This Dissertation on Telecommunication Industry Brand loyalty conduct to study and evaluate the effect of service quality on brand loyalty in telecommunication industry: A case of O2 UK.
CHAPTER 1: INTRODUCTION
1.0 Overview of the Chapter
The first chapter refers to the introductory chapter of the entire dissertation as it provides the reader with the insights regarding the foundations upon which the entire research has been based. The present research revolves around investigating the impact of service quality on brand loyalty in telecommunication industry. For this purpose, a telecommunication organization has been chosen by the researcher known as O2. Furthermore, this particular chapter includes context of the study along with the research objectives and aim followed by the map of the entire dissertation. This chapter facilitates the reader by providing a zoom out version of the basic concept of the chosen topic.
1.1 Context of the Study
Customer satisfaction has become one of the global issues for all the national, local, small, medium sized or giant industries. Different companies have shown their interest in studying and evaluating the strategies that can maximizes customer satisfaction, since the business model adopted by companies these days are not based on the internal resources of efficiencies of the organization, rather it revolves around the customers. Customers are the centric part of the organization strategy. Researchers and scholars have highlighted different variables that are directly proportional with customer satisfaction (Olorunniwo, Hsu, and Udo, 2006). However, Pepur, Mihanovi and Pepur (2009) stated that surprisingly not much of the research has been conducted on this topic. Marketers have also linked quality of the product with purchase intention that in-turns develop loyalty among consumers. It has become easier for the companies to predict the behavior of customers if the quality of the product exceeds customer expectations. Other factors that determine the customer satisfaction is the rate of complaints from the customer and the positive word of mouth spread by them regarding the product. Eboli and Mazzulla (2007) stated that with the maturity of the industry, customer satisfaction and superior service quality has become the competitive edge for the organizations, hence, the firms now treat their loyal customers as their most profitable assets and strengths. (See more about : Networks and distributed systems Course Assignment Help)
However, the figure 1 below has been showing the distinction between service quality and customer satisfaction. The fist distinction states that customer satisfaction can result from any dimension that could or could not be related to the quality of the product, but the dimensions of quality are fixed, whereas, the level of quality is perceived differently by different customers. The other point in the figure states that the satisfaction of customer can arouse by factors such as customer’s need and psyche, service price, availability or lack of alternatives in the market. On the other hand, the quality of the product is generated by the perception build in the minds of the customers regarding the brand or by the image of the organization.
The satisfaction of the customer also depends on the past relation of the customers with the organization, whereas, the service of the product is not merely based on the past experience as the defects in the service quality can arise any time due to any minor errors, but it does not always result in minimizing satisfaction of customers (Lee and Lin, 2005). Lastly, it is illustrated through the figure below that the satisfaction of the customer is highly liked with the experience of the customer with the product. The longer the experience of the customer, the higher is the rate of satisfaction. On the other hand, quality of the product does not depend upon the relation or experience of the customer with the product or service.
In the following study, the researcher has tried to clarify the differences present in customer satisfaction and service quality by including different arguments presented by scholars and critically defending those judgments with the help of different models and theories. Researchers also believed that for organizational leadership attracting new customers in more difficult as compared to retaining the older ones. As it has been mentioned above that satisfaction can be build over time and experience, therefore, organizations should focus on other factors as well rather than completely focusing on the quality of the product. The main objective of the organization is not to increase or improve the quality of the product but to compel them towards product repurchase.
1.1.1 Overview of the Organization
O2is the organization providing telecommunication and internet services in United Kingdom. It was found in 1985 by John Carrington. It is now known as the UK’s second largest provider of mobile telecommunications (O2, 2015). It has been selected by the researcher for the purpose of completing the current research study due to its strong and positive brand image among the consumers and other brands operating the same industry.
1.2 Research Question
The question of the research indicates the main problematic area on which the research has focused. It clarifies the aim and objectives of the research and set a direction for the researcher. As it has been discussed above that the loyalty or satisfaction of the customer depends on a number of things. These include the image of the service, perception about the organization and customer experience. In order to make the broader concept more specific, the study has only focused on the effect of service quality on brand loyalty. This particular area has been chosen as the key focus as it is not discussed in much detail up till now in the prior research studies. Therefore, the main question of the research is given below:
What is the effect of service quality on brand loyalty in telecommunication industry?
Telecom sector has been selected as the subject of the research as the reputation and perception of the telecom companies are highly linked with the type and quality of service provided by them.
1.3 Aim of Study
The intensity of the competition drives the firm to attract potential and current customers by enhancing the degree offerings against the products and services of the competitors. Therefore, various firms in order to acquire maximum market share strives to deliver optimum service levels to their customers with an aim to derive the aspect loyalty within the customers. The basic purpose of the study is to explore the impact of service quality upon brand loyalty within the customers in telecommunication industry. Therefore the particular research aims to investigate the antecedents of loyalty for the brands within the customers in telecommunication sector. Hence, O2 a renowned telecommunication corporation has been chosen by the researcher in order to identify the influence of quality of services upon customer brand loyalty.
1.4 Objectives of Study
The objectives of the particular study facilitate the reader by providing them with a road map that the researcher has aimed to encounter while accomplishing the research. The research objectives emphasizes upon the key issues and problems endeavored by the researcher during the journey of completion of the research. As the present study aspires to examine the impact of service quality upon the brand loyalty in telecommunication sector, the objectives of the current study are mentioned below,
- To study and evaluate the importance of high service quality for the organizations.
- To analyze and evaluate the level of impact service quality can have on the overall organizational success in telecommunication industry.
- To ascertain the effect of service quality on the brand loyalty of O2 in UK.
- To provide recommendations to O2 in order to improve its service quality so that the loyalty of customers towards the brand can be increased.
Scope of the Study
As the subject of the study is O2, therefore, the findings and discussion presented in the study is highly beneficial for the selected company. This research can help the organization in molding their inernational business stately and directing their service quality as per the expectations of the customers. Moreover, the research has also presented some of the most beneficial model and theories that the company can easily implement in its business plan. The findings of the company have also highlighted the current perception of the consumer regarding the company and the lacking or the complaints that the customer have from O2. The particular research has also highlighted the gaps that are still not covered, through this piece of work the company can take the initiative in filling those gaps and strengthen its position in the market. Other O2 the particular study has also found helpful for other services company whether in the service sector or in some other service sector of the market. Moreover, through the research with the support of its findings has also tried to answers many queries prevailing in the minds of scholars and academicians. Moreover, the limitations presented in this research give a scope and direction for future researchers in order to make their research findings more interesting and useful.
1.6 Motivation of the Research
The researcher is motivated to evaluate the factors that directly effects customer satisfaction. The topic has focused specifically on the quality of the services as this topic has not been discussed in detail before. The research has therefore, discussed all the aspects that influences the quality of the service. This is done because the researcher believes that organizations these days has centered there focus on the customers and their needs and wants and for this reason the researcher has chosen this topic as the main subject of the research.
1.7 Organization of Dissertation
The above given diagram has been presenting the organization of current dissertation. This depicts the areas that each chapter of the research has covered. This is done to direct the reader where he could find the required information. The outline of each chapter is discussed below:
Research Introduction: this is the first chapter of the research. It discusses the background, aim and objectives along with basic question of the research. The background of the research indicates the significance of the topic, the aim and objectives gives the direction and set targets for the research. It has also provided a brief overview of the company.
Literature Review: In the second chapter, the researcher has critically reviewed the previous literature and studies that have been presented before on the similar topic. Based on the critical reviews, the research has identified the gaps found in them and then the framework of the research has been derived on those gaps and identified factors that influence customer satisfaction.
Research Methodology: In this section, the researcher has discussed the process adopted for the completion of this study which includes research design, research approach and research strategy. Along with this, the research has also discussed the sample size of the study and the techniques used in identifying the sample. Moreover, the data techniques used in analyzing the data has also been mentioned in the chapter.
Conclusion and Recommendation: The last section of the research has compiled all the above findings of the research in a summaries manner this chapter presents recommendation and future implications of the research.
1.8 Chapter Summary
In the above chapter, the researcher has introduces the research concept and the aims to the readers. The main focus of the research is to analyze and evaluate the factors that directly impact the customer satisfaction in the service sector. The factor that has been analyzed in this research is quality of the service. Therefore the aims and objectives of the research are then accordingly set as per the focus of this research. ( Read more about : System Development lifecycle Assignment Help)
CHAPTER 2: LITERATURE REVIEW
This dissertation focuses on quality of services and the impact it has on brand loyalty considering a telecommunication industry. Theories regarding service quality and brand loyalty are being identified along with models highlighting features for service quality enhancement. Service quality significance is being focused on along with theories for brand loyalty models have been analyzed. The chapter consists of factors affecting customers considering their brand loyalty in telecommunication industry.
Furthermore, strategies have been introduced in this dissertation to incorporate service quality with brand loyalty. Gaps of the research have been identified along with a conceptual framework identifying relevant independent and dependent elements. The conceptual framework has concluded a hypothesis identifying what the company needs to improve its service quality for the enhancement of its brand loyalty.
2.2 Service Quality
Service quality is dependent on several factors that enhance its overall importance and the benefits offered are being acknowledged by the company working on the quality of services. Service quality can be ranked by both managers and the employees identifying their weaknesses and strengths, however, customer’s feedback makes an impact on the quality of the services because of their utilization of particular goods and services (Dabholkar, 2015; Jemmasi, Strong and Taylor, 2011). Lee, Lee and Yoo (2000) further identified that service quality is dependent on company strategies and policies with regard to the customers’ needs and wants being identified in the most efficient manner possible. Moreover, the enhanced service quality widens the opportunities such as competitive advantage over other organizations and progress in other aspects of quality development for different products and services.
There have been various models illustrated to describe various methods to improve overall service quality of companies. Two models are being discussed as follows identifying how service quality can be enhanced considering customers and how it can be used for organizational success in the other model:
2.2.1 Theories and Models of Service Quality
188.8.131.52 Service Quality Model for Customer Service
This above given model depicted how service quality can be improved considering customers of an organization manufacturing products. It identified that customers judge products of brands consciously and subconsciously along with the service provided by those product and its quality being considered (Bauer, Falk and Hammerschmidt, 2006). An organization requires conducting research on customers along with implementing strategized theories and approached for further training of their employees to develop customer care services and be proficient regarding these strategies being introduced in the organization. Throughout the process, there is continuous improvement approaches being considered requiring for further product and services being developed (Chiou and Droge, 2006). Measurement of these methods is to be done through feedback gained by the customers who have availed services of the organization. Loyalty can be measured and analyzed with regards to company value and supply chain being considered and assessed thoroughly (Akbaba, 2006).
184.108.40.206 Multi-Dimensional Quality Model
The study of Bauer, Falk and Hammerschmidt, (2006) identified that multi-dimensional quality model was proposed by Howard and Sheth in 1969. The study of Dabholkar, (2015) in agreement to the model stated that multi-dimensional quality model reveals the factors that have an association with the brand loyalty. According to the author, in this model, Howard and Sheth 1969 proposed a different definition of brand loyalty. The difference is majorly experienced with respect to the beneficial construct of brand loyalty from the limitations of repeated obvious behavior. The model proposes numerous differences within the context of brand loyalty.
The model does not limit the meaning and concept of brand loyalty because the researchers believe that loyalty is not based on consumption and usage of the product. In other words, it is not essential for a customer to consume the product so as to propose loyalty. However, loyalty is also confirmed in the sense of word of mouth. Bauer, Falk and Hammerschmidt, (2006) agreed that statement and stated that loyal customers are in charge of sharing the positive facts about a product. It is also believed that loyal customers are the best promoters of the product, thus, it has been estimated that brand loyalty is not connected with the buying and consuming of the product. For instance, young children are also counted in as loyal customers because they prefer the brands and stay connected to them although they do not buy it by their self.
The model also revealed that even though customers are loyal, they do not buy but becomes a reason of brand promotion and advertisement. Apart from this, if customers are loyal with the product they have cognitive and attitudinal aspects related to it. The model suggested that it is essential to distinguish the meaning and concept of brand loyalty in the perception of customers. They should know the value of brand loyalty when they attempt to be a consumer, a decision maker or the purchasing agent. All three concepts should be clearly distinguished because they have the tendency to shift the behavior of customers with product.
220.127.116.11 SERVQUAL Model
According to Dabholkar, (2015) SERVQUAL model also called RATER is defined as a quality management framework. The model is quite known because it shares the factors that has the inclination to discuss and asses the level of service. The model was developed by Zeithaml, Parasuraman and Berry in 1980s so as to measure the quality in the service sector. The concept of service quality model is based on the effectiveness of five factors namely Reliability, assurance, tangibles, empathy and responsiveness. The model is also helpful in estimating the gap, according to the model the estimated gaps identified through service quality concept are listed below:
- Gap 1: The gap between customer’s expectations versus management perceptions because the authors believed that there is a significant gap between both factors.
- Gap 2: the service quality gap is also distinguished between management perceptions vs. service specifications.
- Gap 3: Similar to this, the third gap is observed within the service specification vs. service delivery.
- Gap 4: The fourth gap is defined within the service delivery and external communication.
- Gap 5: The gap is also measured in discrepancy between customer expectation and their perceptions.
- Gap 6: The sixth gap identified through this model is estimated as inconsistency between customer expectations and employees’ perceptions
- Gap 7: The last estimated gap is y between employee’s perceptions and management perceptions.
Apart from this, the model is based on the measurement of following dimensions as mentioned by Dabholkar, (2015):
- Reliability: It is the capacity to share the product with the full guarantee and estimation.
- Responsiveness: The willingness to assist the customers without a delay that means customers are responded quickly for their queries.
- Tangibles: The presence and psychological appearance of correspondences and materials.
- Empathy: The affirmation and politeness of the representatives to pass on trust of assurance.
- Assurance: The assurance and genuineness of the service provided by the representatives.
18.104.22.168Quality of Service Model
The above depicted model is illustrated identifying relevant aspects that are required to be fulfilled by the organization. Organization stability is to be achieved for sustaining profitable results and maintaining overall productivity rates for higher efficacy and enhancing loyalty amongst customers and employees (Akbaba, 2006). Collier and Bienstock, (2006) stated that organization performance is to be regularly tested for further disruptions to be analyzed and eliminated, performance tuning takes place after discrepancies within the organization have been identified.
Collier and Bienstock, (2006) further identified that strategies are to be implemented for crisis management handling and effectively eliminating further disruptions. Employees need to review their performances through performance appraisals in order to make effective decisions regarding the enhanced profitability levels. Stevenson and Sum (2009) negated that security offers a stable and safe environment to work which can affect the quality of services to be offered. Performance testing requires employees and managers to identify their capabilities and how they can shape their current skill sets in order to enhance quality of their work that has a direct impact on the quality of services provided by the organization.
2.3 Significance of Service Quality for the Firms
It has been said by Jemassi, (2011) that service quality importance can be identified through key aspects being consumed by organization’s employees. Initially start up businesses is required to provide their customers with a service relevant to their needs, when this stage has been overcome the enhancement of quality is worked on. Evans and Lindsay, (2005) mentioned in their book that brand names are required to portray and promote an image relevant to customer’s expectations and shaping their behaviors and attitudes. Brand names when established can then identify features for the quality and reliability of improving organization position in the market through its image. Similar to brand identity and names there are other indicators contributing towards organization’s service and the quality provided by the products offered.
Sethi and Sethi (2009) stated that quality of the firms is important as it requires organizations to evaluate their performances and compare it with their competitors to gain a competitive edge and have an advantage over them. Quality features of a product enable characteristics in a product that make it more desirable for consumers. According to Kumar, Kee and Manshor (2009) there have been various studies regarding the quality of services in the past years by introducing models such as the SERVQUAL model which was introduced decades ago evaluating and signifying the importance of service quality through tangibles involving physical existence and availability of services being offered. Communication with the customers is to be acquired along with their expectations being met to build an understanding and gaining their loyalty towards a brand or a product being offered.
Following are some of the highlighted features identified from various service quality models signifying its importance:
Furth, Peter and Muller, (2006) stated that reliability refers to meeting customer expectations and honoring the promises made to them considering product specifications and quality being provided. Enhancing product development through strategies and approaches by the organization that are relevant to meeting customer expectations can signify brand importance.
2.3.2 Readiness to Provide Service
Olorunniwo, Hsu and Udo (2006) mentioned that the courtesy of employees should be focused on through acknowledging customer needs and wants for services being offered improving quality. Organization can control and maintain its reputation through providing services with better responsiveness by the organization staff.
2.3.3 Effective Communication
Communication amongst organization employees and potential customers needs to be clear. Providing platforms where they can provide their feedback regarding a service and enhancing its quality will enable better opportunities for company’s profitability. Communication amongst organization staff members and customers including external customers i.e. their supply chain network needs to be implemented for efficient use of resources and eliminating disruptions that could arise in the organization (Kilkki, 2008).
2.3.4 Gaining Trust of Customers
Hwang and Kim, (2007) identified hat gaining customers trust will increase their loyalty towards a product being offered to them. Trust of customers is important when it comes to enhancing service quality. For a firm the significance of the quality provided by them makes an impact on its loyal as well as potential customers. Product enhancements and development strategies can be worked on if repetitive monitoring of strategies is being put to use. Honesty offered by a brand increases its loyalty considering its customers and an understanding is being built amongst the organization and its consumers.
Security refers to confidentiality of the employees currently working in the organization, along with the data being gathered by the employees that need to be anonymous for their privacy concerns and not being utilized for further research without their consent. A secure environment needs to be established for the employees to work and engage in to achieve better productivity levels out of them enhancing overall quality of services offered by the firm. Financial security needs to be considered for the employees reducing turnover rates and stabilizing organizational profits (Wang and Zhang, 2005).
Competence refers to the skill set of employees that can enable better profitability for organizations. For efficient quality of services organizations are required to implement strategies that comply with job enrichment methods to increase employee’s knowledge (Liu, Du and Tsai, 2009).
2.4 Brand Loyalty
Matzler, Krauter and Bidmon, (2008) have explained in their book that brand loyalty refers to an attitude and perception that customers have about a particular brand offering them services that comply with their needs. Loyal consumers prefer a brand over other products being offered because of the quality of the products that may include economical prices along with their convenience of placement in the market. Improving brand loyalty consists of a lot of indicators such as efficient use of resources to make products marketing mix more advanced and use the approached involved for improving brand image and loyalty amongst customers. The main factors that are involved in enhancing brand loyalty include brand recognition, its preference amongst the customers and brand insistence.
The aforementioned characteristics involved in the formation of effective brand loyalty strategies include recognition, insistence and preference of a brand by the customer sand potential consumers. Brand recognition can be achieved through approaches that promote brand image and requires an audience to know their product, this can be done through events and promotions for a product to be recognized (Gelder, 2005). Brand preference is when a customer has a strong liking for the brand and prefers it over other brands offering the same product, for this aspect to be achieved and retained organization needs to research and update their current methods for product development to keep their customers entertained and always indulged in upcoming services that can be offered (Maclnnis, Park and Joseph, 2014). Ferrel and Hartline (2007) further negated that the strongest degree of the brand loyalty model is brand insistence where customers are determined to buy the product that is being utilized by them. They would not prefer any other alternates or substitutes that other brand scan offer but would focus on the same brand to be consumed.
As negated by Kumar, (2009) brand loyalty is also being regarded as brand equity identifying its position in the market place. A brand being significant amongst customers requires an organizations utmost dedication towards building awareness amid its target market. Pertinent strategies are to be introduced in order for a brand to increase its visualization for promotion requirements.
2.4.1 Theories and Models of Brand Loyalty
The above mentioned model is of brand loyalty and brand performance. This model has been proposed by Chaudhuri and Holbrook (2001) in their research study conducted to examine the role of brand loyalty. The model comprises of six variables in addition to product level controls and brand level controls. The model indicated that the brand trust is associated with the purchase loyalty as well as with attitudinal loyalty. Moreover, the model also desires to test the association of purchase and attitudinal loyalty with the brand affects. Above and beyond this, the model has also been established to test the impact of purchase loyalty on the market share of the companies. As per this model, as the purchase loyalty among the customer enhances, the market share also tends to go on higher side. It also investigates the impact of attitudinal loyalty on the relative prices and claims that relative prices increases due to the increase in the attitudinal loyalty.
Another model proposed by De Chernatony, McDonald and Wallace (2010) highlighted the methods to achieve brand loyalty by linking brand loyalty with the purchase behavior and relative attitude of the customer. As per the author, the purchase behavior and buying patterns of the customers matters a lot in order to indicate that whether the customers are loyal or not to the company’s brand. The model has been mentioned below:
The model has been considered as the simple brand loyalty model and as per this model; the customers depict true loyalty for the company if their repurchase patronage and relative attitude has been observed as high, whereas, if the repurchase patronage of the customer has been low with relative attitude remained high, then the customer will depict latent loyalty. Besides this, if the relative attitude is low although the repeat patronage is high, the type of loyal observed will be spurious; however, having both the relative attitude and repeat patronage of the customers low will result in no loyalty. This model of brand loyalty helps the managers to make distinctions between their profitable and unprofitable customers which thereby facilitate them to design effective strategies for the retention of their profitable customers.
2.5 Factors Affecting Brand Loyalty of Customers in Telecommunication Industry
Morris (2012) affirmed that loyalty of customer is differently influenced in different products. These factors are explained as dimensions because they direct in estimating the figures that are essential for the marketers in acquiring customer loyalty. Various facts extracted from the in-depth analysis of previous reviews declared that customers are attracted towards the product that has the tendency to attain the trust of customers. Similar to this, Mayberry, Nicewander, Qin and Ballard, (2006), stated that majority of customers decide to buy when they are satisfied with the corporate image. The corporate and brand image help the customers in recognizing the product which further facilitates in consuming the product. Apart from this, the study of Robledo (2001) revealed that price is also a factor that makes customers feel satisfy with the product. Before switching to some other brand, customers examine the cost of switching the brand because it also has an impact over the brand loyalty of customers. The study of Rizka and Widji (2013) agreed that switching cost has the propensity to affect the loyalty of customers because the estimated cost that can occur during the process of changing brand or the product.
Considering the brand loyalty in telecommunication industry suggests that four factors are there that has the ability to affect customer loyalty. These factors includes corporate image, perceived quality, switching cost and trust. Parasuraman, Zeithaml, and Berry (2010) in addition explained that these factors not just directly influence the customers’ loyalty but has an association with each other as well. Corporate image, perceived quality, trust and switching cost interact with each other also. These dimensions have an association with each other because they are found to have an influence for the customer’s loyalty while choosing the telecommunication service providers.
According to the model above, loyalty of brand is associated with four dimensions which include corporate image, trust, perceived quality and switching cost. These factors are briefly discussed below:
Ø Perceived Quality
Riscinto-Kozub, (2008) argued that loyalty of the customer is directly affected through service quality because it is defined as fulfillment of customers’ desire and need. According to the point of view of Wirtz, Lovelock and Wirtz (2007) in the mean time, administration or the service quality alludes to the level of inaccuracy between buyers’ regulating desires for the service and their view of service execution. As stated by Dabholkar, (2015) high administration or service quality prompts abnormal state of buyer’s maintenance which can constitute for productivity. It has been discovered that apparent service quality is decidedly identified with repurchase proposition, proposal, and imperviousness to alluring and better options.
Ø Corporate Image
Riscinto-Kozub, (2008) defined that corporate image is portrayed as the general impression made on the personalities of open around a firm which is identified with physical and behavioral qualities of the firm. It is a consequence of a conglomeration process which fuses with different data utilized by shoppers to structure impression of a firm. Wirtz, Lovelock and Wirtz (2007) stated that firms experience improved output and high sales only if the management is able to reveal the corporate image. A decent corporate image has been found to help make and keep up steadfast association with clients and impact repurchases support. Wirtz, Lovelock and Wirtz (2007) in addition stated that corporate image is worthy in structuring the perception of potential buyers which results in preference of reiterate purchase of good or service offered.
Ø Switching Cost
The work of Riscinto-Kozub, (2008) specified that brand switching is often observed when customers change their products and product perception because of a dissatisfaction or distortion with the product. Switching cost, then again, is the expenses connected with changing from one administration supplier to an alternate which will not cause if a client stays with the current administration supplier. Increment in exchanging expense would bring about higher hazard and trouble on the customers.
Wirtz, Lovelock and Wirtz (2007) defined that loyalty is preserved when customers trust the product or service. As indicated by Hwang and Kim, (2007) trust is a conviction to an alternate party’s word of honor or guarantee in light of the fact that the gathering is considered as necessary, legit, truthful, and ready to perform activities that will bring about positive results or counteract activities that will end in negative results. A buyer who believes a certain brand is liable to structure positive purchasing maintenance towards the brand. Chiou and Droge (2006) concluded that customers tend to repurchase only when they feel that product is trustworthy. Buyers make decision when they feel they are able to trust the products because trust is accountable of structuring relationships between customers and buyers.
2.6 Association of Service Quality with the Loyalty of Brand
According to the study of Alexandris et al (2008), the quality is the foremost factor that the customer looks for in products and services. Thus, the companies should give ample focus on the quality of their offerings. Moreover, quality is the main characteristics of the product that differentiate it from those of the competitor’s products. As per Poolthong and Mandhachitara (2009), majority of the brands all over the world are popular only because of the quality they intend to offer to their customers. In addition, quality also plays a vital role in the attraction of the customers towards the brands. In the light of the study of Akbar and Parvez (2009), approaching and catering to the need of vast range of market is the key to success and to achieve it, the best tool is provision of quality into the products and services. Providing the customers with the superior service quality projects the image of the company in the mind of the customers as the one that intends to builds long-lasting relationship with them. Subsequently, the customers can be made loyal to the brand if they are provided with the quality services.
However, the study of Kassim and Asiah Abdullah (2010) has contradicted with the former authors by stating that brand loyalty depends upon the pricing strategies implemented by the companies. The customers usually switch towards the brand that charges them the lowest prices regardless of the duration of the relationship they have with the company. Tax and Brown (2012) also stated that, it is the pricing strategy set by the company that stimulate the interest of the customer towards the brands and the repeat purchase behavior of the customer can also be influenced in a positive manner if the company charges lowest prices as compared to other companies; hence it has been concluded that service quality has no relationship with the brand loyalty. It is the prices that affect the brand loyalty most in a positive way. Moreover, Jamal and Anastasiadou (2009) stated that regardless of the service quality the company desires to deliver to its customers, brand loyalty cannot be achieved if the customers have not been made aware of the services on frequent basis. Consequently, the study of the author concludes that effective promotional tools play a major role in making the customers loyal to the brands.
As per Davis-Sramek et al (2009), repeat purchase behavior of the customer can only be observed if the customers have been satisfied with the services or the products of the company, and to make the customers satisfied it is mandatory to provide them with quality services. Therefore, quality services will enhance the satisfaction of the customers with the brand which thereby also increase their repeat purchases. In addition, repeat purchases also increase brand loyalty for the company. Nam, Ekinci and Whyatt (2011) also supported the former author by concluding that brand equity and brand loyalty can only be achieved if the customers are satisfied with the services and products of the company and the best way to make customers satisfied is to provide them with the quality.
In the light of the study of Siddiqi (2011), with the purpose to delight the customers with the services of the company and to achieve the order winning criteria the companies nowadays are focusing more on their quality standards than any other element. They have developed a complete audit system that continuously ensures that the product or the services they have designed is of superior quality. Due to such measures the companies have also been successful in gaining larger market share. This maximum market share of the companies clearly highlights that the customers are loyal to the brand of such companies only because of the quality they are delivering. Nevertheless, it can be concluded that to achieve brand loyalty it is must that the companies should provide excellent quality of services and products. Above and beyond this, Li and Petrick (2008) argued that enhancement in the market share not necessarily indicate that the company has been enjoying greater brand loyalty. The increase in the market share can also be due to other factors, among which the most common is lowest prices.
From the study of Santouridis and Trivellas (2010), it has been highlighted that the customers are more interested in the variety of products and services rather than the quality. In their purchase decision process they like to choose the company that offers maximum number of products despite of the inferior services provided by those companies. Nevertheless, for making the customers loyal to the brand the aspect of quality services does not have any importance. However, Kheng et al (2010) stated that customers can also be made loyal to the brand if they are provided with the customized products and services. Customized products and services are those that are designed as per the needs, taste and preferences of the customers and thus they have been considered as of great quality. The study of the author concludes that the service quality do facilitate the companies in obtaining brand loyalty.
A study conducted by Carpenter (2008) in the retail sector stated that the customers are more willing to walk in the stores and are also brand loyal mainly because of the quality of the services such as: parking facilities, wider aisle, and leverage in the mode of payment, skilled staff members and so on. Besides this, Hazra (2009) also stated that with the help of the interrupted quality services the customer’s demands and needs can be better met in a most lucrative way which thereby arouses their interest towards the brands of the company. The quality services also help in the retention of the customer and it also attracts and catches the attention of potential customer through word of mouth.
In accordance with Gorla, Somers and Wong (2010), brand loyalty depends upon the effectiveness of the company to retain its customers for a long period of time and also on a life time basis. Moreover, to hold on the customers one of the ways that has been utilized by the companies is usage of variety of sales promotional tools. Ganesan-Lim, Russell-Bennett and Dagger (2008) stated that to make customer loyal to the brand sales promotion techniques plays the most crucial role. Through this technique the companies not only make the people aware of their brands but also encourage them to often purchase company’s product or avail the services by providing them with discounts or freebies. Due to the fact that majority of the consumers are price sensitive, this technique used by the company helps to retain the customers which highlights that the customers are loyal to the brand. Chang, Wang and Yang (2009) argued that any sort of promotional mix cannot facilitate the company to make the customers loyal to the brand. It is because the promotional mix tools are for short term basis and could not help the company in the long run. Furthermore, in order to obtain customer loyalty for a lifetime basis the only way is to provide constant quality services. The study of the author, thus puts great emphasize on the association of the quality service with brand loyalty.
2.7 Significance of Brand Loyalty
As ascertained by Chiou and Droge (2006) brand loyalty is key component that is associated with customer loyalty. In other words, brand loyalty is defined as the key driver that sets the acceleration within the sales of a firm. Bauer, Falk and Hammerschmidt, (2006) defined that brand loyalty is often expressed as the intention of customers to make repeat purchase. From the academic point of view, brand loyalty is a consequence of customer satisfaction and has the tendency to get influenced through the preferences of a customer. Similar to this, from the managerial point of view, brand loyalty leads to the consistent purchase of a good or service. Customers will continue the purchase of products and brands with which they are loyal, regardless of convenience and price. Akbaba, (2006) in addition suggested that loyalty of a customer is effective for the business; therefore, marketers tend to cultivate the loyalty of customers through executing different strategies and practices. According to Hazra (2009) variety of factors are studied in past times that are counted in as the ones that have the tendency to affect the product or brand loyalty of customers.
The researcher further elaborated that brand loyalty is not limited to the purchase or consumption of a product. Dabholkar, (2015) in addition stated that customers can become brand loyal even though they have not bought or consumed it. For instance, teenagers or young students become extremely loyal customers with certain products. Bauer, Falk and Hammerschmidt, (2006) in contrast stated that customers are loyal when they consume the product and feel satisfy with it. If a product is able to meet the expectation of customers, they will automatically become brand loyal because it has an association with customer satisfaction. Chiou and Droge (2006) argued that loyalty of buyers is often affected through several associations that are offered with the product. Dabholkar (2015) defined that customer loyalty is essential for an organization because it is an ultimate source of sales for the firm. Loyal customers are key drivers of business operations because they are accountable of making purchase repeatedly. Organizations require implementing the strategies that can help in cultivating the loyalty of customers. These strategies strongly relates to the factors aforementioned above. The management and improvement of loyalty of customers assist in attracting customers in the direction of products offered by the firm which ultimately results in augmenting the product sales and values. The study of Akbaba, (2006) revealed that managing the customer’s loyalty can boost the economic position and status of an organization.
2.8 Gaps of Research
This research is being analyzed and focused on considering online articles, company profiles and relevant features are being identified through models and illustrations by renowned authors and scholars. However, there have been limitations regarding customer feedback of the telecommunication industry. There were limitations regarding acknowledging organizations policies for effective service qualities and strategies to be introduced for brand loyalty to be gained amongst customers. The illustrations provided for further acknowledgment f brand loyalty enhancement only focuses on certain aspects regarding employees and customers of an organization, since an organization consists of a wide number of operations involving its supply chain network, contractors, international links and contacts that need to be identified for proper information system regarding its service quality and how it has an impact on loyalty of brands by the customers.
2.9 Hypotheses of the Study
H0: There is no impact of reliability on the brand loyalty of O2 in UK
H1: There is a significant impact of reliability on the brand loyalty of O2 in UK
H0: There is no impact of responsiveness on brand loyalty of O2 in UK
H2: There is a significant impact of responsiveness on brand loyalty of O2 in UK
2.10 Conceptual Framework
The above established conceptual framework of the current study consists of two independent and one dependent variable. The independent variables are service reliability and responsiveness and the dependent variable is brand loyalty. Through this framework, the dependence of brand loyalty has been examined on service reliability and responsiveness. The framework also aims to test the variation in the brand loyalty caused due to these two independent variables.
2.11 Chapter Summary
In a nut shell, it has been concluded that the service quality do play a major role in making the customers brand loyal. The chapter also concludes that other than the quality of the services or the products there are also other factors such as the price that helps the company to attract and retain the customers and avert their attention from competitor’s brands. Moreover, hypothesis and the conceptual framework have also been established for testing. The framework incorporates service responsiveness and reliability as independent whereas brand loyalty as dependent variable.
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