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Internship report Spring - 2005

A RELATIONAL STUDY ON SERVICE QUALITY, SWITCHING COST, TRUST, CUSTOMER SATISFACTION AND CUSTOMER LOYALTY IN THE CONTEXT OF GRAMEENPHONE

Submitted by, Masud Parvez (ID # 0120016)

Submitted to, Mr. Muzahid Akbar Lecturer

Independent University, Bangladesh April 28, 2005

A RELATIONAL STUDY ON SERVICE QUALITY, SWITCHING COST, TRUST, CUSTOMER SATISFACTION AND CUSTOMER LOYALTY IN THE CONTEXT OF GRAMEENPHONE

A RELATIONAL STUDY ON SERVICE QUALITY, SWITCHING COST, TRUST, CUSTOMER SATISFACTION AND CUSTOMER LOYALTY IN THE CONTEXT OF GRAMEENPHONE

Submitted by, Masud Parvez (ID # 0120016)

Submitted to, Mr. Muzahid Akbar Lecturer

Independent University, Bangladesh April 28, 2005

April 28, 2005

Mr. Muzahid Akbar Lecturer, School of Business Independent University, Bangladesh

Dear Sir, It is a great pleasure for me to submit the report on A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty in the context of GrameenPhone. I am submitting this report as the part of my internship (BBA-499A) in GrameenPhone. This report will help the organization to find out related factors with customer satisfaction and loyalty. This is the first time I have done a correlational study in a complete form and I have tried my best to complete the study in proper way. It is true that it could have been done in better way if there would not be the limitations. I hope you will asses my report considering the limitations of the study. Your kind advice will encourage me to do further research in future.

Yours most obediently Masud Parvez ID # 0120016

Acknowledgement

In the preparation and finish this internship report, I acknowledge the encouragement and assistance given by a number of people and institution. I am most grateful to the GrameenPhone Ltd.s management to give me the opportunity to complete my internship in their organization. I would like to express my gratitude to my Supervisor Mr. Muzahid Akbar for providing me detailed feedback and advice on this report. He always gave me his suggestions in making this study as flawless as possible. I also want to render my special thanks to Mr. Azam M. Ferdous Alam, Deputy Manager, Logistcs, Sales & marketing Division, GrameenPhone for providing all the support in the organization. Special thanks go to the respondents, who spared their time generously, and took the trouble of answering a detail Questionnaire and helped me to complete my study.

Table of Contents
Page Executive Summary 1.0 Introduction 1.1 Statement of the problem 1.2 Purpose of the study 1.3 Limitations of the study 1.4 Research timeline 2.0 Literature Review 2.1 Service quality 2.1.1 Dimensions of service quality 2.1.1.1 Reliability 2.1.1.2 Responsiveness 2.1.1.3 Tangible 2.1.1.4 Empathy 2.2.2.5 Assurance 2.1.2 Switching cost 2.1.3 Trust 2.1.4 Customer Loyalty 2.1.5 Customer satisfaction 2.1.6 Relationship between service quality and customer satisfaction 2.1.7 Relationship between service quality and customer loyalty 2.1.8 Relationship between switching cost and customer loyalty 2.1.9 Relationship between trust and customer loyalty I 1 1 1 2 2 2 2 3 3 4 4 4 4 4 5 6 6 7 8 8 9

3.0 Operational definition 3.1 Research questions 3.2 Hypotheses 3.3 Development of conceptual framework 4.0 Methodology 4.1 Research design 4.2 Sampling method 4.3 Survey instrument 4.4 Data collection 4.5 Data analysis 5.0 Results 5.1 Reliability Coefficient and Descriptive Statistics 5.2 Correlation analysis 5.3 Regression analysis 6.0 Assessment of Hypotheses 7.0 Recommendation 8.0 Conclusion References Appendices

10 10 10 11 12 12 12 12 14 14 14 14 16 17 20 23 25 26 34

Executive Summery

This research intends to investigate the relationships of service quality, switching cost and trust with customer satisfaction and customer loyalty in GrameenPhone, the leading GSM mobile telephony system in Bangladesh. It is a correlation study which measures the correlation among the study variables such as service quality, switching cost, trust, customer satisfaction, and customer loyalty. The sample for this study was the subscribers of Grammeen phone visiting the customer care. The researcher distributed 101 questionnaires among the respondents. Collected data were analyzed by using the SPSS version 11.1. Correlation analysis, stepwise regression and entered regression were performed to asses the hypothesis. The correlation analysis provided full support to prove almost all the hypothesis but the step and entered regression provided partial support to the hypothesis.

Introduction
GSM technology was introduced in Bangladesh from 26th march 1997 by GrameenPhone. The first year after the GrameenPhone was launched, there were no other operators using the GSM technology. From 1998 AKtel started there operation using the same technology to serve the subscribers of Chittagong. With time both the operator extended there coverage and service feature. Within a short period of time SHEBA Telecom joined the market which is now named as Banglalink with a new management called Orascom. GrameenPhone is the market leader having more than 2.4 million subscribers; AKtel is the market follower having 1 million subscribers. Banglalink is also increasing its market share by providing various types of attractive offers to capture the existing market. As the socioeconomic status of the country does not provide further possibilities to increase the growth of the industry, market followers are trying to attract other operators subscriber. So, there is an emergence of studying the related factors of the customer loyalty in the context of Bangladesh GSM telecommunication system for GrameenPhone to preserve its market share.

Statement of the problem


In the GSM mobile telephony sector in Bangladesh vast competition has emerged. So, the subscribers now have various alternatives to choose according to their convenience. Therefore, to maintain the leading position in the market GrameenPhone has to identify the factors related to customer satisfaction and loyalty.

Purpose of the study


The purpose of the study was to present the relationship between service quality, switching cost and trust with customer satisfaction and customer loyalty in GrameenPhone, the leading GSM mobile telephony system in Bangladesh.

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

Limitations of the study


The study was limited by a number of factors. Firstly, the research was limited only in Dhaka city. Secondly, sample size was very small to present the proposed scenario. Thirdly, time constraint led to get narrower outcomes and finally, the knowledge constraint of the researcher was another limitation for this study.

Research timeline
2005 2005 2005 2005 2005 February March April 10 April 20 April 28 Research proposal writing and literature review Data collection procedure Data analysis and interpretation of findings Final redraft of complete manuscript. Submission of research paper

Literature of review
Service quality According to Berry et al. (1988), service quality has become a significant differentiator and the most powerful competitive weapon which all the service organizations want to possess. Definitions of service quality hold that this is the result of an evaluation process where customers compare their expectations about a service with their perception of the service to be received (Lewis & Booms, 1983; Lehtinen & Lehtinen, 1982; Gronroos, 1984; Parasuraman et al., 1985, 1988, 1994). They also added that service quality can be split into technical quality which means what is done and functional quality which means how it is done. Lehtinen and Lehtinen (1982) gave a three-dimensional view of service quality consisting interaction, physical, and corporate quality.

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

Numerous researches have been delineated service quality as forms of attitude a long run overall evaluation, and the two constructs (service quality and attitude) are viewed as similar (Parasuraman et al., 1988; Bitner, Booms, & Tetreault, 1990; Bolton and Drew, 1991; Cronin & Taylor, 1992; Bitner & Hubert, 1994). Allport (1935) defined attitude as a learned predisposition to respond to an object in a consistently favorable or an unfavorable way. As perceived service quality portrays a general overall appraisal of service, i.e. a global value judgment on the superiority of overall satisfaction with the service, it is viewed as similar to attitude (Sureshchandar et al., 2002). Parasuraman et al. (1988) have developed a service quality measure, SERVQUAL which reasonable of the overall service quality dimensions. The researchers developed ten general dimensions named- tangibles, reliability, responsiveness, competence, courtesy, credibility, security, access, communications, and understanding. SERVQUAL was revised later by Parasuraman et al. (1991) based on the result of an empirical study on five service companies. They noticed that some of the ten dimensions were correlated. They refined it and finalized the instrument composed of five dimensions include reliability, responsiveness, assurance, empathy, and tangibles. In this present study these dimensions will be used to measure the service quality.

Dimensions of service quality Reliability According to Philip Kotler (1999); Bitner, M. J., and Zeithaml, V. A. (2003) the ability to perform the promised service dependably and accurately is the reliability. Gilbert A. Churchill, Jr. & J. Paul peter (1999) added that customers want performance to be consistent and dependable.

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

Responsiveness According to Philip Kotler (1999); Bitner, M. J., and Zeithaml, V. A. (2003) responsiveness is the willingness to help customers and provide prompt service. Gilbert A. Churchill, Jr. & J. Paul peter (1999) added that customer must see service provider as ready and willing to perform. Tangibles According to Philip Kotler (1999); Bitner, M. J., and Zeithaml, V. A. (2003), the appearance of physical facilities, equipment, personnel, and communication material of an organization is the tangibles. Gilbert A. Churchill, Jr. & J. Paul peter (1999) added that customer look for quality in the equipment, facilities, and communication materials used to provide the service. Empathy According to Philip Kotler (1999); Bitner, M. J., and Zeithaml, V. A. (2003), empathy means the provision of caring, individualized attention to the customer. Assurance According to Philip Kotler (1999); Bitner, M. J., and Zeithaml, V. A. (2003), assurance means the knowledge and courtesy of employees and their ability to convey trust and confidence.

Switching cost According to Porter (1998), switching cost is the cost involved in changing from one service provider to another. In addition to measurable monetary costs, switching costs also include time and psychological effort involved in facing the uncertainty of dealing with a new service provider (Dick and Basu, 1994; Guiltinan, 1989). According to Jackson (1985), it is the sum of economic, psychological cost, and physical costs. It includes the psychological

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

cost of becoming a customer of a new firm, and the time effort involved in buying new brand (Klemperer, 1995; Kim et al., 2003). Hence, switching cost varies from customer to customer (Shy, 2002). Psychological cost is a perceived cost stemming from social bonds that form in the course of time and the uncertainty and risk associated with switching to an unfamiliar brand (Patterson and Sharma, 2000; Sharma, 2003). Thus the switching cost can vary from customer to customer. The definition provided by Porter (1998) will be considered as switching cost in this study.

Trust Trust is consistently related to the vulnerability of the trustor (Bigley and Pearce, 1998; Singh and Sirdeshmukh, 2000), because without vulnerability of the trustor upon the trustee, trust becomes irrelevant. In business studies, trust has been found to be important for building and maintaining long-term relationships (e.g. Geyskens et al., 1996; Rousseau et al., 1998; Singh and Sirdeshmukh, 2000). Anderson and Narus (1990) postulated that, if one party believe that the actions of a third party will bring positive outcomes to him, trust can be build. Trust was viewed as one of the most relevant antecedents of stable and collaborative relationships. The centrality of trust in market relationships is made evident by the many research and some wide literature review are already available (Castaldo, 1995; Blois, 1999). Doney and Cannon (1997) added that the third party also must have the ability to continue to meet its obligations within the cost-benefits relationship. Therefore, the customer should not only perceive positive outcomes but also believe that these positive outcomes will continue in the future. According to Lau and Lee (1999), as one party trusts another and develop positive behavioral intentions towards the other, when customers trust brands they also form positive buying intentions towards those brands. Trust is sometimes conceived of having two

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

components, performance or credibility trust and benevolence trust, as Ganesan (1994) pointed out in a business-to-business context.

Customer loyalty Customer loyalty represents the repeat purchase, and referring the company to other customers (Heskett et al. 1994). He also sated that customer loyalty is a figure that may be measured directly as measuring the actual repeated sales to customers. According to Duffy (2003) loyalty is the feeling that a customer has about a brand which ultimately generates positive and measurable financial results. Improvements in retention and increasing in the share of the company are the obvious economic benefits of customer loyalty. According to Feick and Lee (2001), customer loyalty has been measured as the long-term choice probability for a brand or as a minimum differential needed for switching. Several earlier studies identified customer loyalty in several ways such as attitudinal approaches focused mainly on brand recommendations, resistance to superior products (Narayandas, 1996), repurchase intention (Cronin & Taylor, 1992) and willingness to pay a price premium (Bitner & Zeithaml, 2003). Czepiel and Gilmore (1987), define service loyalty as a specific attitude to continue in an exchange relationship based on past experiences. Their definition implies that levels of service loyalty can be assessed by attitudinal measures such as the ones based on intentions to repatronize a service provider. Such attitudinal measures have an advantage over behavioral measures (e.g. repeat patronage) in that they can provide greater understanding of the factors associated with the development and modification of loyalty (Oliva et al., 1992). Customer satisfaction The most common interpretations reflect the notion that satisfaction is a feeling which results from a process of evaluating what was received against that expected, the purchase

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

decision itself and the fulfillment of needs or want (Armstrong & Kotler, 1996; Berkowitz et al.1999). Kotler (1999) also noted that satisfaction is a function of perceived performance and expectations which identifies feelings of a person resulting from comparing a products perceived performance in relation to his or her expectations. Bitner and Zeithaml (2003) stated that satisfaction is the customers evaluation of a product or service in terms of whether that product or service has met their needs and expectations. Fe and Ikova (2004) added that the perception of the word "satisfaction" influences the activities which we conduct to achieve it. Researchers have also identified customer satisfaction from a multi dimensional nature and view overall satisfaction as a function of satisfaction with multiple experiences with the service provider (Sureshchandar et al., 2002).

Relationship between service quality and customer satisfaction The empirical studies show that two constructs service quality and customer satisfactions are conceptually distinct (Bitner, 1990; Boulding, Kalra, Staelin, & Zeithaml, 1993). Sureshchandar et al, (2002) identify that the survey result shows that there are high relationships between service quality and customer satisfaction. Sureshchandar et al (2002), have emphasized that the two constructs service quality and customer satisfaction do exhibit the independence and are indeed different constructs from the customers point of view. In more recent studies Spreng and Mackoy (1996) addressed the relationship between service quality and customer satisfaction by using the model developed by Oliver et al (1992). The model integrates the two constructs and suggests, among other things that perceived service quality is an antecedent to satisfaction. Spreng and Mackoy (1996) showed that service quality leads to customer satisfaction. Bitner (1990) developed a model of service encounter evaluation and empirically supported the effect of satisfaction on service quality.

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

Bolton and Drew (1991) also proposed that satisfaction leads to service quality. Earlier, Woodside et al. (1989), supported the causal relation of service quality and satisfaction with data collected in the area of health care.

Relationship between service quality and customer loyalty The relationship between service quality and customer preference loyalty has been examined, among others, by Boulding et al. (1993) and Cronin and Taylor (1992). Cronin and Taylor (1992) focused solely on repurchase intentions, whereas Boulding et al. (1993) focused on the elements of repurchasing and willingness to recommend. In the study by Cronin and Taylor service quality did not appear to have a significant (positive) effect on repurchase intentions (in contrast to the significant positive relation between satisfaction and repurchase intention), while Boulding et al. (1993) found positive relationships between service quality and repurchase intentions and willingness to recommend. Furthermore, it has been argued that actually responding to dissatisfaction (e.g. complaining directly to the company or complaining to a third party) is negatively related to the level of service quality (Beardon et al., 1979; Yi, 1990). Rust and Zahorik (1993) related service quality perceptions to consumer loyalty in banking, Crosby and Stephens (1987) investigated loyalty in the insurance industry and with regard to retailing, customer patronage was investigated in relation to service encounter failures by Kelley et al. (1993).

Relationship between switching cost and customer loyalty It has been suggested that the degree of switching costs may have an influence on customer loyalty in a given industry (Anderson and Fornell, 1994; Dick and Basu, 1994; Fornell, 1992; Gremler and Brown, 1996). Andreasen (1982; 1985) found empirical support for the effect of

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

high switching costs on customer loyalty in relation to medical services. In addition to customer uncertainty and structure of the market, the level of competition and loyalty programmes (e.g. membership programmes, customer clubs, seasonal tickets in theatres and opera houses) may increase the perceived and actual cost of switching (Gruen and Fergusson, 1994; Gummesson, 1995). In other words, in the presence of switching cost, customers who might be expected to select from a number of functionally identical brands display brand loyalty (Klemperer, 1987).In conclusion, it appears that there is a positive relationship between the level of switching costs and customer loyalty in services.

Relationship between trust and customer loyalty Trust is logically and experientially a critical variable in relationships, as has been hypothesized and borne out in the marketing literature (Moorman et al., 1993; Morgan and Hunt, 1994). Those who are not willing to trust a vendor in a competitive marketplace are unlikely to be loyal. The importance of trust in explaining loyalty is also supported by authors as Lim et al. (1997), Garbarino and Johnson (1999), Chaudhuri and Holbrook (2001), Singh and Sirdeshmukh (2000), and Sirdeshmukh et al. (2002). However, it must be admitted that, while in a market with suitable alternatives lack of global and benevolence trust should lead to negative loyalty (desire and intention to switch), positive benevolence and global trust may not necessarily lead to positive loyalty. In some markets where all or nearly all vendors are trustworthy, one could trust many vendors equally, one could expect trust as a normal part of doing business, and therefore be loyal or not without reference to trust. So, the trust-loyalty relationship, while positive, may be weak in some markets.

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Operational definition
Summaries of the operational definitions of measured variables are given below in Table1. Table1 Operational Definitions of Measured Variables Measured Variables Service quality Switching cost Trust Customer satisfaction Customer loyalty

Operational Definitions Was operationally defined by Zeithaml and Bitner (1996). Was operationally defined by Burnham et al. (2003). Was operationally defined by Morgan and Hunt (1994). Was operationally defined by (NQRC, 1995) and Feick et al. (2001). Was operationally defined by Narayandas (1996).

Research questions
The following research questions can be addressed from the research problem1. Is there any relationship between service quality (reliability, responsiveness, assurance, empathy, and tangibles) and customer satisfaction in GrameenPhone? 2. Is there any relationship between service quality (reliability, responsiveness, assurance, empathy, and tangibles) and customer Loyalty in GrameenPhone? 3. Is there any relationship between switching cost and customer loyalty in GrameenPhone? 4. Is there any relationship between trust and customer loyalty in GrameenPhone?

Hypotheses
The hypotheses which can be established from the research questions are1. There is a significant relationship between service quality (reliability, responsiveness, assurance, empathy, and tangibles) and customer satisfaction in GrameenPhone.

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2. There is a significant relationship between service quality (reliability, responsiveness, assurance, empathy, and tangibles) and customer Loyalty in GrameenPhone. 3. There is a significant relationship between switching cost and customer loyalty in GrameenPhone. 4. There is a significant relation ship between trust and customer loyalty in GrameenPhone.

Development of conceptual framework


The conceptual framework for the proposed study is given below-

Service Quality Reliability Responsiveness Assurance Empathy Tangibles

Customer satisfaction

Switching cost

Customer loyalty

Trust

Figure 1: the conceptual frame work

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Methodology
Research design The graphical representation of the proposed framework (Figure1) depicted the pattern and structure of relationships among the set of measured variables. The purpose of the study was to measure correlations among variables. This research intended to investigate the relationships of service quality, switching cost and trust with customer satisfaction and customer loyalty in GSM mobile telephony system in Here, service quality, switching cost and trust being are considered as the independent variables and customer satisfaction and customer loyalty are being considered as dependent variables. This research used a correlational study to establish the existence of relationships between the measured variables. In this study, the researcher only wanted to identify whether any relationships exists between these measured variables or not. Correlational study provides a measure of degree between two or more variables. Therefore, the present study was characterized as a correlational study.

Sampling method In this study the researcher collected information from the subscribers of GrameenPhone. The sample frame of this study was the entry list of subscribers in the customer care at Gulshan. The researcher followed the systematic approach of probability sampling technique by selecting every third subscriber starting from the tenth from the entry list.

Survey instrument To gather data the researcher used questionnaires. The questionnaire survey is the most effective method for this study to collect data for this study for the following reasons1. Respondents anonymity can be maintained.

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2. The researcher has conducted survey on 101 respondents. It will not be possible to conduct personal interview because of time limitation. Therefore, questionnaire survey will be the most appropriate one for this study. 3. The postal system of the country is very slow. Hence, mail survey will be too time consuming to be feasible for this study. 4. The internet facility is not widespread in our country. Therefore, online survey will also be inappropriate for this study. 5. In most of the studies conducted on the variables of the current study, the researchers used questionnaire survey for their study. Structured questionnaire was being used in this research to collect data. Each of the questionnaires had 5 sections. Service quality was being measured by using 21 items (Section1, Question 1-21) developed by Zeithaml and Bitner (1996). Questions from 1-5 measured the reliability of the service, 6-8 determined the responsiveness, 9- 12 determined the assurance, 13-16 determined the empathy and the questions from 17-21 measured the tangibility of the organization. This scale was used by Brown et al. (1993), Carmen (1990), Cronin and Taylor (1994, 1992) and reported the reliability of this variable ranging from 0.750.93. The switching cost was being measured by using 7 items (Section 2, Question 22-28) adapted from Burnham et al. (2003) and the reliability was 0.674. The trust was being measured by using 5 items (Section 3, Question 29-33) adapted from Morgan and Hunt (1994) and the reliability was 0.856. Customer satisfaction was being measured by using 3 items (Section 4, Question 34- 36) adopted from the American Customer Satisfaction Index study (NQRC, 1995) and Feick et al. (2001) and reported the reliabilities of the items were above 0.771. The customer loyalty was

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being measured by using 5 items (Section 5, Question 37-41) developed by Narayandas (1996) and reported the reliabilities of the items were above 0.88. For all of these variables the previous researchers used 5 point Likert scale. Therefore, the researcher of present study also used 5 points Likert scale to measure all of these variables.

Data collection The present research is a unique one for GrameenPhone. As a result, secondary sources of data were being available for the present study. Therefore, the researchers will require primary data to investigate the research questions. To collect data from the primary sources, the researchers will use questionnaire survey method.

Data analysis The proposed study was a correlational study. As a result, after collecting the data the researcher used correlational matrix to identify whether relationships exist between the measured variables or not. Beside it the researcher calculated the mean and standard deviation of the five dimensions of service quality to identify the variable having most influence on service quality. For this research SPSS version 11 was being used as the statistical data analysis tool as it offers greater flexibility in data analysis and visualization.

Results Reliability Coefficient and Descriptive Statistics

The reliability coefficients, means and standard deviations of all the constructs in the current study are displayed in Table 2. The coefficient alphas for the different constructs were computed using the reliability procedure in SPSS (version 11.0). Nunnally (1978) suggested

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that for early stages of any research the reliability of .50-.60 is sufficient. The reliabilities of all the constructs in this study found to be above the standard set by Nunnally (1978). Table 2 Reliability Coefficient and Descriptive Statistics of Service quality (Reliability, Responsiveness, Assurance, Empathy, and Tangibility), Switching cost, Trust, Customer satisfaction, and Customer loyalty Scales Reliability Responsiveness Assurance Empathy Tangibility Switching cost Trust Customer satisfaction Customer loyalty Note: n = 101 Number of items 5 3 4 4 5 7 5 3 5 Alpha 0.72 0.72 0.80 0.87 0.77 0.76 0.51 0.62 0.85 M 4.18 4.14 4.19 4.01 4.09 3.91 4.33 4.32 4.40 SD 0.49 0.62 0.62 0.85 0.58 0.58 0.31 0.49 0.54

Mean scores have been computed by equally weighting the mean scores of all the items. On a five-point scale, the mean score for reliability is 4.18 (sd = .49). The mean score for responsiveness is 4.14 (sd = .62). The mean score for assurance is 4.19 (sd = .62). The mean score for empathy is 4.01 (sd = .85). The mean score for tangibility is 4.09 (sd = .58). The mean scores of service quality of GrameenPhone range from 4.01- 4.19 indicating that consumers perception about the service quality of GrameenPhone is high. The mean score for switching cost is 3.91 (sd = 0.58). It suggests that the switching cost in this industry is also high. The mean score for trust is 4.33 (sd = 0.31). It indicates that the current customers of GrameenPhone highly trust the company. The mean score for customer satisfaction is 4.32 (sd = 0.49). It implies that the customers of GrameenPhone are highly satisfied with their service. The mean score for customer loyalty is 4.40 (sd = 0.54). It suggests that these customers are very much loyal with GrameenPhone .

Correlation analysis

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A correlation analysis was conducted on all variables to explore the relationship between variables. The bivariate correlation procedure was subject to a two tailed of statistical significance at two different levels highly significant (p<.01) and significant (p<.05). Table 3 Correlation Matrix for Service quality (Reliability, Responsiveness, Assurance, Empathy, and Tangibility), Switching cost, Trust, Customer satisfaction, and Customer loyalty SWI_ COS .54** .57** .50** .62** .71** CUS_ LOY .35** .46** .25** .31** .32** .38** .45** .72** -

REL RES ASSU EMP TAN SWI_ COS TRU CUS_ SAT CUS_ LOY Note: *p < .05, **p < .01.

REL -

RES .68** -

ASSU .77** .66** -

EMP .78** .72** .78** -

TAN .76** .63** .68** .75** -

TRU .089 .30** -.018 .012 .003 .136 -

CUS_SAT .43** .44** .246* .33** .44** .44** .33** -

The result of correlation analysis for all the variables is shown in Table 3. It examines the correlations among reliability, responsiveness, assurance, empathy, tangibility, switching cost, trust, customer satisfaction, and customer loyalty of GrameenPhone. The variables, significantly correlated with reliability were switching cost (r = .54, p< .01), customer satisfaction (r = 43, p< .01), and customer loyalty (r = .35, p< .01). No significant correlation was being found among reliability of the organization and trust on the organization. Responsiveness was found to be significantly and positively correlated with switching cost (r = .57, p< .01), trust (r = 30, p < .01), customer satisfaction (r = 44, p< .01), and customer loyalty (r = .46, p< .01). The variables, significantly correlated with assurance were switching cost (r = .50, p< .01), customer satisfaction (r = 25, p< .05), and customer loyalty (r = .25, p<

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.01). Empathy was significantly and positively correlated with switching cost (r = .62, p< .01), customer satisfaction (r = 33, p< .01), and customer loyalty (r = .31, p< .01). Tangibility was significantly and positively correlated with switching cost (r = .71, p< .01), customer satisfaction (r = 44, p< .01), and customer loyalty (r = .32, p< .01). In the case of switching cost it was positively and significantly correlated with customer satisfaction, and customer loyalty (r = .44, p< .01; r = .38, p< .01). In the case trust it was positively and significantly correlated with customer satisfaction (r = .33, p< .01), and customer loyalty (r =.45, p < .01). Customer satisfaction, and loyalty were found to be positively and significantly correlated (r = .72, p< .01). Regression analysis Both stepwise and entered regression were conducted to asses the relationship between the study variables Stepwise regression Two Stepwise regression analyses were performed to identify the relationship between Reliability, Responsiveness, Assurance, Empathy, Tangibility, Switching cost, Trust and customer satisfaction and loyalty in GrameenPhone. Table 4A Stepwise regression on Customer satisfaction Variable B SE B Step 1 .374 .076 Tangibles Step 2 Tangibles Responsiveness Step 3 Tangibles Responsiveness Assurance .229 .214 .326 .290 -.204 .096 .090 .107 .097 .102

.442***

R2 .195 .239

.044

.270* .270* .269 .385** .367** -.257* .03

*p<.05, **p<.01, ***p<.001.

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Table 4A depicts that in GrameenPhone Tangibility (p<.001), Responsiveness (p<.01) and Assurance (p<.05) were found to be statistically significantly related with customer satisfaction. Reliability and Empathy failed to enter into the regression Equation which indicates that they are not significantly associated with customer satisfaction. Significantly related three predictor variables together explained 27% of the variance in Customer satisfaction. Tangibility, Responsiveness and Assurance Explained about 20%,4%and 3% of the customer satisfaction, respectively. Table 4B Stepwise regression on Customer Loyalty Variable Step 1 Responsiveness Step 2 Responsiveness Trust B .407 .314 .601 SE B .078 .077 .152 .464*** .323 .357*** .346*** .109 R2 .215 R

*p<.05, **p<.01, ***p<.001. Table 4B depicts that in GrameenPhone Responsiveness (p<.001), Trust (p<.001), were found to be statistically significantly related with customer Loyalty. Reliability, Assurance, Empathy, Tangibility and Switching cost failed to enter into the regression Equation which indicates that they are not significantly associated with customer Loyalty. Significantly related two predictor variables together explained 32% of the variance in Customer loyalty. Responsiveness and Trust Explained about 21% and 11% of the customer loyalty, respectively.

Standardized (simultaneous) analysis:

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Two entered regression analysis were performed to identify the relationship between Reliability, Responsiveness, Assurance, Empathy, Tangibility, Switching cost, Trust and customer satisfaction and loyalty in GrameenPhone.

Table 5A Standardized (simultaneous) Regression on customer satisfaction Variable Reliability Responsiveness Assurance Empathy Tangibles *p<.05, **p<.01, ***p<.001. B .314 .272 -.248 -.088 .267 SE B .166 .103 .121 .098 .123 .311* .344 -.313* -.154 .316* R2 .297

Table 5A depicts that in GrameenPhone Tangibility (p<.05), Reliability (p<.05) and Assurance (p<.05) were found to be statistically significantly related with customer satisfaction. Responsiveness and Empathy are not significantly associated with customer satisfaction. Significantly related three predictor variables together explained 27%.

Table 5B Standardized (simultaneous) Regression on Customer Loyalty Variable Reliability Responsiveness Assurance Empathy Tangibles Switching cost Trust *p<.05, **p<.01, ***p<.001. B .146 .176 -.050 -.013 .020 .165 .622 SE B .182 .125 .132 .108 .152 .117 .165 .130 .200 -.057 -.021 .021 .177 .358*** R2 .356

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Table 5B depicts that in GrameenPhone Trust (p<.001) was found to be statistically significantly related with customer Loyalty. Reliability, Responsiveness, Assurance, Empathy, Tangibility and Switching cost are not significantly associated with customer Loyalty. All the variables explained 36% of the variance in Customer satisfaction.

Assessment of the research hypothesis: Hypothesis 1: There is a significant relationship between service quality (reliability, responsiveness, assurance, empathy, and tangibles) and customer satisfaction in GrameenPhone. The result of correlation analysis depicts that The variable, significantly correlated with reliability is customer satisfaction (r = 43, p< .01), Responsiveness was found to be significantly and positively correlated with, customer satisfaction (r = 44, p< .01) The variables, significantly correlated with assurance were customer satisfaction (r = 25, p< .05). Empathy was significantly and positively correlated with, customer satisfaction (r = 33, p< .01. Tangibility was significantly and positively correlated with, customer satisfaction (r = 44, p< .01). so the result of correlation analysis provided support for hypothesis 1 The result of stepwise regression depicts that in GrameenPhone Tangibility (p<.001), Responsiveness (p<.01) and Assurance (p<.05) were found to be statistically significantly related with customer satisfaction. Reliability and Empathy failed to enter into the regression Equation which indicates that they are not significantly associated with customer satisfaction. Significantly related three predictor variables together explained 27% of the variance in Customer satisfaction. Tangibility, Responsiveness and Assurance Explained about 20%, 4%and 3% of the customer satisfaction, respectively. So the result of stepwise regression analysis provided partial support for hypothesis 1.

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The result of Standardized regression depicts that in GrameenPhone Tangibility (p<.05), Reliability (p<.05) and Assurance (p<.05) were found to be statistically significantly related with customer satisfaction. Responsiveness and Empathy are not significantly associated with customer satisfaction. Significantly related three predictor variables together explained 27%. So it provides partial support for the hypothesis 1.

Hypothesis 2: There is a significant relation ship between service quality (reliability, responsiveness, assurance, empathy, and tangibles) and customer Loyalty in GrameenPhone. The result of correlation analysis depicts that The significantly correlated variable with reliability is customer loyalty (r = .35, p< .01). Responsiveness was found to be significantly and positively correlated with customer loyalty (r = .46, p< .01).The variables, significantly correlated with assurance were customer loyalty (r = .25, p< .01). Empathy was significantly and positively correlated with customer loyalty (r = .31, p< .01). Tangibility was significantly and positively correlated with customer loyalty (r = .32, p< .01). So the result of correlation analysis provided support for hypothesis 2 The result of stepwise regression depicts that in GrameenPhone Responsiveness (p<.001), was found to be statistically significantly related with customer Loyalty. Reliability, Assurance, Empathy and Tangibility failed to enter into the regression Equation which indicates that they are not significantly associated with customer Loyalty. Responsiveness explained about 21% of the customer loyalty. So the result of stepwise regression analysis provided partial support for hypothesis 2. The result of Standardized regression depicts that in GrameenPhone Reliability, Responsiveness, Assurance, Empathy, Tangibility are not significantly associated with

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customer Loyalty. The entire predictor variable explained 36% of the variance in Customer satisfaction. So the result does not support the hypothesis.

Hypothesis 3: There is a significant relationship between switching cost and customer loyalty in GrameenPhone. The result of correlation analysis depicts that the switching cost was positively and significantly correlated with customer loyalty (r = .44, p< .01; r = .38, p< .01). so the result of correlation analysis provided support for hypothesis 3. The result of stepwise regression depicts that in GrameenPhone Switching cost failed to enter into the regression equation which indicates that it is not significantly associated with customer Loyalty. So the result of stepwise regressionanalysis provided no support for hypothesis 3. Theoretically it should support the hypothesis but may be the peculiarity of the responses of the respondents created the unsupportive nature of the result of regression analysis. The result of Standardized regression depicts that in GrameenPhone Switching cost is not significantly associated with customer Loyalty. So the result does not support the hypothesis.

Hypothesis 4: There is a significant relation ship between trust and customer loyalty in GrameenPhone. The result of correlation analysis depicts that In the case trust it was positively and significantly correlated with customer loyalty (r =.45, p < .01). so the result of correlation analysis provided support for hypothesis 4 The result of stepwise regression depicts that in GrameenPhone Trust (p<.001), was found to be statistically significantly related with customer Loyalty. Significantly related predictor

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variable Trust Explained 11% of the customer loyalty. so the result of step wise regression provided support for hypothesis 4 The result of Standardized regression depicts that in GrameenPhone Trust (p<.001) was found to be statistically significantly related with customer Loyalty. Significantly related the only predictor variable explained 36% of the variance in Customer satisfaction. So the result provides support for hypothesis 4.

Recommendation
After analyzing the study variables in the context of GrameenPhone, the following issues were found to be recommended From the result of regression it was found that Tangibles, Responsiveness and Assurance are significantly related with the customer satisfaction. Therefore, these issues should be taken more care of. Although all the variables have impact on customer satisfaction, these three described variables have more importance to the subscribers. So to ensure better tangibles GrameenPhone need to change their interior decoration and design of all the brochures of customer care. Although the current decoration and other physical facilities of GrameenPhone are good enough, all theses things have become outdated and losing their appeal day by day. To make the whole environment more appealing to the customers, GrameenPhone should change their decoration frequently. The customer care department and activation authorities should emphasize more on the responsiveness because if the subscribers find the employees late response to their problems it may make them dissatisfied. This dissatisfaction even can increase the switching rate of the subscribers of GrameenPhone. Therefore, all the employees working in this two area should provide prompt responses to any problem of the customers.

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Assurance need to be given some extra care because in telecommunication service, customers seek for confirmation that his/her problem is going to be performed as promised. Especially in case of post paid customers need to be assured about uninterrupted service. If bills are paid on due date, line should be connected within a very short time, any kind of discrepancy can affect customer satisfaction as well as the trust of the subscribers on the company. Beside the described issues, there are other things that GrameenPhone should take under consideration. For example to increase the number of user, the call rate and connection fee should be reduced. Thus, GrameenPhone can attract the potential subscribers. The reduction of the call rate will increase the number of actual subscribers and also the usage. To increase the satisfaction level of the customers GrameenPhone should participate in some promotional activities. In the current market, consumers have the perception that the other operators are providing extra facilities compared to GrameenPhone. Therefore, to hold the market share or to build it for the long term, GrameenPhone has to provide different types of consumer promotions such as- they can introduce price pack and can sell the package at a reduced rate, they can offer free SMS and call services on the special occasions. Currently where the other operators are focusing on theses types of promotional activities Grameen is doing almost nothing to increase or to hold their market share. Therefore, it can be recommended that, GrameenPhone should deeply focus on the customer promotional tools to survive in this competitive industry.

Conclusions

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In the context of service oriented organization trust and switching cost have great importance in the service marketing to ensure the customer loyalty beside the service quality. Therefore, from this study GrameenPhone can get the indications on which of the issues they have to pay more attention to hold the market share, to raise it and to increase the usages. Finally, this research will encourage further study and useful guidelines for these types of researches.

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Appendix-1 An overview of telecommunication sector in Bangladesh

In the 21st century Bangladesh has a well established telecommunication industry. Maximum part of the Bangladesh is now connected by telecommunication facilities. There is both land and mobile telephony system is available. Most of the town area of districts is connected by land phone and in present time the remote places are also connected by the mobile telephony systems. Now there is four mobile operators serving beside the BTTB (Bangladesh Telegraph and Telephone Board). Recently BTTB also started mobile telephony service. In the last five years the major development in the mobile telephony system occurred. In the Bangladeshi market there is both GSM and CDMA technology is available. At present there is only one operator have the CDMA technology and other three operators are using GSM technology. City cell have started the first operation in Bangladesh with a intention to serve a limited selective market with CDMA technology. Then GrameenPhone has started there operation with GSM and serving till now as the market leader of cellular communication in Bangladesh. Following the success of GrameenPhone other two operator AKtel and Sheba world started there operation in Bangladesh. Now Sheba world is serving as Banglalink under the new management of Orascom.

GSM stands for Global System for Mobile telecommunications. In 1989, GSM responsibility was transferred to the European Telecommunication Standards Institute (ETSI), and phase I of the GSM specifications were published in 1990. Commercial service was started in mid1991, and by 1993 there were 36 GSM networks in 22 countries, with 25 additional countries having already selected or considering GSM In addition to Europe, South

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Africa, Australia, and many Middle and Far East countries have chosen to adopt GSM. By the beginning of 1994, there were 1.3 million subscribers worldwide.

The digital nature of GSM allows data, both synchronous and asynchronous data, to be transported as a bearer service to or from an ISDN terminal. The data rates supported by GSM are 300 bps, 600 bps, 1200 bps, 2400 bps, and 9600 bps.

The most basic teleservice supported by GSM is telephony. A unique feature of GSM compared to older analog systems is the Short Message Service (SMS). Supplementary services are provided on top of teleservices or bearer services, and include features such as international roaming, caller identification, call forwarding, call waiting, multiparty conversations, and barring of outgoing (international) calls, among others.

CDMA(Code Division Multiple Access) is a digital air interface standard, claiming eight to fifteen times the capacity of traditional analog cellular systems. It employs a commercial adaptation of a military spread-spectrum technology. Based on spread spectrum theory, it gives essentially the same services and qualities as wire line service. The primary difference is that access to the local exchange carrier (LEC) is provided via a wireless phone.

Though CDMAs application in cellular telephony is relatively new, it is not a new technology. CDMA has been used in many military applications, such as Anti-jamming (because of the spread signal, it is difficult to jam or interfere with a CDMA signal). Ranging (measuring the distance of the transmission to know when it will be received). Secure communications (the spread spectrum signal is very hard to detect). CDMA is a spread spectrum technology, which means that it spreads the information contained in a particular

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signal of interest over a much greater bandwidth than the original signal. With CDMA, unique digital codes, rather than separate RF frequencies or channels, are used to differentiate subscribers. The codes are shared by both the mobile station (cellular phone) and the base station, and are called pseudo-random code sequences. Since each user is separated by a unique code, all users can share the same frequency band (range of radio spectrum). This gives many unique advantages to the CDMA technique over other RF techniques in cellular communication.

CDMA is a digital multiple access technique and this cellular aspect of the protocol is specified by the Telecommunications Industry Association (TIA) as IS-95. In CDMA, the BSSAP is divided into the DTAP and BSMAP (which corresponds to BSSMAP in GSM).

In Bangladesh GSM is more accepted then CDMA although CDMA is better in terms of connectivity and network facility. Network block rate is very low in CDMA. The only draw back that CDMA have is fixed connection system. The CDMA users cannot change there handset whenever he/ she wants. The People of Bangladesh are moderately concerned about frequently changing the hand set when ever a new technology enters in the market. So the subscribers prefer GSM rather then CDMA as it provides the SIM system which enables a person to change the hand set any time he/she wants. The CDMA also have an option called RIM card which is transferable to different set but the availability of compatible hand set is less. GSM operated telephony service is growing fast in the Bangladeshi market.

Today in the world of GSM in Bangladesh market, GrameenPhone is acting as the leading role. GrameenPhone was offered a cellular license in Bangladesh by the Ministry of Posts and Telecommunications on November 28, GrameenPhone launched its service on 1996

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March 26, 1997, the Independence Day of Bangladesh. After seven years of operation, GrameenPhone has more than 2.8 million subscribers as of Jan 2005. GrameenPhones Global System for Mobile or GSM technology is the most widely accepted digital system in the world, currently used by over 300 million people in 150 countries. By bringing electronic connectivity to rural Bangladesh, GrameenPhone is delivering the digital revolution to the doorsteps of the poor and unconnected. By being able to connect to urban areas or even to foreign countries, a whole new world of opportunity is opening up for the villagers in Bangladesh. Grameen Bank borrowers who provide the services are uplifting themselves economically through a new means of income generation while at the same time providing valuable phone service to their fellow villagers. The telephone is a weapon against poverty.

Currently GrameenPhone is providing several products or service bundle named GP national (nation wide post paid connection), GP regular (ISD and T&T supported connection), Easy prepaid (mobile to mobile prepaid connection), easy gold (Prepaid Version of Regular). Recently GrameenPhone launched Any time 300 and 450 where subscribers can enjoy some extra benefit by paying a bundle fee. Beside the original stream of GrameenPhone Telenor has launched a new brand called djuice on the 14th April, 2005. This is the new brand offering some band new features targeting the young generation of the country. It is a prepaid connection and previous 50/300/600 tk GrameenPhone card is usable to recharge the account. The call rate of all the products of GrameenPhone is higher then the competitors but still they have the largest amount of subscribers. The reason behind this achievement is the advantage of extensive network all over the Bangladesh. Currently GrameenPhone has the only highest capacity and coverage. This feature is attracting subscribers to continue with GrameenPhone.

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Aktel is the follower of GrameenPhone having 1.8 million subscribers. TM International Bangladesh Limited, a joint venture company of Telecom Malaysia and A.K. Khan & company Ltd of Bangladesh has started its commercial operation in Dhaka as a GSM 900 cellular phone operator on 15Th November, 1997. Moreover TMIB has started its operation in Chittagong in March 26, 1998.

TM international Bangladesh Limited corporate in Bangladesh with the objective of offering the modern telecommunication services to the people of Bangladesh at a competitive price. TMIBs vision is to monitor the needs and wants of the customer and to meet their needs and wants by the development of their services. So, now a day they provide various types of services to fulfill the needs and wants of their customers. Some of their services are Standard, Mobile plus, Mobile to mobile etc. Among these Standard is the postpaid connection with both way T&T connectivity facilities. Mobile plus is the post paid connection with T&T incoming connectivity only and there is another option is only mobile to mobile postpaid connection. Aktel also have prepaid services in two kind of package. One is the only mobile to mobile connection and another one is the T & T in coming facilities. Aktel is the calimer of having the largest coverage just after the GrameenPhone. Even they have some network coverage in some special places where Grameen transmission is a bit weak. So there is a controversy among the subscribers about the network coverage of GrameenPhone and Aktel. Incase of network coverage both may be same but in terms of capacity AKtel have some lackings. Customers have complaine about network jamming. Especially callers from other operators face serious problem to get the connection with Aktel numbers. Except these small number of problems Aktel has an over all good image in telecommunication industry. They have the popularity because of the comparatively low call rate and pulse from the first minute facilities. Aktel provides all the additional value added

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service that other GSM service providers provide like Call Waiting, Call Conference, Call Divert, Call Barring, Voice Mail Service (VMS), Short Message Service (SMS). Aktel has also a special service during the Ramadan called AKTEL Tele Ramadan.

Banglalink is the third competitor in the GSM mobile telecommunication system. They have started there operation as Banglalink recently under the new management of Orascom ltd. Previously it was under the management of Sheba telecom private ltd. During that period the operator was known as Sheba world. The share of Banglalink in the industry is rapidly increasing because of amazing offers. Their recent offer of giving hand set for only 1500 tk was agreat success. The response of the market was good because many of the subscribers cannot start their subscription because of the lack of hand set. Many people cannot buy a good hand set because of high price but the offer helped them a lot. Although the market response was good the activation rate was comparatively poor. The reason behind this is the weak and limited network facilities. So they do not have gained the popularity yet. They have the plan for covering 61 districts of Bangladesh by the end of the year 2005. It is expected that next year hey will have more acceptability in the telecommunication market. From the month of April they have offered another exiting offer of 1000 free SMS. They have plan for offering more exiting offers in future. Currently the services provided by bangle link are the Standard with the Mobile to Mobile and PSTN (Local, NWD, ISD) incoming and outgoing, M2M Gold with the Mobile to Mobile and PSTN incoming facilities, M2M Silver with Mobile to Mobile calling facilities. They are providing 2.22 taka per pulse that is 4.44 taka per minute. So if they can extend their network coverage quickly there is a chance to capture a large segment of telecommunication market.

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The fourth and the youngest member of GSM family in Bangladesh telecommunication market is the Bangladesh Telegraph and Telephone Board (BTTB). They have very little amount of connection till now. There is a high demand of this connection but they are not yet prepared to provide service to the mass.

The one and only CDMA network operator in Bangladesh is the CityCell. CityCell is under the management of Pacific Bangladesh Telecom Limited is Bangladeshs pioneering mobile communications company. CityCells growth strategy is to integrate superior customer service, highest standard technology and choice of packages at affordable rates. The company operates a 24-hour call centre with over 86 well trained operators to respond to customer queries. CityCells customer service is open 7 days a week to ensure customers can access CityCell at any convenient time. CityCell is focused on innovation and creating new ways for customers to stay in touch and to do business. CityCells is offering a wide range of competitive prepaid and postpaid mobile packages as well as Value Added Services such as SMS and information based services. CityCell is looking forward in introducing CDMA 1x technology to provide innovative multimedia features, including Multimedia Messaging Service (MMS) and many more data based mobile features currently not available in Bangladesh. The existing subscribers of CityCell are highly satisfied with the service of CityCell but yet they have moderately low market share because of the characteristics of their connection. They do not have any SIM so subscriber has to buy the offered hand set only by CityCell. Recently they have introduced RIM but still RIM compatible hand sets are not available. So the modern and young subscribers who love to use the latest hand set with new feature and design cannot take the CityCell connection.

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

41

There is an opportunity for other foreign telecommunication companies to enter in the Bangladesh telecommunication sector. Competition is getting harder and harder day by day because the operators are providing more net work coverage and new offers. As the mass people of Bangladesh cannot effort the current call rate the industry size is not growing in the pace it should be. People of Bangladesh need reduced call rate rather then thousands of features because the basic need of mobile is to communicate. So for the operators the only way to gain the maximum market share is to reducing the call rate.

Adopted From

www.aktel.com www.grameenphone.com www.banglalinkgsm.com www.citycell.com

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42

Appendix-2

The Questionnaire for Customers of GrameenPhone

Age Female

________ Years

Male

Please carefully read each descriptive statement, thinking in terms of your opinion about the provided service quality of GrameenPhone(GP). Please circle the number, which most closely responds to your thinking. 1 Strongly disagree 2 Disagree 3 Uncertain 4 Agree 5 StronglyAgree

1. When GP promises to do something by a certain time, it does so 2. When you have a problem, GP shows a sincere interest in solving it 3. GP performs the service right the first time 4. GP provides its service at the time it promises to do so 5. GP keeps customers informed about when services will be performed 6. Employees in GP give you prompt service 7. Employees in GP are always willing to help you 8. Employees in GP never too busy to respond to your request 9. The behavior of employees in GP instills confidence in you 10. You feel safe in your transactions with GP 11. Employees in GP are consistently courteous with you 12. Employees in GP have the knowledge to answer your questions 13. GP gives you individual attention 14. GP has employees who give you individual attention 15. GP has your best interests at heart 16. Employees of GP understand your specific needs

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2

3 4 5 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5

3 4 5

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43

17. GP has modern-looking equipment 18. GPs physical facilities are visually appealing 19. GPs employees appear neat 20. Materials associated with the service (such as pamphlets or statements) are visually appealing at GP 21. GP has convenient business hours 22. Switching to a new operator causes high monetary cost 23. If I switched to a new operator, the service offered by the new operator might not work as well as expected 24. I am not sure that the billing of a new operator would be better for me 25. To switch to a new operator; I should compare all operators, (on account of services, coverage area, billing, etc.) 26. Even if I have enough information, comparing the operators with one another takes a lot of energy, time and effort 27. If I switched to a new operator; I couldnt use some services (MMS, GPRS, WAP, etc.), until I learned to use them 28. I would be concerned about the people who would dial my previous number and couldnt reach me 29. I trust this GP 30. I feel that I can rely on GP to serve well 31. I trust the billing system of GP 32. I believe that I can trust GP will not try to cheat me 33. GP is reliable because it is mainly concerned with the customers interests 34. GP completely meets expectations from any operator 35. I am satisfied with GP 36. GP meets my pre-purchase expectations 37. I will go on using GP connection 38. If I bought a new GSM line, I would prefer this GSM operator

1 1 1 1 1 1 1

2 2 2 2 2 2

3 4 5 3 4 3 4 3 4 3 4 3 4 5 5 5 5 5

2 3

4 5

1 1

3 4 4

5 5

2 3

3 4

3 4

3 4

1 1 1 1 1

2 2 2 2 2

3 4 3 4 3 4 3 4

5 5 5 5

3 4 5

1 1 1 1 1

2 2 2 2 2

3 4 3 4 3 4 3 4

5 5 5 5

3 4 5

A relational study on service quality, switching cost, trust, customer satisfaction and customer loyalty

44 5 5 5

39. I recommend GP to people 40. I encourage friends who plan buying GSM line 41. Even if the other operators billing is cheaper, I would go on using GP connection

1 1 1

2 2 2

3 4 3 4 3 4

THANK YOU VERY MUCH

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Appendix-1

Reliability of reliability
****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 5

.7162

Reliability of responsiveness
****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 3

.7256

Reliability of assurance
****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 4

.8052

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46

Reliability of empathy
****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 4

.8724

Reliability of tangibility
****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 5

.7702

Reliability of switching cost


****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 7

.7569

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47

Reliability of trust
****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 5

.5083

Reliability of customer satisfaction


****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 3

.6264

Reliability of customer loyalty


****** Method 1 (space saver) will be used for this analysis ****** _

R E L I A B I L I T Y

A N A L Y S I S

S C A L E

(A L P H A)

Reliability Coefficients N of Cases = Alpha = 101.0 N of Items = 5

.8552

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Descriptives
Descriptive Statistics N REL RES ASSU EMP TAN SWI_COS TRU CUS_SAT CUS_LOY Valid N (listwise) 101 101 101 101 101 101 101 101 101 101 Minimum 3.20 2.67 2.00 1.50 2.80 1.71 3.60 3.33 3.00 Maximum 4.80 5.00 5.00 5.00 5.00 4.86 5.00 5.00 5.00 Mean 4.1822 4.1386 4.1906 4.0693 4.0970 3.9123 4.3327 4.3168 4.4079 Std. Deviation .48670 .62051 .61963 .85522 .57939 .58308 .31404 .49075 .54547

Correlations
Correlations SWI_CO S .538(**) .000 101 .577(**) .000 101 .505(**) .000 101 .615(**) .000 101 .711(**) .000 101 1 . 101 .136 .175 CUS_S AT .429(**) .000 101 .442(**) .000 101 .246(*) .013 101 .328(**) .001 101 .442(**) .000 101 .443(**) .000 101 .330(**) .001

REL REL Pearson Correlation Sig. (2-tailed) N RES Pearson Correlation Sig. (2-tailed) N ASSU Pearson Correlation Sig. (2-tailed) N EMP Pearson Correlation Sig. (2-tailed) N TAN Pearson Correlation Sig. (2-tailed) N SWI_COS Pearson Correlation Sig. (2-tailed) N TRU Pearson Correlation Sig. (2-tailed) 1 . 101 .688(**) .000 101 .767(**) .000 101 .780(**) .000 101 .764(**) .000 101 .538(**) .000 101 .089 .377

RES .688(**) .000 101 1 . 101 .657(**) .000 101 .720(**) .000 101 .633(**) .000 101 .577(**) .000 101 .308(**) .002

ASSU .767(**) .000 101 .657(**) .000 101 1 . 101 .785(**) .000 101 .682(**) .000 101 .505(**) .000 101 -.018 .857

EMP .780(**) .000 101 .720(**) .000 101 .785(**) .000 101 1 . 101 .753(**) .000 101 .615(**) .000 101 .012 .905

TAN .764(**) .000 101 .633(**) .000 101 .682(**) .000 101 .753(**) .000 101 1 . 101 .711(**) .000 101 .003 .974

TRU .089 .377 101 .308(**) .002 101 -.018 .857 101 .012 .905 101 .003 .974 101 .136 .175 101 1 .

CUS_LO .352( .0 1 .464( .0 1 .256( .0 1 .310( .0 1 .320( .0 1 .385( .0 1 .456( .0

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49
101 101 1 . 101 .718(**) .000 101 1 1 .718( .0 1

N CUS_SAT Pearson Correlation Sig. (2-tailed) N CUS_LOY Pearson Correlation Sig. (2-tailed) N

101 .429(**) .000 101 .352(**) .000 101

101 .442(**) .000 101 .464(**) .000 101

101 .246(*) .013 101 .256(**) .010 101

101 .328(**) .001 101 .310(**) .002 101

101 .442(**) .000 101 .320(**) .001 101

101 .443(**) .000 101 .385(**) .000 101

.330(**) .001 101 .456(**) .000 101

** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

Regression
Variables Entered/Removed(a) Variables Entered Variables Removed

Model 1

Method Stepwise (Criteria: Probability -of-F-toenter <= .050, Probability -of-F-toremove >= .100). Stepwise (Criteria: Probability -of-F-toenter <= .050, Probability -of-F-toremove >= .100). Stepwise (Criteria: Probability -of-F-toenter <= .050, Probability -of-F-toremove >= .100).

TAN

RES

ASSU

a Dependent Variable: CUS_SAT

Model Summary

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Model 1 2 3

R .442(a) .489(b) .518(c)

R Square .195 .239 .269

Adjusted R Square .187 .223 .246

Std. Error of the Estimate .44248 .43246 .42609

a Predictors: (Constant), TAN b Predictors: (Constant), TAN, RES c Predictors: (Constant), TAN, RES, ASSU

ANOVA(d) Sum of Squares Regressio n Residual Total 2 Regressio n Residual Total 3 Regressio n Residual Total a b c d 4.701 19.383 24.084 5.755 18.328 24.084 6.473 17.610 24.084

Model 1

df 1 99 100 2 98 100 3 97 100

Mean Square 4.701 .196

F 24.009

Sig. .000(a)

2.878 .187

15.387

.000(b)

2.158 .182

11.886

.000(c)

Predictors: (Constant), TAN Predictors: (Constant), TAN, RES Predictors: (Constant), TAN, RES, ASSU Dependent Variable: CUS_SAT

Coefficients(a) Unstandardized Coefficients Model 1 B (Constant ) TAN (Constant ) TAN RES (Constant ) TAN RES ASSU 2.784 .374 2.493 .229 .214 2.634 Std. Error .316 .076 .332 .096 .090 .335 .107 .097 .102 .385 .367 -.257 .270 .270 .442 Standardized Coefficients Beta t 8.810 4.900 7.505 2.375 2.375 7.866 3.052 3.002 -1.989 Sig. .000 .000 .000 .020 .020 .000 .003 .003 .050

.326 .290 -.204 a Dependent Variable: CUS_SAT

Regression
Variables Entered/Removed(b)

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51

Model 1

Variables Entered TAN, RES, ASSU, REL, EMP(a)

Variables Removed .

Method Enter

a All requested variables entered. b Dependent Variable: CUS_SAT Model Summary Adjusted R Square .260 Std. Error of the Estimate .42210

Model 1

R .545(a)

R Square .297

a Predictors: (Constant), TAN, RES, ASSU, REL, EMP

ANOVA(b) Sum of Squares Regressio n Residual Total 7.158 16.926 24.084

Model 1

df 5 95 100

Mean Square 1.432 .178

F 8.035

Sig. .000(a)

a Predictors: (Constant), TAN, RES, ASSU, REL, EMP b Dependent Variable: CUS_SAT

Coefficients(a) Unstandardized Coefficients Model 1 B (Constant ) REL RES ASSU EMP TAN 2.181 .314 .272 -.248 -.088 .267 Std. Error .416 .166 .103 .121 .098 .123 .311 .344 -.313 -.154 .316 Standardized Coefficients Beta t 5.245 1.885 2.632 -2.049 -.900 2.171 Sig. .000 .063 .010 .043 .371 .032

a Dependent Variable: CUS_SAT

Regression
Variables Entered/Removed(b) Variables Entered TRU, TAN, ASSU, SWI_COS, RES, REL, EMP(a) Variables Removed

Model 1

Method

Enter

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52

a All requested variables entered. b Dependent Variable: CUS_LOY

Model Summary Adjusted R Square .307 Std. Error of the Estimate .45399

Model 1

R .596(a)

R Square .356

a Predictors: (Constant), TRU, TAN, ASSU, SWI_COS, RES, REL, EMP

ANOVA(b) Sum of Squares Regressio n Residual Total 10.586 19.168 29.754

Model 1

df 7 93 100

Mean Square 1.512 .206

F 7.338

Sig. .000(a)

a Predictors: (Constant), TRU, TAN, ASSU, SWI_COS, RES, REL, EMP b Dependent Variable: CUS_LOY

Coefficients(a) Unstandardized Coefficients Model 1 B (Constant ) REL RES ASSU EMP TAN SWI_CO S TRU -.092 .146 .176 -.050 -.013 .020 .165 Std. Error .770 .182 .125 .132 .108 .152 .117 .165 .130 .200 -.057 -.021 .021 .177 .358 Standardized Coefficients Beta t -.119 .804 1.404 -.378 -.121 .132 1.415 3.770 Sig. .905 .424 .164 .706 .904 .895 .160 .000

.622 a Dependent Variable: CUS_LOY

Regression
Variables Entered/Removed(a) Variables Entered Variables Removed

Model

Method

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53

RES

Stepwise (Criteria: Probability -of-F-toenter <= .050, Probability -of-F-toremove >= .100). Stepwise (Criteria: Probability -of-F-toenter <= .050, Probability -of-F-toremove >= .100).

TRU

a Dependent Variable: CUS_LOY

Model Summary Adjusted R Square .207 .309 Std. Error of the Estimate .48577 .45328

Model 1 2

R .464(a) .569(b)

R Square .215 .323

a Predictors: (Constant), RES b Predictors: (Constant), RES, TRU

ANOVA(c) Sum of Squares Regressio n Residual Total 2 Regressio n Residual Total 6.393 23.361 29.754 9.618 20.135 29.754

Model 1

df 1 99 100 2 98 100

Mean Square 6.393 .236

F 27.092

Sig. .000(a)

4.809 .205

23.407

.000(b)

a Predictors: (Constant), RES b Predictors: (Constant), RES, TRU c Dependent Variable: CUS_LOY

Coefficients(a) Unstandardized Coefficients Model B Std. Error Standardized Coefficients Beta t Sig.

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(Constant ) RES (Constant ) RES TRU

2.722 .407 .505 .314

.328 .078 .637 .077 .152 .357 .346 .464

8.308 5.205 .792 4.084 3.962

.000 .000 .430 .000 .000

.601 a Dependent Variable: CUS_LOY

Excluded Variables(c) Collinearity Statistics Model 1 Beta In REL ASSU EMP TAN SWI_CO S TRU 2 REL ASSU EMP TAN .062(a) -.085(a) -.050(a) .045(a) .176(a) .346(a) .148(b) .054(b) .112(b) .167(b) t .503 -.721 -.386 .385 1.625 3.962 1.273 .465 .889 1.510 Sig. .616 .473 .700 .701 .107 .000 .206 .643 .376 .134 .051 Partial Correlation .051 -.073 -.039 .039 .162 .372 .128 .047 .090 .152 .197 Tolerance .526 .569 .482 .599 .667 .905 .510 .515 .433 .558 .665

SWI_CO .198(b) 1.974 S a Predictors in the Model: (Constant), RES b Predictors in the Model: (Constant), RES, TRU c Dependent Variable: CUS_LOY

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