Customer satisfaction and loyalty on service provided by Malaysian telecommunication companies

Abstract

Customer loyalty has been largely treated as either repurchase behaviour or an attitudinal component attached with repurchase behaviour. However, many researchers have recognized the problem to associate customer loyalty as solely repurchase behaviour because measures do not distinguish spuriously loyal customers. This empirical study on users' perception integrated the role of customer loyalty within the context of other service marketing variables like service quality and customer satisfaction, besides corporate image and pricing strategy. The research objectives of the study are to investigate (1) the determinants of perceived service quality, corporate image and price and which is more significantly affecting customer satisfaction; and (2) the effect of customers' satisfaction on service loyalty of telecommunication service providers. This study seeks to contribute to the development of a conceptual framework that integrate service quality, corporate image, price, customer satisfaction, and service loyalty. As a result, a survey of consumers was conducted to provide insight into these issues in Malaysian context. Two hundred forty one replies were received from an on-line survey. The research findings showed service quality, corporate image, and price were predictors of customer satisfaction. Nonetheless, there was a trade-off between price and service quality in terms of customer satisfaction. Among the predictors, price had been identified to have the most impact. There were also evidences showing that customer satisfaction performed a mediating role on the link among service quality, corporate image and price towards service loyalty. In conclusion, the results demonstrated the importance of improving the quality management of mobile phone services. It showed that customer satisfaction was dependent on the perceived level of quality delivered. This study of the mobile telephone market in Malaysia supported the contention in the general marketing literature that the main factor creating and improving customer loyalty is customer satisfaction. This study gives implications for differentiated marketing strategies according to the perceived value and type of customer loyalty.