CUSTOMER SATISFACTION IN MOBILE PHONE SERVICES IN BANGLADESH: A SURVEY RESEARCH Assistant Professor Mohammed Belal Uddin Comilla University, Bangladesh Email: email@example.com Assistant Professor Bilkis Akhter University of Dhaka, Bangladesh Email: bilkis_akhter@ yahoo.com Abstract: This study seeks to explore customer satisfaction and its influencing factors of the mobile phone operation industry in Bangladesh. Data were collected through a questionnaire survey form a diversified representative sample. An iterated factor analysis with principal component analysis (PCA) and structural equation modeling (SEM) including measurement model and structural model were applied to analyze data. The empirical results demonstrate that service quality and fair price have indirect influence on customer satisfaction of a mass service industry (i.e., mobile phone operators) through perceive value. Perceived value has mediating role between quality, charge fairness and satisfaction. Furthermore, result shows that fair price has positive direct impact on customer satisfaction, whereas, the results did not find any significant direct impact of service quality on customer satisfaction. Mobile phone operators are recommended to formulate operations and marketing strategies that focus on expectations of customers to enhance level of satisfaction. Similar industries may reveal similar relationship features in respect to these relationship constructs, if they are under similar category. Keywords: Service quality, Price, Perceived value, Customer satisfaction, mobile phone service Introduction regulatory systems, restricted Mobile phone services are the fast openness, and concentrated marketgrowing services in telecommunication orientation. Effective regulation, moreindustry in Bangladesh. This sector is openness, and entrance of competitiveshowing an inspiring growth in last few firms including launching a new state-years. Land phone market has no owned mobile phone service companycompetency to compete with mobile foster competition in this sector sincephone market. Land phone market 2005. It is assumed that, currently thefaces some problems such as weak and number of mobile phone subscriber isinadequate infrastructure, corruption, more than 46 million and expected it willlong procedures, limited income of cross 60 million by 2012 (Hasan, 2008).consumers etc. It is expected that Telecommunication sector of aBangladesh will be the third biggest country can tremendously affect thetelecom market in Asia after China and society with different products andIndia (Hasan, 2008). But mobile phone services which is also true forservice charges in Bangladesh were Bangladesh. In Bangladesh, mobilehigh before 2005 because of weak phone operators are contributing a lot
Management&Marketing, volume X, issue 1/2012 21with their services by the creation of which is about 56.36 millionvalue to the society. Citycell, subscribers.GrameenPhone, Robi (Aktel), Mobile phone operators provideBanglalink, Teletalk (state-owned voice service and value added servicescompany), and Airtel(Warid) are the including SMS (short message service),mobile phone service providers in MMS (multimedia message service),Bangladesh. Citycell (Pacific ringtone, games, electronic transaction,Bangladesh Telecom Limited) is the first and web browsing etc. Themobile phone operator of Bangladesh improvement of service quality,which, obtained a license in the name perceived value, and satisfaction ensureas Bangladesh Telecom Limited (BTL) customer loyalty (Kuo et al., 2009; Lai etto operate cellular, paging, and other al., 2009; Wu and Liang, 2009). Thesewireless communication networks in are the key source of success in the1989 and in 1990 a joint venture business and competitive advantage.Hutchison Bangladesh Telecom Limited Besides, voice services proving value(HBTL) was incorporated. Citycell added services are becoming greatstarted its commercial operation from prospect for mobile phone service1993. Ministry of Posts and providers. Since the studies regardingTelecommunications of Bangladesh in service quality and customerNovember 28, 1996 gave license to satisfaction issues in telecom industry isGrameenphone and in March 26, 1997 limited and there is no availableGrameenphone launched its service. measurement scales for service quality,Grameenphone has built the largest especially in Bangladesh, this studycellular network in the country and attempts to design the measurementintroduced the pre-paid service in scales for factors affecting customerSeptember 1999. Telecom Malaysia satisfaction and for customerInternational (Bangladesh) commenced satisfaction itself. The objectives of thisits operation in 1997 under the brand study are firstly, to recognize thename Aktel which is a joint venture influencing factors of customercompany between Axiata Group satisfaction and post-purchaseBerhad, Malaysia and NTT DOCOMO intentions. Secondly, to examine theINC, Japan. The company changed its interrelationship between customerbrand name Aktel with the brand name satisfaction and influencing factors ofRobi on 28th March, 2008. Under the satisfaction such as service quality,Companies Act, 1994, Teletalk price, and perceived value. The result ofBangladesh Limited (the “Company”) this study has managerial and academicwas incorporated on 26 December, implications. Managers of mobile phone2004 as a public limited company. service providers can use the findingsBangladesh Government sponsored the as sources of reference to manage theircompany. In February 2005, Banglalink business and improve their serviceentered the telecommunication sector of quality, and academicians can use theBangladesh and it became one of the finding for application of servicefastest growing mobile operators. In marketing field and further extension ofJuly 2007, a joint venture between Abu this topic or related topics.Dhabi Group & SingTel Group named The rest of the paper is structuredas Warid Telecom started its operation as follows. The next section providesin Bangladesh. Later on its ownership the theoretical background andhas changed and now it is providing hypotheses (see Figure-1) of the study.service with the name Airtel. All of these The following two sections outlinemobile phone operators in Bangladesh research methodology and offerare competing with each other to statistical analysis and major findings ofcapture a major portion of market share the study. The last section presents
22 Management&Marketing, volume X, issue 1/2012 discussion, theoretical and this study, and guidelines for furthermanagerial implications, limitations of study. Theoretical background and the utility of that product or servicehypotheses development comparing with expectation. Recently Service quality marketing researchers and managers Service quality is the gap between are focusing on value perceptions as acustomers’ expectation and actual key strategic component to explainperformance of a service (Parasuraman customer satisfaction and loyalty (Linet al., 1985; 1988). Mentioning five and Wang, 2006). To assess valuedimensions such as tangibility, perception customers considerresponsiveness, reliability, assurance, perceived benefits relative to sacrificeand empathy; Parasuraman et al., (Lee et al., 2007). Except monetary(1988) developed the SERVQUAL sacrifice perceived value assessmentmodel. The conceptual framework and includes social psychologicalmeasurement method of this model perspective and non monetary costshave been heavily criticized by several such as search cost, transaction cost,scholars. In 1992, the alternative negotiation cost, and consumption ofmethod, referred to as SERVPERF, was time (Kuo et al., 2009; Chen and Tsai,proposed by Cronin and Taylor. They 2008). Purchasing some goods orargued that, to assess service quality, services sometimes has some meaningperception of customers regarding the that increases social status as well asperformance of service provides better value of the customers in the society.results than using SERVQUAL. Along Customer desire to obtain or retain ofwith other researchers in 1994, any product or service is reflected byParasuraman et al. also mentioned that value perception. Value perceptionmeasurement method using deals with the agreement ofSERVPERF is better than using performance of product or service andSERVQUAL, though SERVQUAL can the value system of customer (Neapprovides better diagnostic results of and Celik, 1999). Thus, perceived valueservice quality. Service quality has a is a consumers’ evaluation of perceiveddistinct constructs and distinguish benefits with expectation and sacrifice.features for different services. Forinstance, website service quality Relationship between servicedepends on usability, usefulness of quality and perceived valuecontent, adequacy of information, With the consumption of anyaccessibility, and interaction (Yang et product or service customers haveal., 2005). On the other hand, Kuo et al. some benefits expectation based on(2009) proposed four dimensions of their advance sacrifice of resources.service quality of mobile value-added Perceived value is the appraisal of theservices including customer service and expected benefits with actualsystem reliability, navigation and visual performance of the products ordesign, content quality, and connection services. Several scholars examinedspeed. Thus, this study will concentrate association between service quality andon perceived service quality of mobile perceived value in their studiesphone services in Bangladesh. (Hutchinson et al., 2009; Kuo et al., 2009; Lai et al., 2009; Wu and Liang, Perceived value 2009). They found high service quality Value is the quality or expectation is correlated with high perceived value.in mind. Perceived value is the Experience about service qualitycustomers’ psychological assessment positively and significantly persuaderegarding the product and service about perceived value of a customer (Chen
Management&Marketing, volume X, issue 1/2012 23and Chen, 2010). By studying luxury factors are responsive employees,hotel-restaurant industry in Taiwan Wu well-mannered employees, educatedand Linag (2009) stated that, to employees, cooperative employees,increase customer experiential value correctness of billing, billing relevance,hotel managers should emphasize on competitive pricing, service feature,three quality aspects including service superior value, billing transparency andenvironment, employee service fast service. Alternative options andperformance, and interaction with products/services available for aclients. Therefore, there exists a customer may create differences inpositive relationship between service satisfaction level. Organizations canquality aspect and experiential well as accomplish customer satisfaction byperceived value. Kuo et al. (2009), Lai satisfying their customers’ needs andet al. (2009), and Turel and Serenko wants (La Barbera and Mazursky,(2006) studied relationship between 1983). Customer Satisfaction isservice quality and perceived value customers’ collective conception of aalong with other constructs in mobile firm’s service performance (Johnsonphone service industry and found and Fornell, 1991). In case of mobileservice quality positively motivate commerce, customer satisfaction isperceived value. Having influencing role customer’s post-purchase appraisal andof service quality also is an antecedent emotional response or reaction to theof value perceptions (Hutchinson et al., overall product or service familiarity in a2009). Thus, there is a positive mobile commerce environment (Lin andrelationship between customer Wang, 2006).perceptions of service quality and valueperceptions, and service quality is the Relationship between servicebest predictor of perceived value. So, quality and customer satisfactionwe posit: Customer satisfaction literature discusses about satisfaction model in H1: Service quality has positive marketing. According to the satisfactioninfluences on perceived value in mobile model customer satisfaction isphone services. influenced by service quality. When customers get expected service quality, Customer satisfaction it leads to higher satisfaction Customer satisfaction is the (Hutchinson et al., 2009). The differenceauthentic expression of the status of between customers’ expectations andsatisfaction will differ from person to the real performance is reflected asperson and product/service to perceived service quality. The higherproduct/service and is an appraisal of perceived performance has a positivehow products and services of a association with higher perceivedcompany meet up or exceed customer service quality. And expectation has aanticipation. Satisfaction is the negative relationship with perceivedconsequence of a number of both service quality. So, perceivedpsychological and physical factors performance has direct and positivewhich associate with satisfaction relationship with satisfaction (Chen,behaviors. Kotler (2000) defined 2008). Tourists’ perceived experiencesatisfaction as: “a person’s feeling of quality influences positively andpleasure or disappointment resulting significantly both perceived value andfrom comparing a product’s perceived satisfaction, in the tourism contextperformance (or outcome) in relation to (Chen and Chen, 2010). In thehis or her expectations”. Hokanson telecommunication context, service(1995) focuses on different factors quality implies network quality whichaffecting customer satisfaction and the includes clarity of voice reproduction,
24 Management&Marketing, volume X, issue 1/2012 indoor and outdoor coverage, performance, potentials have ansmoothness of connectivity along with incorporation effect on performance andeffective delivery of other value added satisfaction judgments and forservices (Gerpott et al., 2001). Service inconsistency potentials have no effectquality is the determinant of customer on performance and satisfactionsatisfaction (Cronin and Taylor, 1992) judgments (Voss et al., 1998). Theand by ensuring good service quality; perceived price fairness related totelecom operators can enrich customer different levels intangible services hassatisfaction (Kuo et al., 2009). A positive direct or indirect effect on customerbehavioral intention is the refection of loyalty in case of banks, auto repair andsatisfaction that is also influenced by maintenance shops, and (gasoline)service quality. A negative intention is filling stations (Lien and Yu-Ching,the outcome of dissatisfaction that may 2006). Consumers knowledge of pricesarise from experiences of customers may be affected by economicregarding service quality issue environmental factors such as interest(Zeithaml et al., 1996). Gerpott et al. rates, unemployment, inflation, country(2001), Kim et al. (2004), Kuo et al. of study, and passage of time and GDP(2009), and Lin and Wang (2006) growth (Estelami et al., 2001).studied telecommunication customersatisfaction aspects in Germany, Korea, Relationship between price andTaiwan, and Taiwan respectively and perceived valuefound the positive relationship between Customers are always costservice quality and customer concern. They want such an exchangesatisfaction. Thus, we propose: where benefits exceed the outlays (monetary and nonmonetary costs). H2: Service quality has positive Reduction of outlays related withinfluences on customer satisfaction in purchasing process, is one the way tomobile phone services. enhance perceived value (Chen and Hu, 2010). Customer value is a function Price of quality and price. It provides a In finance price is termed as the competitive advantage when firms takeamount of payment requested by the cost-cutting imitative to ensureseller of goods or services. The ratio customer value (Spiteri and Dion,between two products exchanged 2004). Real price competitiveness is anquantity is defined as price from important determinant of customereconomic point of view. Price is value. Price satisfaction increases thedetermined by several factors such as value perception and there is a directwillingness of the buyer to pay, relationship between price and valuewillingness to accept, costs, markup, (Ralston, 2003). Perceived value islegal environment, intensity of influenced by price factors and noncompetition price substitute products price factors. Monetary price includesetc. For different product/brand quality advertised sale price, advertiseprice also varies and price has influence reference price, shipment and handlingon economic performance of a product charges. Whereas, searching costs,or brand quality (Etgar, 1981). Price product or service evaluation, time effortfluctuations in many service industries etc. are included in nonmonetary priceresults in price-performance and the (Grewal et al., 2003). Monterey value islevel of price-performance stability the part of value perception ofmoderates the relationship between customers. To capture market share,performance potential and successive Chinese mobile phone operatorsperformance and satisfaction provide competitive pricing strategiesjudgments. For consistency in price and such as free offer and low charges. If
Management&Marketing, volume X, issue 1/2012 25customers feel these offers are the customers in general. If thereasonable and acceptable, they reasons for increase in price areperceive these offers as monetary value indefensible then it can be treated asunder their value perception (Deng et unfair by the customers (Xia et al.,al., 2010). Customers may be highly 2004; Campbell, 1999). The reason forprice-conscious or less price-conscious. an increase in price is reasonable if it isHighly price-conscious customers related to the factors external to the firmresponse quickly with price changes such as increase in supplier’s price. Onthan that of less price-conscious the other hand, reasons are inexcusablecustomers, and price is a significant when the factors are internal to the firmpredictor of their value perception as such as increase in profit marginwell as repeat purchase behavior (Vaidyanathan and Aggarwal, 2003).(Hidalgo et al., 2008). Price has an Customers can be attracted to a retailimpact on customer buying behavior store by using price and specialand value perception. Price needs promotions (Grewal, et al., 1998). Thus,special consideration to assess value we posit:perception of customers, notgeneralized along with other factors H4: Fair price has positive(Lockyer, 2005). Therefore, we propose: influences on customer satisfaction in mobile phone services. H3: Fair price has positiveinfluences on perceived value in mobile Relationship between perceivedphone services. value and customer satisfaction Value judgments of customers Relationship between price and have influence on satisfaction, andcustomer satisfaction perceived value is considered as a Customers’ perception about price powerful measure of customeris that the forces of supply and demand satisfaction and post-purchasedetermine the market price and they intentions. Recently marketingalso consider that price is a pointer of managers and researchers are focusingproduct or service quality. Customer more on value judgments of customers.satisfaction is affected by the price Transactional satisfaction and overallawareness (Varki and Colgate, 2001; satisfaction are two types of customerIyer and Evanschitzky, 2006). Price satisfaction. Transactional satisfaction islevel, value for money and special offers related with particular buying judgment,may result in both satisfaction and whereas, overall satisfaction is relateddissatisfaction and price fairness, price with overall experience and valueperceptibility and price processibility judgment (Spiteri and Dion, 2004).may result in dissatisfaction for Customer satisfaction is positivelycustomers (Zielke, 2008). In addition to influenced by perceived value. Thethe various levels of product price, a extent of satisfaction depends on extentmixture of price awareness dimensions of perceived value and higher level ofhave potentiality to intimidate the perceived value lead to higher level ofcustomers’ satisfaction (Diller, 2000; customer satisfaction (Kuo et al., 2009;Matzler and Pramhas, 2004; Matzler et Turel and Serenko, 2006). Customeral., 2006). Perceptions of customers satisfaction tends to positive postabout price fairness have been major purchase behavior, thus, satisfactionconcern due to huge interest of mass playas a mediating role in thepeople (Xia et al., 2004, Martin et al., relationship of perceived value and2009). When the price of a product or behavioral intentions (Lin and Wang,service is increased or decreased there 2006). Among the determinants ofis an instant response from the side of satisfaction perceived value is the
26 Management&Marketing, volume X, issue 1/2012 important one (Chen and Chen, 2010) behavioral intentions i.e. customerand perceived value plays mediating loyalty (Lai et al., 2009). Severalrole between service or product quality research works (Kuo et al., 2009; Lai etand customer satisfaction (Chen and al., 2009; Lin and Wang, 2006; TurelTsai, 2008). To achieve competitive and Serenko, 2006) have beenadvantages over the rivals firms try to conducted on mobile phone voicesatisfy customers, perceived value is services and value added servicesconsidered as a crucial predictor of regarding customer satisfaction, andoverall customer satisfaction. These found a positive association betweenvalue judgments of customers connect perceived value and customerwith customer post purchase behavior satisfaction. Therefore, the followingas desire to repurchase and word of hypothesis is proposed.mouth (Lee et al., 2007). Service qualityand fair price both have significant, H5: Perceived value has positivedirect effects on perceived value. Then, influences on customer satisfaction inperceived value influences on customer mobile phone services.satisfaction that lead to positive Service Quality H2 H1 Customer Perceived Satisfaction Value H5 H5 H3 Price Price H4 Figure 1. Hypothesized research model Research methodology respondents regarding the constructs of Questionnaire design the model. All constructs were The questionnaire was designed measured using multiple items by aaccording to the existing literatures and seven point Likert-type scale (1=experts’ opinions. We have reviewed strongly disagree, 2= disagree, 3=management, marketing (service moderately disagree, 4= neutral, 5=marketing, relationship marketing, brand moderately agree, 6= agree, and 7=management etc.), and operations strongly agree).management literatures. Some itemswere directly adopted from previous The Samplesurvey instrument to operationalize the The study was conducted inconstructs in this study. Few new items Bangladesh – a country of high growingalso included in different constructs to telecommunication services in Asia.get good response from data collection Total 433 questionnaires werethrough survey. The questionnaire has distributed to the general people whotwo parts. The first part was intended to were the target respondents of thisunderstand the personal information of study. And 382 responses wererespondents using nominal scale. The received, of which 373 were completesecond part consists the perceptions of and usable (response rate is 88
Management&Marketing, volume X, issue 1/2012 27percent, whereas, effective response graduation, and 21 percentrate is approximately 98 percent). Sixty- completed post-graduation. Thetwo percent (62 percent) respondents summary statistics of the survey arewere men and 38 percent were women. shown in Table 1. In order to control60 percent respondents were up to common method biases, it was assuredthirty years, 15 percent were thirty-one to respondents that there was no rightto forty years, 16 percent were forty-one or wrong answers and they shouldto fifty years, and 9 percent were above provide answer as honestly as possiblefifty years old. 22 percent respondents and no information will be shared withwere involved in government service, 21 other person or organization. It haspercent were in private service, 18 been also assured that the respondents’percent were in business, 16 percent identity will not be disclosed i.e. as likewere housewife, and 23 percent were answers to be anonymous and thestudent respondents. 35 percent information of this survey will be usedrespondents completed up to college for researchers’ academic purpose.level education, 40 percent completed Table 1 Summary statistics of questionnaire survey Constructs No. of Mean SD Sources of scale itemsService quality 6 5.992 0.857 Chae et al., 2002; Wouters, 2004; Yang et al., 2005Price 4 5.550 1.092 Kim and Lee, 2010; Zielke, 2008Perceived value 3 4.782 1.203 Chen and Tsai, 2008; Cronin et. al., 2000; Hutchinson et al., 2009; Lai et al., 2009Customer 6 5.090 1.409 Chae et al., 2002; Lin andsatisfaction wang, 2006; Olorunniwo et al., 2006 SD = standard deviation Analyses and Results obtained using Bartlett’s sphericity test, Structural equation modeling which suggests that the inter-correlation(SEM) was employed in this study to matrix contains sufficient commontest proposed model and hypotheses variance to make factor analysisand used AMOS 17.0 as the analysis worthwhile. For EFA, the Principalinstrument. For parameter estimation, Component Analysis (PCA), withmaximum likelihood method was varimax rotation and eigenvalue greateradopted. Measurement model and than 1 was used. As a conservativestructural model test were used to test heuristic, a cut-off point as 0.50fitness of the model. The exploratory (suppress absolute value less thanfactor analysis (EFA) was performed to 0.50) was imposed in factor analysisunderstand underlying relationship of that enhance the total reliability of thefactors and data reduction purpose. To questionnaire. We restricted the numberdetermine whether the data were of factors to four as the theoreticalappropriate for factor analysis, a Bartlett background of this study has total foursphericity test was performed. A KMO underlying factors. As suggested by the(Kaiser–Meyer-Olkin) value of 0.868 results of EFA one item (v6) wasand significance level of .000 were removed. Table-2 shows the rotated
28 Management&Marketing, volume X, issue 1/2012 factor loadings and their respective rule of thumb of 0.70 (Nunnally, 1978),eigenvalue and cronbach alpha values. that expresses a good internalIt is notable that all calculated alpha consistency among items within eachvalues are above the widely recognized construct. Table 2 Result of factor analysisNo. Service Price Perceived Customer quality value satisfactionSq1 0.868Sq2 0.882Sq3 0.816Sq4 0.770Sq5 0.742Pr1 0.758Pr2 0.775Pr3 0.863Pr4 0.841Pv1 0.874Pv2 0.868Pv3 0.852Cs1 0.910Cs2 0.933Cs3 0.932Cs4 0.894Cs5 0.921Cs6 0.739Eigenvalue 6.770 3.405 2.091 1.707Varience 35.630 17.922 11.003 8.982explained (%)Cronbach 0.887 0.852 0.919 0.957alphaOverall cronbach alpha is 0.899. Measurement model (χ√/df) ratio, root mean-square error of Confirmatory factor analysis (CFA) approximation (RMSEA), goodness of fitwas conducted to have a more rigorous index (GFI), normed fit indexinterpretation of customer satisfaction. (NFI),comparative fit index (CFI),The CFA model or Measurement model incremental fit index (IFI). As Table-3was employed to identify and determine shows χ√/df = 2.235, RMSEA = 0.058,the relationships of variables within the GFI = 0.935, NFI = 0.957, CFI = 0.976,model. To evaluate the goodness-of-fit and IFI = 0.976. All measures fulfill theof model several measures of indices suggested values. Therefore, CFAare used as suggested by Hair et al. model can be said as a good fit model.(1998), Iacobucci (2010), Schumacker(1992): Chi-square/degrees of freedom
Management&Marketing, volume X, issue 1/2012 29 Table 3 Goodness of fit statistics for measurement model and structural model Suggested Measurement Structural values model values model values χ√/df <3 2.235 2.285 RMSEA <0.06 0.058 0.059 GFI >0.90 0.935 0.936 NFI >0.90 0.957 0.958 CFI >0.90 0.976 0.976 IFI >0.90 0.976 0.976 After achieving the well fit indices, intends to the degree to which anthe measurement model was further observed variable reveals an underlyingassessed for reliability and validity. The factor. Table-4 presents the itemamount of variance in an item because reliability and construct reliability results.of underlying construct is indicated by Standardized loadings ranged fromitem reliability. Standardized loading 0.565 to 0.949 indicating good itemgreater than 0.70 demonstrate item reliability. All values of constructreliability but standardized loadings ≥ reliability were above the threshold0.50 are also acceptable (Chin, 1998; value (i.e. 0.70) indicating high level ofHair et al., 1998). For construct reliability for all the constructs.reliability, value ≥ 0.70 is required that Table 4 Measurement model resultsConstructs and Standardized t-statistics Construct Averagevariables loadings reliability variance (CR) extracte d (AVE)Service qualitySq1 0.861 18.705** 0.88 0.61Sq2 0.868 19.018**Sq3 0.742 15.800**Sq4 0.698 14.424**Sq5 0.706 14.721**PricePr1 0.775 10.991** 0.84 0.57Pr2 0.940 13.232**Pr3 0.687 11.013**Pr4 0.565 9.452**Perceived valuePv1 0.882 21.265** 0.92 0.80Pv2 0.949 24.034**Pv3 0.841 19.878**Customer satisfactionCs1 0.902 22.164** 0.95 0.78Cs2 0.941 23.036**Cs3 0.941 23.966**Cs4 0.870 21.079**Cs5 0.885 21.602**Cs6 0.730 16.321****Indicates significance at p< 0.01 level.
30 Management&Marketing, volume X, issue 1/2012 CR= (∑ Standardized loadings) √ ⁄ [(∑ Standardized loadings) √ + ∑ (measurementindicator error)]AVE = ∑ (Standardized loadings√) ⁄ [∑ (Standardized loadings√) + ∑ (measurement indicatorerror)] After being assured that a scale items offer good measures to theirinstrument provides necessary levels of respective latent construct because ofreliability, this study stepped to scale all t-statistics values are statisticallyvalidity. Under construct validity significant at 0.01 level and confirmedconvergent validity and discriminant convergent validity of the constructs.validity were tested in this study. The Average variance extracted (AVE) isdegree to which dimensional measures also used to assess discriminant validityof the same concept are correlated is (Fornell and Larcker, 1981). The role ofassessed by convergent validity. To thumb is that the average varianceassess convergent validity average extracted (AVE) values should bevariance extracted (AVE) is used greater than corresponding squired(Fornell and Larcker, 1981; Hair et al., inter-construct correlation estimates1998). Representation of latent (SIC) in the model. Table-5 shows theconstructs by items is truly denoted as average variance extracted (AVE)higher as the average variance estimates in the diagonal values andextracted is higher. For latent construct corresponding squired inter-constructthe average variance extracted (AVE) correlation estimates (SIC) values,should be more than 0.50 (Hair et al., supportive evidence for discriminant1998). Table-4 shows the average validity. For example, (Table-5) averagevariance extracted (AVE) values for variance extracted (AVE) estimate forconstructs ranged from 0.61 to 0.80 price was 0.57 and correspondingexceeded the threshold value 0.50, squired inter-construct correlationsupportive evidence for convergent estimates (SIC) values were 0.09, andvalidity. Moreover, in a CFA setting, t- 0.06 for perceived value and customerstatistics related to factor loadings is satisfaction respectively, an indication ofassessed to measure convergent discriminant validity.validity (Rao and Troshani, 2007). All Table 5 Squared correlations between constructs Service Price Perceived Customer quality value satisfactionService quality 0.61*Price 0.11 0.57*Perceived 0.12 0.09 0.80*valueCustomer 0.04 0.06 0.20 0.78*satisfaction*Diagonal elements are average variance extracted (AVE) Structural model (Hair et al., 1998; Iacobucci, 2010; Table-3 shows the common Schumacker, 1992) the evidence of amodel-fit indices, recommended values good model fit was revealed. Given theand results of the test of structural good fit of the model, the estimated pathmodel fitness. As shown in Table-3, coefficients of the structural model werecomparison of all fit indices with their then examined to evaluate thecorresponding recommended values hypotheses.
Management&Marketing, volume X, issue 1/2012 31 Table 6 Path analysis of structural modelCasual path Hypotheses Path t- Results coefficient statisticsService quality perceived H1 0.231** 4.387 SupportedvalueService quality H2 0.016 0.303 Notcustomer satisfaction supportedPrice perceived value H3 0.119* 2.055 SupportedPrice customer satisfaction H4 0.136* 2.315Perceived value H5 0.385** 7.024 Supportedcustomer satisfaction**indicates significance at p< 0.01 level; *indicates significance at p< 0.05 level Table-6 depicted the empirical satisfaction. It is notable that the indirectresults of structural model by path effect of service quality on customeranalysis. The path coefficients along satisfaction is so significant as to playwith hypotheses and t-values of the down the direct effect of service qualitylatent constructs are visualized in on customer satisfaction. This isFigure-2, where hypotheses were drawn perhaps caused by data co-linearityin the solid lines. The empirical results and/or model misspecification. On thesupport all hypotheses (i.e., H1, H3, H4 other hand, price has significant directand H5) except one hypothesis (H2). and indirect effect on customerThe empirical results did not find any satisfaction.significant positive relationship betweenservice quality and customer Service Quality H2 0.016 (0.303) H1 0.231** (4.387) Customer Perceived H5 0.385** Satisfaction Value H3 0.119* (7.024) Price (2.055) Price H4 0.136* (2.315) **p<0.01, *p<0.05 Value within the parenthesis is t-value Figure 2. Outcome of hypothesized structural model Conclusions and in Bangladesh, researches do notimplications provide a clear idea of measurement of Though mobile phone services is customer satisfaction including specialone of the fast growing service sectors concentration on service quality, service
32 Management&Marketing, volume X, issue 1/2012 charge/price , and perceived value all concerned to generate the outcomestogether. This study sheds light on (Gomez et al., 2004; Ralston, 2003).possible influence of service quality, To the limited knowledge of theprice fairness, and perceived value on authors, it is the first time that pricecustomer satisfaction in mobile phone fairness is introduced separately inservices industry. This study contributes basic customer satisfaction model. Thisin the branch of service study shows fair price has a significantmarketing/consumer behavior in terms direct impact on customer satisfactionof theory development and managerial and an indirect influence on customerimplications especially in mobile phone satisfaction through perceived value.operations industry in a developing Our empirical study confirms that pricecountry like Bangladesh. fairness is a significant determinant of Our empirical results show that customer satisfaction in the serviceboth service quality and fair price industries. Maintaining service quality, ifpositively influenced value perception of services providers reduce price or offercustomers of mobile phone service competitive price, it ensure competitiveoperators. Consequently, perceived advantage.value also positively influenced The results of this study offercustomer satisfaction. Hence, perceived some implications for mobile phonevalue performed mediating role between operators or similar industry inservice quality, fair price, and customer Bangladesh. The significant effects ofsatisfaction which is similar to the other two exogenous variables imply thatstudies (Kuo et al., 2009; Lai et al., research in customer satisfaction should2009 Turel and Serenko, 2006). take into account not only factors suchFurthermore, fair price has direct impact as service quality and perceived valueon customer satisfaction. This result is but also other potentially importantconsistent with findings of other factors, such as price fairness as wellscholars (Diller, 2000; Iyer and as service charge fairness. In this study,Evanschitzky, 2006; Varki and Colgate, we extend the existing customer2001). On the other hand, empirical satisfaction model by incorporatingresults did not find any significant direct three antecedents in the proposedimpact of service quality on customer model, presenting a moresatisfaction. It is important that most of comprehensive picture of customerthe previous studies emphasized on satisfaction and post-purchaseservice quality, and perceived values as intentions. Therefore, theory building inthe motivating factors of customer this area could benefit from examiningsatisfaction, whereas, this study provide the issues from multiple perspectives toequal importance to price fairness. provide additional insights. From aWhen service providers offer lower managerial perspective, service quality,prices ensuring same level of quality and perceived value is an importantthey may get competitive advantages as influencing factor on customerthe consequence of customer satisfaction. Firms should understandsatisfaction (Kim and Lee, 2010). Price the importance of quality assurance andsatisfaction is related with customer value of the service to customers.satisfaction is a psychological reaction Perceived value is influenced by priceof customer, resulting from the dealings and service quality. At the same timeof cognitive and emotional processes. they have positive direct influence onOn the other hand, perceived customer customer satisfaction. Thus, the positivesatisfaction and fairness positively effect of quality, low price, andinfluence business performance and are perceived value makes customersdependent on the customer service satisfied. Managers should havequality as well as the dealings planning to ensure service quality,
Management&Marketing, volume X, issue 1/2012 33competitive price, increased perceived survey customer satisfaction. Anothervalue of customers to achieve limitation is this study only focuses oncompetitive advantages over their rivals. one sector (mobile phone operations). There are some limitations of the Future study should utilize thisstudy that could be addressed in future methodology for several industries inresearch in this area. Due to the mass service to confirm the modelexploratory nature of the study, only identified for customer satisfaction.three factors deemed the most Finally, further study should address theimportant in influencing satisfaction of customer satisfaction issues on othercustomer are included. In particular, typology of service such service factory,some constructs from the social and service shop, and professional service.cultural aspects could also be used toREFERENCESBaker, D. A., and Crompton, J. L. (2000), “Quality, satisfaction and behavioral intentions”, Annals of Tourism Research, 27(3), 785-804.Campbell, M.C. (1999), “Perceptions of price unfairness: antecedents and consequences”, Journal of Marketing Research, 36, 187-199.Chae, M., Kim, J., Kim, H., and Ryu, H. (2002), “Information quality for mobile internet services: A theoretical model with empirical validation”, Electronic Markets, 12(1), 38-46.Chen, C-F. (2008), “Investigating structural relationships between service quality, perceived value, satisfaction, and behavioral intentions for air passengers: Evidence from Taiwan”, Transportation Research Part A, 42, 709-717.Chen, C-F., and Tsai, M.H. (2008), “Perceived value, satisfaction, and loyalty of TV travel product shopping: Involvement as a moderator”, Tourism Management, 29, 1166-1171.Chen, C-F., and Chen, F-S. (2010), “Experience quality, perceived value, satisfaction and behavioral intentions for heritage tourists”, Tourism Management, 31, 29-35.Chen, P-T., and Hu, H-H. (2010), “The effect of relational benefits on perceived value in relation to customer loyalty: An empirical study in the Australian coffee outlets industry”, International Journal of Hospitality Management, 29, 405- 412.Chin, W. (1998), “The partial least square approach for structural equation modeling. In G. A. Marcoulides (Ed.)”, Modern methods for business research. Hillsdale, NJ: Lawrence Erlbaum Associates, 295–336.Cronin, J. J., and Taylor, S. A. (1992), “Measuring service quality: A reexamination and Extension”, Journal of Marketing, 56(3), 55-68.Deng, Z., Lu, Y., Wei, K.K., and Zhang, J. (2010), “Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China”, International Journal of Information Management, 30, 289-300.Diller, H. (2000), “Preiszufriedenheit bei Dienstleistungen. Konzeptualisierung und explorative empirische Befunde”, Die Betriebswirtschaft (DBW), 60 (5), 570-587.
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