
investigate ways to strengthen CRM practices by the Mobile Service Providers.
Methodology underlying the purpose of the study was briefly described and
justified. Definitions of the key concepts are also presented. Some delimitations of
the scope are delineated and a chapter structure was provided for the whole thesis.
On these foundations, the thesis proceeds with a detailed description of the research
beginning with the chapter two - Literature Review.
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CHAPTER 2
LITERATURE REVIEW
Rekha Jain (1993) reviewed the policy changes in the Indian Telecom
Sector during the initial stages of post liberalization. The author explained that in
response to the business needs of faster, cheaper, and more varied modes of
communication, the telecommunication sector in many countries had undergone
rapid technological and structural changes.
Jain (2001) explained that spectrum auctions had been used with
significant success in many developed countries. He analyzed that while India was
one of the early adopters of spectrum auctions, its success in service provision had
15
been low. The author examined the issues in auction design that contributed to the
delay and reviewed the key elements in the design process namely a coherent
regulatory framework, choice of service areas, flexibility for service area
consolidation, standards and their role, convergence, managing public service
regulation and managing defaults.
Joe Peppard (2000) has emphasized that CRM should not be looked from
a narrow perspective. He presented a CRM framework which was based on
incorporating e-business activities, channel management, relationship management
and back office / front-office integration within a customer centric strategy.
school placement center, a tire store, and an acute care hospital. Six basic questions
of interest to the retailer were discussed: (1) the number of dimensions and how
generic they are, (2) the extent to which item wording can be changed, (3) service
situations that include multiple service functions, (4) the validity of analyzing
differences between expectations and perception, (5) the point at which expectation
information should be obtained, and (6) the relationship between expectations and
importance.
Danaher and Gallagher (1997) used the study of an actual hotel service
delivery process and partitioned into five distinct service encounters; check-in, the
room, the restaurant, the breakfast and check-out and investigated how quality
factors were related to their respective encounters and how cumulative satisfaction
levels impact on each other and over time. Average satisfaction levels for each of the
five encounters were found to be significantly different. Moreover, there was a clear
trend in the cumulative satisfaction results. Check-in resulted in high satisfaction,
the room was not so satisfying and the restaurant rated the worst. Satisfaction scores
rose after the breakfast experience and rose again after check-out.
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Christine and Binks (1999) emphasized that within any service there is
scope for considerable variation in the degrees to which both parties become
involved in the relationship; beyond a certain minimum level, customers and service
providers may be more or less participative. However, participative behavior should
yield benefits. Customers who are more willing to share information and develop
closer personal contacts might be expected to benefit in terms of a higher quality of
service provision, because the provider will be more knowledgeable about their
needs and expectations.
influences on future behaviors after the key drivers of customer value and customer
satisfaction are identified.
and to maintain an on-going relationship with their customers. It is argued that long-
term superiority of a service firm is dictated by the organizations ability to maintain
their relationship with the customer by offering `service loyalty: a demonstration of
the organizations commitment to maintain the service promise. The author argues
that service loyalty precedes customer loyalty. The author emphasizes how a firms
service employees develop the emotional connection with customers which leads to
exceptional service and the ability to exceed customer expectations.
The evidence from previous studies (Bob E. Hayes, 2007) shows that the
Advocacy Loyalty Index (ALI) ,the Purchasing Loyalty Index (PLI) and Defection
Loyalty index (DLI) measure three different types of loyalty. Even though these
types of loyalty are correlated (advocates tend to be purchasers), the relationship
between the ALI and PLI is not perfect, suggesting that these loyalty indices
measure unique constructs. Customer loyalty is not a unidimensional construct, but
rather a multidimensional construct that can help reliability measured. When we say
a customer group has high vs. low loyalty, we need to clarify to which loyalty we
are referring. It is possible that a given customer group can have different levels of
loyalty (e.g., high advocacy, low purchasing). It is clear that a blanket statement
about levels of "customer loyalty" can be ambiguous.
30
result, much research has been invested into new ways of identifying those
customers who have a high risk of churning. However customer retention efforts
have also been costing organisations large amounts of resource. In response to these
issues, the authors suggested that the next generation of churn management should
focus on accuracy.
value and customer satisfaction, and the influence of content quality ranks
second; (6) the proposed model is proven with the effectiveness in explaining the
relationships among service quality, perceived value, customer satisfaction, and
post-purchase intention in mobile added-value services.
2. This rising level of competition in turn has forced the mobile service
providers to focus on various customer centric strategies wherein the
service providers concentrate on sustained competitive advantage.
gap can be further explored and studied and the present attempt is
towards such a linkage. It is also a fact that the CRM practices in
Indian Telecom is in the matured stage. Hence such a linkage study
particularly in the telecom industry would be timely to provide
managerial insights in order to further strengthen the CRM practice in
this highly competitive industry.
2.8 SUMMARY
CHAPTER 3
RESEARCH METHODOLOGY
3.1 INTRODUCTION
The research design adopted for this study was descriptive in nature.
Descriptive research is a type of conclusive research that has its major objective as
the description of something- usually market characteristics or functions (Malhotra,
2006). The current research used a quantitative approach. Quantitative research
methodology seeks to quantify the data and typically applies some form of statistical
analysis (Malhotra, 2006). The benefits of quantitative research are that researchers
rely on large samples to show statistical effect and can generalize the findings from
the sample to the population (Churchill and Iacobucci, 2002).
36
The data for testing the proposed models were collected among the
resident mobile subscribers in Chennai. Chennai, capital of Tamil Nadu is the fourth
most populous metropolitan area and the fifth most populous city in India. The
population of Chennai is 4.6 million (2011 census).
The instrument was designed using scales from previous related research.
Since this study attempts to verify the relationships between the constructs,
quantitative research methodology is employed. Instrument is in Appendix I.
Scales for the independent and the dependent variables were adopted
from the extant literature due to their relevance to the study's context and past
measurement reliability.
In order to comply with the objectives laid down for the study, certain
independent variables were considered for analyzing behavioral pattern of the
mobile subscribers, which are as follows:
Demographic Variables
Loyalty Indices
Age
Length of Use
37
Monthly Expenditure
Education
Occupation
The service quality aspects of the mobile service providers were analyzed
based on the following dimensions. These dimensions are identified based on the
SERVQUAL Construct. This extended SERVQUAL (Seth et al, 2008) instrument
determines service quality structure by combining both functional as well as
technical quality (i.e., network quality in cellular mobile context) attributes.
Reliability - refers to the ability to perform the promised service dependably and
accurately.
Empathy - refers to caring, individualized attention the firm provides its customers
Convenience- implies flexible and comfortable facilities to suit the customer needs.
Your call gets connected to the called person during the first attempt
most of the time
I will transact with this mobile service provider again for future needs
I will try new services that are provided by the service provider
I will say positive things to other people about the services provided
by the mobile service operator
Attitudinal Loyalty - refers to the predisposition towards the provider deriving from
a psychological process.
I am likely to pay little more for the services when situation arises
Affective Loyalty refers to the state when the customer feels involved with the
service provider. Affective loyalty is the state of mind that is developed as a result of
a liking or attitude toward the service provider on the basis of cumulatively
satisfying usage occasions. This reflects the pleasure dimension of the satisfaction
definition and pleasurable fulfillment. The loyalty exhibited is directed at the degree
of affect (liking) for the service provider.
Trust loyalty - refers to the state which is developed as a result of the belief on the
competence of the service provider. If the service provider has the required
expertise, to perform his/her activities, carry out his/her obligations or accomplishes
his/her promises, the consumer gets a feeling of security about the service provider.
Even when I get to hear any negative information about the provider,
I would still continue with this service provider
Bob E. Hayes, 2007 identifies key drivers of loyalty for service providers
and introduces new customer loyalty metrics designed to help companies increase
revenue through new and existing customers. The instrument to measure loyalty
indices were used to understand the respondents perception about their level of
agreement with respect to questions, each on a five point Likert Scale (1 Strongly
Disagree and 5 Strongly Agree). He has identified three loyalty indices namely,
Advocacy Loyalty Index (ALI) - reflects the degree to which customers will be
advocates of the company.
Likelihood to recommend
Purchasing Loyalty Index (PLI) - reflects the degree to which customers will
increase their purchasing behavior.
Defection Loyalty Index (DLI) - reflects the degree to which customers will show
symptoms of defecting to competitors.
Burns and Bush (1999) believe that sample size affects the accuracy of
results. Sample size also has a direct impact on the appropriateness of the statistical
techniques chosen (Hair et al., 1998). The size of the sample for this research was
designed in accordance with the criterion for applying the analytical technique
chosen. Since this study used Structural Equation Modeling and regression a large
sample was required for this multivariate technique. The sample size was fixed for
around 550, as a small sample size might provide less accurate estimates of the
degree of relationship among the variables due to unstable correlations (Bordens and
Abbott, 1996).
All variables in the study were identified through a review of the relevant
research and literature. External validity refers to the researchers ability to
generalize the results of the study from the sample to the population from which the
44
sample was drawn (Gay, 1987). One of the threats to external validity occurs if the
sample is not representative of the population. The best protection for equal
representation occurs when a sample has been randomly selected (Fink, 1995).
Sampling error refers to chance variation among the means (Gay, 1987) due to
influences not under the control of the researcher. Sampling errors are normally
distributed and can be controlled if a sufficiently large number of subjects are
selected from the population. Sampling error for this study was controlled through
the selection of a sample large enough to be representative of the population.
3.4 PRE-TEST
data was collected from the survey, data was processed through several steps to fine-
tune their quality and these steps are discussed in the following sections.
This section describes briefly three steps to deal with the data before they
were used for analysis. These steps included data editing, coding and categorizing.
Their purpose is to ensure that the data are reasonably good and of assured quality
for the later analysis (Sekaran, 2003). Data editing was firstly conducted to check
the degree of questionnaire completion. This step was initially done at the same time
when the respondents returned the questionnaires. The interviewers checked the
completion of all questions on the spot and asked for further information if any
question was unanswered. A second editing was conducted after the data were
collected.
Then coding was conducted to facilitate the entry of responses and avoid
later confusion (Sekaran, 2003). Finally, data were keyed into the Microsoft Excel
sheet by using actual scores marked by the respondents. There were no missing data.
After the data were entered in the worksheet, analysis of the data would be
conducted by importing the data into the SPSS data editor and into AMOS 19.0. The
procedures for examining the data are described in the following section.
The main focus of the current research study is the validation of the
hypothesized causal models on the influences of demographic variables, service
48
quality and service loyalty on customer loyalty, using the Structural Equation
Modeling (SEM) technique. SEM is the most appropriate method for the current
research problem due to the following characteristics:
the data, the structural model then provides an assessment of the extent of
relationships between the hypothesized constructs (Byrne, 1994). We have followed
this two stage approach using the SEM software AMOS 19.0 with maximum
likelihood estimation.
Two considerations in the selection of best fit indices were kept in mind.
These involved a reference of most cited indices in the methodological literature on
Confirmatory Factor Analysis CFA and the extent to which these indices are less
affected by sample size, estimation procedures, violations of assumptions or some
combinations of both (Chaudhuri, 1995, Diamantopoulos and Siguaw, 2000, Byrne,
1998). The first measure of fit included in the AMOS output is the chisquare value
2
). The chi-square statistic is the traditional measure for evaluating overall model
fits in covariance structure models and provides a test of perfect fit in which the null
hypothesis is that the model fits the population data perfectly (Diamantopoulos and
2
Siguaw, 2000). A statistically significant causes rejection of the null hypothesis,
implying imperfect model fit and possible rejection of the model. Thus the aim in
confirmatory analysis and Structural Equation Modeling, contrary to conventional
hypothesis testing procedures, is not to reject but to accept the null hypothesis. By
2
consensus, a large value of indicates that the model fit poorly with the population
2
and subsequently small values of correspond to good fit (Joreskog and Sorbom,
1996). Despite its importance in providing a formal significance test of the
2
covariance structure hypothesis, had led to problems of fit. The Chi-square
statistic has been found to be very sensitive to both normality (particularly excessive
kurtosis), and the size of the sample, and it also assumes that the model fits perfectly
well in the population. This last point has an unrealistic impact in the empirical
analysis since the model might fit well the sample but it is very unlikely to happen in
2
the population. For the above reasons, instead of regarding as a test statistic, the
literature considered it as a goodness (or badness)-of-fit measure (Diamantopoulos
and Siguaw, 2000).
Among the common indicators used to judge a good fit of the model to
the population were the Root Mean Square Residual (RMR) and the Root Mean
51
The Root Mean Square Residual (RMR) represents the average residual
value derived from the fitting of the variance-covariance matrix for the hypothesised
model to the variance-covariance of the sample data and a value of 0.05 or less is
considered of a good fit (Chaudhuri, 1995). Although, RMR values are highly
regarded, they are difficult to interpret due to their residual susceptibility to the sizes
of the observed variances and covariances (Byrne, 1998).
Additional information regarding the fit of the model was obtained from
the values of the following indices of fit which were first introduced by Joreskog
and Sorbom (1982).
52
The final measure of fit is Hoelters (1983) critical N (CN) that is very
different to the previously mentioned indices as it relates to the appropriate size a
sample must have in order to accept the fit of a given model on a statistical basis.
(Hoelter, 1983). A CN value > 200 has been deemed an appropriate sample size
(Hoelter, 1983). However, this cut-off value has been challenged as some considered
higher CN values to yield an adequate fit of the model (Chaudhuri, 1995).
3.8.1.4 AMOS
AMOS is that, although developed within the Microsoft Windows interface, the
program allows the researcher to choose from three different modes of model
specification. Using the one approach, AMOS Graphics, one can work directly from
a path diagram; using the others, AMOS VB.NET and AMOS C#, and one can work
directly from equation statements. The choice of which AMOS method to use is
purely arbitrary and bears solely on how comfortable the researcher feels in working
within either a graphical interface or a more traditional programming interface.
AMOS Graphics allows for the estimates to be displayed graphically in a path
diagram.
where Y is the predicted value on the dependent variable, a is the Y intercept (the
value of Y when all the X values are 0), X represents the various independent
variables and b is the coefficients assigned to each of the independent variables
during regression (Tabachnick and Fidell 2001).
After the final model has been derived and the predictive power of the
regression model has been estimated, the final task is to interpret the regression
parameter by evaluating the estimated regression coefficients for their explanation of
the dependent variable. The regression coefficient captures the effect of one variable
while controlling for (i.e. holding constant) the other variables in the model. Two
coefficient values are of interest for interpretation. These are the unstandardised and
standardised regression coefficients, or b and beta, respectively. The unstandardised
regression coefficients (b-coefficients) represent the amount of change in the
dependent variable associated with a one-unit change in that independent variable,
with all other independent variables held constant (Newton and Rudestam 1999).
compares each producer with only the "best" producers. By the way, in the DEA
literature, a producer is usually referred to as a decision making unit or DMU.
The heart of the analysis lies in finding the "best" virtual producer for
each real producer. If the virtual producer is better than the original producer by
either making more output with the same input or making the same output with less
input then the original producer is inefficient. The subtleties of DEA are introduced
in the various ways that producers A and B can be scaled up or down and combined.
Consider trying to create a virtual bank that is better than Bank A. Such a
bank would use no more inputs than A (10 tellers), and produce at least as much
output (1000 checks and 20 loans).Clearly, no combination of banks B and C can
possibly do that. Bank A is therefore deemed to be efficient. Bank C is in the same
situation.
outputs using a smaller vector of inputs. The score reflects the radial distance from
the estimated production frontier to the DMU under consideration.
There are a number of equivalent formulations for DEA. The most direct
formulation of the exposition I gave above is as follows:
Min
Subject to i Xi 0
i Yi 0
where i is the weight given to DMU i in its efforts to dominate DMU 0 and is the
efficiency of DMU 0. So the 's and are the variables. Since DMU 0 appears on
the left hand side of the equations as well, the optimal cannot possibly be more
than 1. When we solve this linear program, we get a number of things:
DEA assumes that the inputs and outputs have been correctly identified.
Usually, as the number of inputs and outputs increase, more DMUs tend to get an
efficiency rating of 1 as they become too specialized to be evaluated with respect to
60
other units. On the other hand, if there are too few inputs and outputs, more DMUs
tend to be comparable.
Inputs and outputs can have very different units. For example, X1
could be in units of lives saved and X2 could be in units of dollars
without requiring an a priori tradeoff between the two.
The same characteristics that make DEA a powerful tool can also
create problems. An analyst should keep these limitations in mind
when choosing whether or not to use DEA.
3.10 SUMMARY
CHAPTER 4
There are two types of service providers in the Indian Telecom Industry:-
Value added service providers are those who provide services, such as
cellular telephony, paging, e-mail and VSAT network, which provide the subscriber
greater ease of communication and enhance the utility of basic services network.
The following are the various types of services provided by both the
service providers put together:-
Telephone Services
Pay Phones
Telex
Electronic Mail
Voice Mail
Audio-Text
Radio Paging
Video-Tex
Video Conferencing
V-SAT
Internet
ISDN
The Indian Telecom industry has witnessed several events since the day
on which the first operational landline was laid in 1851. For about 140 years
afterwards nothing much happened in the industry to excite the world around, till the
liberalization initiative in 1991, followed by telecom reforms that lead to the
announcement of the Telecom policy in 1994. The Table 4.1 shows the important
dates in the history of the Indian Telecom Sector.
65
Table 4.1 Important Dates and Events in the Indian Telecom Industry
Year Events
1851 First Telephones in India
1943 Nationalization of telephone companies
1985 DoT was created
1986 Creation of MTNL and VSNL
1991 Telecom equipment liberalized
1994 Licenses for paging
1994 Telecom Policy announced
September 1994 Guidelines for private sector participation in basic
services
November 1994 Cellular licenses issued
January 1995 Issue of tenders for 2nd operator in basic services
August 1995 VSNL launches internet services
January 1996 TRAI formed
February 1996 Supreme court allows multiple players in Basic services
October 1999 New Telecom Policy announced
October 2000 BSNL formed
December 2001 33 Licences to private palyers in Basic services
February 2002 Disinvestment of VSNL
May 2002 Bharti offers ILD Services with sharp cuts in tariffs
September 2002 TRAI decides forbear from regulating cellular tariffs
March 2006 WPC set subscriber thresholds for GSM and CDMA
operators for spectrum allocation
March 2007 9 dinstinct operators had been allocated GSM spectrum.
Out of these, only Bharti has pan-India presence
August 2007 Subscriber thresholds were revised by TRAI as
operators could support more subscribers with lower
spectrum as compared to WPC allocation
January 2008 Govt. of India allocated start-up spectrum to all prior
licenses awaiting spectrum. These include Aircel (14
circles), Idea (2 circles), RComm (14 circles) and
Vodafone (6 circles)
January 2009 TRAI plans to introduce MNP on a pan-India basis
January 2011 MNP implemented
66
The study on the growth of the Indian telecom sector is presented under
two heads:
The Indian telecom sector like any other infrastructure sector was owned
and controlled by the Government of India, since independence. The nationalization
of the telecom companies to form Post, Telephone and Telegraphs in 1943 was an
important milestone in the history of Indian telecommunications. There was a
gradual growth during the five-year plans in the sector and the entire sector was
brought under the control of the Department of Telecommunications (DoT) in 1985.
The status of the telecom sector for the period 1993-94, which is stated as
the year of the monopoly reign, is as follows:
To focus on the objectives, the following were the policy decisions taken
by the Government of India, on the licensing and operational front.
The private players were invited to operate in both basic and cellular
telephony. To facilitate licensing, the nation was divided into 20
telecom circles for basic and 21 circles for cellular telephony.
69
Out of 6 lakh villages in the country 3.4 lakh were provided with
VPTs as on December 1999.
The New Telecom Policy (NTP) announced in 1999 modified the NTP
1994 to take into account the far-reaching technological developments taking place
in the telecom sector globally and to implement the Governments resolve to make
India a global IT superpower. NTP 1999 also seeks to solve problems arising out of
the implementation of NTP 1994.
In order to achieve the above objectives, the following targets were fixed:
3. Increase rural teledensity from 0.4 (in 1999) to 4 by the year 2010 and
provide reliable transmission media in all rural areas.
5. Provide Internet access to all district head quarters by the year 2000.
72
The following are the policy decisions advocated to achieve the above
objectives and targets in a smooth way.
The NTP 1999 is clear in its objectives, comparing to NTP 1994. Built
on these objectives is the phenomenal growth, the Indian Telecom Sector is
witnessing today. The major achievements of NTP 1999 are:
Apart from the PSU (Public Sector Unit) service providers, licenses were
given to several private players to provide a variety of communication services to
74
the people. Hence the monopoly in the sector is broken and the users are now given
with a wide variety to choose in almost all the services starting from the basic voice
services, value-added services to data and satellite services.
With the major policy governance as regards the pricing, spectrum usage,
mobility, entry legislations and other licensing issues still at the hands of the
government regulatory body, the competitive environment in the industry needs to
be analyzed to have a clear understanding of the factors influencing the operations of
the players.
In this section, the micro and macro environmental factors are analysed
by the application of PEST analysis and Micael Porters Five Forces Competitive
Advantage Model.
The framework for PEST analysis is drawn from the contributions made
by several eminent management practitioners and theorists like Nigel M Healey
(1994), De Avison, Wa Eardley, P Powell (1998), Alistair R. Anderson & Martin
H.Atkins (2001), Judith Broady-Preston & Tim Hayward (2001), James Manktelow
(2004), in their research works on various management issues.
P Political Environment
E Economic Environment
S Social Environment
T Technological Environment
75
Political Factors
The political factors that influence the operations of the telecom players
in India are:
Economic Factors
Social Factors
Technological Factors
technology for gaining competitive edge. The very fact that the
industry is technology intensive acts as an entry barrier.
The five forces model is widely accepted as a yardstick for measuring the
industry profitability. It analyzes the various forces influencing the industrys
competitive environment. This is a macro model concentrating on the external forces
like rivalry between firms, bargaining power of the buyer, bargaining power of the
supplier, availability of substitutes and entry barriers. In order to perform this
analysis, the competitive forces in the industry need to be thoroughly understood,
the attractiveness of and growth opportunities within, a new industry need to be
assessed and the effective strategies to raise the profitability, power and competitive
position in an industry need to be developed accordingly.
Entry Barriers: New entrants are potential competitors. New entrants are a weak
force in the industry. The lesser the entry barriers, easier it is for new companies to
enter the industry and hence, greater the competition in the industry. New entrants
will often attempt to break into the industry with low prices, innovative products, or
new features and benefits. When the barriers are strong, the threat of new entrants is
low.
AVAIALABILITY OF SUBSTITUTES
Close substitutes
Undifferentiated Pricing
Differentiated Services
Substitute Performance
Low-loyalty levels
VAS Preferences
82
83
1. Buyer Power: There are several factors leading to increase in the buyer
bargaining power in the telecom industry. As a result of privatization and
competition, the buyers are provided a variety of alternatives to choose from, which
was unavailable during the pre-privatization period. Due to falling prices the
switching costs are reduced and the development of IT and increasing incomes has
resulted in change in the standard of living of the consumers.
5. Entry Barriers: The entry barriers are in the form of earning sensitivity
issues and technology investments, which make the industry feasible to operate only
for cash-rich companies. The licensing and operating regulations adopted by the
government also form the entry barriers. The picture of consolidation and capital
intensive nature of the industry are the other factors that function as entry barriers
for the new aspirants to the industry.
The last few years have witnessed a phenomenal growth in the wireless
industry, both in terms of mobile technology and its subscribers. There has been a
clear shift from fixed to mobile cellular telephony, especially since the turn of the
century. By the end of 2010, there were over four times more mobile cellular
subscriptions than fixed telephone lines.
Both the mobile network operators and vendors have felt the importance
of efficient networks with equally efficient design.
Key Statistics
In its recent statement issued, TRAI has revealed that the country's
mobile subscriber base has reached 951.3 million wherein the
operators added 8 million subscribers in March 2012.
86
The wireless segment in India is much larger than the wire line
segment and is growing steadily due to the convenience and utility it
offers.
The subscriber base of the wire line segment is decreasing due to its
limited usage.
Rural markets are expected to be the next key growth drivers for the
Indian telecom sector, given rural Indias growing population and
disposable income.
Bharti Airtel has the largest market share in the GSM segment. As of
June 2011, Bharti accounted for 25.9 per cent of the GSM market,
followed by Vodafone, with a 20.7 per cent market share.
Consumers can get all these services from the same telecom operator,
and enterprises can also access virtual private networks (VPNs),
video-conferencing, enterprise solutions, mobility and fixed
telephony.
This section gives the details of the mobile service providers used for the
study.
cable landing station at Chennai, which connects the submarine cable connecting
Chennai and Singapore.
It is known for being the first mobile phone company in the world to
outsource all of its business operations except marketing, sales and finance. Its
networkbase stations, microwave links, etc.is maintained by Ericsson, Nokia
Siemens Network and Huawei, business support is provided by IBM and
transmission towers are maintained by another company (Bharti Infratel Ltd. in
India). On May 2012, Bharti Airtel awarded the three year contract to Alcatel-
Lucent for setting up an Internet Protocol across the country. This would help
consumers access internet at faster speed and high qualiy internet browsing on
mobile handsets.
4.7.2 Aircel
It is Indias fifth largest GSM mobile service provider & seventh largest
mobile service provider (both GSM and CDMA) with a subscriber base of over
51.83 million, as of January 31, 2011. It has a market share of 6.72% among the
GSM operators in the country. Additionally, Aircel has also obtained permission
from Department of Telecommunications (DoT) to provide International Long
Distance (ILD) and National Long Distance (NLD) telephony services. It also has
the largest service in Tamil Nadu.
90
Then Idea set sights on RPGs operations in Madhya Pradesh which was
successfully acquired, helping Batata have a million subscribers, and the licence to
be the fourth operator in Delhi was clinched.In 2004, Idea (the company had by then
been rechristened) bought over the Escorts groups Escotel gaining Haryana, Uttar
Pradesh (West) and Kerala and licences for three more UP (East), Rajasthan
and Himachal Pradesh. By the end of that year, four million Indians were on the
companys network. In 2005, AT&T sold its investment in Idea, and the year after
Tatas also bid good bye to pursue an independent telecom business. And Idea was
left only with one promoter, the AV Birla group. Rs 2,700 crore adding Punjab and
Karnataka circles. Modis joint venture partner, Telekom Malaysia, invested
Rs 7,000 crore for a 14.99% stake in Idea. Just around then, Ideas subsidiary,
Aditya Birla Telecom sold a 20% stake to US-based Providence Equity Partners for
over Rs 2,0000 crore.
4.7.4 Vodafone
On July 2011, Vodafone Group agreed terms for the buy-out of its
partner Essar from its Indian mobile phone business. The UK firm paid $5.46 billion
to its Indian counterpart to take Essar out of its 33% stake in the Indian subsidiary. It
will leave Vodafone owning 74% of the Indian business, while the other 26% will be
owned by Indian investors, in compliance with Indian law. On 11 February, 2007,
91
Vodafone India provides 2.75G services based on 900 MHz and 1800
MHz digital GSM technology. Vodafone India launched 3G services in the country
in the January-March quarter of 2011 and plans to spend up to $500 million within
two years on its 3G networks.
4.7.5 BSNL
4.8 SUMMARY
CHAPTER 5
DATA ANALYSIS
5.1 INTRODUCTION
This chapter focuses on the detailed analysis of the data collected and the
statistical results of the study.
This section provides the response rate obtained in the survey and the
characteristics of the respondents for this study. The questionnaires including
covering letter, were personally distributed to customers of mobile services, during
Apr-Jun, 2011. The sampling for the study was based on Convenience Sampling
Method, taking into account the operational difficulties associated in the process of
data capturing. However, by going through this method of sampling it was ensured
that all units of population were adequately represented. In determining the sample
size the following factors were taken into consideration:
From table 5.1, it is inferred that out of the total sample of 490
respondents using different mobile services, 15.9% used Aircel, 20.2% used Airtel,
18.6% used BSNL, 11.6% used Idea, 12.2% used Reliance, 12% used Vodafone and
9.4% used other service providers like Uninor and Videocon services.
The distribution based on plan of the respondents was analyzed with the
help of the following table.
96
From table 5.2, it is inferred that out of the total sample of 490
respondents using different mobile services, 60.2% used the prepaid plan and 39.8%
used the postpaid plan.
The distribution based on age of the respondents was analyzed with the
help of the following table.
Frequenc
No. Name %
y
1 18-20 27 5.5
2 21-30 87 17.8
3 31-40 87 17.8
4 41-50 158 32.2
5 >50 131 26.7
From table 5.3, it is inferred that out of the total sample of 490
respondents using different mobile services, 5.5% belonged to the age group of 18-
20, 17.8% belonged to the age group of 21-30, 17.8% belonged to the age group of
31-40, 32.2% belonged to the age group of 41-50 and 26.7% of the respondents are
aged over 50.
97
From table 5.4, it is inferred that out of the total sample of 490
respondents using different mobile services, 21.2% respondents are using the
services for less than 2 years, 21.4% respondents are using the services for two to
three years and 57.3 % respondents are using the services for more than 3 years.
From table 5.5, it is inferred that out of the total sample of 490
respondents using different mobile services, 31.6 % respondents spend upto Rs. 500,
23.9 % respondents spend between Rs.501 and Rs.1000, 16.3 % respondents spend
between Rs. 1001 and Rs. 2000 and 28.2 % respondents spend more than Rs. 2000.
From table 5.6, it is inferred that out of the total sample of 490
respondents using different mobile services, 31.8 % respondents are undergraduates,
40.8 % respondents are postgraduates and 27.3 % respondents belong to others
category. The Others category includes school dropouts, uneducated people and
people who have just completed schooling.
The employment status of the respondents was analyzed with the help of
the following table.
99
From table 5.7, it is inferred that out of the total sample of 490
respondents using different mobile services, 10.2 % respondents are having their
own business, 19.2 % are professionals, 5.7 % are educators, 16.5 % are home
makers, 39 % are students and 9.4% are others.
This section describes the preliminary analysis of the data and discusses
the results obtained in the study. It starts with the descriptive statistics and the test
for normality
To study the central tendency and the dispersion of the variables the
mean and standard deviation were calculated. The results indicated that the
responses of the variables had a good dispersion on the scales. The means of the
variables ranged from 2.94 to 3.78 and standard deviation ranged from 0.652 to
1.15.
Table 5.8 Descriptive Statistics of the Interval Scaled Variables
100
Construct Measure Variables Mean Std Dev Skew ness Kurtosis
They have convenient business hours 3.51 0.775 -0.126 0.168
Ease of lodging the complaints / queries 3.46 0.838 -0.061 -0.186
Convenience
Your service provider provides flexibility in the payment of bills 3.21 0.909 -0.043 -0.137
Application formalities are simple 3.54 0.845 -0.229 -0.355
Your service provider provides sufficient geographical coverage
3.57 0.894 -0.068 -0.745
(on highways, inside the buildings and basement)
Customer Perceived You experience minimum premature termination of calls during conversation (ie call drops) 3.44 0.979 -0.118 -0.603
Network Quality You get clear and undisturbed voice 3.57 0.876 -0.256 -0.115
Your call gets connected to the called person during the first attempt most of the time 3.43 1.10 -0.185 -0.462
You are able to make calls at peak hours 3.66 1.077 -0.702 0.069
I will transact with this mobile service provider again for future needs 3.28 0.721 -0.859 0.630
I will try new services that are provided by the service provider 3.17 0.754 -0.654 0.063
Behavioural I will recommend other people to patronize this service provider 3.25 0.804 -0.698 -0.486
I will say positive things to other people about the services provided by the mobile service 0.572
3.34 0.758 -1.018
operator
I will continue to patronize this mobile service provider / service even if the service charges are
3.03 0.987 -0.535 -0.949
increased moderately
Attitudinal I have strong preference to this service provider 3.27 0.811 -0.958 0.328
I will continue to use this service provider regardless of changes in the service 3.26 0.819 -0.806 -0.234
I am likely to pay little more for the services when situation arises 3.05 0.921 -0.439 -1.015
101
Construct Measure Variables Mean Std Dev Skew ness Kurtosis
To me, this service provider would rank first among others 2.94 0.849 -0.343 -0.694
I would continue this service for a long period of time 3.30 0.780 -1.008 0.605
Cognitive
I will deal exclusively with the service provider 3.22 0.846 -0.842 -0.071
The service of the provider reflect a lot about who I am 3 0.841 -0.393 -0.644
I have found this provider better than others 3.24 0.867 -0.751 -0.585
Conative
Repeatedly, the performance of this provider is superior to that of its competitors 3.23 0.817 -0.821 -0.040
I dislike the terms of the service provider 3.44 0.696 -1.123 0.903
I like the performance and services of the provider 3.40 0.686 -1.069 1.197
Affective
I have a negative attitude toward this provider 3.47 0.737 -1.540 2.347
I am satisfied wih my decision to stay with this provider 3.43 0.721 -1.428 2.327
The employees at the providers place give individual attention 3.48 0.674 -1.185 1.113
The employees understand my specific needs and go out of their way to help me 3.36 0.705 -0.863 0.262
Trust
The employees respond caringly when I share my problems 3.44 0.692 -1.175 1.306
The personnel at the service provider are filled with professionalism and dedication 3.50 0.652 -1.091 0.612
I am committed to the service provider 3.38 0.762 -1.173 0.969
Even when I get to hear any negative information about the provider, I would still continue with
3.31 0.770 -0.987 0.549
Commitment this service provider
I like switching from one service provider to another 3.25 0.821 -0.804 -0.200
My continued association with the mobile operator is important to me 3.32 0.780 -1.01 0.480
102
Construct Measure Variables Mean Std Dev Skew ness Kurtosis
Likelihood to choose the service again 3.78 0.854 -0.794 0.113
Likelihood to recommend 3.58 0.959 -0.730 0.356
Advocacy
Likelihood to pass on positive feeling about the services 3.41 0.966 -0.420 0.048
Likelihood to continue purchasing the same products / services 3.48 0.964 -0.611 0.1622
Likelihood to purchase different products / services 3.55 0.849 -0.259 -0.357
Purchase
Likelihood to increase frequency of purchasing 3.48 0.924 -0.066 -0.376
Defection Likelihood to continue this only as a supplementary connection 3.38 0.762 -1.173 -0.969
Likelihood to switch to a different provider 3.31 0.770 -0.987 0.549
103
104
5.3.2 Normality
Inter item
Alpha ( ) Item to
Alpha correlations
Construct Items if item total
) (absolute value)
deleted correlations
Highest Lowest
Rel1 0.828 0.598
Rel2 0.818 0.640
Reliability Rel3 0.846 0.827 0.613 0.695 0.429
Rel4 0.791 0.735
Rel5 0.806 0.685
Resp1 0.822 0.722
Resp2 0.846 0.659
Responsiveness 0.863 0.687 0.542
Resp3 0.822 0.717
Resp4 0.809 0.750
Assu1 0.730 0.661
Assurance Assu2 0.799 0.513
0.802 0.617 0.376
Assu3 0.739 0.643
Assu4 0.736 0.659
Emp1 0.792 0.606
Emp2 0.733 0.717
Empathy 0.816 0.639 0.423
Emp3 0.757 0.665
Emp4 0.795 0.580
Tang1 0.654 0.649
Tangibles Tang2 0.775 0.716 0.593 0.560 0.486
Tang3 0.715 0.594
Conv1 0.722 0.590
Conv2 0.695 0.636
Convenience 0.778 0.542 0.361
Conv3 0.714 0.602
Conv4 0.762 0.506
Cupqly1 0.774 0.444
Customer Cupqly2 0.765 0.477
Perceived
Cupqly3 0.781 0.717 0.639 0.607 0.302
Network
Quality Cupqly4 0.705 0.653
Cupqly5 0.731 0.584
107
1 - Disagree strongly
2 - Disagree somewhat
3 - Agree somewhat
4 - Agree strongly
Inter item
Alpha ( ) Item to correlations
Alpha
Construct Items if item total (absolute value)
)
deleted correlations
Highest Lowest
Behloyl1 0.813 0.725
Behavioural Behloyl2 0.852 0.627
0.859 0.725 0.476
Loyalty Behloyl3 0.793 0.769
Behloyl4 0.822 0.701
Attloyl1 0.790 0.708
Attitudinal Attloyl2 0.792 0.706
0.843 0.685 0.497
Loyalty Attloyl3 0.801 0.682
Attloyl4 0.821 0.634
Cogloyl1 0.832 0.702
Cognitive
Cogloyl2 0.843 0.676
Loyalty 0.865 0.852 0.469
Cogloyl3 0.831 0.704
Cogloyl4 0.801 0.776
108
Inter item
Alpha ( ) Item to correlations
Alpha
Construct Items if item total (absolute value)
)
deleted correlations
Highest Lowest
Conative Conloyl1 0.676 0.676
0.806 0.676 0.676
Loyalty Conloyl2 0.676 0.676
Affloyl1 0.735 0.567
Affective Affloyl2 0.725 0.587
0.780 0.721 0.334
Loyalty Affloyl3 0.724 0.589
Affloyl4 0.721 0.594
Truloyl1 0.853 0.765
Truloyl 2 0.849 0.775
Trust Loyalty 0.888 0.715 0.636
Truloyl 3 0.858 0.752
Truloyl 4 0.866 0.731
Commloyl1 0.876 0.735
Commitment Commloyl 2 0.877 0.732
0.894 0.745 0.606
Loyalty Commloyl 3 0.844 0.820
Commloyl 4 0.859 0.781
Inter item
Alpha ( ) Item to correlations
Alpha
Construct Items if item total (absolute value)
)
deleted correlations
Highest Lowest
LoyIndx1 0.906 0.711
Advocacy
LoyIndx2 0.856 0.860
Loyalty 0.908 0.810 0.578
LoyIndx3 0.864 0.839
Index
LoyIndx4 0.891 0.766
Purchase LoyIndx5 0.602 0.602
0.750 0.602 0.602
Loyalty Index LoyIndx6 0.602 0.602
Defection LoyIndx7 0.606 0.606
Loyalty 0.754 0.606 0.606
LoyIndx8 0.606 0.606
Index
109
After establishing the reliability for the constructs, factor analysis was
carried out to confirm the factors of Service Quality dimensions, Service Loyalty
dimensions and Loyalty Indices. Factor analysis is a method to determine the
dimensionality of a scale. Factor analysis is used to identify clusters of inter-
correlated variables called factor. To check the factorability, either the values of
correlation matrix should be greater than 0.3; values on anti-image correlation
diagonals should be greater than 0.5 or Measures of Sampling Adequacy Bartletts,
significant and KMO should be greater than 0.6.
Service Quality
Kaiser-Meyer-Olkin Measure of
.876
Sampling Adequacy.
Approx. Chi- 7404.62
Bartlett's Test of Square 6
Sphericity Df 406
Sig. .000
110
Components
N/w
Reliability Responsiveness Assurance Convenience Empathy Tangibles
Qlty
Rel4 .835
Rel5 .758
Rel2 .677
Rel1 .643
Rel3 .639
Resp3 .764
Resp1 .749
Resp4 .729
Resp2 .696
Cupeneqlty3 .790
Cupeneqlty4 .752
Cupeneqlty1 .652
Cupeneqlty5 .642
Cupeneqlty2 .614
Assu4 .767
Assu1 .718
Assu3 .679
Assu2 .645
Conv1 .779
Conv3 .779
Conv2 .637
Conv4 .587
Emp2 .657
Emp4 .557
Emp1 .544
Emp3 .522
Tang3 .759
Tang1 .729
Tang2 .727
111
Service Loyalty
Kaiser-Meyer-Olkin Measure of
.849
Sampling Adequacy.
Bartlett's Test of Approx. Chi-
8234.730
Sphericity Square
Df 325
Sig. .000
Loyalty Indices
Kaiser-Meyer-Olkin Measure of
.824
Sampling Adequacy.
Bartlett's Test of Approx. Chi-
2068.275
Sphericity Square
Df 28
Sig. .000
The items having factor loadings less than 0.5 were eliminated (Hair et
al., 2005). Finally, seven factors comprising twenty-nine items for service quality
and seven factors comprising twenty-six items for service loyalty, all having eigen
values of unity and above were extracted and the results are shown in Table 5.13
and 5.15.
From table 5.17, the items that load on the first factor appear to have a
strong emotional component to them, reflecting the extent to which customers
advocate the company. Consequently, this factor is labeled Advocacy Loyalty Index.
The items that load on the second factor reflect indications or symptoms of
customers defecting to competitors and the items that load on the third factor reflect
113
The KMO values are 0.876 for service quality, 0.849 for service loyalty
and 0.824 for loyalty indices. Bartletts Test of Sphericity is significant at 0.000 for
all the constructs. Communalities, which refer to the extracted factors that explains
most of the variance in the variables being analyzed is greater than 0.5. For service
quality, the lowest value of communality is 0.532; for service loyalty it is 0.599 and
for loyalty indices it is 0.715.
A good factor solution is one that explains most variance with few
factors. Realistically it should be between 50-75% of the variance explained. In this
study, the variances explained are as follows:
Comparative Goodness of
Factors
Fit Index (CFI) Fit Index (GFI)
Commitment Loyalty .956 .948
Trust Loyalty .997 .994
Attitudinal Loyalty .949 .956
Behavioural Loyalty 1.00 .999
Affective Loyalty .911 .918
Cognitive Loyalty .985 .980
Conative Loyalty .943 .952
From the Confirmatory Factor Analysis, it is inferred that the CFI and
GFI values are greater than 0.91 which confirms the uni dimensionality of the
factors.
115
Chi-square value for the overall model fit was 1692.327 for 356 degrees
of freedom (p< 0.001). Fit indices for the above model were NFI = 0.918; ; CFI =
0.914; GFI = 0.92, RMSEA = 0.058.
Chi-square value for the overall model fit was 1721.072 for 402 degrees
of freedom (p< 0.001). Fit indices for the above model were NFI = 0.941; CFI =
0.932; GFI = 0.924; RMSEA = 0.054.
Chi-square value for the overall model fit was 63.976 for 17 degrees of
freedom (p< 0.001). Fit indices for the above model were NFI = 0.969; CFI = 0.977;
GFI = 0.969; RMSEA = 0.075.
118
5.6.1 ANOVA
One way ANOVA is used when only one independent variable and one
dependent variable are considered. It is used in this study to check the influence of
each of the categorical demographic variables - length of use, age, monthly
expenses, education and occupation on service quality dimensions, service loyalty
dimensions and loyalty indices.
The table 5.21 gives the details of the relationship between the
demographic variables and the service quality dimensions. The F Values of Brown-
Forsythe and Welch are given. The LSD Post Hoc results give the details of the
values which are significantly different.
Table 5.21 One-Way ANOVA Demographic Variables on Service Quality
Brown-
Demographic Service Quality Sig. Welch F
Forsyth F LSD Post Hoc Inference
Variables Dimensions Value Value
Value
Reliability 0.013 3.551 3.487 < 2 yrs find the service providers Reliability and Responsiveness only.
more reliable that > 3 yrs
The subscribers using the service
Responsiveness
0.001 7.719 7.958 > 3 yrs find the service providers
are more responsive than < 2yrs
The subscribers whose age is > 50 Age has influence only on
Age
Reliability 0.000 14.056 12.484 find that the service provider is Reliability.
reliable.
The subscribers whose monthly Monthly Expenditure of the
expenses is between Rs.501-1000 respondents influences Reliability,
Reliability 0.000 13.887 15.517 find that the service provider is Responsiveness, Assurance, Empathy,
Monthly Expenses
119
Service Brown- Welch
Demographic Sig.
Quality Forsyth F LSD Post Hoc Inference
Variables Value
Dimensions F Value Value
The subscribers whose monthly expenses is >
Rs.2000 find that the service provider
Assurance 0.002 5.553 5.659 promises an assured service than the
subscribers whose monthly expenses are upto
Rs.500 and Rs.501-1000.
The subscribers whose monthly expenses are >
Rs.2000 find the empathy of the service
Empathy 0.000 10.800 9.056 provider better than the subscribers whose
monthly expenses are upto Rs.500 and Rs.501-
1000.
The subscribers whose monthly expenses is
between Rs.501-1000 find the service provider
Convenience 0.003 3.553 3.267
convenient than the subscribers whose
monthly expenses are > Rs.2000.
Customer The subscribers whose monthly expenses are >
Perceived Rs.2000 find that the service provider has a
0.000 5.032 5.211
Network good network quality than the subscribers
Quality whose monthly expenses are upto Rs.500.
The subscribers whose education is UG find Education of the
Education
120
121
The rest of the variables were found to be insignificant. Since there are
many variables that are found to be insignificant, the hypothesis H 01 is accepted.
The table 5.22 gives the details of the relationship between the
demographic variables and the service loyalty dimensions. The F Values of Brown-
Forsythe and Welch are given. The LSD Post Hoc results give the details of the
values which are significantly different.
Table 5.22 One-Way ANOVA Demographic Variables on Service Loyalty
Brown-
Demographic Service Loyalty Sig Welch F
Forsyth LSD Post Hoc Inference
Variables Dimensions Value Value
F Value
The subscribers using the service for 2-3 yrs are Length of Use has influence on
Length of
The subscribers using the service < 2yrs are and Commitment Loyalty.
Trust 0.015 3.376 NA
more trust loyal than > 3 yrs.
The subscribers in the age group 21-30 are more Age has influence only on
Age
Commitment 0.004 2.469 NA commitment loyal than the subscribers whose Commitment Loyalty
age is > 50.
The subscribers whose monthly expenses is Monthly Expenses have influence
upto Rs.500 are more attitude loyal than the on Attitudinal Loyalty, Affective
Attitudinal 0.006 2.713 2.888
subscribers whose monthly expenses are > Loyalty, Trust Loyalty and
Rs.2000. Commitment Loyalty
The subscribers whose monthly expenses is
Monthly Expenses
Trust 0.034. 3.471 3.364 more trust loyal than the subscribers whose Trust Loyalty
education are PG.
122
123
The rest of the variables were found to be insignificant. Since there are
many variables that are found to be insignificant, the hypothesis H 02 is accepted.
The table 5.23 gives the details of the relationship between the
demographic variables and the loyalty indices dimensions. The F Values of Brown-
Forsythe and Welch are given. The LSD Post Hoc results give the details of the
values which are significantly different.
Table 5.23 One-Way ANOVA Demographic Variables on Loyalty Indices
Brown-
Demographic Loyalty Welch F
Sig. Value Forsyth F LSD Post Hoc Inference
Variables Indices Value
Value
The subscribers using the service for > Length of Use has influence
Length of
124
125
The rest of the variables were found to be insignificant. Since there are
many variables that are found to be insignificant, the hypothesis H 03 is accepted.
Demographic Variables
AGE Age
ME Monthly Expenses
EDU Education
OCC Occupation
RLY Reliability
RSP Responsiveness
ASR Assurance
CNV Convenience
EMP Empathy
TNG Tangibles
The independence of error term was also met because the value of
Durbin-Watson, which was close to 2 (the closer to the value to 2, the better the
independence of error) (Field, 2005). From the table above, it is inferred that the
demographic variable, Monthly Expenditure has significant relationship with most
of the service quality dimensions, Occupational Status has significant relationship
with Reliability and Educational Status has significant relationship with Tangibles.
Hence H01 is accepted for all the other variables.
Demographic Variables
AGE Age
128
ME Monthly Expenses
EDU Education
OCC Occupation
From the table above, it is evident that though the Durbin- Watson
values are close to 2, the R values shows that there is not very significant
relationship between Demographic Variables and SERVLOYAL dimensions.
There is only one demographic variable, monthly expenditure which has
significant relationship with commitment loyalty and trust loyalty. Hence H 02 is
accepted for all other variables.
129
Demographic Variables
AGE Age
ME Monthly Expenses
EDU Education
OCC Occupation
Loyalty Indices
RLY Reliability
RSP Responsiveness
ASR Assurance
CNV Convenience
EMP Empathy
TNG Tangibles
From the above table, it can be inferred that all the three loyalty indices
have significant relationship with SERVQUAL dimensions.
RLY Reliability
RSP Responsiveness
ASR Assurance
CNV Convenience
EMP Empathy
TNG Tangibles
Loyalty Indices
From the above table, it can be inferred that all the three loyalty indices
have significant relationship with SERVLOYAL dimensions.
Loyalty Indices
Chi-square value for the overall model fit was 93.366 for 68 degrees of
freedom (p< 0.001). Fit indices for the above model were NFI = 0.903; NNFI =
0.907; CFI = 0.917; IFI = 0.923; GFI = 0.977; AGFI = 0.978; RMSR = 0.032;
RMSEA = 0.030.
137
Thus, overall the model can be considered to have a high level of fit, as
most of the fit indices show a good fit for the model by Hu and Bentler (1999) and
(1 < 2/df < 5) by Wheaton et al. (1977) Moreover, due to the dependency of the
2 statistic on the sample size, a higher than cut-off value of comparative fit index
(CFI) and a value of the 2/df ratio between 1 and 5 indicate a good fit.
Fit indices
Chi-square value for the overall model fit was 253.868 for 69 degrees
of freedom (p< 0.001). Fit indices for the above model were NFI = 0.918; NNFI =
0.920; CFI = 0.938; IFI = 0.942; GFI = 0.948; AGFI = 0.956; RMSR = 0.046;
RMSEA = 0.047.
139
Thus, overall the model can be considered to have a high level of fit, as
most of the fit indices show a good fit for the model by Hu and Bentler (1999) and
(1 < 2/df < 5) by Wheaton et al. (1977) Moreover, due to the dependency of the
2 statistic on the sample size, a higher than cut-off value of comparative fit index
(CFI) and a value of the 2/df ratio between 1 and 5 indicate a good fit.
Fit indices
Chi-square value for the overall model fit was 283.623 for 74 degrees
of freedom (p< 0.001). Fit indices for the above model were NFI = 0.903; NNFI =
0.9; CFI = 0.921; IFI = 0.924; GFI = 0.948; AGFI = 0.916; RMSR = 0.030;
RMSEA = 0.042.
141
Thus, overall the model can be considered to have a high level of fit, as
most of the fit indices show a good fit for the model by Hu and Bentler (1999) and
(1 < 2/df < 5) by Wheaton et al. (1977) Moreover, due to the dependency of the
2 statistic on the sample size, a higher than cut-off value of comparative fit index
(CFI) and a value of the 2/df ratio between 1 and 5 indicate a good fit.
Fit indices
the DMU under consideration could improve its performance by decreasing its
input and increasing its output. The improvement is pursued until the boundary of
the convex hull of the other DMUs is reached. A DMU which cannot improve its
performance is efficient or non-dominated. Otherwise, it is dominated by a convex
combination of other DMUs. Thus, possible improvements for a particular DMU
are indicated, not in an arbitrary direction, but on the basis of the performance of
the more successful and efficient DMUs. Thus, in the case of CRM practices by
the Mobile Service Providers, it is essential to assess the performance of CRM in
the light of three aspects: (1) relationship between Service Quality dimensions and
the Service Loyalty dimensions; (2) relationship between Service Quality and
Loyalty Indices and (3) relationship between Service Loyalty and Loyalty Indices.
To determine the input and output parameters for each of the above, linear
regression is performed on service quality, service loyalty and loyalty indices
constructs. The figure below gives the details of the service providers used in the
study.
The predictors from the regression analysis are used as input parameters
and each of the service loyalty dimensions are used as output parameters for the
study. Then the data pertaining to the service quality parameters are taken as input
143
for each of the Service Providers. Data pertaining to 7 Service providers are used
for the study.
Mobile Service
Responsiveness Empathy Behavioural
Provider
SP1 3.4135 3.1923 3.1955
SP2 3.4924 3.2904 3.3005
SP3 3.3544 3.1978 3.1291
SP4 3.4781 3.3465 3.2851
SP5 3.6417 3.4583 3.3875
SP6 3.589 3.25 3.3093
SP7 3.6413 3.5326 3.3587
Mobile
Network
Service Responsiveness Empathy Behavioural Eff1 % Eff2 %
Qlty
Provider
SP1 3.4135 3.1923 3.5282 3.1955 93.6 100
SP2 3.4924 3.2904 3.5697 3.3005 94.5 100
SP3 3.3544 3.1978 3.5319 3.1291 93.2 97
SP4 3.4781 3.3465 3.4947 3.2851 94.4 98
SP5 3.6417 3.4583 3.4967 3.3875 93 97
SP6 3.589 3.25 3.6542 3.3093 92.2 100
SP7 3.6413 3.5326 3.487 3.3587 92.2 95
The table 5.32 depicts that SP2 and SP4 has the highest value for Eff1
when the behavioural loyalty is measured with respect to responsiveness of the
service provider. But SP1, SP2 and SP6 have highest percentage for Eff2 when
behavioural loyalty is measured with respect to empathy. The other service
providers do not compare so well with these, so are presumably performing less
well. That is, they are relatively less efficient at using their given input resources
(responsiveness and empathy) to produce output (Behavioural Loyalty).
One problem with comparison using ratios is that different ratios can
give a different picture and it is difficult to combine the entire set of ratios into a
single numeric judgement. For instance consider SP1 and SP5; SP1 is (93.6 / 93) =
1.006 times only as efficient as SP5 at the Eff1 but (100 / 97) = 1.03 times as
efficient at the Eff2. To combine these figures into a single judgement is very
difficult. This problem of different ratios giving different pictures would be
especially true if there is an increase in the number of service providers (and/or
increase the number of input/output measures).
technique called Data Envelopment Analysis which interprets the ratios and
provides the efficient frontier.
For those who are comfortable with mathematics, the mathematics for
the simple set of mobile service providers example is presented below.
Maximise ESP4
Subject to
where:
To calculate the efficiency of the other service providers the only step is
to change what is to be maximised (e.g. maximise ESP4 to calculate the efficiency
of SP4). This is exactly the association of non-negative weights with each input
and output measure. The above optimization problem is a nonlinear problem and
hence difficult to solve numerically. In fact it can be converted into a linear
programming problem. To do this we:
Subject to
3.4781Wresponsiveness + 3.3465Wempathy= 1
Wbehloyl>= 0
Wresponsiveness >= 0
Wempathy >= 0
Maximise 3.2851Wbehloyl
Subject to
3.4781Wresponsiveness + 3.3465Wempathy= 1
(3.1955Wbehloyl) - (3.4135Wresponsiveness + 3.1923Wempathy) <= 0
(3.3005Wbehloyl) - (3.4924Wresponsiveness + 3.2904Wempathy) <= 0
(3.1291Wbehloyl) - (3.3544Wresponsiveness + 3.1978Wempathy) <= 0
(3.2851Wbehloyl) - (3.4781Wresponsiveness + 3.3465Wempathy) <= 0
(3.3875Wbehloyl) - (3.6417Wresponsiveness + 3.4583Wempathy) <= 0
(3.3093Wbehloyl) - (3.589Wresponsiveness + 3.25Wempathy) <= 0
(3.3587Wbehloyl) - (3.6413Wresponsiveness + 3.5326Wempathy) <= 0
Wbehloyl>= 0
Wresponsiveness >= 0
Wempathy >= 0
148
Thus DEA provides the details of the best performing DMU which is
usually 100% efficient. The other DMUs are not performing upto this efficient
frontier. The Table 5.33 gives the DEA Solver Output for the Effect on
Behavioural Loyalty.
149
Mobile
Service Responsiv Empath Behavioura Weighte Weighte Efficienc
Working
Provide eness y l d O/p d I/p y
r
SP1 3.413 3.192 3.195 0.995 1 0.995 -0.004
2.41E-
SP2 3.492 3.290 3.300 1.027 1.027 1.000
08
SP3 3.354 3.197 3.129 0.974 0.994 0.9798 -0.02008
SP4 3.478 3.346 3.285 1.023 1.037 0.986 -0.01419
SP5 3.641 3.458 3.387 1.054 1.077 0.9794 -0.02217
SP6 3.589 3.25 3.309 1.030 1.030 1.000 0
SP7 3.6413 3.532 3.358 1.045 1.091 0.958 -0.04562
Weight 0.110 0.195 0.311
From the analysis using DEA, it can be seen that SP2 and SP6 are the
two mobile service providers who are on the efficient frontier as the efficiency is
1.00. The other service providers SP1, SP3, SP4, SP5 and SP7 are less performing.
For instance, SP7 is only 95% efficient when compared to SP2 and SP6. That
means, given the current scenario, SP7 needs to improve by 5% to reach the
efficient provider with respect to Behavioural Loyalty.
Mobile
Reliabil Empa Convenie N/w Attitudi Weighted Weight Efficie Worki
Service
ity thy nce Quality nal O/p ed I/p ncy ng
Provider
SP1 3.47 3.19 3.35 3.52 3.12 1.00 1.00 1.00 3E-08
SP2 3.67 3.29 3.47 3.56 3.19 0.97 1.01 0.96 -3E-02
SP3 3.46 3.19 3.40 3.53 3.14 0.99 0.99 1.00 -7E-08
SP4 3.40 3.34 3.51 3.49 3.20 0.97 0.97 0.99 -2E-03
SP5 3.53 3.45 3.49 3.49 3.15 0.99 0.99 1.00 0E+00
SP6 3.49 3.25 3.45 3.65 3.11 1.00 1.03 0.97 -3E-02
SP7 3.65 3.53 3.51 3.48 3.14 0.99 0.99 1.00 0E+00
Weight 0.03 0.05 -0.10 0.29 3.12
From the analysis using DEA, it can be seen that SP1, SP3, SP5 and
SP7 are the mobile service providers who are on the efficient frontier as the
efficiency is 1.00. The other service providers SP2, SP4 and SP6 are less
151
performing. For instance, SP2 is only 96% efficient when compared to SP1, SP3,
SP5 and SP7. That means, given the current scenario, SP2 needs to improve by 4%
to reach the efficient provider with respect to Attitudinal Loyalty.
Mobile
Service Responsiveness Convenience Empathy Tangibles Cognitive
Provider
SP1 3.4135 3.359 3.1923 3.4103 3.0208
SP2 3.4924 3.4747 3.2904 3.5421 3.3438
SP3 3.3544 3.4066 3.1978 3.3816 3.0625
SP4 3.4781 3.5175 3.3465 3.3392 3.0278
SP5 3.6417 3.4917 3.4583 3.5167 3.5
SP6 3.589 3.4534 3.25 3.5345 4
SP7 3.6413 3.5163 3.5326 3.4928 3.0815
Mobile
Respons Conve Empat Tangi Cognit Weighted Weighted Effici
Service Working
iveness nience hy bles ive O/p I/p ency
Provider
SP1 3.413 3.359 3.192 3.4103 3.0208 1.000 1.000 1.000 -1E-07
SP2 3.492 3.474 3.290 3.5421 3.3438 0.903 1.136 0.795 -2E-01
SP3 3.354 3.406 3.197 3.3816 3.0625 0.986 1.141 0.865 -2E-01
SP4 3.478 3.517 3.346 3.3392 3.0278 0.998 0.998 1.000 -2E-07
SP5 3.641 3.491 3.458 3.5167 3.5 0.863 0.925 0.933 -6E-02
SP6 3.58 3.453 3.25 3.5345 4 0.755 0.830 0.910 -8E-02
SP7 3.641 3.516 3.532 3.4928 3.0815 0.980 0.990 0.990 -1E-02
Weight -2.493 0.495 1.104 1.26 3.020
From the analysis using DEA, it can be seen that SP1 and SP4 are the
two mobile service providers who are on the efficient frontier as the efficiency is
1.00. The other service providers SP2, SP3, SP5, SP6 and SP7 are less performing.
For instance, SP3 is only 86% efficient when compared to SP1 and SP4. That
means, given the current scenario, SP3 needs to improve by 14% to reach the
efficient provider with respect to Cognitive Loyalty.
Mobile
N/w
Service Responsiveness Empathy Tangibles Conative
Quality
Provider
SP1 3.4135 3.1923 3.41 3.5282 3.2308
SP2 3.4924 3.2904 3.54 3.5697 3.3182
SP3 3.3544 3.1978 3.38 3.5319 3.1319
SP4 3.4781 3.3465 3.34 3.4947 3.2632
SP5 3.6417 3.4583 3.52 3.4967 3.275
SP6 3.589 3.25 3.53 3.6542 3.339
SP7 3.6413 3.5326 3.49 3.487 3.087
153
Mobile N/w
Respon Emp Tangi Cona Weighte Weighte
Service Qualit Efficiency Working
siveness athy bles tive d O/p d I/p
Provider y
SP1 3.41 3.19 3.41 3.53 3.23 1.000 1.000 1.000 -3E-08
SP2 3.49 3.29 3.54 3.57 3.32 0.974 1.064 0.915 -9E-02
SP3 3.35 3.20 3.38 3.53 3.13 1.032 1.032 1.000 -1E-04
SP4 3.48 3.35 3.34 3.49 3.26 0.990 0.990 1.000 -7E-08
SP5 3.64 3.46 3.52 3.50 3.28 0.987 1.022 0.966 -4E-02
SP6 3.59 3.25 3.53 3.65 3.34 0.968 0.968 1.000 -9E-05
SP7 3.64 3.53 3.49 3.49 3.09 1.047 1.047 1.000 -3E-05
Weight -0.76 0.51 0.55 0.02 3.23
From the analysis using DEA, it can be seen that SP1, SP3, SP4, SP6
and SP7 are the mobile service providers who are on the efficient frontier as the
efficiency is 1.00. The other service providers SP2 and SP5 are less performing.
For instance, SP2 is only 91% efficient when compared to SP1, SP3, SP4, SP6 and
SP7. That means, given the current scenario, SP2 needs to improve by 9% to reach
the efficient provider with respect to Conative Loyalty.
The input parameters are Reliability and Empathy and the output
parameter is Affective Loyalty
154
Mobile Service
Reliability Empathy Affective
Provider
SP1 3.4718 3.1923 3.234
SP2 3.6768 3.2904 3.6111
SP3 3.4615 3.1978 3.4313
SP4 3.4035 3.3465 3.5132
SP5 3.5367 3.4583 3.5458
SP6 3.4915 3.25 3.4322
SP7 3.6522 3.5326 3.2283
Mobile
Weighted Weighted
Service Reliability Empathy Affective Efficiency Working
O/p I/p
Provider
SP1 3.47 3.19 3.23 0.94 1.00 0.935 -0.06
SP2 3.68 3.29 3.61 1.04 1.04 1.000 0.00
SP3 3.46 3.20 3.43 0.99 1.00 0.993 -0.01
SP4 3.40 3.35 3.51 1.02 1.02 1.000 0.00
SP5 3.54 3.46 3.55 1.03 1.05 0.974 -0.03
SP6 3.49 3.25 3.43 0.99 1.01 0.981 -0.02
SP7 3.65 3.53 3.23 0.93 1.08 0.864 -0.15
Weight 0.14 0.16 0.29
From the analysis using DEA, it can be seen that SP2 and SP4 are the
mobile service providers who are on the efficient frontier as the efficiency is 1.00.
The other service providers SP1, SP3, SP5, SP6 and SP7 are less performing. For
instance, SP5 is only 97% efficient when compared to SP2 and SP4. That means,
155
given the current scenario, SP4 needs to improve by 3% to reach the efficient
provider with respect to Affective Loyalty.
Mobile
Service Reliability Responsiveness Assurance Empathy Trust
Provider
SP1 3.47 3.41 3.56 3.19 3.54
SP2 3.68 3.49 3.74 3.29 3.60
SP3 3.46 3.35 3.55 3.20 3.40
SP4 3.40 3.48 3.75 3.35 3.42
SP5 3.54 3.64 3.84 3.46 3.45
SP6 3.49 3.59 3.66 3.25 3.24
SP7 3.65 3.64 3.73 3.53 3.37
Mobile
Relia Responsi Assura Emp Weighted Weighted
Service Trust Efficiency Working
bility veness nce athy O/p I/p
Provider
SP1 3.47 3.41 3.56 3.19 3.54 1.000 1.000 1.000 -6E-08
SP2 3.68 3.49 3.74 3.29 3.60 1.018 1.133 0.898 -1E-01
SP3 3.46 3.35 3.55 3.20 3.40 0.960 1.021 0.941 -6E-02
SP4 3.40 3.48 3.75 3.35 3.42 0.966 1.138 0.848 -2E-01
SP5 3.54 3.64 3.84 3.46 3.45 0.975 1.101 0.886 -1E-01
SP6 3.49 3.59 3.66 3.25 3.24 0.915 0.974 0.939 -6E-02
SP7 3.65 3.64 3.73 3.53 3.37 0.952 0.952 1.000 7E-08
Weight 0.00 -0.73 1.21 -0.25 0.28
156
From the analysis using DEA, it can be seen that SP1 and SP7 are the
mobile service providers who are on the efficient frontier as the efficiency is 1.00.
The other service providers SP2, SP3, SP4, SP5 and SP6 are less performing. For
instance, SP4 is only 84% efficient when compared to SP1 and SP7. That means,
given the current scenario, SP4 needs to improve by 16% to reach the efficient
provider with respect to Trust Loyalty.
Mobile
Service Reliability Responsiveness Empathy Assurance N/w Quality Commitment
Provider
SP1 3.47 3.41 3.19 3.56 3.53 3.32
SP2 3.68 3.49 3.29 3.74 3.57 3.42
SP3 3.46 3.35 3.20 3.55 3.53 3.17
SP4 3.40 3.48 3.35 3.75 3.49 3.29
SP5 3.54 3.64 3.46 3.84 3.50 3.39
SP6 3.49 3.59 3.25 3.66 3.65 3.31
SP7 3.65 3.64 3.53 3.73 3.49 3.36
Mobile
Relia Respon Emp Assur N/w Commit Weighted Weighted Effici Worki
Service
bility siveness athy ance Quality ment O/p I/p ency ng
Provider
SP1 3.47 3.41 3.19 3.56 3.53 3.32 1.00 1.000 1.00 1E-08
SP2 3.68 3.49 3.29 3.74 3.57 3.42 1.03 1.030 1.00 0E+00
SP3 3.46 3.35 3.20 3.55 3.53 3.17 0.95 1.026 0.93 -7E-02
SP4 3.40 3.48 3.35 3.75 3.49 3.29 0.99 1.047 0.94 -6E-02
SP5 3.54 3.64 3.46 3.84 3.50 3.39 1.02 1.019 1.00 -2E-11
SP6 3.49 3.59 3.25 3.66 3.65 3.31 1.00 0.996 1.00 0E+00
SP7 3.65 3.64 3.53 3.73 3.49 3.36 1.01 1.011 1.00 0E+00
Weight -0.05 -0.44 0.29 0.20 0.30 0.30 0.090
From the analysis using DEA, it can be seen that SP1, SP2, SP5, SP6
and SP7 are the mobile service providers who are on the efficient frontier as the
efficiency is 1.00. The other service providers SP3 and SP4 are less performing.
For instance, SP3 is only 93% efficient when compared to SP1, SP2, SP5, SP6 and
SP7. That means, given the current scenario, SP3 needs to improve by 7% to reach
the efficient provider with respect to Commitment Loyalty.
The predictors from the regression analysis are used as input parameters
and each of the loyalty indices are used as output parameters for the study. The
data pertaining to service quality parameters are taken as input for each of the
Service Providers. Data pertaining to 7 Service providers are used for the study.
Mobile
Network
Service Reliability Responsiveness Empathy Assurance Advocacy
Qlty
Provider
SP1 3.4718 3.4135 3.1923 3.4103 3.5282 3.4455
SP2 3.6768 3.4924 3.2904 3.5421 3.5697 3.6742
SP3 3.4615 3.3544 3.1978 3.3816 3.5319 3.5165
SP4 3.4035 3.4781 3.3465 3.3392 3.4947 3.5526
SP5 3.5367 3.6417 3.4583 3.5167 3.4967 3.5756
SP6 3.4915 3.589 3.25 3.5345 3.6542 3.7246
SP7 3.6522 3.6413 3.5326 3.4928 3.487 3.4565
Mobile
Effic
Service Relia Responsi Emp Assur Network Advoc Weighte Weighte Wor
ienc
Provide bility veness athy ance Qlty acy d O/p d I/p king
y
r
SP1 3.47 3.41 3.19 3.41 3.53 3.45 0.97 1.00 0.97 -0.03
SP2 3.68 3.49 3.29 3.54 3.57 3.67 1.03 1.03 1.00 0.00
SP3 3.46 3.35 3.20 3.38 3.53 3.52 0.99 0.99 1.00 0.00
SP4 3.40 3.48 3.35 3.34 3.49 3.55 1.00 1.00 1.00 0.00
SP5 3.54 3.64 3.46 3.52 3.50 3.58 1.01 1.01 0.99 -0.01
SP6 3.49 3.59 3.25 3.53 3.65 3.72 1.05 1.05 1.00 0.00
SP7 3.65 3.64 3.53 3.49 3.49 3.46 0.97 0.97 1.00 0.00
Weight -2.33 -2.03 1.77 4.45 -1.37 0.29 0.97 1.00 0.97 -0.03
From the analysis using DEA, it can be seen that SP2, SP3, SP4 and
SP6 and SP7 are the mobile service providers who are on the efficient frontier as
the efficiency is 1.00. The other service providers SP5 are less performing. For
instance, SP5 is only 99% efficient when compared to SP1, SP2, SP3, SP4, SP6
159
and SP7. That means, given the current scenario, SP5 needs to improve by only 1%
to reach the efficient provider with respect to Advocacy Loyalty Index (ALI).
Mobile
Service Reliability Responsiveness Assurance Empathy Convenience Purchase
Provider
SP1 3.47 3.41 3.56 3.19 3.36 3.41
SP2 3.68 3.49 3.74 3.29 3.47 3.54
SP3 3.46 3.35 3.55 3.20 3.41 3.42
SP4 3.40 3.48 3.75 3.35 3.52 3.46
SP5 3.54 3.64 3.84 3.46 3.49 3.63
SP6 3.49 3.59 3.66 3.25 3.45 3.61
SP7 3.65 3.64 3.73 3.53 3.52 3.70
From the analysis using DEA, it can be seen that SP3 and SP7 are the
mobile service providers who are on the efficient frontier as the efficiency is 1.00.
The other service providers SP1, SP2, SP4, SP5 and SP6 are less performing. For
instance, SP1 is only 98% efficient when compared to SP3 and SP7. That means,
given the current scenario, SP1 needs to improve by 2% to reach the efficient
provider with respect to Purchase Loyalty Index (PLI).
Mobile
Network
Service Reliability Responsiveness Empathy Defection
Qlty
Provider
SP1 3.4718 3.4135 3.1923 3.5282 3.3333
SP2 3.6768 3.4924 3.2904 3.5697 3.4545
SP3 3.4615 3.3544 3.1978 3.5319 3.2418
SP4 3.4035 3.4781 3.3465 3.4947 3.2719
SP5 3.5367 3.6417 3.4583 3.4967 3.425
SP6 3.4915 3.589 3.25 3.6542 3.3136
SP7 3.6522 3.6413 3.5326 3.487 3.4348
From the analysis using DEA, it can be seen that SP5 and SP6 are the
mobile service providers who are on the efficient frontier as the efficiency is 1.00.
The other service providers SP1, SP2, SP3, SP4 and SP7 are less performing. For
instance, SP3 is only 77 % efficient when compared to SP5 and SP6. That means,
given the current scenario, SP6 needs to improve by 23 % to reach the efficient
provider with respect to Defection Loyalty Index (DLI).
The predictors from the regression analysis are used as input parameters
and each of the loyalty indices are used as output parameters for the study. The
data pertaining to the service loyalty parameters are taken as input for each of the
Service Providers.
Mobile
Service Attitudinal Trust Affective Cognitive Commitment Advocacy
Provider
SP1 3.13 3.54 3.23 3.02 3.32 3.45
SP2 3.20 3.60 3.61 3.34 3.42 3.67
SP3 3.14 3.40 3.43 3.06 3.17 3.52
SP4 3.20 3.42 3.51 3.03 3.29 3.55
SP5 3.15 3.45 3.55 3.50 3.39 3.58
SP6 3.12 3.24 3.43 4.00 3.31 3.72
SP7 3.14 3.37 3.23 3.08 3.36 3.46
Mobile
Weighted Weighted
Service Attitudinal Trust Affective Cognitive Commitment Advocacy Efficiency Working
O/p I/p
Provider
SP1 3.13 3.54 3.23 3.02 3.32 3.45 0.99 1.00 0.99 -0.01
SP2 3.20 3.60 3.61 3.34 3.42 3.67 1.06 1.06 1.00 0.00
SP3 3.14 3.40 3.43 3.06 3.17 3.52 1.01 1.02 1.00 0.00
SP4 3.20 3.42 3.51 3.03 3.29 3.55 1.02 1.03 1.00 0.00
SP5 3.15 3.45 3.55 3.50 3.39 3.58 1.03 1.05 0.98 -0.02
SP6 3.12 3.24 3.43 4.00 3.31 3.72 1.07 1.07 1.00 0.00
SP7 3.14 3.37 3.23 3.08 3.36 3.46 1.00 1.00 1.00 0.00
Weight 0.18 0.06 0.06 0.08 -0.06 0.29
From the analysis using DEA, it can be seen that SP2, SP3, SP4, SP6
and SP7 are the mobile service providers who are on the efficient frontier as the
efficiency is 1.00. The other service providers SP1 and SP5 are less performing.
For instance, SP5 is only 98 % efficient when compared to SP2, SP3, SP4, SP6 and
163
SP7. That means, given the current scenario, SP5 needs to improve by 2 % to reach
the efficient provider with respect to Advocacy Loyalty Index (ALI).
From the analysis using DEA, it can be seen that SP6 and SP7 are the
mobile service providers who are on the efficient frontier as the efficiency is 1.00.
For instance, SP1 is only 81 % efficient when compared to SP6 and SP7. That
164
means, given the current scenario, SP5 needs to improve by 19 % to reach the
efficient provider with respect to Purchase Loyalty Index (ALI).
Mobile Service
Behavioural Conative Commitment Defection
Provider
SP1 3.20 3.23 3.32 3.33
SP2 3.30 3.32 3.42 3.45
SP3 3.13 3.13 3.17 3.24
SP4 3.29 3.26 3.29 3.27
SP5 3.39 3.28 3.39 3.43
SP6 3.31 3.34 3.31 3.31
SP7 3.36 3.09 3.36 3.43
Mobile
Behavi Weighted Weighted
Service Conative Commitment Defection Efficiency Working
Oural O/p I/p
Provider
SP1 3.20 3.23 3.32 3.33 0.98 1.00 0.98 -0.02
SP2 3.30 3.32 3.42 3.45 1.02 1.03 0.99 -0.01
SP3 3.13 3.13 3.17 3.24 0.95 0.95 1.00 0.00
SP4 3.29 3.26 3.29 3.27 0.96 0.99 0.98 -0.02
SP5 3.39 3.28 3.39 3.43 1.01 1.02 0.99 -0.01
SP6 3.31 3.34 3.31 3.31 0.97 0.99 0.98 -0.02
SP7 3.36 3.09 3.36 3.43 1.01 1.01 1.00 0.00
Weight -0.01 -0.01 0.32 0.29
165
From the analysis using DEA, it can be seen that SP3 and SP7 are the
mobile service providers who are on the efficient frontier as the efficiency is 1.00.
For instance, SP5 is only 99 % efficient when compared to SP3 and SP7. That
means, given the current scenario, SP5 needs to improve by 1 % to reach the
efficient provider with respect to Defection Loyalty Index (ALI).
5.9 SUMMARY
This chapter discussed the data analysis of the research, namely profile
of the respondents, preliminary data analysis and hypothesis testing. The result
showed a response rate of 95.4%. Most of the respondents (about 60%) were pre-
paid, while rest (40%) of the respondents accounted for post-paid services.
Preliminary analyses of the data tested the data for internal consistency of the
166
CHAPTER 6
FINDINGS
Age (more than 50 years), Education (UG), length of use (less than
2 years) and Monthly Expenses (between Rs.501-1000) determined
Reliability dimension.
168
The path models examined and confirmed the path to depict the
relationships between the different dimensions, namely, between service quality
dimensions and service loyalty dimensions; service quality dimensions and loyalty
indices and service loyalty and loyalty indices. All the three path models were
found to be statistically fit with the Fit Indices having values greater than 0.9 and
the RMSEA Values less than 0.06
6.6 SUMMARY
This chapter provided the findings in detail. The findings with respect
to profile of the respondents, descriptive statistics, ANOVA and linear regression
were presented. The findings on the path models as well as the DEA were also
presented. The discussion on the findings and the implications on the research and
the managerial aspects are presented in the next chapter.
175
CHAPTER 7
DISCUSSION
This study worked on the underlying premise that one area that
remained relatively underdeveloped, is the relationship between
evaluation of service quality and loyalty of service
customers.(Glemer & Brown,1996). This is in spite of the fact that
loyalty is essential for service business survival (Reichheld, 1993).
Since service quality, service loyalty and loyalty indices are all
multidimensional variables, it can be seen from the observed model that some of
the demographic variables have relationship with some dimensions only. But
Monthly Expenses is the demographic variable which has relationship with most of
the dimensions. The confirmatory path depicted the relationship between service
quality and service loyalty; service quality and loyalty indices and service loyalty
and loyalty indices.
The study establishes that there is a strong linkage between (a) service
quality and service loyalty; (b) service quality and loyalty indices and (c) service
179
loyalty and loyalty indices. Although Zeithaml et al. (1996) report a strong
association between overall service quality and service loyalty across multiple
companies, the findings clearly highlights the quality-loyalty relationship with
reference to the Indian Mobile segment. This underlines the importance of a
multidimensional approach to service loyalty. The findings have a number of
research and managerial implications.
With regards to the complaining behaviour part of the loyalty scale, the
incidental nature of service problems may require incident-based measurement
(such as the Critical Incident Technique) rather than service attitude-based
measurement instruments. Further research should also incorporate multiple
measures of the relevant constructs in order to increase the number of items that
are used for the individual service loyalty dimensions. For instance, word-of-
mouth should also be formulated in negative terms.
quality into account. An area that definitely also merits further investigation is the
impact of loyalty on other organisational performance measures, such as
profitability (Storbacka et al., 1994).
Furthermore, the results have specific indications for the different path
models and service industries' research and budget allocations and personnel
management decisions relating to the improvement of service loyalty on the basis
of service quality.
efficiencies. In this study, DEA was used to analyse the relative efficiencies which
is used to benchmark the service providers on various dimensions. For the other
service providers to improve their performance they need to analyze the input and
output parameters of the best performing service providers.
7.5 CONCLUSION
run sustainability. The study uses path models to depict the relationships between
service quality, service loyalty dimensions and loyalty indices.
The study concludes by asserting the fact that if the behavioural aspects
are studied and its influence on the loyalty indices are focused by the mobile
service providers, it could improve their overall strength in the competition.
183
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199
APPENDIX I
Questionnaire
Prepaid Postpaid
> 3 yrs
6. Education
7. Occupation
Student Others
200
5 4 3 2 1
1 Contact employees perform the service right the first time
2 The company provides services at the promised time
You are kept well-informed about the progress of your
3 complaints
4 Billing system is accurate and error free
5 Bills are received in time
6 Contact employees gives you prompt service
7 Your Complaints / queries are taken seriously
8 Your complaints are resolved quickly
9 They are always willing to help you
Contact employees are friendly and polite while handling your
10 complaints / queries
They have the adequate knowledge of tariffs and plans of
11 service providers
12 The behaviour of contact employees instils confidence in you
13 You feel safe in your transactions with your service provider
For lodging the complaints service provider is easily
14 accessible
15 They have your best interests in heart
16 Contact employees give you individual attention
17 The employees understand your specific needs
18 Retailer network of your service provider is easily located
19 Service provider's physical facilities are visually appealing
20 Contact employees appear neat
Materials associated with the service(such as pamplets etc) are
21 visually appealing
22 They have convenient business hours
23 Ease of lodging the complaints / queries
Your service provider provides flexibility in the payment of
24 bills
25 Application formalities are simple
Your service provider provides sufficient geographical
26 coverage (on highways, inside the buildings and basement)
You experience minimum premature termination of calls
27 during conversation (ie call drops)
28 You get clear and undisturbed voice
Your call gets connected to the called person during the first
29 attempt most of the time
30 You are able to make calls at peak hours
201
SA A DA SD
4 3 2 1
I will transact with this mobile service provider again for future
31 needs
32 I will try new services that are provided by the service provider
38 I am likely to pay little more for the services when situation arises
SA A N DA SDA
5 4 3 2 1
59 There is a likelihood to choose the service again
60 There is a likelihood to recommend
There is a likelihood to pass on positive feeling
61 about the services
There is a likelihood to continue purchasing the
62 same products / services
63 There is a likelihood to increase purchase size
There is a likelihood to increase frequency of
64 purchasing
There is a likelihood to purchase different
65 products / services
There is a likelihood to continue this only as a
66 supplementary connection
There is a likelihood to switch to a different
67 provider
We once again thank you for the opportunity and the time in providing
these details.
203
Refereed Journals
CURRICULUM VITAE
from Regional Engineering College, Jaipur (now NIT Jaipur) in 1996 and M.B.A
Lumpur, Malayasia. All her papers have been well received by the academia.