Customer satisfaction in mobile industry in Egypt an empirical study - Thesis Example

Satisfaction in Mobile Industry in Egypt an Empirical Study Literature Review The telecommunication industry in Egypt has hada checkered evolution from the start to now. Its current strategic operational and competitive environments are basically determined by a series of factors such as an ever intensifying competitive environment among the mobile service providers, supply chain management cost related constraints and a global economic downturn. This literature review focuses on customer satisfaction in mobile industry in Egypt in general and the American Customer Satisfaction Model (ACSM) evaluation in particular with specific reference to Egyptian mobile industry. Babakus, Bienstock, and James (2004) have identified that the customer satisfaction models on service quality evaluation techniques have been built in a number of industries. The theoretical and conceptual framework of this research effort is basically determined by the relevance of the existing theoretical postulates and the conceptual frameworks of analysis and reference within the wider Egyptian market structures. Thus there will be an in-depth examination of the available literature on the subject to identify the correlations between among a set of more significant endogenous and exogenous variables involved in customer satisfaction and loyalty at Egypt telecommunication sector (Gustafsson, and Johnson, 2004). Egyptian telecommunication industry invariably brings to bear a diversity of experience and culture on its diverse customer base. Global telecommunication service operations are characterized by ever increasing uncertainty and competition. Against this backdrop it's essential to consider the extent to which the product and service quality has an impact on customers in mobile industry in Egypt (Fornell, 2001). As much as mobile services are highly influenced by competitor behavior as an exogenous variable, the service quality also affects the consumers' perception and behavior as an endogenous variable. This paradigm of behavior is essentially associated with the ever rising telecommunication industry competition across the globe and above all customer satisfaction strategies and initiatives have shaped Egypt mobile industry's operations. Customer satisfaction is the key in any business undertaking, especially success or failure of the business is mainly dependent on it. In the past the importance of customer satisfaction was not recognized as an important metric in determining critical success factor related outcomes due to the fact that many entrepreneurs focused attention on the increase of new customers rather than retaining the existing customers. It was a pure number game. Li, Jiayin, and Huaying(2008) suggest that many companies have identified the importance of customer satisfaction especially by service-centric companies such as mobile telephone service industry on the premise that customer satisfaction is a growth factor directly influenced by the quality of service. Thus many mobile service producers in the global arena have adopted customer satisfaction as a high priority in achieving corporate goals. Though customer satisfaction is a mental perception, many techniques and methods are developed to measure the effectiveness of it. For example the American Customer Satisfaction Index (ACSI) model is an economic indicator which analyses the degree of customer satisfaction in the US. Claes,et al (1996) argue that this model has mainly been developed with five variables - perceived value; satisfaction; loyalty; reputation; and recommendation. Thus the service quality of the mobile industry depends on the delivery excellent or superior service to fulfill customer expectations, and it occurs for most services during the interaction between a customer and the mobile service provider. According to Anckar, and D'Incau (2002), the mobile service producers in Egypt have efficiently created a perceived value on the customer's mind through real value generation such as providing a number of additional mobile services at no extra cost to the customer. For instance the provision of combined service packages, security services and so on are considered to be far reaching in their impact on customers. Also many mobile service providers have been advertised about the actual features of their service in eBooks. Kno, Ching and Wei-jaw (2009) successfully identified the existence of initiatives that make people feel the service and thus increasing their perceived value about the service. And further they identified that the mobile service producers in Egypt have been able to produce the value at a profit by satisfying all groups of mobile customers irrespective of their age differences. Today due to the higher level of competition, assuring satisfaction of customers may not be sufficient for the survival of the company. Therefore mobile service producers should also focus on ensuring customer loyalty towards the service by enhancing mobile customer's perception regarding the service quality and increasing the perceived value by the customer (Lin, and Yi-Shun, 2006). Previous studies by Eshghi, Dominique and Heikki (2009) suggest that the importance of service quality, perceived value, image and sound relationship existing between mobile service producer and the customer, all lead to behavioral intentions to create superior customer value thus, service providers can achieve high customer satisfaction on their service. And it reduces customer complaints regarding service quality and compels the customer to repurchase the service. According to Munnuklea's (2005) the interaction between customer satisfaction and his willingness to pay the price is a sign of tolerance. His aim was not only to determine whether the interaction with customer satisfaction and price tolerance is positive or negative but to determine the degree of association of these two factors. Further he identified that there is a fair chance of high willingness to pay for the quality of service, irrespective of competitors' low prices. The rational mobile customer expects a good network connection and a quality service such as clearness and security of the mobile connection. Chen, and Bayu (2008) pointed that the national ACSI score gives an idea about the degree of satisfaction of the mobile consumer. This broad perspective gives a chance for ACSI researchers to analyze the impact of enhancing or de-scaling the degree of satisfaction on macroeconomic performance in time to come. Relatively higher satisfaction lelvels of the consumers are sought to be ensured by these sectors (Fornell, et al 1996). These industry sectors are more likely to be well established and therefore those companies that adopt the outdated strategies have been focusing only on the quality control procedures including Total Quality Management and Six Sigma. These industries do not consider new market potentials and initiatives; more importantly industries that depend less on human resources in the production and marketing processes will not be succesecssful in consumer satisfaction aspects. On the other hand, the "new economy" service sector industries, which rely more on customer service and human intervention in the consumption process, have tended to perform below average. According to Buellingen, and Martin (2004) the telecommunication industry in Egypt that have been performing well over the years due to the fact that the strategies of electronic commerce have enabled them to serve customers with superior technology and broader networks. The SAS Index (South African Satisfaction Index) indicates that the telecommunication industry in whole African continent including Egypt shows an increase in customer satisfaction over the last few years with the development of telecommunication technology (Liang et al, 2007). However in Egypt the transparency of the service in mobile industry is very low when compared to other Arab and African neighbor countries. Thus it is regarded as a public and common measurement of service quality levels in various industries. The reason behind the success of the telecommunication industry in Egypt is attributed to the availability of strong network and many distribution points with recharge cards and vouchers. This strong network provides a great comfort to the mobile customers and thus increases the accessibility of the customers to the service. Services of point of sales and activation attributes measuring reasonable cost for the service and quality of the service for the value for money have increased the customer loyalty towards the telecommunication industry in Egypt. According to Revels, Dewi and Yelena (2010) when the industry is becoming complex and there is huge competition as customers' expectation regarding the service increases, there can be a lot of secondary developments. When the demand for the service rises it becomes harder to maintain the satisfaction level and the standard of service. He says, if the service provider accomplishes the customer requirements in these conditions, it might ensure the loyalty of the customers on the service. Today telecommunication industry is considered as the fastest growing segment of service and business development all over the world (Leem, Hyung and Dae, 2004). In the recent years monopoly power of the mobile industry has been reduced due to the government interventions and adaptation of effective policy framework for licensing of mobile enterprises in Egypt. According to Constantiou (2009) recent developments in advanced technology in telecom sector, have made the entrance difficult for various telecommunication competitors to the Egyptian market. The main objective of his statement is that to explore the domain of motivational and coaching skills required for the mobile service providers to retain and expand their service in Egyptian market in order to provide a satisfactory mobile service to the Egyptian customer, there must be a long term commitment, because Egypt is considered as the entrance to whole Africa and gulf countries, so the available market potential and opportunities for expansion of service is very high (Lu, Long, and Bin, 2009). Mobile industry in Egypt has been successful in satisfying the customer needs even when there was a global economic recession. According to Lee and JongKun (2007) the nature of the business and the special relationship maintained by the mobile service providers in Egypt specially in after sales activities has lifted up the customer satisfaction. Customer satisfaction will be dependent on what type of satisfaction is being received by the customer out of the service. As an example he says, service providers typically decide on low cost and low price strategy to get the customer's attraction towards the network and to create brand loyalty. A clear understanding of the mobile customers' requirements, the latest design preferences and effective network packages will help the mobile service provider to deliver the service according to the customer's needs (Revels, et al 2005). And thus it would help the company to recognize future opportunities to expand the service and service innovation through performance appraisal and reward systems. References 1. Anckar, Bill, and D'Incau Davide. "Value creation in mobile commerce: Findings from a consumer survey." Journal of Information Technology Theory and Application 4. 1(2002): 43-64. 2. Babakus, Emin., Carol C. Bienstock, and James R. Van Scotter. "Linking perceived quality and customer satisfaction to store traffic and revenue growth." Decision Sciences 35.4 (2004): 713-737. 3. 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