An analysis of the antecedents of loyalty and the moderating role of customer demographics in an emerging mobile phone industry

Abstract

Purpose – The purpose of this paper is to investigate how various antecedents influence customer loyalty in the mobile phone industry and how customer demographic variables moderate such relationships. A comprehensive model is proposed and tested empirically that features six antecedents identified in recent industry literature – customer satisfaction, perceived service quality, value, switching costs, trust, and corporate image – and common demographic variables. Design/methodology/approach – Data were collected using a field questionnaire survey of mobile phone users in Pakistan. Structural equation modeling (SEM) and multi-group SEM evaluate direct and moderating effects. Findings – Findings suggest that of six antecedents, customer satisfaction, perceived switching costs, service quality, and perceived value have positive and significant relationships with customer loyalty. Among the demographic variables, only income and area of residence moderate the relationships between customer loyalty and the antecedents. Research limitations/implications – The research was conducted in an Asian country where – due to recent liberalization – the telecommunications industry is emerging. The cultural and socio-economic diversity in Asia limits generalization of findings. Practical implications – Resource allocation that promotes customer loyalty in the mobile phone industry and improves customer satisfaction, perceived service quality, value, and switching costs can be optimized by implementing different measures for demographic groups. Policies should require mobile phone operators to invest more in rural areas to enhance and expand services. Originality/value – This study contributes to the literature by offering a comprehensive model that includes the most important antecedents of customer loyalty and customer demographics in the mobile phone industry. The model is validated empirically in the context of emerging Asian economies with new field data sourced from Pakistan.