Factors affecting customer perception

Published Date: 23 Mar 2015

CHAPTER 1: INTRODUCTION

Introduction

This is a report on the survey of the factors that affecting the customer perception in choosing their mobile service provider. The use of "customer perception" is to require the company figure out what their customers think. Customers always evaluate the perceived benefits before they decide to purchase a particular product. They also include costs of usage, the lost opportunity to use other offering, potential switching costs etc. Consumers always value these added benefits when making a purchasing decision. Therefore this is making it important for company to understand the customers' need when marketing to their customers.

Recently, the hottest topic in the Malaysia's mobile industry which is Mobile Number Portability (MNP) are discussing by everyone. In simple, Mobile Number Portability (MNP) is taking our Mobile Number from one mobile phone network to another. It enables us to maintain their existing mobile phone numbers when changing from one mobile network operator to another mobile network operator. This removed one of the major restrictions on changing mobile network operator, and allows users to freely select from among the mobile network operators on offer. In Malaysia, there are four main mobile service providers - Celcom, Maxis, DiGi and U-Mobile. A desire for cheaper calls is the reason that most consumers cite for possibly changing to a new network. Everybody is looking to change networks give a heavy weighting to four major factors: cost, coverage, technology and service options. This indicates that service providers need to take a multidimensional approach to managing their corporate customer bases.

MNP will allow further flexibility in the mobile phone market, as a result of which mobile network operators will be subject to other competition. This will cause mobile network operators to clarify their features in various policies such as fees and services. We have seen some of the mobile network operators introducing measures such as fixed price for calling other users of the others mobile network operator.

There are five factors that has been found out how on what factor that influence the customers to select the certain telecommunication service provider- peer influence, product quality, customer service quality, promotion and network coverage. The consumer are getting the benefits from the result of this fierce competition among the telecommunication service provider in Malaysia because these company will keep improving and offer more attractive promotion in order to maintain and attract the new customers.

Background of the research

Malaysia's telecommunication infrastructure market was opened in 1989 when a second mobile operator, Celcom, launched service. From 1993 to 1995, the market was further opened when three additional companies were granted various operating licenses such as fixed, long distance, mobile cellular allowing them to compete as full service operators. The telecommunication companies are competing among each other and create a competitive environment in the telco industry. There are some of the companies had merged with others big company and some of them gone bankruptcy. Today, four companies make up the major telecommunication market segment. The companies are DiGi, Maxis, Celcom and U-mobile.

Celcom (Malaysia) Berhad is the oldest mobile telecommunications company in Malaysia that was established in 1988 and Celcom had transform itself as the market leader by offering the quality services to the customers. It continues to spread its wings and is undeterred by the dynamic nature of the mobile communications industry. Currently, Celcom offers its mobile postpaid and prepaid services under the access codes 019 and 013, serving a combined customer base in excess of 5 million with network coverage spanning over 95 per cent of the populated areas in the country. Furthermore, businessman was the major user of this Celcom service provider due to the stable network coverage.

According to the Maxis website, Maxis Mobile Sdn Bhd, which started operations in 1995, Maxis has steadily built up its role to become leading telecommunications service provider in Malaysia by focusing its core business, adding 600 base stations during 2003. In 2003, the company acquired an additional 25 MHz spectrum in the 1800 MHz band and with a 3G license which launched by 2006. Being the leader within the telecommunication industry, the corporation is the fifth largest Public Company in Malaysia with total subscribers of 6.4million, providing a wide range of innovative mobile, fixed and international network services to their customers. Maxis Mobile Sdn Bhd first used the Cardax System (CC Unix) since 1998 when they moved their operations into Menara Maxis, owned and managed by Tanjong City Centre Property Management (Tanjong Plc Group of Companies).

DiGi Telecommunications is smallest of the major mobile service provider that is majority controlled by Telenor, is holding its own in the face of its two bigger rivals. DiGi is supported by Telenor with the financial and technical stability. DiGi as the smallest of remaining mobile cellular companies has benefited from the sustained growth in market demand for cell phones in Malaysia. DiGi tend to serve their customers with high quality services and products by offering an affordable price, convenient and easy to access the broadband services in order to enrich the customers' life. DiGi is the first mobile service provider to launch the prepaid concept for mobile services in Malaysia and till today, DiGi Prepaid remains the market leader. To achieve the quality and innovation services, DiGi is placing a lot of emphasis upon backend systems, efficient billing system and customer relationship management system. Now they had come out the broadband package which has a higher speed so called 3.5G.

U mobile Sdn Bhd is Malaysia's new established mobile service provider by offering value added services such as 3G video call to attract the youth market. U Mobile is using 018 prefix and provide the call charges with per second per block charges. This uniqueness had become their strength and a point to attract the light users of mobile. They just need to pay as how many second they are using. In April 2007, U Mobile signed Malaysia's first ever nationwide roaming memorandum of understanding as a precursor to an agreement with Celcom (Malaysia) Bhd. This initiative allows U Mobile's customers to experience nationwide coverage from day one of service availability, whilst U Mobile continues to progressively rollout its own unique HSDPA - driven mobile network. KT Freetel of South Korea and NTT DOCOMO of Japan's combined investment of USD$200 million in December 2007 marked an exciting new chapter for U Mobile. This strategic partnership supports U Mobile's rapid go-to-market and product enhancement and diversification plan. U Mobile introduced 3G mobile phone bundling packages for its U38, U68, and U98 Postpaid plans at attractive prices in August 2008.

These few company's core business is segmented of the Malaysia telecommunication market, mobile markets and also the broadband markets. Besides, the telecommunication companies are also provided mobile services such as Short Message Service (SMS), Wireless Application Protocol, subscription services, General Packet Radio Services (GPRS), and Third Generation known as 3G that enable the customer to connect with a video call. These companies are offering the price promotion in order to attract the customers. Now there is an aggressive competition among these companies, so the company should figure out the factors of playing a vital role to choose the telecommunication service providers

The Malaysia mobile industry is going the new era of competition. Therefore, all these mobile service provider need to differentiate themselves from others and presence itself well to become the one of the market leader in telecommunication industry. They can differentiate themselves by delivering more value added service such as the superior call charges and quality and improve their network coverage to maintain their market position and generating more innovation in their performance to meet the customer expectation.

Problem Statement

"To what extent do the peers influence, customers' services quality, products quality, promotion and network coverage affect the customer perception in choosing their mobile service provider?

Research Objective

The overall goal of this study is to determine and identify the factors that affecting customers' perception in choosing their mobile service provider. The following objectives are built to achieve the goals of this study:

1. To access that how peer influence, customer service quality, product quality, promotion and network coverage going to become the factor for customer to using specific telecommunication service provider.
2. To determine whether the customers like the mobile service providers' marketing activities
3. To determine the mobile service provider positioning strategies in serving their customers.

Justification for the research

The telecommunication industry is undergoing in a dramatic changes. The value of the paper will indicate the consumer behavior in the competitive market. This study provides insights of the factors that affecting the customer perception in choosing their mobile service provider nowadays. This research is done for the contribution that will bring for the family; society, country, and it also lead us to a better living environment with advanced technology.

The result of this research will be beneficial for the telecommunication operator to serve as a guideline in implementing their business strategy. With the information, those telecommunication provider will be able to design packages that satisfying consumers to improve their company performance as well as to maintain their market share. This research is important because it can outline what the factors that affecting the consumers' perception in choosing their mobile service provider.

Also, this research able to provides the factors that cause the switching behavior. When service provider understand what is the wants and needs of the consumer. Thus, it helps to reduce their cost in research and development. By then, service provider can focus to increase their product features or quality that serves to the consumers. Superior customer service and products quality can affect customers' perception in choosing their mobile service provider.

Through this study, service provider can focus on what is the best business quality and services to consumers in order to maintain their life long relationship to create maximum life time value to the company itself. This research can figure out the relationship between product and service quality with the customers' perception in choosing the mobile service provider. Therefore, Telecommunication Company should emphasis on its product quality and customer service aspect in order to improve customers' satisfaction.

Before taking any actions to change the customer perception, the most crucial thing is to understand what factors influence customer satisfaction, and then try to make improvements in these critical areas so that they can have more satisfied and loyal customers.

Methodology

The methodology used for the survey to collect data in this research is through questionnaire. The population of this study is individuals who are mobile users in Malaysia. It is impossible to get all mobile users to conduct the survey; therefore survey will conduct to selected samples to gather the data. Besides, non-probability purposive sampling method will be used as this is an exploratory study. Other than that, the questionnaire conducted would be self-administered and made from secondary data obtained from journals from other researchers due to the lack of local research on the topic. The methods used for this research also come from review of literatures and books from the internet as it is more time saving and less costly.

Limitations of the research

Despite the useful findings of this study, this empirical study has several limitations to be acknowledged. First, the findings in this study depend on the honesty of the respondents. It is known individuals would agree more on socially desirable answers and disagree more towards socially undesirable answers rather than fully and truly express the feeling and opinions. Next, the limitation of this research is that the data of this study is collected through the surveys, so there is a high probability of inaccurate information. The sample size of 300 is not enough to determine the actual factor. There are too many factors that will affect the customer's perception. More researches need to be conducted on the higher population in order to get the actual factors.

Outline of the research project report

This research paper is divided into five chapters.

Chapter 1: Introduction

The background of study is mentioned in this chapter. The discussion of the overall question and the relevance topic are being carried out. This chapter includes the objectives and the problem statement of this study. Besides that, the explanation of who is gaining benefits from this study is included. Lastly, important terms are clearly defined to avoid confusion amongst readers.

Chapter 2: Literature Review

This chapter is the part to cite those relevant studies from authors and year of the study. Both dependent and independent variables will then be identified and highlighted as the foundation to build the theoretical framework and hypotheses development. Arguments and opinions from different authors are included to support the study. During this chapter, readers will have a clear idea about the problems and the possible solutions that can be made to solve.

Chapter 3: Research Methodology

Theoretical framework and hypothesis of study will be stated. Theoretical framework shows the relationship between variables. Next, testable hypotheses will be developed based on their relationships. These hypotheses are to examine whether or not the framework is valid by using appropriate statistical analysis.

Chapter 4: Data Analysis

Before proceed into this chapter, data collection is needed from respondents through various methods. The results will then be tested to analyze the response in order to get a clearer and more concrete result.

Chapter 5: Discussions and Conclusion

Chapter 5 contains the conclusions and justification on the hypothesis constructed in the research. Other than that, the chapter also summarized the research findings and suggestions on the future findings are given supported by assumptions made from the research. Figure 1 below shows the outlines of the research.

Definition

1. Peer Influence

Past research shows that peer influence has emerged over the last 50 years to be the chief source of values and behavioral influence in adolescence, replacing the influence of adults. By examining the peer influence on the consumer perception, we can know why peer influence is a factor that affects consumer perception in choosing their mobile service provider.

2. Customer Service Quality

Customer's service quality includes trust, reliability and responsiveness of the company in telecommunication industry. This study will figure out how this factor affects the consumer's perception.

3. Product Quality

Product quality is the characteristics of a product that bear on its ability to satisfy stated or implied needs. Customers always focus on the product quality when they purchase a product/service.

4. Promotion

Promotion is one of the four elements of the marketing mix. Promotion able to attract the customers to disseminate the information of a product. This study will discuss how promotion works as one of the factors to affect the consumer perception.

5. Network Coverage

Network Coverage is the range of mobile network signal provided by the telecommunication mobile service provider. This study will also discuss about how the network coverage will affect the consumer perception.

Scope

This research is particularly interested in investigating consumers' behaviors and perceptions such as motivations of changing or remaining with mobile operators with the introduction of MNP. This paper is tending to find out what are the factors that affecting customer perception in choosing their service provider through this study. All respondents are assumed to have basic mobile knowledge. There are many factors that cause the consumers to choose their mobile service provider. The study will also include the implications of switching cost on the telecommunication industry, service providers and consumers.

Conclusion

This research is aim to complete successfully within the time frame so that the result would accurate and will achieve the research objectives. This research had confirms the significant positive relationship of peer influence, customer service quality, product quality, promotion and network coverage to affect the consumers' perception. It is expected to provide a broader understanding of mobile service provider in Malaysia and explore the real factors that affecting the consumers' perception in choosing their mobile service provider. It is also hope that the successful completion of the survey would have positive impact on the mobile service provider strategies in order to grab the customers and maintain their customer relationship.

Chapter 2 Literature Review

Dependent Variable

Customer's perception in choosing their mobile service provider

The understanding of consumer perception in a virtual environment is limited. It is important to develop an understanding of the factors that affect consumer perception in this market space. This will enable mobile service provider to develop more effective and focused strategies for optimizing the visibility of their product offerings and to attract more customers. There are various factors that can affecting the consumer perception when making buying decision on a product.

Independent Variables

Peer Influence

        Peer influence is commonly defined as the extent to which peers exert influence on the attitudes, thoughts, and actions of an individual (Bristol and Mangleburg, 2005). There will be some of the people will affect the perception of the customer when they decide to buy a product. When they decide using which mobile service provider, most of customers will think which mobile service providers are currently using by their friends and family. Peers influences include the spread opinions of friends, family, colleagues and reference group. Mostly individuals will be influenced and get into following their trend and take their opinions as a standard of their purchase decisions. Peers can influence each other either in a positive way or negative way.

The potential power of WOM (Word of Mouth) as a form of promotion is generally accepted (Arndt, 1967; Buttle, 1998; Dye, 2000). WOM is a strong factor to affect the customers' perception. If the customer is less well understood the product, he/she will refer to the people around them. WOM can be negative or positive, so the company should utilize the effectiveness of WOM as a good promotional tool and build goodwill of the product in order to enhance their company reputation.

The influence that a source's word-of-mouth information exhibits on the receiver has traditionally been explained by models of interpersonal influence (Bansal and Voyer, 2000; Bone, 1995; Cohen and Golden, 1972). Within this stream of research, it has often been suggested that interpersonal or social influence can be categorized as either informational or normative influence (e.g. Deutsch and Gerrard, 1955). Word of mouth can operate through both channels: Informational influence occurs when information is accepted as evidence of reality (e.g. Burnkraut and Cosineau, 1975). In contrast, normative influence operates through compliance, which means that the individual conforms to the verbalized expectations of referent others (Kelman, 1961)

Customer service quality

Service quality had become an important attention to the company due to its strong impact on their business performance. Customer service is a series of activities designed to enhance the level of customer satisfaction. That is, the feeling that a product or service has met the customer expectation.

Customer service quality is the perceived quality of service obtained by a customer when using the current mobile service providers. Customer service is what an organization provides to its customers and is relatively easy to measure. Typically the measures include response time, time required to provide service, ability to handle a customer's issues on the first call, procedures for handling customer complaints. Customer service is always important and companies should enhance all the ways in which they touch their customer, the service they provide and their measures to continuously improve that service.

Superior service quality measurably increases a firm's overall profitability. Mobile users always requested the fast connection either in calling or sending short message from the mobile service provider. They will make judgment based on the service quality given by their mobile service provider in order to change the mobile service provider or being loyal to their current mobile service provider. If the customers maintain loyalty to their mobile service provider, thus it will bring continuous revenue to the company.

Service quality is associated with the relationships between server and customer, The customers will consider the politeness, helpfulness, speeds of delivery, and pleasantness of the service (Berry, 1987) when they received the services from their mobile service provider. Customer service is playing an important role in mobile service provider; it helps to maintain the loyalty of consumer towards the company. According to Taylor, 1992, service quality enhancement differentiates the service providers from competitors. Consumer often compares the service quality within other mobile service provider companies. There is huge amount of support in the service quality literature for a link with customer loyalty and future purchases. Customers always put the service quality they receive as the factor that affects them to do purchase of the product. If the service is bad, the customer will tend to change to mobile service provider.

        Service quality is very important that companies have gone to great efforts to evaluate and keep records of service quality levels. Service quality is about the consumer's judgment about the overall excellence or superiority of a service" (Zeithaml, 1988). If the mobile service providers provide the bad services in handling the customers' issues, it will leave a bad impact of the brand name in the customers' mind. In order to have a better understanding about service quality, there are few attributes about services:

• services are intangible;
• services are heterogeneous, meaning that their performance often varies with respect to the provider and the customer;
• services cannot be placed in a time capsule and thus be tested and re-tested over time; and
• The production of services is likely to be inseparable from their consumption (Gronroos, 1990).

The service evaluation can be associated with service delivery process, along with output (Cody and Hope, 1999). These two underlying processes generally explain the contribution of service quality to profitability. First, service quality is regarded as one of the few means for service differentiation and competitive advantage that attracts new customers and contributes to the market share (Venetis and Ghauri, 2000, p. 215). Second, service quality enhances customers' intention to purchase again, to buy more, to buy other services, to become less price-sensitive and to tell others about their favorable experiences (Venetis and Ghauri, 2000, p. 215).

        Reichheld and Sasser (1995) had proposed that the high level of satisfaction lead to increase the customer loyalty. There is growing evidence that customer perception of service quality they received when using the mobile service provider will affect their behavioral intention.

Nowadays, the telecommunication industry is become more competitive and there are more new entrants of other small mobile service provider to grab the market. According to Melody (2001) public utilities is derived from the law in any country. Where the demand for a good or service is considered a common necessity for the public at large and the supply conditions are such that the public may not be provided with reasonable service at reasonable prices. Service is a form of attitude which is related to satisfaction and also leads to consumer loyalty (Johnson and Sirikit, 2002) and future purchase. In particular consumers prefer service quality when the price and other cost elements are held constant (Boyer and Hult, 2005). It has become a distinct and important aspect of the product and service offering (Wal et al., 2002). According to Leisen and Vance (2001) service quality helps to create the necessary competitive advantage by being an effective differentiating factor. Service quality was initiated in the 1980s as the worldwide trend when marketers realized that only a quality product could not guaranteed to maintain competitive advantage (Wal et al., 2002). Competitive advantage is a value-creating strategy, simultaneously which is not implemented by any existing or potential competitors (Barney, 1991). Service quality is essential and important for a telecommunication service provider company to ensure the quality service for establishing and maintaining loyal and profitable customer (Zeithaml, 2000; Leisen and Vance, 2001). Conversely, Johnson and Sirikit (2002) stated that service delivery systems have the ability to allow managers of company to identify the real customer feedback and satisfaction on their telecommunication service. Since, quality reflects the customers' expectations about a product or service. Lovelock (1996) stated that this customer driven quality replaced the traditional marketing philosophies which was based on products and process.

Product quality

The quality of a product is a conceptualize service quality as the relative perceptual distance between customer expectations and evaluations of service experiences and service quality using a multi-item scale called the SERVQUAL model.(Parasuraman et al., 1988). The SERVQUAL model includes the five dimensions of tangibles which is the physical facilities and the appearance of personnel, reliability to perform the promised service dependably and accurately, responsiveness as the willingness to help customers and provide prompt service, assurance where employee knowledge base which induces customer trust and confidence, and empathy which is the caring and individualized attention provided to customers by the service provider.

        To get products or services in good quality is a must in customers' perception. Especially for telecommunication industry, customers cannot touch the physical product before they make their decision. To gain trust in consumers, it is necessary for the mobile service provider to provide the identity and complete information of the company such as their physical location, pass record, product quality approved. Besides, telecommunication company have to ensure they provide only good quality product or service to consumer because can gain word of mouth. Once they fail to do it, they will suffer it.

According to lemons model (Akerlof 1970), product quality is the basic idea in a competitive market. Products only differentiated by their exogenous quality. If product quality is undistinguishable beforehand by the buyer, then there is one price. If cost are increasing in quality, then at that price the highest quality products may not be offered, and as a result buyers become reluctant to pay high price. They learn to expect low-quality products which mean the price must fall.

Product quality is always an important aspect of a purchasing decision and in market behavior. Since, consumers regularly face the task of estimating product quality under conditions of imperfect knowledge about the underlying attributes of the various product offers with the aid of personal, self-perceived quality criteria (Bedeian, 1971 adapted by Sjolander, 1992). According to Sjolander (1992), the consumer behavior in modern market is different from the theoretical case of consumer decision making in free markets.

Promotion

In order to promote a company's product, a company often uses advertising to create brand and or product differentiation in order to soften the price competition. To the extent that persuasive advertising create customer loyalty through perceived differentiation over essentially identical products, they create market power in the sense that consumers may be willing to pay more for preferred brands, thus allowing Telco Company to raise prices above marginal costs. The most preferred outcome by firms is where one advertises while its competitors don't, leading to market share and profitability gain at the expense of its rivals.

In the price promotion, the Telco companies are using game theoretic model (Axelrod and Hamilton, 1981) to provide a homogenous product and have sufficient capacity to serve the market demand. It is a non-cooperative game as there weren't any enforceable agreements between them as they compete in the marketplace. It is a repeated one-shot simultaneous game as they were driven by quarterly performance accountable to shareholders. As such, they would decide on their pricing strategies independently and aware of rivals' prices in the market while forming certain expectations about rivals' pricing strategies. Actions available are Maintain Price and Undercut Price. Payoffs are ranked in order of preference (higher number is preferred). The most preferred outcome by firms is where one undercuts price while its competitors maintains price, leading to market share gain at the expense of its rivals. When all firms maintain prices, there is no change in market-share and profitability. When all firms undercut prices, market-share remains with reduced profitability. Price plays a vital role in telecommunication market especially for the mobile telecommunication service providers (Kollmann, 2000). It's included not only the purchase price but also the call and rental charges. Generally, a price dominated mass market leads to customers having more choice and the opportunity to compare the pricing structures of different providers. Therefore, the company that will offer lower charges, the more customers will commit themselves to the telephone networks, so more call minutes will achieved.

It will be interesting to study the impact of the two or more mobile service provider having price competition. One of the impact will be the customers will keep switching from one mobile service provider to another one. For example, there is a new customer will think of reducing its switching cost. The customers that keep changing their customer due to price promotion offered by the mobile service provider, they won't realize the switching cost would be higher in long run although they get the cheaper price for this moment.

Customers may behave strategically when they learn over time that their current decisions will affect the prices they are offered in the future. Thus they could forgo a purchase to secure a lower price in the future (Villas-Boas,1999,2004,Chen and Zhang,2001). According to Villas-Boas,2004, the strategic customers can even make monopolists worse-off when they implement targeted pricing, While Chen and Zhang, 2001 show that the negative effects of customer recognition may not offset the benefits of targeted pricing. It could also be the possible that the loyal customers are less sensitive to the price promotion offered by other mobile service provider. Their current mobile service provider is keep innovating in their price and promotion tends to maintain the current customers and to attract the new customers to choose them as preferred mobile service provider.

Network Coverage

The mobile industry has become one of most exciting service industries due to its expanding network coverage. The telecommunication system has become the electronic infrastructure for transmitting the all kinds of information, for instant, voice, data, graphics, video, music. It is a rapidly growing medium of communication all over the world.

There is a natural lock-in effect in phone services due to the personalized nature of the mobile service numbers. As such, different segments of customers have different personal barriers to switching providers. This lock-in effect will be reduced with the introduction of Mobile-Number-Portability (MNP) which allows subscribers to change operators, location or technology whilst retaining their existing mobile service numbers. In here, the network coverage plays a very important role in order to gain more and attract the competitors' users to join as their user. High-speed connection and various office features would help companies and their workers become more productive in challenging economic times.

Network effects in telecommunication are not necessarily connected to the infrastructure or hardware-level but rather to some virtual network which is made up of all the consumers who can be reached. This may or may not coincide with the subscribers to either one particular service provider. In mobile communication most of the network operators also provide services for instance in Finland, some telecommunications firms have established a joint venture the 3G company, which will be a pure network operator. At the same time service operators like RSL Com and Saunalahti lease their connections from Sonera (Ministry of Transport and Communication Finland, 2000).

With the technology advancement, customers demand on the operator is not the same like last previous year which customers only use their phone to call or to send instant message. The customers are demanding for technology which is more advance. The cellular technology adopted is the European GSM standards. However, due to constant technology changes, both Maxis and Celcom have launched 3G services earlier this year with limited coverage while Digi launched its 2.75G (EDGE) services last year. Digi is now vying for a 3G licenses in order to be able to compete on par with both Maxis and Celcom. (Wong, 2005).

Wi-Fi systems are being developed very rapidly. It offering city-wide, high speed, wireless Internet connections at no cost or at prices much lower than DSL or cable access. Wi-Fi technology is limited to a range of only 150 feet or so. However an advanced wireless technology, WiMAX, with a range of up to 30 miles has the potential to disrupt traditional broadband, cell phone, landline and Wi-Fi systems. Phone service using Voice Over Internet Protocol (VOIP) promises consumers good value and the number of companies offering this service has increased dramatically and millions of households and businesses worldwide have signed up for VOIP service.

Now, Malaysia has become among the most modern telecommunications networks in the region with fiber optic trunks in Peninsular Malaysia, satellite, VSAT (Very Small Aperture Terminal) and ISDN (Integrated Subscriber Digital Network) services. According to the Sectoral Studies Report, 1999, the digitization of the network is far advanced covering about 80 percent of the transmission lines with over 96 percent of the main lines connected to the digital exchanges. This physical and structural transformation has gone through during the past fifteen years.

CHAPTER 3 CONTENT

Introduction

        In this chapter, methodology of the research in collecting, handling and presenting the gathered data will be discuss in order to test the hypotheses, to get the result of the research and for better understanding. This chapter will include the theoretical hypothesis and the research framework. Besides, there will be show out the relationship between dependent variable and independent variables. The research variables and research hypothesis development which related to this research will be discussed. Next, the research design, procedures on data collection, content development of the questionnaires, sampling process and data analysis techniques will also be discussed in this chapter.

Research framework

In attaining this research, a research framework has been created in order to guide along the research process. The framework explains the relationship between the independent variables and dependent variable and the direction of the relationships.

Research Variables

Dependent Variable

        Dependent variables are the key factor that has been looked into to explain or predict if they are affected by some other factors. The dependent variable for this study is customers' perception in choosing their mobile service provider. The results are important because it shows the mobile users' behavioral intention in choosing their mobile service provider. It also shows the customers' satisfaction level towards the telecommunication services.

Independent Variable

The independent variable is defined as the presumed cause of some changes in the dependent variable (Robbins, 1998). The following variables that are hypothesized to affect the customers' perception in choosing their mobile service provider are including: peer influences, customer service quality, product quality, promotion and network coverage. These independent variables will specific questions about to mobile users' perceived usefulness and perceived ease of use when they want to select the mobile service provider.

Hypothesis Development

According to Burns and Bush (2005), hypothesis is the sate used by marketing researcher about the population parameter using prior knowledge, assumptions or intuition to form an exact specification as to what the population parameter value is. Once the independent and dependent variables has been identified and establishing the relationship between the variables through logical reasoning in the theoretical framework has been done, the next step is to test whether the relationship that have been formed do in actual fact, stand to be accurate.

From the literature reviews, the consumer perception in choosing the mobile service provider, which is represented as dependent variables in the study, can be explained in terms of the following independent variables as described in Figure 2. Based on literature review, with regards to the concept of theoretical framework, the following hypotheses were developed:

H1: There is an association between peer influences and consumer perception in choosing the mobile service provider

Peer influence will have some impact on customer perception in choosing the mobile service provider. Peers are main influence for the new subscriber because they are the one that the subscribers call the most. Some customer tends to be loyal to the service provider since having their first mobile phone.

H2: There is an association between the customer service quality and consumer perception in choosing the mobile service provider

Customer service quality is the main essential and importance in order to ensure the quality service for establishing and maintaining loyal and profitable customer. Indeed, through this research I will need to undergo some analysis in later part to prove it.

H3: There is an association between product quality and consumer perception in choosing the mobile service provider

Customer's perception of product quality is always an important aspect of a purchasing decision. Product quality from the consumer's perspective is associated with the capacity of a product to satisfy customer needs so through this research, how the quality will be able to influence the customer preference can be test

H4: There is an association between promotion and consumer perception in choosing the mobile service provider

Promotion was always the tools that practice by every company from different industry as it is one of the important elements out of the marketing mix. Therefore, there is some evidence that promotion by the network service provider in introducing new features will affect the customer switching behavior.

H5 There is an association between network coverage features and consumer perception in choosing the mobile service provider

Network coverage that provide by the network service provider or operator may have also influence the switching behavior of the mobile users since the customer nowadays are mostly exposed in sending short messages, surfing internet using mobile. Therefore, customer will need a stronger and speedy network to help support their daily activities. In such situation, there were evidence that customer might have switch due to the network coverage features.

H6: Promotion will mostly affect the switching behavior of the mobile users if compared to the others independent variables

Promotion will have significantly affects the switching behavior among the customer. This is because promotion is not just restricted in one particular area but it can be either in price promotion, product promotion, value added promotion or even network promotion. All this could have been under promotion tools to affect the customer switching behavior.

Research Design

This research is based on a formal study which incorporates hypotheses that are formally tested. The instrument used to collect appropriate data to support the study is through questionnaire. The hypotheses developed are measured using muti-item scales and the instruments used in previous researched with some modification to suit the purpose of this study. Last but not least, six-point Likert scales are used to measure the variables.

Data Collection Method

Questionnaire

The study used a survey questionnaire for the purpose of data collection. Questionnaire will be main research tools in order to measure the factor that affecting the consumers' perception. The questionnaire will be develop in survey form and distribute to the target sample that consists of different races and gender. Besides, this research will use online survey and distribute it to the online respondent. It saves cost and convenient, and it is easy to collect back the survey answer.

Population and Sampling

Population includes the entire group of people or events that the researchers wants to investigate. The target market will be the lecturer, students in Multimedia University, and outsider for investigation. Sample is a subset of population that includes some of the elements in the population. This questionnaire will be done by sample of 300 respondents and the questionnaires were only distributed to the relevant subjects who consist of different background, ages, and genders as well.

Pilot Test

Pilot study is crucial and useful as it will help in the construction of the questionnaires and to test the relevance of the questions. The pilot test will be undertaken on 5 mobile users, which will help n providing comments and suggestions on the questions format, layouts friendliness and clarity, with the view of firming the questionnaire before finalize and distribute to the respondents.

Sampling Issue

This study is identifying the factor that can affect the consumers' perception in choosing their mobile service provider. This paper will measure what is main 5 factors to affect the consumers' perception.

Source of data

Primary Data

For this research upon the factor of switching behavior of telecommunication users, a primary source of data is through the questionnaire form which distributed to the different mobile services provider users. Besides, an online questionnaire will be developing to collect the data needed in most efficient manner possible. Questionnaires are also not very expensive to conduct and are a fast way of gathering information from respondents. A lot of possible questions were thought of in designing the questions for the questionnaires. This is done to ensure the reliability and validity of the study.

Secondary Data

Secondary data is crucial for this project as it is used as background reading materials to enable the researcher to gain a better understanding of this research topic. A lot of information could be gathered by collecting secondary data. Secondary data includes books, journals and articles. The journals and articles are for the guidance for this research as well as for the literature review. In addition, definition could also be obtained from these sources. Besides, secondary data also added credibility to this research when this research's results were consistent with those conducted by other researchers in other industries or countries.

Description of Questionnaire

Questionnaire development is a rather important element in this research yet there are many limitation of setting the questions. This paper had clearly articulated what problem or need is to be addressed using the information to be gathered by the questions. Hence, questionnaire developed must be clear and avoid ambiguous questions

As questionnaire need to appear in a reasonable sequence that could convinced the respondent and also increasingly gives the respondent confidence and trust in both the survey and the surveyor. Hence, questionnaire development process will be start by identifying the related information used to develop the question such as the independent variable that had been identify in the earlier stage of the research process. After that, it proceed by choosing the best out of the questions, so that this questionnaire can directly targeted towards the respondent's behavior and perceptions of being a telecommunication users.

The questionnaire was designed to draw out information on respondents' demographic, their experience in using mobile hand phones, their daily average expenditures, and their awareness with various available mobile phone services. The questionnaire is being divided into two sections which is section A and section B. Section A measures the demographic variables and personal information towards their switching behavior whereas, section B measures about the independent variables differently. The methods using for each section are discussed as below:

1. Multiple Choice Questions: For section A, the overall question is about the respondent's background and their personal attitude towards their mobile service provider so as their perceptions over switching mobile service provider.
2. Likert Scale: In section B, this paper will use likert scale for the independent and dependent variables to measure the response of likelihood of customers to the statements in the questionnaire. The five point of scale which starting with least important reasons to most important reason for the factors that considered the respondents. Thus, the remaining two variables were to be scale which starting with strongly disagree to strongly agree. In the end of the questionnaire, the likelihood of the respondents to switch and scale from least likely to most likely will be asked.

Data Analysis

The results of this study depended very much on the efficiency of the data analysis. Thus, all the data collected from respondents were analyzed based on descriptive statistical analysis using the Statistical Package for Social Science (SPSS) software so as to obtain a more comprehensive analysis of the study. One of the strong points of SPSS is that it can perform almost any statistical analysis, thus making this package extremely suitable for the analysis of the survey result (Huizingh, 1994). The item means, the frequency, descriptive analysis and correlation were used to analyze the findings. Therefore, with the use of this SPSS package, it comes handy for the researcher to analyze the data obtained from the questionnaires. It was useful and beneficial package for the data analysis. The following are the type of the tests carried out:

1. Descriptive Analysis: frequency distribution was obtained for section 1 on the demographic variables. Bar and pie charts were used for company information explanation, for the rest of descriptive analysis, frequency table was used to explain it. For the some of the descriptive data, minimum, maximum, mean, standard deviation and variance was obtained. The same also used for interval scales, independent, mediation, moderator and dependent variables.
2. Pearson Correlation: this is suitable for interval and ratio scaled variables when they are measures on interval scale. This correlation test was used for hypothesis testing to see whether there was any relationship between the independent variables, mediation variables, moderator variables and the dependent variable.
3. ANOVA: use of analysis of variance (ANOVA) is to compare three or more population means to determine whether they could be equal. For the purpose of this research ANOVA was used to determine the variance of means of the independent variables, mediation variables, moderator variables and the dependent variable.
4. T-Test: this test was used to test all the independent variables for the difference in mean. This would further explain whether a difference exists or not.

Chi-square: this test was used to test whether two or more variables are independent or homogeneous. The test for independence examines whether knowing the value of one variable helps to estimate the value of another variable. The test for homogeneity examines whether two populations have the same proportion of observation with a common characteristic. Though the formula is the same for both tests, the underlying logic and sampling procedures vary.

Cross-tabulation: this test gives us a basic picture of how two variables interrelated. It is easy to understand, simple to conduct and can be used with any level of data. It was used to provide us with greater insight than single statistics and help us solves the problem of empty of sparse cells.

Hypothesis testing

Hypothesis testing is to determines whether a hypothesis concerning some characteristic of the population that I chosen is likely to be true or given evidence. In hypothesis testing part, a correlation way is used to test the relationship between the independent variables with the dependent variable. Besides, this study will also use multiple regression way to test the relationship of the five independent variables with the dependent variable.