Customers Intention to Switch towards Mobile Number Portability in Chhattisgarh – A Study

 

Ashok Kumar Jha¹, Dr. G. K. Deshmukh², Dr. Sanskrity Joseph²

¹Research Scholar, Institute of Management, Pt. Ravi Shankar Shukla University, Raipur (C.G.)

²Assistant Professor, Institute of Management, Pt. Ravi Shankar Shukla University, Raipur (C.G.)

*Corresponding Author E-mail:

This study is an attempt to assess the customers intention to switch towards Mobile Number Portability in selected district of Chhattisgarh. The respondents have been sampled purposively from the different district of Chhattisgarh. The exploratory factor analysis was performed over the data using SPSS 21sotware to identify different factors that cause intention to switch among customers. The findings revealed three factors responsible for switching intention namely ‘intention to switch in future,’ reasons formulating intention to switch,’ ‘intention to switch due to offer and improper response.’

 

 

INTRODUCTION:

Customer is the empowered king of the market. This fact can be seen and experienced in almost all the sectors of the market. Historically during the production era the customers were forced to make their choices from the array of goods and services made available by the sellers who ensured availability as per their convenience. The all pervasive factor of change characterized basically by forces of external market brought alterations in the ways and means of treatment of the new empowered king. The customers now exercise their power and question each and every offering of the sellers and choose only those products and services which are best suited to their need. The concept of brand loyalty has become a distant dream for sellers in the market as customers are exercising their right of switching from one brand to another.

 

The seller’s nightmare of switching has been defined in various contexts by researchers in the past. Service markets in comparison to product market face the problem of switching more due to its inherent characteristics of intangibility. The customers find it difficult to distinguish one offering from another. Roos (1999) highlighted that switching is related with complete or partial change of service providers due to dissatisfaction on part of customers which may be a result of failed offering or promise. Bansal and Taylor (1999) highlighted that switching behavior is highlighted by change of service providers. It highlights the movement of customer from one service provider to another. Tahtinen and Halinen (2002) indicated that choosing a seller is an alternative selection that customers judiciously does on the basis of his or her requirement. Switching is related with change in the alternative of customer with respect to current service provider.  Further Kumaresh and Sekar (2012) opined that switching is essentially result of dissatisfaction from the current service provider or higher satisfaction from the new service providers offerings.

 

In present market scenario the sellers are experiencing the power of customers. The bargaining power of customers has increased therefore it has become difficult to attract new customers for sellers on one hand and it is equally challenging to retain an existing customer. Nikbin et al. (2011) in their research highlighted that switching is not merely movement of customer, it rather has a deeper impact on working of a service firm. It directly minimizes the profitability and market share of company on one hand and reduces its goodwill in the market on the other hand thereby decreasing its competitiveness in the market. The researchers have made an attempt to understand the phenomenon of switching to understand its basis and reasoning from the study conducted by researchers across the globe. Richins (1983) opined that when customers expectations does not match with their perception with respect to an offering it results in dissatisfaction thereby forcing a customer to switch their brand loyalty. Singh (1990) highlighted that there is a strong correlation between switching, customer complaint and negative market feedback. If the service provider has failed to install an appropriate problem resolution mechanism it will lead to negative credibility thereby encouraging a customer to exercise their switching alternative. Keaveney (1995) indicated that increasing competition in market is the basic reason of customer dilemma while developing brand loyalty. He discussed the interplay of personal subjective cognitive factors like prices, service misplay, opinion of reference group and the attraction of competitors and their impact on switching behavior.

 

The external environment in service sector is highly influenced by social, economic, technological and political factors. The forces of external environment are also playing a dominant role in enforcing the switching behavior of customer in cases of dissatisfaction. The political environment together with economic policies, technological advancement and social awakening has brought forward practices like Portability of services. The governmental policies are playing a dominant role in empowering the king of the markets. It has drafted and redrafted policies which have been instrumental in allowing customer to switch their service providers in case of dissatisfaction on part of customers with policies like portability in return of low or no charges. The effects of portability can be seen in various sectors. The telecom sector in India experienced a sea change with the advent of mobile number portability (MNP). According to Madhani (2006) number portability enables a subscriber to switch between services, locations or operators while retaining the original telephone number without compromising on quality, reliability and operational convenience. TRAI (Telecom Regulatory Authority of India) defines MNP as operator portability applied to mobile to mobile porting process which allows mobile subscribers to change their service providers without changing their existing phone numbers. In India MNP was implemented in a phased manner. The first phase was started with metro cities by December 31, 2009, and in march 2010 second phase was started in rest part of the India, the launch of mobile number portability services was again extended to June 30,2010 due to lack of readiness of various telecom companies. MNP was finally adopted by all the states of India in January 2011. Haryana was the first state to introduce MNP on 25th November 2010. The researchers found that Mobile number portability in telecom sector has favored switching behavior by allowing customers to choose the best service providers in India in exchange of a very low price. A careful analysis indicate that mobile number portability has allowed customers to switch service providers for little tangible gains like suitable promotional offers and service affordability. Jeong and Park (2003) indicated the fact that advent of MNP in Korea has led to development of switching intention due to service provider induced factors like brand image, price and range of services. Saeed et al. (2011) indicated that commitment of companies to provide quality services at affordable prices is understood by customers; if the companies fail to express this commitment than the customers develop switching intention. The role of marketing mix was examined by researchers to understand its correlation with switching intention. Saeed et al. (2011); Clemes et al. (2007); Anton et al. (2007) indicated that price is the most important factor which can be the root cause of switching of service provider. Further Clemes et al. (2007) indicated the role of product and its related service quality is the suggested reason for switching amongst customer in telecom sector.

 

Kumaresh and Praveena (2011) found from their study that price along with promotion mix elements is influencing the mobile subscribers intention to switch service provider. They further reinforced that reference group especially family play an important role in developing switching intention. Kumar, vani and Vandana (2011) found that service quality is the most important factor influencing the mobile subscribers intention to switch service provider. Lee and Murphy (2005) in their study conducted in Australia highlighted price as the most important factor which influences switching intention. Further technical service quality, functional service quality, switching costs were found to be other determinants of switching intention. Clemes et al. (2007); Zhang (2009) justified investment in promotion mix. They highlighted that competition amongst companies to gain the maximum promotion space has also become instrumental developing switching intention.

RESEARCH METHODOLOGY:

Researchers identified purposively two districts from each revenue divisions of Chhattisgarh purposively and collected data administering a schedule about their intention to switch towards Mobile Number Portability from their current service provider to other service providers. In total five hundred mobile phone users having pre-paid (individual/ business) connection and post-paid (individual/ business) connection were sampled.

 

PURPOSE OF THE STUDY:

The study intends to explore important factors that influence customers intention to switch towards mobile number portability in the state of Chhattisgarh.

 

OBJECTIVE OF THE STUDY:

To find out the intention to switch towards Mobile Number Portability among the mobile phone users in Chhattisgarh from their current service provider to other service providers.

 

RELIABILITY:

Reliability test applied in this research is by using Cronbach Alpha coefficient. The data were analyzed by using SPSS version 16. These test procedures provide assurance that the data is fit to be analyzed with another statistical method (Ghozali, 2006).

 

Sample Composition:

The data for the research were collected with respect to two demographics of the respondents, i.e. sex and age. Based on the analysis of data, it was found that total of 52.8 percent of the respondents were in the age group of 21-30 years, followed by 31-40 years (18.9%), below 20 years (14.6%), 41-50 years (9.2%), above 50 years (4.4 %) respectively. 72.6% of total respondents were male and rests were female. 72.1%  respondents had prepaid mobile connection and 27.9 % had postpaid connection. 69.6% respondents were holding individual connection whereas 30.4% holding business connection.

 

DATA ANALYSIS AND INTERPRETATION:

Table 1: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.		.744
Bartlett's Test of Sphericity	Approx. Chi-Square	10985.034
	df	55
	Sig.	0.000

 

Table 1, shows that value of Kaiser-Meyer-Olkin Measure of Sampling Adequacy as .744 which is considered as good and suggests that data is ready for factor analysis. It also indicates that data may be grouped into a smaller set of underlying factors. Further it can be concluded from the Bartlett's Test of Sphericity that relationship among variables is significant for factor analysis.

 

 

Figure 1: Scree Plot

 

The results of the Scree Plot uggest that the study should include three factors. Table 2, shows the component matrix and respective shows unrotated factor loading (extraction) value of 11 variables and communalities represent the proportion of the varience in the original variable that is accounted for by the factor solution.

 

 

Table 2: Factor Matrix^a

	Factor			Communalities
	1	2	3
I will switch to another service provider if  I experience a problem with the current service provider’s service.	00.377	00.532	0.215	0.472
Though I am used to current service provider, I can still stop using it.	0.440	0.660	0.084	0.636
I often think to switch from current service provider.	0.559	0.520	0.102	0.593
I am considering to change service provider within 3 months.	0.593	0.529	-0.036	0.632
I am considering to change service provider to use a better mobile network.	0.654	0.138	-0.190	0.483
I am considering to change service provider to have better services as a customer.	0.672	-0.040	-0.211	0.498
I am tempted to switch because of other service providers offer.	0.568	-0.377	0.616	0.844
I am planning to change current service provider due to recommendations of friends and relatives, I trust.	0.604	-0.335	-0.181	0.509
I am planning to change current service provider because of improper response to my queries / problems	0.538	-0.566	0.479	0.839
I am planning to change current service provider because of dissatisfaction with services.	0.541	-0.548	-0.283	0.673
I think that switching from current service provider to another service provider would be a useful idea.	0.569	-0.249	-0.409	0.553
a. 3 components extracted using Extraction Method: Principal Component Analysis.

 

Table 3: Rotated Factor Matrix^a

	Component
	1	2	3
I will switch to another service provider if  I experience a problem with the current service provider’s service.	0.679	-0.070	0.078
Though I am used to current service provider, I can still stop using it.	0.795	0.004	-0.057
I often think to switch from current service provider.	0.756	0.129	0.071
I am considering to change service provider within 3 months.	0.760	0.234	-0.026
I am considering to change service provider to use a better mobile network.	0.458	0.519	0.063
I am considering to change service provider to have better services as a customer.	0.324	0.612	0.137
I am tempted to switch because of other service providers offer.	0.130	0.168	0.894
I am planning to change current service provider due to recommendations of friends and relatives, I trust.	0.053	0.659	0.269
I am planning to change current service provider because of improper response to my queries / problems	-0.061	0.302	0.863
I am planning to change current service provider because of dissatisfaction with services.	-0.170	0.758	0.263
I think that switching from current service provider to another service provider would be a useful idea.	0.064	0.740	0.037
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 5 iterations.

 

Table 4: Total Variance Explained

Factor	Extraction Sums of Squared Loadings			Rotation Sums of Squared Loadings
	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %
1	3.473	31.573	31.573	2.613	23.756	23.756
2	2.226	20.238	51.811	2.396	21.783	45.539
3	1.034	9.396	61.206	1.723	15.667	61.206
Extraction Method: Principal Component Analysis.

 

 

Table 3 shows the rotated factor matrix through Varimax Rotation with Kaiser Normalization using extraction method Principal Component Analysis.

 

In table number 2 six eleven variables were identified and loaded by the researcher and after principal component analysis three factors were extracted as shown in table 3. It is evident from table 4, that factor analysis of customer’s intention to switch resulted in three factors accounting for 61.20 percent variance and eigen values of all the three factors are more than the accepted value as per Kaiser criterion which is 1 (Kaiser 1960). ‘Intention to Switch in future’ came out as the first dimension/ factor accounted for highest percentage variance of 23.75 among all the three factors.  The first factor includes attributes like switch if experience problem, Switching depends on my mood, often think to switch, switch within 3 months. The second factor identified as ‘Reasons formulating Intention to Switch’ which accounted for 21.78 percent variance. This factor includes attributes like switch to have better service, switch due to recommendation of friends and relatives, Switch because of dissatisfaction, Switching is useful. The third factor identified as ‘Intention to Switch due to offer and improper response’ which accounted for 15.66% variance and includes attributes like Switch because of other service providers offer and Switch because of improper response. Table 5 describes the summary of the result of the factor analysis and the intention to switch of customers about mobile number portability. According to the customers switching intention is due to three factors namely Intention to Switch in future, Reasons formulating Intention to Switch and Intention to Switch due to offer and improper response.

 

 

Table 5: Factor Analysis Summary

Factors	Description	Factor Loading	Eigen value	% of variance	Cummulative %
Factor 1 Intention to Switch in future	Switch if experience problem	0.679	2.613	23.756	23.756
	Switching depends on my mood	0.795
	often think to switch	0.756
	switch within 3 months	0.760
Factor 2 Reasons formulating Intention to Switch	switch to have better service	0.612	2.396	21.783	45.539
	switch due to recommendation of friends and relatives.	0.659
	Switch because of dissatisfaction.	0.758
	Switching is useful.	0.740
Factor 3 Intention to Switch due to offer and improper response	Switch because of other service providers offer.	0.894	1.723	15.667	61.206
	Switch because of improper response	0.863

 

MANAGERIAL IMPLICATION OF THE STUDY:

Telecom companies need to understand switching behavior at three functional levels in order to minimize dissatisfaction and increase customer retention ratios. Switching is basically a psychological process which is enforced at three levels namely (i) stage of felt deprivation, (ii) rationalizing the felt deprivation, and (iii) enforced action. A telecom service provider can retain the customer by stopping the switching intention at any of the three levels.

 

Figure 2 : Psychological hierarchy of Switching Intention

 

The psychological hierarchy of switching intention can be understood by marketers at three levels  

(i)     Stage of Felt Deprivation:

This stage studies the customers Intention to switch. Intention to switch is the outcome of basically factors like problems encountered by customers while using service, often thinking and  experiencing need to switch, development of mood to switch and developing a time frame and thoughts to switch service provider.

   

(ii)   Rationalizing the felt deprivation:

The reason to switch is rationalized by factors like better services, recommendation of reference groups, dissatisfaction from current services and experiencing tangible benefits from switching.

 

(iii) Enforced action:

Finally switching will only take place due to Improper Response regarding problem resolution process with respect to dissatisfaction of customers or absence of Suitable competitive offer to retain customer.

 

A telecom company can stop the customer from switching at any of the three levels. The companies must conduct an intention to switch survey or analysis of satisfaction, dissatisfaction survey in order to understand the perception of customers regarding the offering of companies and analyse the available gap. Further competitive analysis of competitors offering must be carried out from time to time to understand the gap between the companies offering and competitors offering. This will enable the telecom companies understand their promotion strategies, product offering and pricing policies better and will enable development of better service offerings. The final level indicates the factors that need to be seriously considered by companies in order to stop the switching of customers.     

 

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