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CHAPTER I

INTRODUCTION

Wireless communications is an emerging information technology that makes the “anytime-to-anyplace” communication possible, and is now widely applied in the world. Wireless technologies represent a rapidly emerging area of growth and importance for providing ubiquitous access to the network for all of the campus community. Basically, wireless technologies include both wireless devices, such as pagers and cell phones, and wireless transmissions media, such as microwave, satellite, and radio. While there has been an increasing amount of wireless mobile activity, competition between Malaysia’s three main mobile communication service providers, Maxis, Celcom and Digi have getting tougher. Several tactics have been using to attract and retain potential customers. This research focuses mainly on factors that determine users’ satisfaction while using services provided by selected service provider.

1.1 PROBLEM STATEMENT As Malcom Rosario (2001) noted, extensiveness of a network is not the main factor that determines the successful of Celcom Malaysia Sdn. Bhd. in Malaysia. At the end of year 2000, Maxis and Celcom had about 1.5 million customers each. From this data, Maxis has caught up with Celcom because they offered a good customer care services to the Malaysia customers. Celcom's strength is its extensive nationwide network coverage of over 90 per cent of populated areas, including Sabah and Sarawak. It has been acknowledged to have the best infrastructure among the country's five cellular networks. However, Maxis has been setting up Authorised Service Agents outlets nationwide, a programme aimed at improving subscriber loyalty through optimal service. And selected agents will be offering real-time services similar to those available at Maxis Centres. The facilities include customer registration, payment, IDD and Direct Debit applications, and even the reinstatement of mobile lines within two hours. Recently, both Maxis and Celcom planning to expand the network capacity and work with Malaysia company in 3G because there is robust growth in the industry. Where as according to Dr. Jeffrey Bannister (2006), growth of internet over the last ten years has enhanced people’ life in communicating and work as well. However, 1

nowadays users are demanding more and more bandwidth so as to enhance their multimedia experience on the network and get better value for money with more throughputs at a lower cost. 3G which is currently the most visible wireless service promises ubiquitous mobile access for all. Nevertheless, uptake of 3G among mobile subscribers has been extremely slow and they are now offering HSDPA (High-Speed Downlink Packet Access) which is an enhancement to the existing 3G network. The presence of WIMAX (Worldwide Interoperability for Microwave Access) can cover larger areas such as a city – so called wireless metropolitan access networks (MAN). This has raised the question whether these are competitive or complementary technologies. 3G cellular network are offering more data services, while new technologies such as WiMAX cover the same area of wireless/mobile data services and with also the ability to support voice and other multimedia services. Anyway, the benefits is clear where both technologies have something to offer and healthy competition between them should drive access prices down which is good for end users. While L.S.Tee (2006), Malaysia mobile phone users as of first half 2006 has a penetration rate of 81% out of its 27 million population, which mean 21.5 million. The competitive pressures, rising capital expenditure and near-saturation cellular penetration rates has raise the second round of painful price slash. Maxis Communications Bhd started the war by cut the price of its prepaid starter packs by a third. This is a defensive strategy to grab the remaining unsigned subscribers although they may be of lower quality and lower average revenue per user (ARPU) generators, the telcos are looking to grow market share. However, a price war is never good for the players as it destroys value. Besides, development in new technology such as 3G has increased the level of choice for users but increase investments risks for the operator. Therefore subscriber growth will depend on how fast the drop of handset prices.

1.2 SCOPE OF STUDY This study identify relevant attributes of mobile services, the price plans, network quality and customer service in determining UUM students’ satisfaction towards mobile communication service providers.

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1.3 RESEARCH OBJECTIVE i. To determine if price plans has correlation with UUM students’ satisfaction towards service provider. ii. To determine if network quality has correlation with UUM students’ satisfaction towards service provider. iii. To determine if customer services has correlation with UUM students’ satisfaction towards service provider.

1.4 RESEARCH QUESTION

i. Is price plans has correlation with UUM students’ satisfaction towards service provider? ii. Is network quality has correlation with UUM students’ satisfaction towards service provider? iii. Is customer services has correlation with UUM students’ satisfaction towards service provider?

1.5

DEFINITION OF VARIABLES

1.5.1 Pricing Price appears to be a main reason why mainstream consumers sometimes do not buy their preferred commodities. Thus, defining a unique market niche is critical for having any ability to set price rather than being a pure price taker. Consumers are very price sensitive where they are looking for the lowest possible price have a demand curve that is relatively elastic. (Russell Tronstad, 1995) Price is the measure by which industrial and commercial customers judge the value of an offering, and it strongly impacts brand selection among competing alternatives. It is the only element of the marketing mix that directly generates revenue. However, pricing is highly complex and is quite simply too important to forego deep analyses of the relevant company and market influences. Pricing decisions should be based on a comprehensive systematic multistage process that examines and integrates the full range of forces that impact pricing effectiveness. 3

Furthermore, price affects a much broader constituency including rivals, suppliers, distributors and government. From a company perspective, price is a central element of competitive positioning, and as the most flexible component of the marketing mix it can be adapted the most rapidly to meet unexpected environment developments. (David Shipley& David Jobber, 2001)

1.5.2 Network Quality According to Zelthami (as in H. Lim, R. Widdows, and J. Park, 2006), quality is defined as overall excellence or superiority that consumers perceive from a product or service. Traditional approaches to guarantee quality of service work well only with predictable channel and network access. However, as wireless mobile networks become more widely used, there is a growing need to support advanced services where conditions dynamically change as nodes move about the network, a stateless, high level approach is required. Since shared wireless resources are easily over-utilized, the load in the network must be controlled so that an acceptable quality of service for real-time applications can be maintained. (D. Chakeresa, Elizabeth M. Belding-Royerb, & Joseph P. Mackerc, 2006)

1.5.3 Customer Service According to Adelman et al (as in H. Lim, R. Widdows, and J. Park, 2006), customer service includes the perceptions of a firm’s customer care and the manner of service personnel. Customer service is a process for providing competitive advantage and adding benefits to the supply chain in order to maximize the total value to the ultimate customer. (J.J.Coyle, E.J.Bardi & C.J.Langley Jr., 2002). Customer service is a collection of activities performed in a way that keeps customers happy and creates in the customer’s mind the perception of an organization that is easy to do business with. (Murphy, Paul R. & Wood, Donald F., 2004)

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1.5.4 Customer Satisfaction In the research by H. Lim, R. Widdows, and J. Park (2006), they mentioned that functional attributes of service are potentially more important in customer satisfaction. Satisfaction refers to the consumer’s fulfillment response, the degree to which the level of fulfillment is pleasant or unpleasant. As stated in this definition, satisfaction consists of consumers’ global affective responses to marketing stimuli. However, researchers argue that satisfaction is a distinct construct from perceived emotional value. While perceived value can be generated in any stage of consumption experience without actual use of a product or service, satisfaction is aroused in a post-consumption stage after an actual experience of a product or service. Therefore, consumers’ perceived value that is generated in each stage of service experience must be a predictor of satisfaction in the postconsumption phase.

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CHAPTER II

LITERATURE REVIEWS

According to a research by H. Lim, R. Widdows and J. Park (2006), the results of exploratory factor analysis conducted revealed five dimensions of mobile service quality which were pricing plans, network quality, data services, billing system, and customer service quality. Each quality dimension has different effects on consumers’ perceived value, satisfaction and loyalty intention. The results reveal that respondents’ perceived economic value increase with the positive perception of pricing plans and data services, while the billing system and customer service have significant influence on perceived emotional value. The network quality, data services, and customer service quality have significant direct influences on customer satisfaction. According to J. Lee, J. Lee and L. Feick (2001), perceived service quality is a component of customer satisfaction. Based on the performance ratings for cellular phones reported in Consumer Reports in year 1998, they had selected pricing plan, core services (coverage of the calling area and clarity of sound), and value-added services (precision of billing service and easy access to provider) as the relevant attributes to measure customer satisfaction that are appropriate for mobile phone users in their research.

2.1 PRICING PLAN WITH CUSTOMER SATISFACTION According to Tobias Kollmann (2000), who conduct a research on perspectives of a pricing policy in European telecommunication markets, had found that customer has consider two factors before they make a decision to buy and use telecommunications products. These factors include accepting the purchase price and accepting the charges for using the product. The development towards a price dominated mass market leads to customers having more choice and the opportunity to compare the pricing structures of different providers. The situation in Europe – similar to that in the USA – is currently characterized by tough price competition. The managers of most private providers have recognized that telecommunications customers, who are willing to swap providers, will make their decision on price first.

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In the J.D. Power Asia Pacific 2003 Singapore Mobile Telephone Service Satisfaction StudySM (2003) that evaluates customer satisfaction with mobile phone service providers in Singapore, the inaugural study had identifies six factors that contribute to customer satisfaction with mobile phone service providers. In order of importance, the factors are: cost (25 percent), reliability/image (23 percent), call quality (18 percent), billing (16 percent), value-added service (9 percent), and sign-up (9 percent). The study found that Singapore mobile phone subscribers are more concerned about cost than subscribers in the UK, USA and Japan. In the UK and USA, call quality is the most important factor while handset features is the most important in Japan. According to the study, monthly charges are the major consideration in selecting a mobile phone service provider in Singapore, but this priority differs by the service provider. SingTel Mobile users consider "wide coverage area" to be most important, while M1 and StarHub users place a priority on "inexpensiveness of monthly charge."

2.2

NETWORK QUALITY WITH CUSTOMER SATISFACTION

A research conducted by Telephia (as in Maria Bumatay, 2006), the pioneer in mobile measurement and the standard research source for the wireless industry and the leading provider of performance measurement information to the mobile industry in Canada, showed that network quality is critical to overall satisfaction and subscriber loyalty. The latest report from the Canadian Telephia Attitude and Behavior Survey (Canadian TABS) reveals that network experience and satisfaction is responsible for 41 percent of overall satisfaction, while price and handset satisfaction are also important drivers of overall satisfaction which responsible for 33 percent and 26 percent respectively.

2.3 CUSTOMER SERVICE WITH CUSTOMER SATISFACTION

According to the J.D. Power and Associates 2006 Wireless Prepaid Customer Satisfaction StudySM (2006), Virgin Mobile, the ranked highest service provider, has differentiated itself from the competition in areas related to the support functions by providing its customers with a positive service experience start from initial account set up and activation, to account management that tracks and updates available minutes. It appears to be providing its customers with important elements that impact the daily service experience. The inaugural study had measures customers’ satisfaction with their current 7

prepaid wireless service across seven key dimensions which are call quality, company image, cost of service, account management, initial activation, service plan options, and customer service.

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CHAPTER III

METHODOLOGY

3.1

RESEARCH MODEL

The research model was developed by H. Lim, R. Widdows and J. Park (2006), from a research conducted to investigate determinants of satisfaction and loyalty decisions in the US mobile market. The statistical analysis identified five distinct dimensions of mobile service quality, namely pricing plans, network quality, data services, billing system, and customer service quality. These dimensions have direct and indirect effects on economic value and emotional value that had significant influences on customer satisfaction, and then, on loyalty intention. The model also showed interrelationship between economic and emotional value.

3.2

THEORETICAL FRAMEWORK 9

IV PRICING PLAN

DV CUSTOMER SATISFACTION TOWARDS SERVICE PROVIDER

NETWORK QUALITY

CUSTOMER SERVICE

Theoretical framework of this research consists of three independent variables, namely pricing plan, network quality and customer service whereby dependent variable is customer satisfaction towards service provider. The main purpose of the study is to determine whether the independent variables have a significant correlation with customer satisfaction.

3.3 HYPOTHESIS

H1:

Pricing plans has correlation with customer satisfaction towards service provider.

H2:

Network quality has correlation with customer satisfaction towards service provider.

H3:

Customer service has correlation with customer satisfaction towards service provider.

3.4 VARIABLES AND MEASUREMENT Measures of variables were adapted from research paper conducted by H. Lim, R. Widdows, & J. Park (2006) in USA. The research determines factors that affect the level of mobile customers’ satisfaction. The variables, namely pricing plans, network quality, customer service, and customer satisfaction, were measured on five-point Likert scales ranged from “strongly

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disagree” (1) to “strongly agree” (5). Relevant questions were raised accordingly to each variable. The measures of pricing plans in customer’s perception is whether the service provider is reasonably priced, offering the best plan that meets a customer’s need, and the superiority of overall pricing options. For second variable, the measures for network quality in customer’s perception are the network coverage, the voice quality, and the frequency of dropped call. Whereas the measures for customer service in customer’s perception are the ability in fixing a problem, courtesy of customer service representative and provision of consistent advice and instructions from the service agents. Finally, the customer satisfaction is conceptualized as consumers’ overall evaluation of service experience after the actual use of the service over time, as indicated by Garbarino and Johnson (as in H. Lim, R. Widdows, and J. Park, 2006). Table below shows number of questions for each variable:

Independent and Dependent Variables Pricing plans Network Quality Customer Services Customer Satisfaction

No of Question 3 3 4 3

3.5 POPULATION, SAMPLE AND SAMPLING METHOD Population of UUM’s students is around 20000 people. The proportion of male with female in UUM is 1:7 (Guan Li Leng, 2007). The sample consists of 60 students which are selected randomly from different college and faculty. The sampling method we adopted for this research is probability sampling where the elements in the population have a known chance of being chosen as subjects in the sample. Besides, it is an unrestricted-simple random sampling as every element in the population has a known and equal chance of being selected as subject. 3.6 RESEARCH DESIGN The nature of this study is hypothesis testing while the type of investigation is correlation study because it explains the nature of relationship between three independent variables

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(pricing strategies, customer services, and network quality) with UUM students’ satisfaction towards mobile communication service provider. The extent of researcher interference is minimal where the study will conduct in natural environment without manipulation of the variables. The study analyze individual unit and is a non-contrived study that using the same natural environment in which the students normally function. This is a cross-sectional study where the data collected at one point in time will be sufficient. The research uses quantitative method where the data will be collected through questionnaire and secondary sources.

3.7 DATA COLLECTION METHOD This report had used both primary and secondary data. The primary data were obtained from a questionnaire survey while the secondary data were obtained from the internet web sites and printed materials such as books.

3.7.1 The Primary Sources

3.7.1.1 Questionnaire Sixty sets questionnaire containing 17 questions were distributed randomly to the UUM students from different college and faculty to survey the response and satisfaction of the students towards the mobile service provider.

3.7.2 The Secondary Sources

3.7.2.1 Internet web sites Most of the information for this research paper was retrieved from some famous journal web sites such as Emerald Insight, Pro Quest and Science Direct. Besides, some additional information also retrieved from different web sites such as www.mobile88.com.my and etc.

3.7.2.2 Book review

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Two books entitled “Applied Business Research: Qualitative and Quantitative Methods”, by Cavana,Y.R., Delahaye, L.B. & Sekaran, U. (2003), and “ Elementary Statistics: A Step by Step Approach” written by A.G. Bluman (2004) were reffered. The books were used as a guideline during the preparation of this research paper and report.

3.8 DATA ANALYSIS TECHNIQUES This research used SPSS system to analyze the data. Both descriptive and inferential statistic has been analyzed.

3.8.1 Correlation

A Pearson correlation matrix has used to find out t...