Customer retention strategies in the South African mobile phone network industry
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Date
2015
Authors
Molapo, Motshedisi Elizabeth
Journal Title
Journal ISSN
Volume Title
Publisher
University of the Free State
Abstract
Afrikaans: Ten einde markaandele en –profyt in sakeondernemings te laat styg, is dit belangrik om kliënte te behou. Om kliënte in ’n kompeterende sakeomgewing te behou, moet ’n stel gemengde strategieë soos produk, proses, prys, persone, promosies, plek en praktiese bewyse (algemeen bekend as die 7Ps) gewoonlik ontplooi word. Hierdie studie ondersoek die invloed van individueel gemengde bemarkingstrategieë op kliëntebehoud in die selfoonnetwerkbedryf. Kliëntebehoud is deur kliënte se aansluiting by ’n spesifieke netwerk bepaal sonder die intensie om na ’n ander netwerk oor te skakel. Deur gebruik te maak van selfgeadministreerde vraelyste is data van 479 respondente aan drie kampusse van twee tersiêre instansies (die Universiteit van die Vrystaat en twee Maluti VOO-Kolleges) wat in die Oos-Vrystaat van Suid-Afrika geleë is, versamel. Kruistabellerings, Chi-kwadraattoetse vir Onafhanklikheid van Assosiasie, Tweerigting Chi-kwadraattoetse en die Probit Modelanalises is gebruik om die data te analiseer.
Kruistabellerings het inligting aangaande die demografiese statistieke van respondente voorsien. ’n Tweerigtingklassifikasie Chi-kwadraattoets vir Onafhanklikheid van Assosiasie het getoon dat die waargenome verskille in aansluiting tussen mans en vrouens vir al die netwerke nie statisties verskillend was nie (p>0.05), wat impliseer dat netwerkaansluiting en geslag onafhanklik van mekaar is. Tog was netwerkaansluiting en aansluitingsvoorkeure weer beduidend afhanklik van mekaar, met ’n sterk voorkeur tot voorafbetaalde aansluiting. In al die netwerke tesame, was 32.7% van die respondente deeltyds in diens en is al die netwerke deur respondente in die R1-1500 inkomstekategorie gedomineer. Behalwe vir Virgin Mobile waar die dominante ouderdomskategorie 18-21 jaar was, is al die ander selfoonnetwerke konstant deur respondente in die 22-25 jaar ouderdomskategorie gedomineer.
Die studie het ook getoon dat die gemengde bemarkingsveranderlikes nie aansluitings of behoud in dieselfde mate beïnvloed nie. As deel van die 7Ps, het die Tweerigting Chi-kwadraatanalise getoon dat die behoud van intekenaars beduidend en positief deur produk (p<0.01), plek (p<0.05), persone (p<0.01), prys (p<0.01) en promosie (p<0.01) in al die netwerke beïnvloed is. Tog het proses en praktiese bewyse nie die gebruik van netwerke deur intekenaars beduidend aangemoedig nie. As bykomende veranderlikes is gevind dat bevrediging, korporatiewe sosiale verantwoordelikheid en opinie-leierskap kliëntebehoud positief invloed het, met die eersgenoemde twee beduidend. Die Probit Modelanalise het onthul dat produk en persone die gebruik van Vodacom beduidend beïnvloed, met die eersgenoemde wat die gebruik aanmoedig en die laasgenoemde die teenoorgestelde. Produk en proses was die enigste twee gemengde bemarkingsveranderlikes wat kliëntebehoud positief en beduidend in MTN beïnvloed het (p<0.01 en p<0.1 respektiewelik). Vir Cell-C was dit net prys wat hoogsbeduidend was om kliëntebehoud positief te beïnvloed (p<0.1). Vir Telkom Mobile (8ta) en Virgin Mobile het produk en proses kliëntebehoud beduidend en positief beïnvloed(p<o.01 en p <0.1) respektiewelik). Daar is bevind dat korporatiewe sosiale verantwoordelikheid kliëntebehoud beduidend verhoog het vir Vodacom (p < 0.1) en vir Telkom-Virgin Mobile (p<0.05). Bevrediging het kliëntebehoud beduidend verhoog in Vodacom (p < 0.01), MTN (p < 0.1) en Cell C (p < 0.01), maar beduidend verlaag in Telkom-Virgin Mobile (p < 0.01). Opinie-leierskap aan die ander kant het kliëntebehoud vir intekenaars op al die netwerke verhoog, maar dit was nie beduidend nie (p<0.05).
Op grond van hierdie bevindinge en kompeterende strategieë wat onlangs deur hierdie selfoonnetwerke ontplooi is volgens gedetailleerde mediaverslae, is aanbevelings gemaak wat wissel van samesmeltings, verhoogde produkinnoverings, verbeterde kliëntesorg, geografiese markuitbreiding, verhoogde kleinhandelskanale en verlaagde pryse om die oorlewing van die netwerke in hierdie hoogs kompeterende bedryf te verseker.
English: Customer retention in business is important to increase market share and profits. To retain customers in a competitive business environment, a set of marketing mix strategies, comprising of product, process, price, people, promotion, place and physical evidence (commonly known as the 7Ps), are usually employed. This study investigated the influence of the individual marketing mix strategies on customer retention in the mobile phone network industry. Customer retention was determined by customers’ subscriptions to a particular network who had no intention to switch to another network. Using self-administered questionnaires, data was collected from a sample of 479 respondents at three campuses representing two tertiary institutions (University of the Free State and two Maluti Technical and Vocational Education and Training (TVET) Colleges situated in the eastern Free State in South Africa). Cross tabulations, the Chi-Squared Test for Independence of Association, the Bivariate Chi-Squared Test and the Probit Model analysis were used to analyse the data. Cross tabulations provided information on the demographic statistics of respondents. A two-way classification Chi-Squared Test for Independence of Association showed that the observed differences in subscription between males and females for all the networks were not statistically different (p > 0.05), implying that network subscription and gender are independent of each other. However, network subscription and subscription preferences were significantly not independent of each other, with a strong bias towards prepaid subscription. In all the networks combined, 32.7% of the respondents were employed on part-time basis, with all the networks dominated by respondents in the R1-1500 income category. With the exception of Virgin Mobile where the dominant age category was 18-21 years, all the other mobile phone networks were consistently dominated by respondents in the 22-25 year age category. The study also showed that the marketing mix variables do not influence subscriptions or retention to an equal extent. Among the 7Ps, the Bivariate Chi-Squared analysis showed that retention of subscribers is significantly and positively influenced by product (p < 0.01), place (p < 0.05), people (p < 0.01), price (p < 0.01) and promotion (p < 0.01) in all networks, however process and physical evidence did not significantly encourage the use of networks by subscribers. As additional variables, satisfaction, corporate social responsibility and opinion leadership were also found to positively influence retention, with the former two being significant. The Probit Model analysis revealed that product and people significantly influenced the usage for Vodacom, with the former encouraging the usage and the latter the opposite. Product and process were the only two marketing mix variables found to positively and significantly influence retention in MTN (p < 0.01 and p < 0.1, respectively). For Cell C, only price was found to be highly significantly in positively influencing retention (p < 0.1). For Telkom Mobile (8ta) and Virgin Mobile, price, product and process significantly and positively influenced retention (p < 0.01, p < 0.1 and p < 0.1, respectively). Corporate social responsibility was found to significantly increase customer retention for Vodacom (p < 0.1) and Telkom-Virgin Mobile (p < 0.05). Satisfaction significantly increased customer retention in Vodacom (p < 0.01), MTN (p < 0.1) and Cell C (p < 0.01), but significantly reduced it in Telkom-Virgin Mobile (p < 0.01). Opinion leadership, on the other hand, increased retention of subscribers in all the networks, but was not significant (p > 0.05). On the basis of these findings and the competitive strategies recently employed by these mobile phone networks as detailed in media reports, recommendations ranging from mergers and increased product innovations to improved customer care, geographic market expansion, increased retail channels and lowered prices are made to ensure the survival of the networks in this highly competitive industry.
English: Customer retention in business is important to increase market share and profits. To retain customers in a competitive business environment, a set of marketing mix strategies, comprising of product, process, price, people, promotion, place and physical evidence (commonly known as the 7Ps), are usually employed. This study investigated the influence of the individual marketing mix strategies on customer retention in the mobile phone network industry. Customer retention was determined by customers’ subscriptions to a particular network who had no intention to switch to another network. Using self-administered questionnaires, data was collected from a sample of 479 respondents at three campuses representing two tertiary institutions (University of the Free State and two Maluti Technical and Vocational Education and Training (TVET) Colleges situated in the eastern Free State in South Africa). Cross tabulations, the Chi-Squared Test for Independence of Association, the Bivariate Chi-Squared Test and the Probit Model analysis were used to analyse the data. Cross tabulations provided information on the demographic statistics of respondents. A two-way classification Chi-Squared Test for Independence of Association showed that the observed differences in subscription between males and females for all the networks were not statistically different (p > 0.05), implying that network subscription and gender are independent of each other. However, network subscription and subscription preferences were significantly not independent of each other, with a strong bias towards prepaid subscription. In all the networks combined, 32.7% of the respondents were employed on part-time basis, with all the networks dominated by respondents in the R1-1500 income category. With the exception of Virgin Mobile where the dominant age category was 18-21 years, all the other mobile phone networks were consistently dominated by respondents in the 22-25 year age category. The study also showed that the marketing mix variables do not influence subscriptions or retention to an equal extent. Among the 7Ps, the Bivariate Chi-Squared analysis showed that retention of subscribers is significantly and positively influenced by product (p < 0.01), place (p < 0.05), people (p < 0.01), price (p < 0.01) and promotion (p < 0.01) in all networks, however process and physical evidence did not significantly encourage the use of networks by subscribers. As additional variables, satisfaction, corporate social responsibility and opinion leadership were also found to positively influence retention, with the former two being significant. The Probit Model analysis revealed that product and people significantly influenced the usage for Vodacom, with the former encouraging the usage and the latter the opposite. Product and process were the only two marketing mix variables found to positively and significantly influence retention in MTN (p < 0.01 and p < 0.1, respectively). For Cell C, only price was found to be highly significantly in positively influencing retention (p < 0.1). For Telkom Mobile (8ta) and Virgin Mobile, price, product and process significantly and positively influenced retention (p < 0.01, p < 0.1 and p < 0.1, respectively). Corporate social responsibility was found to significantly increase customer retention for Vodacom (p < 0.1) and Telkom-Virgin Mobile (p < 0.05). Satisfaction significantly increased customer retention in Vodacom (p < 0.01), MTN (p < 0.1) and Cell C (p < 0.01), but significantly reduced it in Telkom-Virgin Mobile (p < 0.01). Opinion leadership, on the other hand, increased retention of subscribers in all the networks, but was not significant (p > 0.05). On the basis of these findings and the competitive strategies recently employed by these mobile phone networks as detailed in media reports, recommendations ranging from mergers and increased product innovations to improved customer care, geographic market expansion, increased retail channels and lowered prices are made to ensure the survival of the networks in this highly competitive industry.
Description
Dissertation (M.Com.(Business Management))--University of the Free State, 2015
Keywords
Cell phones -- South Africa, Cell phone users -- South Africa, Mobile commerce -- South Africa, Customer satisfaction, Customer relations, Customer services