M re dissertation 97-2003

SMM 210

Assessing Quality and Customer Satisfaction with service delivery of mobile telecommunication networks in the UK.

Dissertation

Student Number: 0847416Student Name: Vimal Gopal

MBA International Business

Market Research on Service Quality and Customer Satisfaction 2010

ABSTRACT

Purpose - There are a lot of service quality dimensions derived from the Service

Quality models and frameworks. The aim of this dissertation is to find out the

significance of these dimensions as perceived by the customers and compare it with

the level of service offered by the UK’s Mobile Service Providers.

Review/Methodology – A review was conducted on the relevant models and the gaps

were found using the Qualitative (Focus Group Interview) and Quantitative research

(Questionnaire) methods.

Findings – Five attributes of service quality are found to be deemed with high

importance by the customers and lacks attention from the Mobile Service Providers.

Limitations/Implications – As this research has been conducted using limited time

and resources, the Mobile Networks could conduct research specific to their market

potential and offered service level.

Keywords – Service Quality, customer satisfaction, mobile telecommunication

networks, customer expectations and SERVQUAL

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Deadline: Monday 16th August 2010


Table of contents

1. INTRODUCTION.............................................................................................5

1.1. Background of the study……………………………………………....5

1.2. Overview of Telecommunications Market……………………...…....6

1.3. The current state of telecommunication industry in the UK……….6

1.4. Problem Identification & Purpose of the Study……………………..8

1.5. Research Questions……………………………………………………9

1.6. Research Objectives…………………………………………………...9

1.7. Significance and Limitations of this dissertation……………………10

2. LITERATURE REVIEW.................................................................................11

2.1. Purpose of Literature

review………………………………………….11

2.2. Customer

Psychology………………………………………………….11

2.3. Role of Customer

Satisfaction………………………………………...12

2.4. Measuring Customer

Satisfaction…………………………………….13

2.5. Customer Satisfaction Indices (CSI)

……………………………………..13

2.6. Disconfirmation

Models………………………………………………..15

2.7. Service

Quality………………………………………………………….16

2.8. Relationship between Service Quality and Customer Satisfaction…

18

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2.9. Service Quality Dimensions……………………………………………

19

2.10. Service Quality Models…………………………………………………

19

2.11. SERVQUAL…………………………………………………………….2

0

2.12. Gronroos’ Model of

SERVQUAL……………………………………..23

2.13. Addressing the Research

Questions…………………………………...24

3. RESEARCH METHODOLOGY.................................................................26

3.1. Research Purpose

……………………………………………………...26

3.2. Research

Philosophy…………………………………………………...26

3.3. Research Approach……………………………………………………

27

3.4. Research Method ………………………………………………………

27

3.5. Operationalisation of Concepts………………………………………….30

3.5.1. Minnesota Customer Satisfaction Index (MnCSI)…………..30

3.5.2. Defining Hypothesis…………………………………………....32

3.5.3. Disconfirmation Models……………………………………….33

3.5.4. Over-all Satisfaction…………………………………………...33

3.5.5. Procedures to test Hypotheses………………………………..34

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3.6. Sample Selection and Data

Collection………………………………..37

3.7. Reliability………………………………………………………………

38

3.8. Validity…………………………………………………………………

39

4. DATA ANALYSIS AND DISCUSSION………………………………….41

4.1. Introduction……………………………………………………………41

4.2. Demographic profile…………………………………………………..41

4.3. Assessing Customer Satisfaction with the Service Quality…………41

4.3.1. Results of Minnesota Customer Satisfaction Index…………42

4.3.2. Results of Disconfirmation Models and Over-all

Customer Satisfaction Measure……………………………...43

4.3.2.1. Irrespective of cellular network……………………...43

4.3.2.2. With respect to cellular networks…………………....47

4.4. Customer satisfaction with each service quality dimension………..57

5. SUMMARY AND CONCLUSION.............................................................65

6. BIBLIOGRAPHY........................................................................................69

1. INTRODUCTION

1.1 Background to the study:

During the last few years, the Telecom industry has experienced an enormous

growth across the world and there has been a rapid growth in the wireless technology

(Bharat Book Bureau, 2008). According to an industry market study, by 2013 the

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telecommunications industry is anticipated to attain revenue of $2.7 trillion with an

average growth rate of 10.3 percent an year (Bharat Book Bureau, 2008). In the

present dynamic and interactive market place, the organisations are proposing various

strategic methods to achieve effective Customer Satisfaction (CS) strategy decisions

and eventually increase the CS success rates to sustain long term relationship with the

profitable customers (Chien and Su, 2003; Gronroos, 1994). “Loyal customers are

reported to have higher customer retention rates, commit a higher share of their

category spending to the firm, and are more likely to recommend others to become

customers of the firm.” (Keiningham et al., 2007, p. 362). Hence the organisations are

becoming more customer centric, giving more importance to retaining old customer as

the business would end up spending an approximate of five times more in attracting

new customers than retaining the existing customers in terms of time, money and

resources (Reichheld, 1996; Pizam and Ellis, 1999).

As the growth of the organisation and its survival in the market is driven by

customer loyalty and customer retention, each of these companies is continually

improving on their service quality standards to survive in this highly competitive

market (Keiningham et al., 2007). Hence, in order to maintain these service quality

standards, organisations frequently adopt new measures to check if the customers are

satisfied with the service quality provided. For e.g. by conducting customer surveys

and analysing the acquired data statistically, which would help them make the right

decision to increase customer satisfaction and eventually customer loyalty among

their customers (SPSS White Paper, 1996). Organisations adopt both quantitative and

qualitative methodologies to evaluate CS and the data obtained from these measures

provide constructive feedback to help the organisation know the satisfactory level of

its customers with its products, which would help the organisation to: i) take reliable

steps to improve the quality of service, ii) adding more value to its customers and iii)

achieving high customer satisfaction rates (Amaratunga et al., 2002).

1.2 Overview of the UK Telecommunications Market:

Telecommunications is one of the best growing sectors of the UK economy.

The competition developed strongly in 1984 after the privatisation of British Telecom

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(BT) and as of 2004, the UK had an approximate of 170 fixed telecommunications

provider and 59 mobile service providers (CWU research, 2004). The market for fixed

telephone network has been declining since the evolution of mobile / cellular phone

networks and in 2003 due to flat call volumes and pricing competition, it fell by

£400m (CWU research, 2004). Eventually, the consumers preferred the cellular phone

networks as the mode of communication which was faster and easier than the fixed

telephones (CWU research, 2004).

According to the UK Mobile Operator Subscriber Data, Statistics and Market

Share 2006 - 2008, there are five primary cellular network operators in the UK:

Vodafone, Telefonica O2, T-Mobile, Orange and 3 UK and it was reported to have

73.1 million cellular service subscribers in the last quarter of 2007, which represents

almost 9% of the total European mobile subscriber market and another statistical

report from IE market research Corp reveals that the wireless market is anticipated to

achieve 126% by 2010 and gradually the total subscribers would also reach 78 million

by 2010 (Telecoms Market Research, 2008).

1.3 The current state of telecommunication industry in the UK:

Today, the telecommunication industry has undergone a rapid transformation

creating a lot of new challenges for infrastructure and service providers. The rapid

advances in technology and increased market turbulences have added a lot of value to

the telecom industry (Lia and Whalley, 2002).

Recently T-Mobile and Orange merged becoming a giant in the telecom

industry having 28.4 million customers and now they are the largest cellular service

provider in the UK with an approximate of 37% of the entire mobile market (BBC

News, 2009; The Register, 2010).

The 3G network is up to 40 times faster in data than the 2g or the GSM

networks. This high connection speed adds on more features such as sending Pictures,

MMS (Multimedia Messaging Service) or video clips and also promotes high quality

sound (Robins, 2003).

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However this rapid growing mobile market is expected to face capacity-crunch

i.e. due to the increasing existence of several MVNOs (Mobile Virtual Network

Operators), the mobile data traffic has gradually increased 200% in 2009 and

according to the reports of Ofcom, few service providers such as O2 are about to hit

that capacity (Xln Business Community, 2010). Hence, this capacity-crunch may

bring down the quality of service delivery necessitating the network operators to take

precautions in order to maintain their service delivery standards.

The market share of mobile telecom industry in the UK as of September 2009:

Fig 1.3a Market Share of Mobile telecom industry in the UK

(Source: Guardian News, 2009)

The Fig 1.3a indicates that, as of September 2009, T-Mobile / Orange had

37% of market share being the highest, followed by O2 with 28%, Vodafone with

23% and 3-mobile with the least at 5.8%.

The total number of subscribers for the UK’s mobile telecom industry as on

September 2009:

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Fig 1.3b Number of subscribers for the UK’s mobile telecom industry

(Source: Guardian News, 2009)

The Fig 1.3b indicates that, as of September 2009, T-Mobile / Orange had

28.4 million customers being the highest followed by O2 having 21.5 million

customer, Vodafone with 17.7 million customers and 3-mobile having the least at 4.5

million customers.

1.4 Problem Identification & Purpose of the Study:

Though majority of the customers for UK mobile telecommunication networks

use all of their mobile services like text, data and mobile internet services, they are

dissatisfied with the service-availability and it’s quality; especially the network

coverage is a crucial concern to all of its consumers. (Telecom paper, 2009) Due to

the existence of several MVNOs, customers switch to different service providers

frequently and they are also concerned about the self-regulatory schemes by their

network providers (Telecom paper, 2009).

Customers are known to have reported that there is no network clarity and

coverage. They are not being told if they would have network coverage in their area

before they could sign a contract with the company and they are unhappy with the

after sales service that is being provided to them (Poulter, 2009). “A study on 5,000

people revealed the telecom giants are nearly twice as bad at dealing with issues and

complaints compared with their successors British Gas.” (Xln Business Community,

2009). The customers don’t get reliability and assurance in the services they are being

offered, as they have to go through a sequence of inconsistencies such as waiting in

long queues to speak to representative, incompetent employees who do not understand

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the correct issue that is being faced and bear with their rude behaviour at times (Xln

Business Community, 2009). These situations create a bad impression in the

customer’s mind and lead them to change the service provider. Also, this word of

mouth communication can spoil the image or reputation of the company.

Hence the main research aim of this study would be: To measure and critically

analyse the level of customer satisfaction with regards to service delivery among

different mobile service providers (Mobile Telecommunication Networks) within the

UK.

1.5 Research Questions:

How the customers’ satisfaction with the service quality is described in the UK’s

MTNs with and without respect to the customer’s service providers?

Which attributes of service quality do the customers perceive to be of more

importance that lacks attention from the service providers in the UK?

1.6 Research Objectives:

To find out the level of customers’ satisfaction with the service quality offered to

them by the UK’s MTNs with and without respect to which network customers

subscribe to.

To find out which dimensions of service quality are the customers

satisfied/dissatisfied with in the UK’s MTNs.

To identify the Service Quality dimensions that the customers perceive to be of high

importance in the UK’s MTNs.

1.7 Significance and Limitations of this dissertation:

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This study is significant in various ways to business consultants and business

partners. The results and findings of this study would be helpful to the management of

UK’s cellular service providers, as it provides a reliable scientific measure to evaluate

customer satisfaction level with the services delivered by them. It will reveal the

dimensions of service quality which are considered more important from the

customer’s perspective, which would provide them with a priceless empirical support

to make right strategic decisions in the required areas of operations and over-all it

would act as reliable guide to improve their service delivery standards and create

customer-value. This dissertation would provide enormous valuable information to

business partners such as share-holders and investors which would help them provide

useful suggestions to their respective mobile service providers to improve their

service delivery standards. The dissertation enables the customers to analyze the

ratings of the various dimensions with respect to the service providers so that bringing

in awareness among customers.

The limitations of this dissertation are that, the research would not have access to

every locality in the UK and as the research is mostly done in the city of London. But

London, being a cosmopolitan city, gives us a gist of UK and a right place to conduct

the research. It doesn’t allow us to conduct the analysis on large samples, which is a

prerequisite to have more reliability on surveys (Saunders et al., 2007). But, as the

MTNs are a public service and have millions of users, the samples are obtained from a

much diversified respondents to obtain the best possible results.

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2. LITERATURE REVIEW

2.1 Purpose of Literature review:

The literature review aims at critically exploring the existing knowledge and

theories that are relevant to the research objectives, so that we can develop and refine

the key areas of our research (Saunders et al, 2007). To generate and refine the

research ideas the ‘Relevance Tree’ technique is used in this review of literature i.e. a

broad concept is studied from the view of various authors via which a new sub-

concept is developed and as we proceed deep into the subject new ideas are

formulated (Saunders et al, 2007). The customer satisfaction is measured through the

service quality dimensions defined for that particular product or service. These

dimensions are based on different models created by academics which I critically

analyse in the literature and adopt those that best suit the aim of this dissertation.

2.2 Customer Psychology:

A ‘Customer’ is usually the final user of any product where the purpose of it

being made gets fulfilled (Hayes, 1997). Understanding the psychology of customers

plays a very important role in determining their satisfaction over a product or service.

This includes designing a product according to the needs of the customer. The

satisfaction of a customer starts well before manufacturing the product rather than the

moment after sale. During the service encounters the customers’ values, perceptions,

beliefs and expectations motivate them to choose one service provider rather than

another (Lynch, 1992; Pizam and Ellis, 1999).

At any point of sale, there are four options available for the customer to

choose: Purchase – where the customer is convinced to buy a product or service,

Rejection – where the customer rejects the offer, Postponement – where the customer

is partly convinced and postpones the offer to think at a later date and substitution –

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where the customer compares the product with other contemporary offers. Hence

influencing the customer’s choice to purchase a product is very crucial (Lynch, 1992;

Pizam and Ellis, 1999). Therefore, it is very essential for us to know the customer

expectations and their requirements, to understand customer’s view and perspective

about the quality of services and products they need (Pizam and Ellis, 1999).

2.3 Role of Customer Satisfaction:

Customer Satisfaction (CS) is said to be the customer’s post-purchase

evaluation of services or a product. When the CS level of an organisation is high,

even the market share and profits of the organisation grow higher leading the

company to a stronger competitive position in the market place (Turkyilmaz and

Ozkan, 2007). The customer satisfaction is built on the varied experiences, positive

and negative that the customer has come across at different points of time (Satari,

2007).

The impact of customer care in service quality system would maximize profits

and help the organisations grow by providing customer satisfaction and building great

customer experiences. Customer care is therefore a key to gain the competitive

advantage among the competitors (Lynch, 1992).

“Satisfaction of customers also happens to be the cheapest means of

promotion and therefore, customer satisfaction is recognized as of great importance to

all commercial firms because of its influence on repeat purchases and word-of mouth

recommendations.” (Pizam and Ellis, 1999, p. 326). Hence, it becomes important for

the organisation to offer customers a good experience that exceeds their expectation

and if the customers have bad experiences, then the reputation of the company

reduces rapidly due to word-of-mouth communication.

Satisfaction of customers over a telecommunication product can be two

dimensional: i) It can be component specific – i.e. service specific, over the MMS

services, 3G services, speed etc. and ii) It can be product specific – satisfaction on the

overall performance and responsiveness of the mobile service provider (Cronin and

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Taylor, 1992). These dimensions require us to measure the satisfaction level of the

customers in different particular components as well as on the whole.

2.4 Measuring Customer Satisfaction:

In order to take managerial decisions, the CS needs to be measured in an

organisation and this Customer Satisfaction Measurement (CSM) is used to determine

the customer satisfaction level based on the valuable feedback from the customers and

identifying the customer expectations (Crosby, 1991). The service quality can be

achieved only by knowing the customer’s total needs or customer expectations and

with the help of this data, the service standards and processes may be altered to

achieve customer satisfaction (Crosby, 1991).

After in depth research on CSM, nine distinct theories were developed such

as: Expectancy disconfirmation (Parasuraman et al, 1988), Assimilation contrast,

Comparison level (Gronroos, 2001), Value precept (Zeithaml, 1988), Cognitive

dissonance, Equity, Generalised negativity, Contrast and Attribution (Kauppinen et

al., 2007). Most of these theories were based on cognitive psychology, but they were

developed with no empirical research. However, among these, only two of them were

widely accepted i.e. the expectancy disconfirmation theory and customer satisfaction

indices (Pizam and Ellis, 1999) because all the theories mentioned above use these

two models as a common base (Parasuraman et al, 1988; Gronroos, 2001; Zeithaml,

1988; Kauppinen et al., 2007). Therefore, we would review the customer satisfaction

indices and disconfirmation models which would form the crux of this study.

2.5 Customer Satisfaction Indices (CSI):

This model focuses more on customer’s overall satisfaction with a product or

the services offered to them till date and it is based on a cumulative view of

satisfaction (Turkyilmaz and Ozkan, 2007). “The CSI model is a structural model

based on the assumptions that customer satisfaction is caused by some factors such as

perceived quality (PQ), perceived value (PV), expectations of customers, and image

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of a firm.” (Turkyilmaz and Ozkan, 2007, p. 673). It is equally important to

understand the customer perceived value and their expectations to attain high degree

of customer satisfaction.

The Swedish Customer Satisfaction Barometer (SCSB) is reported to be the

first national customer satisfaction index (NCSI) which was developed in 1989, then

the model was followed by the Germans, they named it as German Customer

Barometer (Fornell, 1992).

The Americans adapted this model in 1993, it was developed by Claes Fornell,

who was the founder of SCSB and they named it as the American Customer

Satisfaction Index (ACSI). The ACSI is a cause and effect model using the responses

from the respondents to form a ‘Multi-Equation Econometric’ model. The responses

were collected according to different variables in a 0-100 scale (Turkyilmaz and

Ozkan, 2007; Fornell, 1992). The European Organisation for Quality (EOQ) and

European Foundation for Quality Management (EFQM) jointly developed the

European Customer Satisfaction Index (ECSI) in 1999. Then gradually many other

countries followed the CSI model (Turkyilmaz and Ozkan, 2007). The ECSI model

included the ‘Corporate Image’ as a component on top of the ASCI model. But, these

indices do not measure the CS levels for specific components and overall CS together

(Turkyilmaz and Ozkan, 2007).

The Workforce Centre developed the Minnesota Customer Satisfaction Index

(MnCSI). The MnCSI model is specifically used to evaluate over-all customer

satisfaction with service delivery of the MTNs on a single scale (Positively

Minnesota, 2007). This model uses the variables of disconfirmation models: both

desire disconfirmation as well as expectation disconfirmation and it combines three

questions which includes the disconfirmation models also (As discussed earlier

disconfirmation models are the second CSM tool which was widely accepted) It also

gets more stable when there are three questions instead of one. In addition, it is

comparatively flexible and best suited for any number of responses (Positively

Minnesota, 2007).

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2.6 Disconfirmation Models:

According to Parasuraman et al. (1988), customer expectations are one of the

most important factors of CS, as they play a major role of ascertaining customer

satisfaction. Even the SERVQUAL model uses the disconfirmation model as its base

and it is basically used for conceptualizing service quality (Parasuraman et al., 1988).

The disconfirmation model was tested and confirmed in a lot of studies conducted

across the world and there are two different types of disconfirmation models - Desire-

Disconfirmation model and Expectancy disconfirmation model (Pizam and Ellis,

1999; Parasuraman et al., 1988). The expectancy disconfirmation model states that

quality is assessed by comparing perceived and expected performance i.e. to examine

if the customer expectations were met during the service delivery process (Oliver and

DeSarbo, 1988; Kang and James, 2004).

According to Oliver (1980), the expectancy disconfirmation model has got

two internal attributes, which are known as positive disconfirmation and negative

disconfirmation. If the performance of the product or service exceeds the customer

expectations and when the customer is highly satisfied with the product or service

delivered, then it is called as value disconfirmation. However, if the customer’s

expectations are met and he/she is satisfied with the product or services offered, then

it is positive disconfirmation and finally if the product or service perceived is below

his/her expectations, then it is called negative disconfirmation (Oliver, 1980). This

theory focuses more on the antecedents of satisfaction, which occurs at the initial

stages of the service-delivery process (Oliver, 1980; Oliver and DeSarbo, 1988; Kang

and James, 2004).

Recently Khalifa and Liu (2002) built a theory that embedded both desire as

well as expectancy disconfirmation theory. They have proved that both these factors

impact the over-all customer satisfaction, as they both are of cognitive standards and

it is hard to evaluate which one of these factors explains CS better.

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2.7 Service Quality:

Service Quality means the service that meets all the customers’ expectation

and satisfies their needs and requirements or it is defined as “a consumer’s judgment

about an entity’s overall excellence or superiority.” (Kang and James, 2004, p. 267)

This term is purely customer oriented. Hence excellence in service requires an

understanding of customer needs and expectation (Edvardsson, 1998).

As there was an enormous growth in mobile telecommunications market in the

last few years, the customers are more conscious about the quality of services being

offered to them (Kumar and Lim, 2008). According to Kumar and Lim (2008), the

service quality in MTNs can be perceived through the technical as well as the

functional attributes of mobile services in which the technical attributes include the

pricing/tariff plan, the network quality & data services and the functional attributes

include the customer service quality and the billing system. “Overall perceptions of

service quality are formed by a consumer’s evaluation of multiple quality

dimensions.” (Kumar and Lim, 2008, p. 569). Hence in order to enhance the

customer’s perceived value and their satisfaction level, it is important for the

organisations to create positive perceptions of service quality among its customers

(Kumar and Lim, 2008).

Service quality enhances the organisation’s operational efficiency as well as

improving the retention rate of its firm (Edvardsson, 1998). The customers assess the

product quality in various tangible ways such as its colour, style and feel. But in most

of the cases only few of these tangibles exist and meet the customers’ expectation

(Parasuraman et al., 1985).

According to Parasuraman et al. (1985), as the services being intangible in

nature, most of it cannot be measured and their heterogeneous nature makes them

vary from time to time and customer to customer. Hence because of these natures, it

becomes hard to evaluate the service quality of an organisation.

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Gronroos (2001) introduced the concept of Consumer Perceived Quality

(CPQ), which evaluates to what extent the service delivered, meets the customer’s

expectation. It compares the consumer’s expectations and the customer’s perception

of service received. According to this theory, over-all satisfaction of the customer

with the organisation is based on every encounter or experience he had with that

organisation. Hence they claim that service quality and customer satisfaction are

distinct conceptually but they are closely related constructs (Kang and James, 2004;

Sureshchandar et al., 2002). A recent study has proved that “the CPQ influences

profitability directly as well as indirectly through market share.” (Crosby, 1991, p. 6).

Hence it is equally important to take CPQ under consideration for this research.

According to Parasuraman et al. (1988), the long term and global evaluation of

a service is related to the service quality perceived by the customers and the customer

satisfaction can be obtained by evaluating specific service transactions and they have

also clearly pointed out that the customer experience with the provided service,

influence the perceptions of service quality. Hence, it could be said that both service

quality and CS are closely related terms.

2.8 Relationship between Service Quality and Customer Satisfaction:

The relationship between service quality and customer satisfaction has gained

a lot of attention in the last few years and they are considered to be the two core

components that frame a crux of the marketing theories (Sureshchandar et al, 2002).

In the current competitive market, the companies can sustain its competitive

advantage by providing service quality of higher standards, which would result in

satisfied customers (Sureshchandar et al, 2002).

Customers are one of the important assets of an organisation as they are the

only ones who keep the business running. As it was already discussed earlier that

retaining existing customers is more essential than generating new ones, it is

important to have service quality in every stroke to build a long term relationship with

the customers, which adds more value to the consumers as well as the company

(Nguyen et al, 2007). Based on the quality of service delivered, is the consumer’s

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commitment to renew/continue our service consistently in the future (Nguyen et al,

2007).

Figure 2.8: Five critical factors of customer perceived service quality

Source: (Sureshchandar et al., 2002)

The figure 2.8 indicates the five critical factors of customer perceived service

quality, in which the core services refer to the content of the services i.e. the different

features offered in a service. The human element of services refers to the empathy,

assurance, reliability and responsiveness i.e. includes the factors that affect the human

behaviour. Standardisation of services refers to the systematizing and simplifying the

systems, processes and the procedures. The tangibles refer to the physical facilities

available, equipments and the appearance of their workers and finally the social

responsibility refers to encouraging ethical behaviour in every aspect, which would

improve the image of the company and also promote customer loyalty and overall

customer satisfaction (Sureshchandar et al., 2002).

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2.9 Service Quality Dimensions:

According to Johnston (1995), it is crucial to identify the determinants of

service quality before we proceed with the service research. Hence this becomes a

central concern, as it is necessary to find out the determinants of service quality to

define measures and control customer perceived service quality.

In 1980s, Parasuraman et al. (1985, 1988, 1994) developed the SERVQUAL

model to determine what service quality meant to the consumers, followed by the

measures they developed strategies to meet customer’s expectations. It is considered

to be the most popular instrument, which is widely used by many researchers and

practitioners to measure service quality (Sureshchandar et al., 2002).

2.10 Service Quality Models:

Many models were developed to capture the quality of service at different

points of time to suit different business objectives (Nitin et al, 2005). The earliest ones

were that of Gronroos’, (1984) ‘Technical and Functional Quality Model’ where the

perceived quality was compared with the Expected Service with reference to the

Functional and Technical dimensions. The next popular model was Parasuraman et

al.’s (1985) GAP model. This model analysed the gaps between the customers’

expected and perceived service forming a base for the SERVQUAL model with

several dimensions like Tangibles, Reliability etc. However, the SERVQUAL model

has been subjected to a lot of criticisms and there have been many scholars who had

tried to modify or restructure this model conceptually (Kang and James, 2004). The

next model designed by Haywood (1998) called as ‘Attribute ServQual Model’

incorporated 3 attributes: ‘Physical facilities and process’, ‘People’s Behaviour’ and

‘Professional Judgement’ into the SERVQUAL components. Haywood (1998) also

said that all the three attributes needs to have a balance and if not leads to fall in

quality. The ‘Synthesized ServQual Model’ by Brogwicz et al. (1990) explained the

importance of the customer’s perception of the brand and image before even the

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product launched. This model added up the ‘Company Image’ component and its

elements to the SERVQUAL model.

Meanwhile, Cronin and Taylor (1992) developed ‘SERVPERF’, the

‘Performance Only Model’ which states that the consumers’ perceptions on the brand

actually predict the service quality and the perception index is a worthy indicator of

the Service Quality. It also criticises that the SERVQUAL model mixes satisfaction

with perception. But the perception cannot always be a proper service quality

indicator because perceptions do change with time, and the organisation that provide

unmatched service excellence always lead even when started with comparatively

lesser brand awareness and marketing system. The Mattson’s (1992) ‘Ideal Value

Model’ calculates the Service Quality in comparison with the Ideal Industry Standard

rather than the Customers’ perceptions. This model may strive to provide the best

service in line with the technological capability but the innovation may not be

focussed on the customer’s requirements. The ‘IT Alignment Model’ (Berkley and

Gupta, 1994) introduced Information Technology for improving the service quality.

Meanwhile, Dabholkar (1996) introduced the ‘Attribute and Overall Affect Model’

which examines the technology used self service options to minimize labour costs.

The PCP Attribute (Philip and Hazzlet, 1997) egg prioritized the dimensions as

Pivotal, Core and Peripheral. Oh (1999) depicted the importance of Customer Value.

Frost and Kumar (2000) proposed the ‘Internal Service Quality’ dimensions based on

the GAP model for the Internal Customers of the organisation. In the ‘Internal Service

Quality DEA model’ (Soteriou and Starvinide, 2000), the Data Envelope Analysis

maps the depreciation in service quality from the client base to branches. Santos’

(2003) ‘e-Service Quality’ is developed on the antecedents of service quality using e-

commerce.

2.11 SERVQUAL:

SERVQUAL is a multiple item scale developed to measure the Service quality

and this instrument illuminates the different dimensions of customer’s perception and

helps assessing the service quality (Parasuraman et al., 1985, 1988).

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It has illuminated five dimensions via which customers perceive and assess service

quality of the organisation and each dimension has a sub-set called ‘items’ via which

the dimensions are being measured (Parasuraman et al., 1988). The five dimensions

are:

1. Tangibles: This includes the physical facilities available, equipments and the

appearance of their workers.

2. Assurance: This includes the courteous nature and the product knowledge of

the employees and also if they are confident and trust worthy.

3. Responsiveness: Providing quick service and their willingness to help the

customers.

4. Empathy: Caring for the customers with more individualised attention.

5. Reliability: Providing accurate service and performing the promised

commitments (Parasuraman et al., 1988).

The required data is collected via structured questionnaire or surveys from a

sample of customers in which many questions are formulated based on the key service

quality dimensions (Parasuraman et al., 1988, 1994). Before reviewing other models

based on SERVQUAL, it is better to look into the advantages and disadvantages of

SERVQUAL.

Advantages and Disadvantages of SERVQUAL:

SERVQUAL has overlooked at some of the important factors of service

quality such as the social responsibility of the organisation, core service and

standardisation of service delivery and there is also a general agreement towards the

22 items scale, that they are reasonably good predictors of service quality

(Sureshchandar et al., 2002). Most of the research models till date have used

SERVQUAL as its base for development (Sureshchandar et al., 2002).

The SERVQUAL model has also been severely criticized in many cases. The

contents of the service quality dimensions obtained from the SERVQUAL model has

not been accepted by everyone, as service quality is generally viewed as a multi-

dimensional construct and it focuses mainly on the service delivery aspects and there

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are many additional factors also to be considered for e.g. Considering only the

functional attributes to predict customer’s behaviour may have low predictive

validity, the semantic differences are not being withstanded in each dimension, etc.

(Kang and James, 2004; Sureshchandar et al., 2002). The criticisms also include “the

use of difference scores, dimensionality, applicability and the lack of validity of the

model, especially with respect to the dependence or independence of the five main

variables” (Kang and James, 2004, p. 267). Hence considering all these criticisms that

SERVQUAL is renowned for its widespread use by other researchers and scholars

and it also has got lot of disadvantages it is advisable to look into other models based

on SERVQUAL.

In 1992, Cronin and Taylor developed the Performance only model, which

they called it SERVPERF. It states that service quality can only be assessed by

perceptions and it is not necessary to measure expectations (Cronin and Taylor, 1992).

The author views service quality as a link between purchase intentions and customer

satisfaction and they challenged the SERVQUAL framework by Parasuraman et al.

(1985), that perceptions are the only predictors of service quality where as

SERVQUAL model confuses consumer satisfaction with attitude of the consumers

(Cronin and Taylor, 1992).

Similarly, Brogowicz et al. (1990) argued that there are many chances for the

service quality gap to occur well before the customer experiences the service, as the

customer may learn through various ways such as word-of-mouth communication and

advertisements. It integrates the traditional managerial framework to the service

quality which comprises of three factors: image, traditional marketing activities and

external influences and the model was called synthesized model of service quality

(Brogowicz et al., 1990).

Another study by Haywood-Farmer (1988) suggests that the attributes has to

be separated into three groups: professional judgement, processes & facilities and

consumer’s behaviour and each of the attributes comprises of various factors. It also

states that all the three groups must be given equal importance, in case if any one of

the attribute is given more importance than others, then it may lead to a disaster

(Haywood-Farmer, 1988).

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Similarly, Parasuraman et al. (1985) had stated that service quality cannot be

assessed only with service outcomes but even the service delivery process needs to be

evaluated, the SERVQUAL is composed of only functional dimension of service

quality and they lack technical dimension and corporate image. Both these dimensions

are inter correlated.

The attributes of functional quality refers to the American perspective of

service quality but however according to the European perspective, the service quality

needs two more attributes in addition, which are technical quality and the corporate

image (Kang and James, 2004). The Gronroos SERVQUAL model includes all the

three attributes i.e. necessary from the European perspective. Moreover, the

Gronroos’ ServQual model was used in an empirical research in the

telecommunications field, which had proved that Gronroos model is more appropriate

to represent service quality in telecommunications industry (Kang and James, 2004).

2.12 Gronroos’ Model of SERVQUAL:

It is a multi dimensional model. According to this model there are two service

quality dimensions, firstly the technical aspect (what kind of service is provided) and

the functional aspect (how is the service being provided).They introduced the

corporate image concept, as one of the other important element in the perceived

service-quality model, as the customers would bring their perceptions and past

experiences with the firm in each encounter with the organisation (Kang and James,

2004). If a positive image about the firm is created in the mind of a customer, then

they wouldn’t bother much about the minor mistakes that happens and in case there is

a negative image about the firm, then the mistakes would be magnified in their mind

(Gronroos, 1994; Kang and James, 2004).

In the mobile telecommunications industry the customers look for both – How

they are being served (functional dimension) as well as the nature of services and

service outcomes which constitute the technical dimension (Kang and James, 2004).

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Hence these three dimensions (technical dimension, functional dimension and

corporate image) are considered the most important.

2.13 Addressing the Research Questions

As discussed earlier in the ‘current state of telecommunication industry in the

UK’ and ‘Problem Identification’ in the introduction (section 1.3 and 1.4), the

network operators are likely to face capacity crunch which induces network coverage

and clarity issues. This in turn shall reduce the service quality standards to a new low.

Moreover, even the reliability, assurance and responsiveness factors are not addressed

with proper concern increasing the customer’s switching intention.

At this juncture it is important to know the service quality dimensions valued

more by the customers and to give more attention towards those in order to achieve

positive customer service experience. These problems led to the main research

objectives specified. Based on the reviewed literature the research objectives can be

obtained using the following theoretical models which has been justified in this

chapter:

i) The MnCSI model, Disconfirmation models (both desire and expectation) and

over-all satisfaction measure is used to assess and describe the level of customers’

satisfaction with the service quality offered to them by the UK’s MTNs with and

without respect to which network customers subscribe to.

ii) The expectation disconfirmation model is used in order to find which dimensions of service quality the customers are satisfied or dissatisfied with in the UK’s MTNs.

iii) The Gronroos’ Servqual model is used to identify the service quality dimensions that the customers perceive to be of high importance in the UK’s MTNs.

The research question one: ‘How the customers’ satisfaction with the service

quality is described in the UK’s MTNs with and without respect to the customer’s

service providers?’ is answered by critically analysing the results obtained from the

first research objective and the research question two: ‘Which attributes of service

quality do the customers perceive to be of more importance and lacks attention from

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the service providers in the UK?’ is answered by critically analysing the results

obtained from objectives two and three.

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3. RESEARCH METHODOLOGY

3.1 Research Purpose:

According to Saunders et al. (2007), research is a systematic or a step by step

procedure to increase the knowledge of a new or an existing subject. The purpose of

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this research is to key out the main service quality dimensions/attributes as perceived

by the customers and find out how satisfied they are with these attributes and also to

explore the reasons for their the intention to change their service providers (Saunders

et al., 2007).

3.2 Research Philosophy:

Research philosophy brings up different philosophical assumptions and beliefs that

would support this research and help us selecting the appropriate research strategy and

phenomenon. It has two core traditions: ‘Positivism’ and ‘phenomenological approach’

(Saunders et al., 2007). Positivism deals with the fundamental laws perceived by us and

their scientific explanations. ‘Phenomenological’ helps in trying to understand a

particular phenomenon (Saunders et al., 2007). The three main characteristics of

positivism are:

• The explanations and knowledge attained in this method are similar to that of

natural science.

• The ‘hypothetico deductive methodology’ which is followed by positivism is

same as natural science.

• It treats its’ subject matter (i.e. mobile telecom networks in UK, in this study) just

like how a natural scientist would treat the world (of natural forces/things)

(Saunders et al., 2007).

Hence, it implies that positivism deals with observable social reality. So, this research is

built on this approach as it involves customer perceptions and identifying relationships

through different theoretical frameworks.

3.3 Research Approach:

According to Saunders et al., (2007), there are two broad methods of reasoning:

deductive approach and inductive approach. The deductive approach is based on the top-

down approach mode where a theory is developed and subjected to more observation

after hypothesis as shown in the fig 4.3. It works from more general to specific reasoning

(Saunders et al., 2007). Conversely, the inductive approach is based on the bottom-up

approach model i.e. the theory is developed based on the data collected during research.

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However, the deductive approach is also said to have degrees of uncertainty (Saunders et

al., 2007) and moreover, as this research is based on theoretical considerations, our

research employs the deductive approach.

Fig 3.3: Deductive Approach

3.4 Research Method:

There are two different groups of research methods: ‘quantitative’ and

‘qualitative’. In quantitative analysis, we obtain statistical data that represents the

concepts empirically. This data is further measured using the quantitative statistical

methods which links the data to concepts (Neuman, 2006). On the other hand,

qualitative analysis explains the social phenomena which involve interviews and

observations from real life situations (Saunders et al., 2007) and the data here includes

written/spoken words, physical objects, sounds or visual images measured

simultaneously while collecting the data (Neuman, 2006).

This research uses both quantitative as well as qualitative methods to get

accurate results. The quantitative measurement uses the following models as justified

in the literature review: Gronroos’ SERVQUAL model (Gronroos, 1994) to evaluate

CS with the Service Quality dimensions (functional dimensions, Technical dimension

and Corporate Image); ‘Disconfirmation models’ to analyse and evaluate customer’s

desires and expectations both with and without respect to their service provider

(Oliver 1980; Parasuraman et al., 1988) and the MnCSI model to evaluate the over-all

customer satisfaction with service delivery of the UK’s MTNs with and without

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THEORY

HYPOTHESIS

OBSERVATION

CONFIRMATION


respect to which Mobile Telecom Network customers subscribe to (Positively

Minnesota, 2007).

According to Neuman (2006, pg. 412), “Researchers often combine focus group

with quantitative research, and the procedure has its own specific strengths and

weaknesses”. The strengths are: the lively setting that allows respondents to express

their opinions or ideas freely and interpretation of ideas is facilitated (Neuman, 2006).

This helps in bridging rich ideas and data in a continuing and interactive manner via

which we could have a better understanding of the subject in a bigger view and these

strengths overwrites the weaknesses which are: ‘polarization effect’ and limitation in

the number of topics discussed in a session (Neuman, 2006). Hence focus group

interview is the chosen Qualitative method as the research also includes quantitative

measurement. The focus group interview uses the Delphi technique to refine the

research ideas. This process involves employing a group of people who can contribute

some more value to the research idea (Saunders et al., 2007). The members of the

group were initially briefed about the research idea and were asked to suggest other

important elements to measure the service quality. According to respondents, among

these attributes they consider the balance between quality and cost as the most

important. It was then derived as another dimension to the Gronroos SERVQUAL

model called as ‘Value for Money (VFM)’. This focus group interview lasted for 60

minutes and the details of which is described in Appendix-A.

All the Service Quality Dimensions and its items (variables) used are listed in

table 3.4. Each dimension is represented with indicators as shown in the table below.

For e.g., Tangibles is TN, Reliability is RE, etc. A set of 3 items were added for every

dimension based on its properties except VFM which has 2 items. The items/variables

under each dimension are defined in the Appendix-H.

Table 3.4: Service Quality dimensions and its comprising items

No. of

Items

Service Quality Dimensions No. of

Items

Service Quality Dimensions

3 TANGIBLES (TN) 3 ASSURANCE (AR)

3 RELIABILITY (RE) 3 TECHNICAL QUALITY (TQ)

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M re dissertation 97-2003

Documents

attributes of service

keywords service quality

service quality dimensions192

service quality models192

level of service

service level

role of customer satisfaction

service quality414