002_060_3rdICBER2012_Proceeding_PG0008_0030

8

3rd INTERNATIONAL CONFERENCE ON BUSINESS AND ECONOMIC

RESEARCH (3rd ICBER 2012) PROCEEDING

12 - 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 NAMIBIA

Liisa 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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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 Namibia’s 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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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 Ferrell (2009) indicate that marketing strategies and business practices that work in one country may

be offensive or ineffective in another. Consequently, understanding the influence cultural factors poses on

consumer behaviour indicate that marketing strategies need to be varied from one area of a country to another.

Therefore, understanding the differences among sub cultures can help marketers develop more effective

marketing strategies. Namibia, particularly Oshakati is composed of significant sub cultures that differ by

ethnicity, nationality, age, social class, rural versus urban reaction, and geographic distribution. Therefore, such

features will make the results from this study to be different from the research results obtained in other regions

and countries.

The outcome of the study would provide insights to service providers to take ardent actions towards enriching

customers’ service experience. Moreover, the study also builds on existing consumer behaviour literature by

exploring the factors influencing consumer buying behaviour that ultimately influence the selection of MTSPs. In

addition, the findings of this study may also assist telecommunication companies to invest their resources more

efficiently, or to make changes to crucial quality attributes that elicit consumer’s satisfaction levels.

Consequently, the study will provide the needed feedback and contribute to the improvement of players’

strategy and their marketing programs.

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2. LITERATURE REVIEW

This section reviews the existing literature on factors influencing consumer buying behaviour in regard to use

and adoption of mobile telecommunication services as well as the marketing mix elements.

2.1 Conceptual Frameworks

The success of telecommunication industry depends on prudent efforts and feasible investments (Rahman et al.,

2010). Mainly customers purchase network connection for instant communication and various services provided

by the mobile telecommunication service provider (MTSP). Services mainly depend on some factors and

customers always try to buy that service/product which has many factors or attributes fulfilling their desire.

Furthermore, in the mobile telecommunication market, customers bring higher expectations for communication

from its service providers and if companies are not able to meet these expectations, the customers will take

their business elsewhere. The consumer wants and expectations are altering all the time and this directs to a

condition where customers create ever higher benchmarks. A company’s most important success factor is the

ability to deliver better customer value than competitors and the objective of a strategy is to deliver value to the

customers in order to provide required returns to the shareholders and employees. In order to identify

purchasing behaviour determinants for mobile connections, some variables that significantly correlate with the

purchase of mobile connections were identified. Addressing these could improve the efficiency to get customers

or make customers switch from the competitors’ products.

2.2 Research Model

In answering the research questions, this study adopted and modified the model by Paulrajan and Rajkumar

(2011) to suit the inquiry. Although, there are many variables and factors determining the selection of MTSPs,

the study benchmarked mobile telecommunication services with the attributes and dimensions illustrated in

Figure 1. The model in this figure indicates the categories, variables, and abstraction and consumer behaviour as

outcomes. Categories consist of social factors, service quality, price, promotion and services availability. The

components of this model are elaborated under their respective headings in this section.

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Figure 1: Factors Determining the Choice of Service Providers

Categories Variables Abstraction Behaviour

Source: Adapted from Paulrajan and Rajkumar (2011:41)

2.3 Cultural and Social Factors

Consumer buying behaviour is also influenced by other factors, such as, social, cultural, personal and

psychological factors (Madaan, 2009). Cultural and social factors exert the broadest and deepest influences on

consumer buying behaviour. They include roles, family, reference group and opinion leaders, social class, and

culture and subculture (Kumar, 2008). According to Bose (2010), culture is the most influencing and fundamental

determinant of a person’s wants and behaviour. Accordingly, the mobile telecommunication marketer needs to

know whether customers are influenced significantly by any reference groups and the kind of customer

influenced by a particular reference group. Though, much marketing efforts need to go into identifying and

High profile customers

Celebrities

Network capability

Reliability of service

Customer care

Accessibility

Call Rate charges

Promotional offers

Advertisement

Sales, refund

International roaming

Outlet appearance

Sa

tisf

act

ion

SO

CIA

L F

AC

TO

RS

SE

RV

ICE

QU

ALI

TY

PR

ICE

P

RO

MO

TIO

N

SE

RV

ICE

AV

AIL

AB

ILIT

Y

Selection

of a

Service provider

Family, friends and colleagues

Innovativeness

Geographical coverage

Free calls and free SMS

Overall service quality

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converting opinion leaders within a particular reference group, opinion followers tend to follow leaders by

imitating them and sometimes purchasing the same brands (Madaan, 2009). Talloo (2008) argues that

consumers often decide to buy goods and services based on what they believe others expect of them. They may

want to project positive images to peers or to satisfy the unspoken desire of family members.

Boone et al. (2009) claim that cultures are not homogenous entities with universal values. Each culture includes

numerous subculture groups, with their own distinct modes of behaviour. Namibia is composed of significant

subcultures that differ by ethnicity, nationality, age, social class, rural versus urban reaction, and geographic

distribution. In view of these, marketing strategies and business practices that work in one country may be

offensive or ineffective in another (Pride and Ferrell, 2011). Consequently, understanding the influence of

cultural/social factors on consumer behaviour indicate that marketing strategies need to be varied from one

area of a country to another. Therefore, business can no longer succeed by selling one-size-fits-all products; they

must consider consumer needs, interest, and concerns when developing their marketing strategies (Boone et al.,

2009). This implies that MTSPs will need to segment their consumer on various categories, for example, sex, age,

geographic, ethnic, social class and so forth (Rao, 2009).

2.4 Service and Service Quality

Hardy (2001) indicates that the “service” in the term of “quality of telecommunication service” is understood to

pertain to something that is provided day-to-day for the use of someone, the user of that service. Nowadays,

consumers and firms are demanding more services as well as services of increasing quality and sophistication.

Baker (2003) defines service as any activity or benefit that one party can offer to another which is essentially

intangible and does not result in the ownership of anything. Due to the fact that services are produced and

consumed simultaneously, the contact personnel or the service delivery personnel become extremely important

(Kapoor, Paul, and Halder, 2011). Consequently, the service design, the roles given to the service personnel, the

environment design for the role of performance of sellers and buyers in service and encounters, will have a

significant impact on the decision-making process of the buyer (Rao, 2011). Thus, the final outcome as well as

the overall perception of the service by the customer depends greatly on the process of service delivery.

Consumer orientation is the key for the success of any business organisation (Rao, 2011). Service provider who

offers quality and reliability (both in networks and organisational support) will enjoy a more favourable elasticity

of customer loyalty in times of economic difficulty and down turn Oodan, Ward, Savolaine, Daneshmand and

Hoath (2003). Customers will remain loyal to a service organisation that offer superior service and exceed

customer expectations (Kandampully, 1998).

2.5 Price

According to Rao (2011) price is the medium for exchange of value between a buyer and seller. It is an

influencing factor in consumer decision-making related to a purchase. It is argued that price plays some vital role

in marketing such as sending signals to customers about product or service quality, as well as being used as a

powerful competitive weapon in markets (Lancaster and Withey, 2007). According to Ruskin-Brown (2006), price

can affect the way customers behave and because ‘price’ is perceived as being the single largest indicator of

value, it will impact on their perceptions of the company’s offering versus that of the competition. Customers’

value is the ratio of benefits to the sacrifice necessary to obtain those benefits (Gitman and McDaniel, 2009).

Creating customer value is a core business strategy of many successful firms. The quality of a product, the

services supplied along with it, the channel of distribution and the promotional effort depend greatly upon price

(Gupta, 2007). According to Lancaster and Withey (2007), demand sets the upper limit to the prices the

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marketer can set. Hence, the marketer cannot charge prices higher than the customer is willing and able to pay.

In this case the economist perspective of price, the price elasticity of demand, applies (Burrow, 2009).

2.6 Promotion

Promotion refers to all activities that the manufacturers of services undertake to make the customers buy their

services (Kapoor et al., 2011). Firms often use tools like advertising, public relations and sales force to

communicate with the market about the service (Pride and Ferrell, 2008). Generally, the communication efforts

have specific objectives and are aimed at stimulating demand (Verma, 2008). Gitman and McDaniel (2009)

concur that promotion aims to stimulate demand for a company’s good or services. Gitman and McDaniel (2009)

further argue that promotional strategy is designed to inform, persuade, or remind target audiences about those

products. Hence, the goals of promotion are to create awareness, get people to try products, provide

information, keep loyal customers, increase use of a product, and identify potential customers.

2.7 Service Availability

Customers buy goods and services at the place which is conveniently located, yet prominent to provide

comparatively higher satisfaction levels as compared to the time and effort spent by the consumer. Hence, the

mega task of a marketer is to manage its logistics, distribution and supply chain in a way that the goods and

services reach the customer in a most cost effective and efficient manner (Kapoor et al., 2011). Rahman et al.

(2010) cited that the quality of a product is also related to the availability of the product's main functional

features on one hand and the consumer's experience-in-use of the other auxiliary features on the other hand.

The main functional features of a product are the sources of the primary benefits that the consumers expect to

obtain when purchasing a product. Baker (2003) states that place decisions refer to ease of access which

potential customers have to a service. For services, such as telecommunication, it is more appropriate to talk

about accessibility as a marketing mix element, rather than a place. This is because service is produced and

consumed simultaneously.

3. RESEARCH METHODOLOGY

A quantitative methodology was used to obtain the primary data. According to Johnson and Christensen (2008),

a quantitative methodology is concerned with the development and testing of hypothesis and the generation of

models and theories that explain behaviour. This study is concerned with testing the assumptions that certain

factors influence consumer buying behaviour, therefore it is appropriate that the quantitative method was used.

The research instrument, a questionnaire was compiled to collect the primary data for this study. This method

was considered suitable because it critically analyses the consumers’ perception and attitudes towards the

telecommunication service providers (MTSPs) in Namibia. A survey questionnaire was also chosen because it is

considered to be inexpensive, less time consuming and provide good quality data easily (Babbie, 2010).

Furthermore, a descriptive research was used in order to describe factor(s) that influence the consumers’ buying

behaviour as well as describing the marketing mix elements that play a role in determining the customers’

selection for MTSP.

Saunders, Lewis and Thornhill (2003) state that it is not easy to survey the entire population. Therefore, it is

necessary to survey a sample of the population as an alternative in order to generalize about the entire

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population. Zikmund and Babin (2007) submit that the sample size depends on the variability within the sample,

that is, heterogeneity or homogeneity. The population for this study was deemed to be homogenous and only a

fraction of the population was selected as research sample. Given the limitations and delimitations of the study

(for instance, time, financial resource and word count), a sample size of 100 participants was decided upon from

a population of 44 131. Based on the above, participants were sampled through non-probability sampling

techniques. In a non-probability sampling a particular group, with the full knowledge that it does not represent

the wider population was targeted (Cohen, Manion and Morrison, 2007). Among different non-probability

sampling techniques, convenience sampling was employed.

Even though convenient sampling contains limitations in terms of its ability to be generalized, it was logically

assumed that the sample represented the whole population of mobile telecommunication services users in the

northern region of Namibia. There is adequate similarity among the elements within the population to conclude

that a few of the elements will sufficiently represent the characteristics of the total 44 131 people. Time and cost

constraints also justified the convenience sampling technique. The designed questionnaire was piloted on ten

participants, selected from the sample, before it was used in the study. The findings of the pilot study did not

reveal any flaws in the questionnaire design. It did however indicate that more persuasion was necessary

convincing the respondents to answer the questions.

The questions were designed with the aim of answering the research questions and meeting the research

objectives. The order and flow of the questions were logically presented to the respondents. The questionnaire

consisted of closed-ended questions as they were quicker and easier to answer and readily amenable to coding

and quantitative analysis. The five-point Likert scales were extensively used to allow respondents the

opportunity to indicate their level of agreement or disagreement with a statement or how they considered the

importance of an aspect. The survey questionnaire consisted of five categories and items on different constructs

are organized in each category namely, service quality, price, promotions, availability and social factors. The

questionnaires were personally delivered to educational institutions, shopping centres and government and

private offices. According to Walliman (2005), the advantages of personal delivery are that respondents can be

helped to overcome difficulties with the questions, and that personal persuasion and reminders by the

researcher can ensure a high response rate. To encourage participation, the purpose of the survey, how the

results could be of benefit to them and how little time it will take to complete, was discussed. Simple

instructions on how to complete the questionnaire were also given. The respondents were easily reachable and

were sufficiently motivated to answer the questions and return the completed questionnaire.

Respondents were given ten days to complete the questionnaire. Each participant was requested to complete

the questionnaire and hand it to a contact person at the institution or company so that it could be collected at

the same time. All participants complied with this requirement and most of the questionnaires were received

before the tenth day. A total of 83 questionnaires out of 100 were received back from the respondents and all of

them were fully completed. Overall response rate is one guide to the representativeness of the sample

respondents (Babbie, 2010). The percentage of people who respond to the survey is considered the response

rate (Babbie, 2010). A high response rate of 83% was achieved in this study, indicating that there is less chance

of significant non-response bias (Babbie, 2010).

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4. VALIDITY AND RELIABILITY

Gravetter and Forzano (2009) state that the validity of a research study is the degree to which the study

accurately answers the question it was intended to answer. The reliability of a research instrument ‘is the

degree of consistency with which the instrument measures the attributes it is supposed to be measuring.

Though validity and reliability were not measured through repeated testing of the research instrument, the

following issues were observed in the study:

• To achieve content validity, the questionnaire included a variety of questions on factors that influence

consumer buying behaviour and elements of marketing mix. Questions were based on information gathered

during literature view to ensure that they were representative of the factors that influence customers to

purchase a particular product or service, giving a strong content validity to the variables being measured

(Babbie, 2010).

• To establish external validity of the research questionnaire in terms of suitability, utility, and clarity, a field

test was conducted. Ten people were selected to participate in a field test to review the instrument for

clarity, content, wording, and length. These people had characteristics similar to those of the target

audience (Cohen et al., 2007).

• In order to measure the reliability of data collected and ensure that the methodology yields the same

results, the questionnaire included different questions that test the same concept in different areas. This

method re-tests the consistency of the participants’ responses (Babbie, 2010).

5. RESULTS ANALYSIS and DISCUSSIONS

5.1 Results of Responses Frequency Distribution

A five-point Likert scale was used to measure the output of each item answered by the participants. The

outputs, frequency tables were generated using the SPSS package and from these the data was presented in bar

graphs. Van Blerkom (2009) states that often frequency distribution can be interpreted more easily when

converted into a graph. The survey data was simplified further by combining the four response categories

(strongly agree, agree, disagree, and strongly disagree) into two nominal categories, agree and disagree.

Moreover, the number of respondents who selected each of the response options is reported as percentages of

the total number of responses. This makes the survey results much easier for the analyst to interpret and

present or report to the audience. Bryman and Cramer (1996) indicate that the main advantage of summarizing

data by constructing frequency distribution or frequency tables is the ease with which it can be interpreted, a

characteristic that may be useful especially when data are being presented to people who may be unfamiliar

with statistical material. For easy interpretation and understanding of information the results were arranged

into groups of five categories tested as per respondent’s influential level in the selection of mobile

telecommunication service provider (MTSP) namely, social factors; service quality; price; promotion; and

availability of services. Figure 2 - Figure 6 display the participants’ frequency responses distribution.

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Figure 2: Frequency Responses for Social Factors

The findings in Figure 2 reveal that a total of 29% of the respondents disagreed, 5% were unsure and 66% agreed

that it is important to subscribe to the same service provider with family members and friends. Additionally, 27%

of the respondents disagreed, 2% were unsure while 71% agreed to value friends, colleagues and family

members’ opinions before buying any product from the service provider. On the other hand, 51% of the

participants disagreed, 2% were unsure and 48% agreed that high profile customers of a particular service

provider influence them to choose a MTSP. Moreover, findings in Figure 2 show also that 60% of the

respondents disagreed, 6% were unsure, 34% agreed that promotional activities by celebrities persuade them to

buy mobile connection from a service provider.

7%5%

17%19%

22% 22%

34%

41%

5%

2% 2%

6%

25%

47%

33%

23%

41%

24%

15%

11%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

same service provider

with family and friends

Value Friends and

Colleagues Opinion

High Profile Customers celebrities promotional

activities

Strongly disagree Disagree Unsure Agree strongly agree

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Figure 3: Frequency Responses for Service Quality Dimensions

Figure 3 reveal that 6% of the participants disagreed, 8% were unsure, 85% agreed that reliability of service

influence their choice of the MTSP. Moreover, the figure show that 7% of the respondents disagreed, 1% were

unsure and 92% agreed that overall service qualities influence their choice of service provider. It is evident that

customer’s choice of MTSP is significantly influenced by overall service quality. Besides, the results reveal that

8% of the respondents disagreed, 2% were unsure and 89% agreed that network capabilities of a service

provider influence their subscription to a MTSP. The results denote that network capability significantly

influence the choice of MTSP in northern Namibia. Similarly, the figure shows that 9% of the respondents

disagreed, 18% were unsure and 73% agreed that geographic network coverage influence them to choose MTSP.

It also reflects that 6% of the respondents disagreed, 6% were unsure and 88% agreed that network

innovativeness is an important factor that they consider when subscribing to a MTSP. Likewise, the results reveal

that 21% of the respondents disagreed, 4% were unsure, and 76% agreed that customer care at the service

provider outlets influence them to choose a mobile service provider.

1% 0% 0%2% 2%

6%5%7% 8% 7%

4%

15%

8%

1% 2%

18%

6%4%

36%

24%

37%34%

51%

40%

49%

68%

52%

39%37% 36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

service

reliability

overall service

quality

Network

capability

Network

coverage

network

innovativeness

customer care

strongly disagree disagree unsure agree strongly agree

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Figure 4: Frequency Responses for Price

Findings in Figure 4 illustrate that 15% of the participants disagreed, 2% were unsure, 83% agreed that low rate

charges influence them to subscribe to a MTSP.

Figure 5: Frequency Responses for Promotional Mix

4%

11%

2%

36%

47%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

influenced by low rate charges


19%

4% 4%2%

39%

28%

13%

5%

15% 15%

11%

5%

21%

37% 37%

31%

7%

17%

35%

57%

0%

10%

20%

30%

40%

50%

60%

influenced by special

number

Advertisment sim card with initial

balance and free

handsets

Free caslls and free

SMS


20





The findings in Figure 5 reveal that 58% of the respondents disagreed, 15% were unsure, and 28% agreed that

they subscribe to a MTSP to get a special mobile number. The results show that special number offers do not

make an impact on the MTSP choice. Besides, the results shows that 32% of the respondents disagreed, 15%

were unsure, and 54% agreed that advertisement influences them to subscribe to a MTSP. These finding

revealed that, although the majority of the customers indicated that advertisement influences their choice of

MTSP, its influence was not significant. Additionally, the findings shows that 17% of the respondents disagreed,

11% were unsure and 72% agreed that offers such as SIM card offered with initial balance, life time validity,

handsets offered with SIM card influences their selection of a service provider. Similarly, Figure 5 reveal that 7%

of the participants disagreed, 5% were unsure and 88% agreed that free calls and free SMS encourage them to

subscribe to a MTSP. The findings show that free calls and free SMS significantly determine customers’ choice of

MTSP

Figure 6: Frequency Responses for Service Availability Aspects

The data in Figure 6 reveals that 37% of the respondent’s disagreed, 30% were unsure, 32% agreed to value

visually appealing physical facilities than customer care. Likewise, it illustrates that 11% of the participants

disagreed, 10% were unsure and 79% agreed that accessibility of services influence their preference for MTSP.

That means ease access to telecommunication services influence consumers’ choice. On the other hand, the

findings reveal that 25% of the respondents disagreed, 24% were unsure, 51% agreed that international roaming

plays an important role when choosing a MTSP.

5.2 Discussions and Implications

The study aimed to critically evaluate the factors that determine the selection of MTSPs in northern Namibia,

with specific reference to Oshakati in order, to help marketers of service providers to design more appealing

13%

4%

8%

24%

7%

17%

30%

10%

24%

19%

42%

33%

13%

37%

18%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

influenced by visually

appealling physical facilities

service accessibility International roaming


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marketing programmes which deliver better customer value thus, providing the required returns. To achieve this

it was necessary to meet the following objectives:

• To determine the service quality dimensions influencing customers’ selection of a particular MTSP.

• To determine the social factors which lead the customer towards selecting a particular MTSP in

Oshakati.

• To establish the influence of marketing mix elements on buying behaviour of MTSP in Oshakati.

The research objectives were to be achieved through three research questions. The research questions for this

study are answered and the results are evaluated in the light of the literature reviewed in section 2.

5.2.1 Research Question 1: Which Social Factors Influence the Selection of MTSP in Oshakati?

The study established (Figure 2) that customers prefer subscribing to the same service provider as their friends

and family members. Boone et al. (2009) argue that consumers often decide to buy goods and services based on

what they believe others expect of them. Findings in Figure 2 validate the theory that the customers’ buying

decision and choice is impacted by reference group such as friends and family. This implies that these customers

want to satisfy their social needs. Phone calls between subscribers of the same provider are usually cheap and at

times service providers offer free data, free SMSs and unlimited talk time between subscribers of the same

service providers, at a very minimum rate. This may be one of the reasons persuading customers to subscribe to

the same service provider with friends and relatives. This result also implies that telecommunication service fulfil

customer social needs of belonging to a group; hence the majority prefer subscribing to the same service

provider with family and friends. Subsequently, identifying and understanding the groups consumers belong to is

a key strategy for marketers. Doing so helps to identify target markets, develop new products, and create

appealing marketing promotions to which consumers can relate.

Hoyer and Macinnis (2009) mention that when consumers’ knowledge is limited, they are motivated to seek out

the opinion of others. Results in Figure 2 indicate that 71% of the respondents agreed to value friends,

colleagues and family members’ opinions before buying any product from the service provider. The findings

indicate that customers go on some form of information search to help them through their purchase decision.

The implication of this finding to the telecommunication service provider is to ensure that customers’ are

satisfied and superior service is offered, as satisfied customers tend to spread positive word-of-mouth and

repeat their purchase. In addition, these findings imply that MTSP marketers should seek to locate group leaders

and others to whom members of the group look for advice or direction. These opinion leaders, if well respected

by the group, can be used to gain insight into group behaviour and if these opinion leaders accept promotional

opportunities could act as effective spokespeople for the marketer’s products.

The number of other customers present at the service outlet, their status in society, gender and composition of

the group are factors that generally influence the preference of other customers (Rao, 2011). Figure 2 illustrated

that 51% of the participants disagreed that high profile customers of a particular service provider influence them

to choose a MTSP. The influence exerted by reference groups tends to vary across products and brands (Wilson

and Gilligan, 2005). It tends to be strongest when the product is visible to others whom the buyer respects.

Furthermore, purchases of products that are bought and used privately are not much affected by group

influences because neither the product nor the brand will be noticed by others. The aforesaid substantiate this

discovery; consequently telecommunication customers are less influenced by the operator’s high profile

customers. This implies that MTSP may need to invest less on high status people, as they exert less influence.

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Furthermore, the result in figure 2 established that promotional activities by celebrities do not persuade the

choice of MTSP. Advertisers often select celebrity endorsers as a promotional strategy to communicate the

attributes of their product/service or brand. Balakrishnan and Kumar (2011) submit that the advertising

practitioner should recognise that the use of well-known personality, who can create initial interest and

attention for an advertisement, does not necessarily result in attitude changes towards the product. In other

words, positive feelings towards advertising and products do not necessarily translate into actual behaviour or

purchase. However, the credibility of celebrities is significantly different among different ethnic groups

(Balakrishnan and Kumar, 2011). Therefore, for telecommunication operators selecting the appropriate celebrity

is important to enhance the credibility of the advertisement. The result reflects that promotional activities by

celebrities have less impact on customer selection of the MTSP (Figure 2). The aforementioned statement

justified this finding.

Boone et al. (2009) claim that children are especially vulnerable to the influence of reference groups. They often

base their buying decisions on outside forces such as what they see on television, opinions of friends, and

fashionable products among adults. Thus, advertising, especially endorsement by celebrities, can have much

bigger impacts on children than on adults, in part because children want so badly to belong to aspiration groups.

Consequently, 34% of the respondents who indicated that they were influenced by celebrities’ promotional

activities to choose a MTSP might be the youth. From the findings, it can be concluded that social factors such as

family, colleagues, and reference group and opinion leaders influence the selection of MTSP in Oshakati.

5.2.2 Research Question 2: Which Service Quality Dimensions Influence the Customers’ Selection of a Particular

MTSP?

In an attempt to establish the service quality dimensions which influence the choice for telecommunication

service provider, service quality was assessed on three dimensions namely, reliability, technical and network

qualities and responsiveness.

The findings of this study suggest that overall service qualities influence mobile phone users choice of service

provider (Figure 3). Thus, the choice to subscribe to a MTSP is influenced by quality in all aspects (i.e. quality of

network; coverage; effective delivery of SMSs, MMSs, voice messages, calls and other services). The finding

implies that network capability, network coverage, customer care services and service delivery affects the

attitudes of customers toward the purchase of telecommunication services. Furthermore, it implies that

connectivity and network performance are some of the most important aspects to increase the customer

satisfaction with telecom services. Hence, satisfied customers are loyal. Oodan et al. (2003) mention that as far

as the telecom user is concerned the quality of the service is experienced when all the necessary network

elements are connected together to make the service possible.

Based on these findings it can be remarked that poor performance of a service provider’s network directly leads

to poor service quality and hence leads to increase in customer complaints and overall customer dissatisfaction

regarding the service. Therefore, as telecommunication customers consider network performance as a major

selection criterion, MTSPs must ensure superiority of their network performance to gain subscriber base. This

can be a huge marketing differentiator in an industry that is reeling under hyper competition. Oodan et al.

(2003) point out those service providers who offer quality and reliability (both in networks and organisational

support) will enjoy a more favourable elasticity of customer loyalty even in time of economic difficulty and down

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turn. Reliability of service implies that service is delivered as agreed and promised, meeting customers’

expectations. These findings imply that MTSPs need to spend more efforts and investments making service

reliable.

The findings in Figure 3 indicated that telecommunication customers desire to make and receive calls anywhere

and anytime in Namibia. Network coverage is one aspect of the broader value element of convenience. There is

no doubt that being unable to make a call due to inadequate coverage is an inconvenience for consumers. These

findings implied that network coverage impact customers’ choice for MTSP. Therefore, MTSPs need to invest in

network coverage as it provides great satisfaction to customers, thus leading to the selection of MTSP The result

of this study is supported by Ojo (2010) who states that when competition exists, customers can set aside old

loyalties and choose the service provider which best serves their needs by meeting or exceeding customers’

expectations.

Innovation is vital for MTSPs to overcome the congestion of declining growth and increasing competition. This

study discovered (Figure 3) that network innovativeness persuade subscriber to select MTSPs. The findings imply

that MTSPs may not only need to be innovative but, should as well ensure the usefulness and ease use of the

innovation, as it has high likelihood of being accepted and used by potential customers. Moreover, network

innovativeness introduces new applications to cater for customers dynamic needs. The ability to launch

competitive new services faster and more cost effectively is a critical success factor for every service provider.

Customer expectations are rising. So are their options. Therefore, it is necessary for MTSPs to study the needs of

their customers.

Due to the fact that services are produced and consumed simultaneously, the contact personnel or the service

delivery personnel become extremely important (Kapoor et al., 2011). It is evident that the majority of the

respondents (76%) are influenced by customer care, both at the service provider outlets as well as at call center,

to choose their mobile service providers (Figure 3). The finding implies that the final outcome as well as the

overall perception of the service by the customer depends greatly on the process of service delivery. It shows

that customer use their interaction with employees to assess value of the offerings and to make the buying

decisions. Therefore, MTSPs need to recruit service-oriented employees, involve them in company activities, and

motivate them.

The study revealed that network capability; network coverage; network innovativess; prompt and efficient

service delivery; customer care service at call centers and operators’ outlets influence the choice of a MTSP.

Similarly, Khan (2010) in a study about assessment of service quality of cellular mobile telephone operators in

Pakistan revealed that convenience and network quality dimensions emerged as the most important dimensions

affecting customers’ perception of quality. A conclusion can, therefore, be drawn that reliability of service,

technical and network qualities, and responsiveness are the service quality dimensions which influence the

customers’ selection of a particular MTSP.

5.2.3 Research Question 3: Which Marketing Mix Elements have an Influence on the Buying Behaviour of

MTSP in Oshakati?

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Buyers’ interest in price stems from their expectations about the usefulness of the product or the satisfaction

they may derive from it (Pride and Ferrell, 2011). Price is seen as being only one factor affecting demand

(Lancaster and Withey, 2007). Price levels will impact on the number of customers buying (Baker and Hart,

2008). It is clear that low rate charges influence customers (83%) to subscribe to a MTSP (Figure 4). This means

that MTSPs which offer low charges would attract more customers, and then increase its revenue. Subsequently

operators’ optimization of resource to provide service quality at minimum cost is essential for effective

management of a telecommunication service.

Thus, the result justify that low rate charges significantly influence consumer preference of the MTSP. Moreover,

the finding indicated that some customer would pay a premium for service differentiation. This was implied by

unsure and disagreeing responses in figure 4. There is also an indication that some customers (those who

disagreed) were influenced by some other factors, for example VASs, to choose MTSPs. These findings

demonstrate that in assessing the cost of the product or service, customers will consider its price, the amount of

time and effort required to obtain it, and perhaps the resources required to maintain it after purchase.

Therefore, service organisations, such as telecommunication service should have strategies for arriving at pricing

decisions, taking into consideration the service characteristics and consumer perception (Rao, 2011).

Promotion is the business of communicating with customers. It provides information that will assist them in

making a decision to purchase a product or service (Verma, 2008). Promotional activities have specific objectives

and are aimed at stimulating demand. The finding in Figure 5 revealed that offers such as SIM card offered with

initial balance, life time validity, handsets offered with SIM card, free calls and free SMSs influences customers’

selection of a service provider. Thus, telecommunication consumers prefer service providers which provide

special services/products that are ‘over and above’ what they would normally provide to the customer.

Therefore, service providers need to use promotional offers to make consumers buy their services and change

their perception and attitude favourably toward product, services, and producer of services.

Pride and Ferrell (2009) argue that some promotional programs are unsuccessful because marketers fail to

generate awareness of critical issues among a significant portion of target market members or because the

programs do not target the right audience. This argument validates the findings in Figure 5, which revealed that

most of the participants (58%) disagreed that they subscribe to a MTSP to get a special mobile number. The

results show that special number offers do not make an impact on the MTSP choice.

Firms often use advertisements to communicate with the market about their services. Figure 5 also shows that

54% of the respondents agreed that advertisements influence them to subscribe to a MTSP. These finding

revealed that, although the majority of the customers indicated that advertisement influences their choice of

MTSP, its influence was not significant. Telecommunication marketing managers must understand that just as

good advertising may increase sales, bad advertising can decrease sales. This finding implies that the

telecommunications companies need to take time to develop and implement appropriate advertisements which

will stimulate the target audience to buy the products or services.

Customers buy goods and services at the place which is conveniently located, yet prominent to provide

comparatively higher satisfaction levels as compared to the time and effort spent by the consumer. The data in

Figure 6 reveals that the outlet physical appearance is not considered an important influencing factor. The

findings imply that telecommunication customers prefer good customer care from employees of service

providers and that they care less about the physical appearance of the operator outlets.

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The finding reflected that the majority of the respondents (79%) agreed that accessibility of services influence

their preference for MTSP. That means ease access to telecommunication services influence consumers’ choice.

Consequently, availability of telecommunication service in terms of network coverage and the strength of

network is an important factor customers consider when selecting a telecom operator. Furthermore, Customers

buy goods and services at the place which is conveniently approachable yet prominent to provide comparatively

higher satisfaction levels as compared to the time and effort spent by the consumer.

In conclusion, the study revealed that call rates; promotional offers such as free calls, free SMSs, free handsets;

advertisements; convenience as well as international roaming influence customers’ choice for a MTSP. The

marketing mix elements which have an influence on the buying behaviour of MTSP in Oshakati are:

service/product, promotion, price and service availability (place). Therefore, mobile telecommunication service

providers’ marketing mix need to take advantage of the original 4 P's of marketing - product, price, place and

promotion - as well as the 5th P of marketing - people - to set them apart from their competitors and better

promote their services.

6. MEASURE OF CENTRAL TENDENCY

The measure of central tendency is descriptive statistics that show the central location of a distribution of

observations (Van Blerkom, 2009). There are three common measures of central tendency, though in this study

the mean was used to summarize the frequency of responses in order to understand the location and degree of

distribution of the scores. The descriptive statistics inserted as Table 1 reflect the relative importance of each

variable in terms of the factors that influence telecommunication customer’s choice for service provider. Table 1

analyses the comparative mean score of various factor which influence consumers to choose a

telecommunication service provider.

Table 1: Comparative Mean Score

Descriptive Statistics

N Mean Std.

Deviatio

n

influenced by quality in all aspects 83 4.52 .846

influenced by free calls and free SMSs 83 4.35 .956

encouraged by network capability to subscribe 83 4.33 .885

influenced by the reliability of service 83 4.28 .901

consider network innovativeness to subscribe 83 4.17 .881

influenced by low rate charges 83 4.12 1.120

accessibility is an influential factor 83 4.02 1.047

influenced by promotions with discount, refund and free sample 83 4.00 1.169

influenced by geographic network coverage 83 3.99 1.042

influenced by SIM card with initial balance, life time validity and handsets 83 3.87 1.145

influenced by customer care at operator's outlet 83 3.86 1.231

subscribe to same service provider with family and friends 83 3.71 1.384

consider friends and colleagues opinion before buying 83 3.64 1.205

influenced by advertisement 83 3.36 1.164

international roaming plays an important role 83 3.35 1.204

appealing physical facilities are important than customer care 83 2.95 1.229

influenced by high profile customers 83 2.94 1.391

persuaded by celebrities promotional activities 83 2.65 1.320

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The above descriptive statistics reflect the relative importance of each item in terms of the determinant factors

that influence telecommunication customer’s choice for service provider.

Note: The above scale is based on:

1 = Strongly disagree

2 = Disagree

3 = Unsure

4 = Agree

5 = Strongly agree

Table 1 indicated that the mean rating of quality in all aspects is 4.52 with a standard deviation of .846.

Statistically, the mean of 4.52 is the highest value – equal to strongly agree (5). Therefore, overall quality is the

most influential factor. Moreover, the level of dispersion is also very low .846. This implies that this result can be

generalized to the entire population of Oshakati, as the level of variability is low. Furthermore, Table 1 revealed

that the following variables have a mean rating ranging from 4.35 to 3.53, respectively.

• free calls and free SMS;

• network capability;

• the reliability of service;

• network innovativeness;

• low rate charges;

• accessibility;

• promotions with discount, refund and free sample;

• geographic network coverage;

• Sim card with initial balance;

• customer care at operator’s outlet;

• same service provider with family and friends; and

• friends, colleagues opinion before buying.

A mean of 4.35 to 3.53 is equal to agree (4), which is a high value. This means that all of the above mentioned

variables are important factors that influence the selection of mobile telecommunication service provider. On

one hand, Table 1 indicates that:

• advertisement;

• international roaming;

• appealing physical facilities;

• high profile customers;

• celebrities promotional activities; and

• special mobile number, have a mean rating ranging from 3.48 to 2.58, respectively.

A mean of 3.48 to 2.58 is equal to unsure (3). The mean of 3 is a low value therefore, the result imply that the

influence by the aforementioned factors is low. Additionally, the standard deviations of all variables in this study

ranges from .846 to 1.496. This shows that the degree of dispersion is very low, hence, implying that most

observations were clustered around the mean.

subscribe to get a special mobile number 83 2.58 1.221

Valid N 83

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7. RECOMMENDATIONS

Based on the findings of this research, the MTSPs are recommended to:

• Provide service quality through network quality, network extension and upgrade.

• Offer quality service at lower rates.

• Provide more offers for family and friends.

• Enrich customer’s service experience and loyalty. Value the importance of day-to-day interactions, such as

response quality in call centers, skills of staffs in retail outlets, speed of technical repair and other measures.

• Pay attention to staff skill possession, knowledge, attention to customers and their needs, offering of fast

and efficient services and general attitude to customer services.

• Consistently monitor what customers want and what they get through the feedbacks, then identify the gap

in between through research and bridge the gap through continuous innovation.

8. LIMITATIONS AND DELIMITATIONS OF THE STUDY

A discussion of the study limitations demonstrates that the researcher understands that no research project is

perfectly designed; consequently, the researcher will make no overweening claims about generalizability or

conclusiveness about what has been learned (Marshall and Rossman, 2011). This study was limited to evaluate

the factors that determine the selection of MTSP in northern region of Namibia. In fact, considering resources

and time constraints, the research was limited to one town in northern Namibia. Therefore, it cannot be

representative of the whole northern part of Namibia population’s behaviour. Some of the limitations originated

from the tool that was used.

The use of the closed ended questionnaire meant that it was not possible to ask follow-up questions and thus

finding out the reasons for selecting a particular service provider over the other. The other concern is that this

study was measuring factors affecting consumers’ perception in the telecommunication sectors were measured,

but there is a lack of related literature. The delimitations of a study are those characteristics that limit the scope

of the inquiry and define boundaries for the study (Ledez, 2008). This study examined only few factors taken

from theories and literatures that influence customers’ perception towards the telecom service providers.

Furthermore, the delimitations of this study were also related to the use of a singular research design as

opposed to triangulation. The research instrument and the number of test items were also limited.

9. FUTURE RESEARCH AREAS

This study had limitations and delimitations. The following areas are suggested for further research:

• A similar study could be extended to the entire Namibian population.

• Various factors influence consumer behaviour, however, emphasis has been only on a few of those factors

and it is suggested to extend the research model by adding more concepts and variables.

• Include open-ended questions to probe the reasons for customers’ selection of a particular service provider.

• A study be undertaken to determine factors affecting brand loyalty and customer satisfaction in Namibia

Telecommunication Networks.

• The statistical analysis could be extended to consider some of the more complex relationships emerging

from the model.

10. CONCLUSION

This study aimed to evaluate the factors that determine the selection of MTSPs in northern Namibia. Namibia’s

mobile telecommunication market has grown over the past decade and it’s highly competitive. In any

competitive environment, firms are likely to compete in order to attract and retain customers. However, it is

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extremely important that a company recognizes the needs, wants, tastes, criteria and the perceptions of its

customers. The study employed data representing factors that influence customers’ selection of MTSPs to

identify and meet customers’ needs and wants as well as to establish the perceived and preferred service

quality, activities that would entice customers, the prices that customers are willing and able to pay, and the

possible best ways of utilizing available resources to supply the needed/desired services. The Namibian MTSPs

must maintain a combination of all these variables in order to succeed in a competitive telecommunication

market as well as to enjoy the much-needed profit to invest in network infrastructure, innovations and human

resources.

Providing superior service quality, particularly, in the dimensions of network quality and performance, reliability,

responsiveness, and convenience, is of utmost importance that requires MTSPs managerial attention in order to

attract and retain customers. The study suggested that regulators in the Namibia’s telecommunication sector

should take appropriate measures to include these dimensions in undertaking objective assessment of quality of

service of mobile telephone operators in safeguarding customers’ interest. In this study, the focus on marketing

mix elements and consumer behaviour was helpful in situating and understanding customers' preferences and

buying behaviour in mobile telecommunication services.

This study contributed in determining the factors which led customers’ toward selecting the MTSP in Namibia

and particularly, the marketing mix elements which influence the buying behaviour of telecommunication

services in Oshakati. Moreover, the results of the study contributed to the existing consumer behaviour

literature by exploring the factors influencing consumer buying behaviour that ultimately influence the selection

of MTSPs. Besides, it is evident that customers’ choice is largely influenced by marketing mix elements. The

current study established that customers look at the call rates; promotional mix offers such as free calls/minutes

and free SMSs, and promotions with discount and free sample play a vital role in customers’ choice of MTSP. It

was also found that customers’ choice is influenced by service accessibility/availability.

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