SERVICE QUALITY AND CUSTOMER LOYALTY IN CAMEROON MOBILE TELECOMMUNICATION SERVICE INDUSTRY

ABSTRACT

The study investigated the relationship between service quality and customer loyalty in the Mobile Telecommunication industry in Cameroon.  The research was conducted at the time when the fourth mobile operator was announced which thus provides dissatisfied customers the opportunity to switch to the new networks in search for better mobile services.  The  literature  review  revealed  that  although  quality  is  an elusive and indistinct construct which may vary from one person to another or even from one  situation  to  another  it  can  be  assessed  by  probing  whether  perceived service delivery meets, exceeds or fails to meet customer expectations.

The SERVQUAL instrument postulated by Parasuraman, et al., (1985) and by Gronroos C., (1982) was used to measure service quality.  Long term customer  loyalty  construct  was also  established  relying  on  studies  done  by  Lin and Wang (2006). A total of 191 questionnaires were administered out of which 171 valid responses were obtained for the study.  The  findings  from  the  study revealed  that  service  quality  variables  such  as  Tangibles,  Responsiveness,  Reliability, Assurance, Empathy and real network quality have a positive influence on customer loyalty.  The  study  recommends  that  mobile  operators  should  Endeavour  to improve  the  quality  of  mobile  services  offered  to  clients  in  order  to  achieve  brand Loyalty.

CHAPTER ONE

THEORETICAL BACKGROUND OF SERVICE QUALITY AND CUSTOMER LOYALTY

How can we evaluate a service encounter (experience) and when do we say a customer is loyal? In an era of increased competition and market dynamism, the importance of achieving high levels of customer satisfaction has gain the attention of researchers and practitioners alike. This is especially the case in the service sector, where many companies are focusing on service quality improvement issues in order to drive high levels of customer satisfaction. Therefore, in this chapter we shall examine the various notion of service, service quality and that of customer loyalty.

SECTION I: THE NOTION OF SERVICE QUALITY

The intangible attribute of services makes it difficult to be assessed. This section seeks to answer the question what is services and how can quality in service be explained? Therefore in this section, we are going to define the concept of services, service quality, bring out the various classifications and dimensions of quality.

I.1 SPECIFICATIONS OF A SERVICE

If it were possible to classify all services in the same way, it would have been much easier from the outset to identify a whole range of characteristics and behaviors significantly distinct and important to merit separate treatment in the literature.

According to Grönroos C., (1990)[1] “service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, take place in interactions between the customer and service employees and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems.” To this effect, services cannot be stocked and their consumption is done directly when it’s been produced. Hence the production of service shall be presented.

I.1.1  SERVICE PRODUCTION

The process of service transformation, distribution and commercialization is known as service production. This process has been baptized “Servuction.” Servuction is a concept in marketing that describes the service creation process. The servuction model demonstrates that consumers are an integral part of service process. It was developed by Eiglier P. and Langeard E., in 1987 by combining the themes service and production. The four components of the servuction model are combined to create the experience for the consumer. See figure 01 below.

Figure 01: The Servuction framework

Source: Eric L. et al., (1981), cited in: Baron S. and Kim H., (1995), services marketing: text and cases, Macmillan Press Ltd, London, p.87.

From this figure, it is important to analyze the two major components that can influence the production of service. Firstly, the back stage or back office also known as the invisible organization and systems refers to the rules, regulations and processes upon which the organization is based. Although they are invisible to the customers, they have a very profound effect on the customer’s service experience and consequently on his satisfaction.

Secondly, the visible organization and systems is also another component susceptible of influencing the service experience of the customer. The latter is made up of three parts namely: Servicescape (inanimate environment), contact personnel/service providers, and other consumers. It is otherwise referred to as front stage or front office. Having seen how services are produced and consumed, it is imperative for us to present the factors that generally characterized services thereby making them different from goods.

I.1.2  DISTINCTIVE ATTRIBUTES OF SERVICES

Services marketing academics and practitioners argued that services required special treatment as a result of their distinctive characteristics: intangibility, inseparability, Variability and perishability. These characteristics were outlined during the ‘crawling out’ stage of services marketing development (Baron S. and Kim H., 1995).[2] The table summarizes the attributes of services.

Table 01: Distinctive service attributes

Each of these attributes is retractable and their inevitable coincidence complicates the consistent service conception and makes service delivery a challenge in each and every case. From the service consumer’s point of view, these characteristics make it difficult, or even impossible, to evaluate or compare services prior to experiencing the service delivery.

I.I.3  STRATEGIC SERVICE CLASSIFICATION

Despite some initial problems, a number of useful attempts have been made since 1980 to classify services; we will use the classification of services proposed by Kotler P., (2003). According to Kotler P., (2003)[4], services vary as to whether they are equipment based or people based, require the customer’s presence or not, meet personal need or not. These varying nature also make the service providers to differ in their objectives and ownership. Therefore we can differentiate different categories of services as shown in the table below.

Table 02: Strategic Classification of Services

Source: Kotler P., (2003), marketing management, Prentice Hall, p. 445.

This implies a company’s offering could include both service and product, and the service component in each category of offering could be major or minor.

I.2  SERVICE QUALITY FRAMEWORK AND DIMENSIONS

          Under this rubric, we will first of all briefly present the definition of service quality from previous literature review, then after we will analyze the service quality framework and dimensions.

I.2.1 DEFINITION  OF SERVICE QUALITY

Service quality is a multi-dimensional and abstract concept. It is associated to some unique features e.g. inseparability of production and consumption, intangibility, and heterogeneity. In the absence of objective measures, the measurement of quality is a very complex issue and firms often need to rely on customers’ perception of service quality (Parasuraman et al., 1985)[5]. Grönroos (1984) proposed that customer compared their expectations to their experience of service quality in forming judgments. The author defined service quality as:   “… the perceived quality of a given service will be the outcome of an evaluation process, where the consumer compares his expectations with the service he perceives he has received, i.e. he puts the perceived service against the expected service. The result of this process will be the perceived quality of the service” (Grönroos, 1984, p.37)[6].

In this research, the concept of service quality is defined as totality of characteristics of a telecommunications service that bear on its ability to satisfy stated and implied needs of the user of the service (ITU, 2011)[7].

I.2.2  SERVICE QUALITY FRAMEWORKS

One of the most widely researched topics in service management is the concept of service quality.  Three common  service  quality  frameworks  are  the  technical  quality  (what)  versus  functional  quality  (how)  schema proposed  by  Grönroos  (1984),  the  SERVQUAL  framework  proposed  by  Parasuraman  et  al  (1985),  and  the SERVPERF framework proposed by Cronin and Taylor (1992).   Since their inception, all three frameworks, or variations of them, have been used extensively in research and practical applications. Clottey A., et al., (2008) [8].

SERVQUAL is probably the most popular service quality framework.  Its roots are in Oliver‘s (1980) disconfirmation model.  Parasuramen et al., (1985) assert that customers form global impressions of the quality of a service  provider  based  on  disconfirmation  assessments  of  ten  distinct  dimensions:    reliability,  responsiveness, competence,  access,  courtesy,  communication,  credibility,  security,  understanding  and  tangibles.    Later, Parasuramen  et  al.,  (1988)  reduce  the  ten  construct  dimensions  to  the  following  five  dimensions:  reliability, assurance,  tangibles,  empathy,  and  responsiveness. The SERVPERF framework (Cronin  and  Taylor,  1992)  is  a derivative of Parasuramen et al.,‘s SERVQUAL framework.

The third service quality framework is the technical or functional quality framework proposed by Grönroos (1984). Technical quality refers to the technical outcome of the service, that is, what the consumer receives as a result of his interactions with a service firm; the hotel guest will get a room; the restaurant patron will get a meal, etc.  Functional quality corresponds to the expressive performance of a service, that is, how the service is performed.   Functional quality is often called process quality and sometimes service quality.  

I.2.3  DIMENSIONS OF SERVICE QUALITY

From their path breaking exploratory research Parasuraman A. et al., (1985)[9], developed the SERVQUAL instrument and laid down a conceptual framework for the measurement of service quality. The SERVQUAL instrument has become the most dominant instrument for measuring service quality and it originally comprises 10 dimensions with 97 items but later reduced to 5 dimensions with 22 items in 1991. The five dimensions are tangibles, reliability, responsiveness, assurance and empathy. The table below isolates the dimensions of service quality.

Table 03: Service Quality Dimensions

I.3  SIGNIFICANCE AND DRIVERS OF SERVICE QUALITY

While the substance and determinants of quality may be undefined, its importance to firms and consumers is unequivocal (Parasuraman et al., 1985)[10]. Delivering excellent service quality is widely recognized as a critical business requirement since it contributes to market share and return on investment. According to Anderson and Zeithaml, (1984)[11] “It is not just a corporate offering, but a competitive weapon concretized by lowering manufacturing cost and improving productivity” which is essential to corporate profitability and survival. Many authors agree that in today’s dynamic market place and marketspace, organization no longer compete only on cost but more importantly on service/product quality. In a competitive marketplace where business competes for customers, delivering quality service is seen as a key differentiator and has increasingly become a key element of business strategy (Heskett, J.L., et al., 1997)[12]. Moreover, service quality helps to create the necessary competitive advantage by being an effective differentiating factor Price plays a vital role in telecommunication market especially for mobile telecommunication service providers.

On the drivers of service quality, the most widely used model is the Service Profit Chain (SPC), first proposed by Heskett et al., (1994). It provides one of the most powerful and widely supported perspectives on this issue. Overall, SPC sees organizational internal features as driver of employee satisfaction, which drives service quality which is also identified as an antecedent of customer satisfaction which in turn drives customer loyalty and retention that eventually leads to profitability and growth.

This section has given us a global view of what the notion of service and service quality is all about. Therefore, it can be said that, service is any intangible product and the quality of service is like beauty in the eyes of the beholder. After having seen what service and service quality is all about, the next section shall present service loyalty framework.

SECTION II: THE CONCEPT OF CUSTOMER LOYALTY

          Customer loyalty has been studied both in the academic field and real business world for years. To keep a long-term relation with their customers is one of the most important goals of many companies in the modern business world. In this section, we are going to bring out on the one hand the definition of customer loyalty, its classification, the four Cs of customer loyalty and on the other hand, we will present the implications of customer loyalty as well as the approaches and dimensions of customer loyalty.

II.1  CUSTOMER LOYALTY DEFINITION AND CLASSIFICATION

          This label seeks to draw our attention on the conceptualization of customer loyalty as well as the theoretical classification of this concept.

II.1.1 DEFINITION OF CUSTOMER LOYALTY

There are several definitions of customer loyalty.  Customer loyalty is defined as a customer who repurchases from the same service provider whenever possible, and who continues to recommend or maintains a positive attitude towards the service provider (Gremler and Brown, 1996).

Oliver (1997, p.13) defined loyalty as: “. . . a deeply held commitment to re-buy or re-patronize a preferred product consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behaviors[13]”. Customer loyalty has been generally described as occurring when customers: repeatedly purchase goods or service over time, and, hold favorable attitudes towards goods or service, or towards the company supplying the goods or service (Wong and Sohal, 2003).

Dick and Basu, (1994) state that, “customer loyalty is viewed as the strength of the relationship between an individual’s relative attitude and their repeat patronage”. In this research we define the loyal customer from two aspects: firstly, repeat purchasing the same brand products and secondly, positive word of mouth. Both are indispensable. Here the word of mouth means the extent to which customers inform friends and family. In this thesis, we agree with Butcher et al. (2001) view about positive word of mouth. They identify four variations of the concept of positive word of mouth: Providing positive word of mouth; recommending the service to others; encourage others to use service and defending the service provider’s virtues.

II.1.2 CLASSIFICATION OF CUSTOMER LOYALTY

          Considering the view of Day, (1969)[14], loyalty is a concept that goes beyond mere repurchase behavior as it presents two perspectives – Proactive and Situational, with all leading to commitment. Thus customer loyalty can be classified into proactive loyalty and situational loyalty.

• PROACTIVE LOYALTY

Also known as “True brand loyalty”, it is a form of repeat purchasing behavior reflecting a conscious decision to continue, buying the same brand, must be accompanied by an underlying positive attitude and a high degree of commitment toward the brand or service. Oliver, (1999) suggested that proactive loyalty occurs when a consumer frequently buys a brand and settles for no other substitute.

• SITUATIONAL LOYALTY

Otherwise called “Loyalty based on inertia”, here a brand is bought out of habit merely because this takes less effort and the consumer will not hesitate to switch to another brand if there is some convenient reason to do so. That is, the consumer is buying the same brand, not because of true brand loyalty, but because it is not worth the time and trouble to search for an alternative. According to Oliver, (1999), situational loyalty exists when the buyer purchases a brand for special occasion.

II.2 DIMENSIONS OF CUSTOMER LOYALTY

Zeithaml et al., (1996), states “loyalty  is  a  multi-dimensional  construct  and  includes  both  positive and  negative  responses”. According to Wong and Sohal, (2003) customer loyalty appears to consist of three separate dimensions, namely, the behavioral, attitudinal and cognitive dimensions. These dimensions shall be presented below:

II.2.1 BEHAVIORAL DIMENSION  

Many scholars think loyalty refers to customer’s consistent purchasing behavior. Jacoby and Kyner (1973) opined that customer loyalty is the behavioral outcome of a customer’s preference for a particular brand from a selection of similar brands, over a period of time, which, importantly is the result of an evaluative decision-making process. But can we equate repurchasing activity of a customer of the same brand product to loyalty? Amine (1998) thinks that repurchasing under the two cases earlier outlined above cannot be called loyalty purchasing:

Firstly, consumers’ repurchasing may be due to the consumers’ tendency to reduce or avoid search efforts. There is a high probability of interrupting this consistent buying and switching to another brand at the first opportunity or inducement to do so (price increasing, new brand launching or brand out of stock). This kind of repurchasing can be called inertia purchasing.

Secondly, when there is a narrow choice in a product category, the repeat purchasing improves too. This consistent brand buying may express more inertia or constrained repeated behavior rather than loyalty with commitment to that brand. Consumer commitment towards the purchase (behavior loyalty) of same brand doesn’t mean he/she is a loyal consumer.

II.2.2  ATTITUDINAL DIMENSION  

Attitudinal dimension of brand loyalty indicates  people’s  mentality  and  intention  towards  service providers,  that is, how  much  does  the  service provider  have  a  stable  and  positive  position  in  its  customer’s  mind,  and  could  it provide a position for itself in customers’ mind as a favorable brand? (Sudhahar, 2006).[15]Jacoby and Chestnut (1978) defined attitudinal loyalty as a customer’s predisposition towards a brand.

II.2.3  ATTITUDINAL – BEHAVIORAL DIMENSION  

Behavioral loyalty suggests that the repeat purchasing of a brand over time by a consumer expresses their loyalty, while the attitudinal perspective assumes that consistent buying of a brand is a necessary but not sufficient condition to ‘true’ brand loyalty (Amine 1998). Likewise Dick and Basu (1994) precisely suggested that a favorable attitude and repeat purchase were required to define loyalty. Behavior loyalty must be complemented with a positive attitude towards this brand to ensure that this behavior will be pursued further. Oliver (1999) defines loyalty as a deeply held commitment to re-buy or re-patronize a preferred product/service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior.

II.3  THE FOUR Cs OF CUSTOMER LOYALTY

The limitation that arises from Dick and Basu’s model are addressed by Rowley (2005)[16]. The author states that the focus of businesses is mostly on the group of loyal customers and from there, the need to refine this particular group arises. The Four Cs of customer loyalty (Figure 02) utilizes inertial and positive behavior and inertial and positive attitude to divide the group of loyalists. From this more detailed classification, one finds captives, convenience –seekers, contended customers and committed customers as subset of the group of loyalists

Figure 02: The Four Cs of customer loyalty

          From the figure above, we can vividly bring out the four Cs of loyalist group as indicated by Rowley. Firstly, the Captives group, are customers which “continue to patronize a brand, service, or service outlet because they have no real choice. These customers have few opportunities for switching, or alternatively they experience what they perceive as high switching cost. Customers may also be tied to a brand that is associated with products or services where buying decisions are infrequent.” (Rowley, 2005)

Secondly, the Convenience–seekers are those that “exhibit a behavior that includes possibly frequent re-purchases or visits to a store location, but are inert in attitude. Convenience is likely to be particularly important in the context of low involvement, routine purchases”. (Rowley, 2005). Thirdly, Contended customers are those that “have a positive attitude to the brand, but are inertial in their behavior. Contended customers are likely to stay with the brand and to support the brand through positive word of mouth exchanges”. (Rowley, 2005)

Finally, Committed customers, “they are positive in both attitude and behavior. They can be dependent on making continuing purchases and to engage in positive and delighted word-of-mouth exchanges with other potential customers”. (Rowley, 2005)From both portfolios, one finds that attitude and behavior are significant determinants of customer loyalty and that the group of loyalists is most important to business organizations, as loyalty leads to repeat patronage and positive recommendations. The question arises how one develops and maintains these factors to improve customer loyalty?

II.4  THE IMPLICATIONS OF CUSTOMER LOYALTY

The  first  step  to  understand  the  benefit  of  customer  loyalty  in  business  is  to  calculate the  profit  earned  from  customers  and  then  identify  the  difference  between  the  mature  and  new customers  that  affect  the  cash  flows.  The table below summarizes some of the benefits of customer retention according to Reichheld, (1996)[17]. 

Table 04: The Implication of Customer Loyalty

          From the above table, we can note that customer loyalty has greatly increased in importance given that this has made many companies to become more customers centric.

          All along this chapter we have revealed the basic concepts of our thesis. We started in section one by reviewing the notion of services and quality in services while in section two summary literature reviews on the concept of service loyalty was presented together with the implications of loyalty to business unites. The chapter that follows shall be aimed at presenting the theoretical relationship that exist between service quality and customer loyalty.

CHAPTER TWO:

THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER LOYALTY

Service quality is a measure of how well the service level delivered matches customer expectations. Delivering quality service means conforming to customer expectations on a consistent basis. From the above statement one major question is raised notably: can this service conformity to customer expectation result to customer loyalty? The focus of this chapter shall be primordially to bring out the theoretical link between service quality and customer loyalty (section 2) passing through aberrant character of customer loyalty (section 1).

SECTION I: CUSTOMER LOYALTY: AN ABERRATION

Consumer satisfaction and consumer loyalty both are considered as a tool to develop and attain sustainable competitive advantage (Ali et al., 2010)[18]. Customer loyalty is characterized by repurchasing and not transferring by the fluctuation of the market; this brings out the aberrant character of the concept of loyalty. There are many factors that affect customer loyalty in the telecommunication service industry, according to opinions of the experts and literatures from previous studies; this section will start from a brief overview of customer loyalty model and follow with a more detailed discussion on loyalty traditional determinants and end with the measurement of service loyalty.

I.1  CUSTOMER LOYALTY MODEL

A model is a schematic description of a system, theory, or phenomenon that accounts for its known or inferred properties and may be used for further study of its characteristics. Amongst these models, the most widely used is the four stage and apostle loyalty model. We therefore review the four stage loyalty model and apostle customer loyalty model that form the pivot of this study and justify our choice of these methods.

I.1.1  FOUR-STAGE LOYALTY MODEL         

Scholars consider customer loyalty as a process of evaluation and decision making. Oliver (1997) developed belief-attitude-conation (ABC model). Oliver divided loyalty into behavioral loyalty and attitude loyalty. He introduces a four-stage loyalty model, implying that different aspects of loyalty do not emerge simultaneously, but rather consecutively over time (Oliver 1997)[19]. More than a clarification, this model (figure 04) extends the loyalty sequence “cognitive-affective-conative” by including an observable behavior, for example actual purchase behavior. At each loyalty stage, different factors influencing loyalty can be detected.

Figure 03: Four stage loyalty model

Source: Sivadas and Prewitt, (2000) cited by Rizan M., (2010), “Analysis of Service Quality and Customer Satisfaction, and its Influence on Customer Loyalty”, Oxford Business & Economics Conference Program, p 11.

The stages of customer loyalty as depicted in the above figure stipulates that loyalty is a continuous process starting from the level of cognition and ending at the phase of action (behavior). These four stages are briefly presented below:

1. COGNITIVE LOYALTY

At this stage, consumer loyalty is determined by information relating to the offering, such as price, quality, and so forth. It is the weakest type of loyalty, since it is directed at costs and benefits of an offering and not at the brand itself. Therefore, consumers are likely to switch once they perceive alternative offerings as being superior with respect to the cost-benefit ratio. Cognitive loyalty is influenced largely by the consumer’s evaluative response to an experience, in particular to the perceived performance of an offering relative to price (value). It is worth noting that cognitive loyalty focuses on the performance of products and it is easily influenced by substitutes.

2. AFFECTIVE LOYALTY

Affective loyalty relates to a favorable attitude towards a specific brand. Attitude itself is a function of cognition (e.g., expectation). Satisfaction is a global affect evaluation or feeling state which can be predicted from perceived performance as the cognitive component of the evaluation (Oliver 1993)[20]. Expectancy confirmation leads to satisfaction, which in turn effectuates affective loyalty. Oliver (1997) defines satisfaction as “the consumer’s fulfillment response, the degree to which the level of fulfillment is pleasant or unpleasant.” Affective loyalty is also subject to deterioration, caused primarily by an increased attractiveness of competitive offerings and an enhanced liking for competitive brands. This can be, for instance, conveyed through imagery and association used in competitive communications.

3. CONATIVE LOYALTY

Conative loyalty implies that attitudinal loyalty must be accompanied by a desire to intend an action, for example repurchase a particular brand. It is stronger than affective loyalty, but has vulnerabilities as well (Blut Markus et al., 2007 p.727). Repeated delivery failures are a particularly strong factor in diminishing conative loyalty. Consumers are more likely to try alternative offerings if they experience frequent service failures. Even though the consumer is conatively loyal, he has not developed the resolve to avoid considering alternative offerings (Oliver 1999)[21]. It is important to note here that conative loyalty is the intention customers have to repurchase. It may not become real purchase.

4. ACTION LOYALTY

Action control studies imply that not all intentions are transformed into action. According to Aghaei M., et al., (2012, p.40), Action loyalty is said to relate customer’s intention for buying from an organization in future. The three previous loyalty states may result in a readiness to act (in this case, to buy). This readiness is accompanied by the consumer’s willingness to search for the favorite offering despite considerable effort necessary to do so. Competitive offerings are not considered as alternatives. At this stage, customers actually repurchase. They will even overcome some barriers to repurchase. They are in a habit of buying a certain brand and they are not easily influenced by others.

I.1.2  APOSTLE LOYALTY MODEL

Another popular model that provides a view of customer loyalty is Harvard Business Review’s Apostle Model, which segments customers into four quadrants (Figure 04). To measure the attitudes that results in this model, customers are asked to rate their overall satisfaction and their likelihood to continue to do business with a particular operator on a scale. The figure below presents the apostle model of customer loyalty as presented by Shirin and Puth in 2011.

Figure 04: Apostle Loyalty Model

Source: Adapted from Shirin A. and Puth G., (2011), “Customer satisfaction, brand trust and variety seeking as determinants of brand loyalty”, African Journal of Business Management, p.11901

Referring to Figure 04, coupling loyalty and satisfaction gives rise to a two by two matrix having four outcomes; namely mercenaries, defectors, hostages and apostles. These outcomes are presented depending on the respective level of satisfaction and loyalty.

1. THE APOSTLE

Also known as loyalist, in most cases, the loyalist is a happy customer who has had good experiences with the company and who is ready to return on a regular basis. This customer has a need and the company provides exactly the product or service that fits him. It explains why this customer is so easy to serve. Even more enthusiastic than loyalists, the apostle is so overwhelmed; his experience brings him so much more satisfaction than he expected that he share his strong feelings with others.

2. THE DEFECTOR

Sometimes called Terrorist, Defectors’ ranks include very dissatisfied, quite dissatisfied, neutral, or even satisfied customers. The number of merely dissatisfied customers or satisfied customers who have encountered failures and defect can be quite impressive. It would be a huge error to let them go since the company has the tools to turn them into highly satisfied customers. The worst defector a company can dream of is called the terrorist. This customer has endured a bad experience and he cannot wait to communicate his frustration and anger to others. These people are angry because no one was there to respond, listen or correct the failure they encountered.

3. THE MERCENARY

This is a kind of customers having no rule and reacting in unpredictable ways. Even if they are highly satisfied, they will show almost no loyalty. “These customers are often very expensive to acquire and quick to depart. They chase low prices, buy on impulse, pursue fashion trends, or seek change for the sake of a change” (Jones & Sasser, 1995)[22].

4. THE HOSTAGE

These customers have endured the worst the company has to offer and still have to accept it. These individuals are stuck in a monopolistic environment. From there, Jones & Sasser enact what should be every company’s ultimate objective: “Turning as many customers as possible into the most valuable type of loyalist, the apostle, and eliminating the most dangerous type of defector or hostage, the terrorist”.

I.2 TRADITIONAL DETERMINANTS OF CUSTOMER LOYALTY

Several factors have been identified to influence customer loyalty. As Beerli et al (2002)[23] pointed out; there has been a growing interest in recent years in analyzing the factors influencing customer loyalty especially in marketing of services amongst these factors we have:

I.2.1 CUSTOMER SATISFACTION

Customer satisfaction presumably has a positive effect on consumers’ behavioral intentions[24].  In  the  viewpoint  of  Bloamer  and Kasper  (1995)[25],  customer  loyalty  is  one  of  the  considerable  paths  with  which  customer  satisfaction  about product or services received is expressed. For this reason brand loyalty is at heart of strategic marketing. Satisfaction generates much post-purchase behavior among customers; it impacts the behavior of customers in a number of ways[26]. First, customer satisfaction is found to be a key determinant of customer retention. Again, according to Gyasi Nimako S., (2012, p.4), customer satisfaction is regarded as a necessary antecedent of customer loyalty, which in turn drives profitability and performance.

Oliver’s cognitive  model  provides  empirical  evidence  that  satisfaction  mediates  the  difference  between  previous  intentions and raised intention to produce a relationship which is stronger than simply the direct effect of previous period intentions  on  present  periods.  This  evidence  would  lead to  the  expectation  that  satisfaction  will  lead  to  higher repurchase  intentions.  Anderson  and  Sullivan  (1993) found  that  intentions  were  positively  influenced  by  the level  of  satisfaction.  Those  firms  with  higher  satisfaction levels  tended  to  have  lower  retention  elasticity.  This conclusion is based on strong evidence in the literature of a relationship between satisfaction levels and behavioral intention.

I.2.2 SWITCHING BARRIERS

As defined by Jones et al., (2002)[27], a switching barrier is any factor that makes it difficult or costly for customers to change providers. Another  brand  loyalty  determinant  is known  as  switching  costs,  which  can  be  defined  as  the factors that act as constraints preventing customers from freely switching to other service providers (Ahn H. et al., 2006)[28]. For this reason, a switching cost can be seen as a cost that deters customers from demanding a rival firm’s brand (Aydin and Ozer, 2005)[29].  Arasil et al., (2005)[30], showed that the switching cost factor directly affects loyalty, and has a moderator effect on both customer satisfaction and trust. Therefore, it plays a crucial role in winning customer loyalty. 

When  the  costs  of  switching  brand  are  high  for  the customer, there is a greater probability that the customer will  remain  loyal  in  terms  of  repeat  purchase  behavior, because of the risk or expense involved in switching and because of the accompanying decrease in the appeal of other alternatives. Moreover, it has also been found that as customers’ perceptions of switching costs increase, the longer they remain with a particular service supplier (Aydin & Ozer, 2005). In the mobile telecommunications service industry, loyalty points and member ship card programs are the major components of switching costs, because all the member ship benefits and accumulated points may be lost when service contracts are terminated or customers switch their service providers.

Previous studies tested the relationship between switching cost and customer loyalty, and their findings indicated that switching cost was an important factor in predicting customer loyalty (Aydin, Özer, & Arasil, 2005)[31]. When people use mobile service provided by one particular service provider and perceive the switching cost for changing to a new mobile service provider is high (for example, telling many old friends the new address and learning the new services), they will have higher customer loyalty.

I.2.3 BRAND IMAGE

Initially used by Grönroos C. as one of the dimension of service quality; it describes customer’s general perception of the supplier. The author stated: “…if the image of the firm is good in the mind of a given customer, problems with the outcome, or the process, which this customer may have, are likely to some extent to be excused by the image perception. If the problems continue to occur, the image will eventually suffer. If the image is negative, quality problems are more likely to be perceived as worse than they in reality are” (Grönroos, 1993)[32]  

Moreover, brand image play an important role in brand building, especially in customer dependability. As Reichheld (2001),[33] perceptively state that preferable brand image will lead consumers to conceive a perception of an organization’s public relationship practice, which matches the corporate reputation better. With this in mind, customers are more likely to retain optimistic faith, attitude, and action. It must therefore be acknowledged that customer loyalty grows fast through approving brand image. In this same light, Toyin A., et al., (2008), concluded in their study that in retail environment, a customer‘s perception of a good brand image has more of a positive effect on their loyalty to the retailer‘s product, than their perceptions of product or service quality alone.

I.3 MEASUREMENT OF CUSTOMER LOYALTY

          “Measurement turns vision into strategy and strategy into facts” (Reichheld, 1996). Many techniques and methods are used to measure the loyalty of consumers. This is a very important and interesting field especially from the companies’ point of view. Knowledge about the level of loyalty of specific segment of purchasers is very helpful in preparing adequate promotional instruments. Literature review shows the differentiation and complexity of the points of view of researchers. For example, R. McMullan presents the researchers (among ferry passengers) of the customer loyalty development, where the Oliver’s model of customer loyalty was used. She concludes that “customer loyalty development is a composite mix of antecedents, sustaining and vulnerability elements” and “the loyalty is present only when there is evidence of each of the phases” (McMullan, 2005, p. 470–481)[34].

Another researcher – S. Rundle-Thiele – conducted many projects concerning consumer loyalty in different branches. The latest research of that author was done on the consumers of beer products, where main conclusions for marketers were “to build consumer loyalty, marketers need to be market focused, not competition focused and (…) to build and maintain loyalty marketers must consider how they can look after their customers and consumers”. The findings of that research show that companies need to adopt a loyal or “look after me and I will look after you” philosophy (Rundle-Thiele, 2006, p. 414–420)[35].

Parasuraman A. et al., (1996)[36], propose a comprehensive multi-dimensional framework to measure customer loyalty. In their research, loyal consumers have: high purchase intention (repurchase intention), less price sensitivity (price insensitivity), feedback to the firm (word-of-mouth, complaint behavior), and do more business (frequent purchase and no switching behavior). Furthermore, in a study carried out by Zhaohua Deng et al., (2010, p.290), these authors measured customer loyalty using the customers’ behavioral intention as well as their inclinations to recommend their service provider. In order to measure the loyalty rates, a variety of indicator methods is employed. These can be divided into three main categories: the intention of repeat purchase, basic consumer behavior (date of last purchase, frequency and financial resources spent), and additional consumer behavior (recommendations given and dissemination of positive opinions).

This section has on the one hand presented an overview of customer loyalty model (the four stages model and the apostle model) and highlighted the loyalty traditional determinants notably satisfaction, brand image and switching cost. And on the other hand it depicted the measurement of service loyalty. At this point a question is posed; how can loyalty be explained through service quality?

SECTION II: THE INCIDENCE OF SERVICE QUALITY ON CUSTOMER LOYALTY

          In the absence of tangible evidence on which to evaluate quality, consumer must depend on other cues. Because of service intangibility, a firm may find it more difficult to understand how consumers perceive services and service quality. “When a service provider knows how [the service] will be evaluated by the consumer, we will be able to suggest how to influence these evaluations in a desired direction” (Grönroos C., 1982)[37]. This section has as primary objective to bring out the theoretical incidence of service quality on customer loyalty passing through service quality models. Its further expatiate the strategies of customer loyalty.  

II.1  PRESENTATION OF SERVICE QUALITY AND ITS MODELS

          Herein, diverse definitions of service quality shall be presented on the one hand and on the other hand the models of service quality will be examined.

II.1.1  DEFINITION OF SERVICE QUALITY

          Efforts in defining and measuring quality have come largely from the goods sector. According to the prevailing Japanese philosophy, quality is “zero defection-doing it right the first time” in this light, “quality is defined as conformance to requirement” (Crosby 1979).[38] Researchers and managers of service firms concur that service quality involves a comparison of expectations with performance as such according to Lewis and Booms (1983) defined service quality as a measure of how well the service level delivered matches customer expectations. Thus delivering service quality means conforming to customer expectations on a consistent basis.

II.1.2 SERVICE QUALITY MODELS

Many  different  models  have  been  developed  to  explain  and  measure  service  quality  in different settings of business operations (Nitin s. et al., 2005). in this thesis, though the focus is  not  on  measuring  service  quality,  there  is  the  need  to  review  literature  on  service quality  models  since  customer  loyalty  relates  to  dimensions  of  service  quality  that  are conceptualized differently in different service quality models.

II.1.2.1  GRÖNROOS MODEL OF SERVICE QUALITY

Grönroos C., (1984),  developed  a  service  quality  model  that  has  three components  of  service quality,  namely:  technical  quality;  functional  quality;  and  image  (see  Figure  05).  He maintains that the customer evaluations of perceived performance of service against his/her perceived service quality result in a measure of service quality.

Figure 05: Grönroos Model of Service Quality

Source: Grönroos C., (1982)

1. Technical quality: 

Technical quality is  the  quality  of  what  consumer  actually  receives  as  a  result  of his/her  interaction  with  the  service  firm  and  is  important  to  him/her  and  to  his/her evaluation of the quality of service.

2. Functional quality:

Functional quality is how he/she gets the technical outcome. This is important to him and to his/her views of service he/she has received.

3. Image:

It could be referred to as reputational quality, is very important to service firms and this can be expected to build up mainly by technical and functional quality of service including the other factors (tradition, ideology, word of mouth, pricing and public relations).

II.1.2.2  GAP MODEL OF SERVICE QUALITY

The GAP model was proposed by Parasuraman, A., et al., in 1985. The  model  presupposes  that service  quality  is  the  differences  between  expectation  and performance  relating  to  quality  dimensions.  These differences are referred to as gaps.

Figure 06: Gap Model of Service Quality

Source: Parasuraman, A., et al., (1985), “A conceptual model of service quality and its implications for future research”, Journal of Marketing, Vol 49, p.44

The gaps model above (figure 06) conceptualizes five gaps which are: Consumer expectation – management perception gap, Management perception – service quality specification gap, Service quality specifications – service delivery gap, Service delivery – external communications gap, Expected Service – perceived service gap. It is worth noting that our study is forcused on the Gap 5. Never the less, these Gaps are briefly explained below:

GAP 1: Consumer expectation – management perception gap

Service firms may not always understand what features a service must have in order to meet consumer needs and what levels of performance on those features are needed to bring deliver high quality service. This results to affecting the way consumers evaluate service quality.

GAP 2: Management perception – service quality specification gap

This gap arises when the company identifies want the consumers want but the means to deliver to expectation does not exist. Some factors that affect this gap could be resource constraints, market conditions and management indifference. These could affect service quality perception of the consumer. 

GAP 3: Service quality specifications – service delivery gap

Companies could have guidelines for performing service well and treating consumers correctly but these do not mean high service quality performance is assured. Employees play an important role in assuring good service quality perception and their performance cannot be standardized. This affects the delivery of service which has an impact on the way consumers perceive service quality.

GAP 4: Service delivery – external communications gap

External communications can affect not only consumer expectations of service but also consumer perceptions of the delivered service. Companies can neglect to inform consumers of special efforts to assure quality that are not visible to them and this could influence service quality perceptions by consumers. 

GAP 5: Expected Service – perceived service gap

From their study, it showed that the key to ensuring good service quality is meeting or exceeding what consumers expect from the service and that judgment of high and low service quality depend on how consumers perceive the actual performance in the context of what they expected. 

Summarily, from the above model service quality as evaluated by the consumer is noticed at Gap 5 in line with the proposition of Parasuraman et al., (1985),[39] “the quality that a consumer perceives in a service is a function of the magnitude and direction of the gap between expected service and perceived service”

II.2 SERVICE QUALITY AND CUSTOMER LOYALTY: WHAT LINK?

The concepts of service quality and customer loyalty relationships have not been widely conclusive; it is very debatable in that while some findings believe that an interrelationship exists between them, other thinks that an antecedent does exist where one leads to the other. Seigyoung, et al., (2005)[40] identified that as customer-organization relationships deepen; consumers increase their expertise in the firm’s product line and industry and develop increased switching costs. Technical service quality is hypothesized to be a more important determinant of customer loyalty than functional service quality as expertise increases. Both technical and functional service quality are hypothesized to have a reduced relationship with customer loyalty as perceived switching costs increase. Three-way interactions between the main effects of service quality, customer expertise, and perceived switching costs yield additional insight into the change in relative importance of technical and functional service quality in customers’ decision to be loyal. They concluded that some relationship exist between service quality and customer loyalty. In addition, Wan-Jin, (2009)[41] in examining the relationship between web-based service quality and customer loyalty found that service quality has a direct and positive effect on customer loyalty. The same relationship is demonstrated by Al-Rousan, and Badaruddin, (2010) in examining the relationship between service quality and customer loyalty in the Jordanian tourism industry.

The GAP model (Parasuraman A., et al., 1985) suggests that the differences between customers’ expectations about the performance of a general class of service providers and their assessment of the actual performance of a specific firm in that class results in perceptions of quality. This is also widely known as SERVQUAL analysis. Meanwhile, Aydin and Ozer (2005) showed that perceived service quality is necessary but not sufficient condition for customer loyalty.   Also, the SERVQUAL model has been mostly applied as a model to analyze service quality and consumer expectation. From the foregoing, this study hypothesized generally that: Service quality directly and positively influences customer loyalty among Cameroonian cellular service subscribers. From this general hypothesis two secondary hypotheses were formulated:

H₁: Functional quality positively influences long term customer loyalty among Cameroonian cellular service subscribers.

H₂: Customers’ perceived technical quality positively affect their long term loyalty.

II.2 STRATEGIES OF CUSTOMER LOYALTY

Taking into consideration that stronger customer loyalty has a positive impact on the companies’ sales, organizations need to develop efficient strategies and programmes of customer loyalty in order to attract and retain more customers. Uncles et al. (2003, p.249)[42] differentiate   between   individual   perspective   and   market   perspective   on   loyalty strategies. From an individual viewpoint, firms need to study consumer behavior and attitudes prior to the formulation of loyalty strategies. In other words, all programmes should be developed on the basis of regular occurrences in customer behavior. Alternatively, the market perspective implies that the developed loyalty strategies should rely on market tendencies, degree of rivalry in the market and the relationships between brands.

Day and Moorman, (2010, p.39)[43] provide a number of principles for building efficient customer loyalty programmes and strategies. Firstly, it is argued by the researchers that staff loyalty should be achieved by organisations. They identified a close relationship between stuff loyalty and customer loyalty. The management of the company should serve their employees so that they can serve customers. Secondly, service quality should be improved to the maximum degree. Thirdly, it is important to note than organisations should carefully analyse and respond to the complaints of customers. Hence they reported that only 10% of customer complaints are given appropriate attention by the management. Fourthly, efficient customer loyalty strategies consist in winning back lost customers.

In a conclusive manner, this chapter of our work shows that mobile operators can enhance their level of customer loyalty by providing higher level of service quality both technical and functional quality as pointed out by Grönroos in 1984. However, service quality alone cannot ensure at 100% the retention of customers in the mobile telecom service industry. Only if the mobile operators’ customer relation strategies are effectively integrated into its policies and procedures can the loyalty of customers be maximized. It links service quality to service loyalty by creating mechanisms to evaluate the results of these delinquency reduction efforts, such as by requiring cellular operators to regularly monitor quality and establish customer data base to verify churners and adherence to the new policies. Given the fact that this second chapter marks the end of our first part which was basically theoretical, the second part shall therefore, be aimed at verifying in the Cameroonian context the relationship that exist between service quality and customer loyalty towards mobile operators.

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