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002_060_3rdICBER2012_Proceeding_PG0008_0030

Jul 24, 2015

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3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (3rd ICBER 2012) PROCEEDING12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my

AN EVALUATION OF FACTORS DETERMINING THE SELECTION OF MOBILE TELECOMMUNICATIONS SERVICE PROVIDERS IN THE NORTHERN REGION OF NAMIBIALiisa Ndapewa Kaapanda Lecturer, University of Namibia, Hifikepunye Pohamba Campus, Ongwediva, Namibia P.O Box 7205, Oshakati, Namibia Tel. +264-65-2323015/+264 811249994 [email protected]

ABSTRACT The Namibian telecommunication sector has grown rapidly over the past years. This exponential market growth attracted new players to this sector, which in turn resulted in increased competition. The aim of this study was to establish critical factors in the selection of mobile telecommunications service providers (MTSPs) in the northern region of Namibia. A survey instrument was employed to collect data from consumers of the three mobile phone operators in Namibia. Convenience sampling, a form of non-probability sampling was used to collect data from 100 participants. This research used descriptive statistics for data analysis and discussions. The results of the study revealed that customers selection of which mobile telecommunications service providers to use is influenced by overall service quality, free calls and free SMSs, network capability, reliability of service, network innovativeness, low rate charges, accessibility, promotions with discount, refund and free sample, geographic network coverage, family and friends, and customer care. In addition to this, the study found that customers prefer subscribing to the same service provider as their family members and friends. However, visually appealing physical facilities, high profile customers, celebrity promotional activities, and special mobile number were found to be the least influential factors in selecting mobile telecommunication service provider. Marketing mix elements are relevant towards evaluating factors that determine the selection of MTSPs in Namibia. However, this study incorporated and investigated further by including factors influencing consumer buying behaviour, which makes it more comprehensive for application in telecommunication services. Thus, the focus on consumer behaviour was helpful in situating and understanding customers' buying behaviour in mobile telecommunication services. The study recommended specific marketing strategies to enhance the success of MTSPs in this competitive market and ensure quality service delivery to satisfy customers. This study had limitations in its research design, strategy and sampling method; hence, areas for future studies addressing these shortcomings have been identified and recommended.

Keywords: consumer behaviour, service quality, price, promotion, service availability/place ----------------------------------------------------------------------------------------------------------------------------------

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3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (3rd ICBER 2012) PROCEEDING12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my

1. INTRODUCTION The advents of computer-based communication technologies and communication networks have become an important factor in global interaction (Haque, Khatibi, Raquib and Al Mahmud, 2007). Telephone, for example, provides the basic connection for social interaction between individuals and linkages, both within and among nations. The Namibian telecommunication industry has grown rapidly over the past years, keeping appropriate pace with global advancements, especially the mobile telecommunication market. The liberalization of the sector has particularly helped to reform and also increase competition among the mobile telecommunication service providers (MTSPs). Therefore, in this highly competitive market, it is important to know the consumer buying behaviour as it plays a vital role in creating an impact on the purchase of products and services. Organisations influence consumer behaviour through the use of integrated marketing mix. Therefore, a successful company is able to constantly offer benefits to satisfy the changing customer needs and wants through the manipulation of its products or services, price, place and promotion. Hence, marketers must try to understand consumer buying behaviour so that they can offer consumers greater satisfaction. The purpose of the study was to evaluate factors that determine the selection of MTSPs in northern Namibia, specifically in Oshakati. Thus, the study was undertaken to evaluate and understand the consumers buying behaviour in selecting MTSPs in the northern region of Namibia; to help service provider to design more appealing marketing programs which deliver better customer value and thus providing the required returns.

The objectives of the study were to determine the service quality dimensions; social factors and marketing mix elements which lead the customer towards selecting a particular MTSP as well as making recommendations on the marketing strategies that will enhance market share of MTSPs in Namibia. Technological change and new service opportunities are factors bearing on the telecom reform process everywhere (Melody, 1999). The reform of the Namibian telecommunications sector began in 1992 with the passing of the Namibia Communication Commission Act (Act 4 of 1992). In the same year, Telecom Namibia and the Namibia Communication Commission (NCC) were established, respectively as fixed line operator and regulatory authority. In the absence of competition, Telecom Namibia, which is wholly-owned by the Government of Namibia through Namibia Post and Telecommunications Holdings (NPTH), flourished as the sole fixed line provider.

However, in 1995, things started to change dramatically when the first major new player, Mobile Telecommunications Corporation (MTC), entered the telecom market. The deregulation of the Namibian telecommunications industry opened the telecoms market from a monopolistic market to a competitive multiple provider. MTC was the first MTSP in Namibia. Since the entry of MTC, there has been a clear shift by customers from fixed-line to mobile/cellular telephony. Melody (2003) mentions that the explosion in mobile phone connections has led to some subscribers replacing their fixed line connections with mobile phones, resulting in a decline of fixed line penetration. In contrast to the growth in the mobile sector, fixed telephony has stagnated in the last decade. Clearly, advance technology enables mobile telephony to deliver telecom services far more cheaply and effectively to many more people than fixed line telephony.

In the meantime, a second mobile phone operator, Cell One, later renamed Leo, was licensed in 2006. The launch of Namibias second mobile phone operator in 2007 intensified competition in the mobile communications sector. This has diluted the market share of Telecom Namibia and MTC (to a lesser extent). Telecom Namibia did not take the entry of a new player (Leo) lying down and respondent by launching its own version of a mobile telephone service, called Switch in 2007. Currently, there are three mobile telecommunication service providers in Namibia. The competitive pressure is very high. This competitive

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3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC RESEARCH (3rd ICBER 2012) PROCEEDING12 - 13 MARCH 2012. GOLDEN FLOWER HOTEL, BANDUNG, INDONESIA ISBN: 978-967-5705-05-2. WEBSITE: www.internationalconference.com.my

environment caused brand consciousness among subscribers and potential buyers (Hanif, Hafeez and Riaz, 2010). Competition allowed customers to enjoy the option of choices among the service providers. In order to survive in this competitive environment, service provider must ensure network quality by investing substantially in network extension and upgrading as well as customer acquisition and retention by direct and indirect price reduction efforts.

The robust competition between the three mobile network operators in Namibia has intensified. Therefore, identifying and understanding the factors which considerably influence the customer buying behaviour is of greatest importance to the marketers. Thus, the key success factors in mobile telecommunication battles are effectiveness of marketing strategies and understanding of consumer behaviour. The determinant factors for customers choice of the MTSP in Namibia is not clear as there is scanty documentation on the issue. Therefore, there is a need to empirically evaluate and analyze the phenomenon for managerial implications. However, it can also be guessed that there would be an alteration in mobile telecommunication consumer behaviour when new entrants generate a different buying pattern.

Earlier research in the area of telecommunication mobile market has identified various factors that influence consumer purchasing behaviour which resulted in the selection of service providers (Paulrajan and Rajkumar, 2011, and Rahman, Haque and Ahmad, 2010). However, there is still a need to determine factors which lead customer towards selecting a particular MTSP in Namibia and more specifically, the marketing mix elements which influence the buying behaviour of telecommunication services in Oshakati. The research results obtained in other regions and countries may not be entirely relevant to the Namibian context due to cultural and behavioural differences. Cultural and social factors exert the broadest and deepest influences on consumer buying behaviour (Kumar, 2008). According to Boone, Kurtz and Mackenzie (2009), cultures are not homogenous entities with universal values. Each culture includes numerous subcultures groups with their own district modes of behaviour. Pride and Fe