Term Paper on "Satisfaction, Trust and Commitment in Customer Relationships"

Term Paper 29 pages (7853 words) Sources: 35 Style: Harvard

[EXCERPT] . . . .

satisfaction, trust and commitment in customer relationships in mobile phone industry in Bangkok, Thailand

MARK1012 Research Methods

Critical Review of the Literature

Research paradigm

Secondary Data

Primary Data

As a result of the intense competitive in mobile phone industry, a plenty of mobile choices are launched to the market. For that reason, many marketing strategies have been introduced in order to compete with competitors in high competitive era. In addition, consumers are likely to concern about the best and suitable mobile phones to their lifestyle. In fact, there are some studies which have been examined in Thailand; however, they are still a small number. This research will present discussions what effects of satisfaction, trust and commitment have an effect on customer relationships of mobile phone. It is not only induced by personal factors but also environmental factors such as brand and price. This research is focused on the customer's loyalty in the light of trust and commitment.

The effects of satisfaction, trust and commitment in customer relationships in mobile phone industry in Bangkok, Thailand

Chapter One: Introduction

Today, in order to remain competitive in an increasingly globalized marketplace, companies of all types have been compelled to provide high-quality products and services on the basis of personal knowledge of customers (Khalil and Harcar, 1999). Not surprisingly, then, relationship marketing has been a rising focus for many companies in various industries. As a result, the importance of the relationship between customer and organization that trade-off in term of benefit has also assumed new relevance today (Sheth and Pavartiyar 2000 cited in Bruhn 2003). Consequently, many companies need to develop several factors in building long-term relationship with customers. These factors consist of trust, commitment, customers' loyalty to repurchase and also customer's satisfaction that are related to each other. To begin with, the customer's satisfaction is the foundation of marketing that should be achieved before continuously considering the other factors which strengthen the relationship. In this regard, Bailey and Schultz (2000) emphasize that providing existing and potential customers with the information they need when they need it an absolutely essential component in promoting customer loyalty: "Every marketing organization wants to develop loyal customers: customers that buy consistently over time, generally at regular prices, commonly ignoring the pleas and platitudes of competitors," the authors note, and add, "Everyone knows customer loyalty is good. and, marketers, given the recent developments in data capture and management, believe they have fairly good ways of developing and measuring customer loyalty" (p. 41). Intuition alone, though, is not sufficient to develop and measure customer loyalty, particularly in highly dynamic industries such as the mobile phone industry. Indeed, in the mobile phone industry, relationship marketing is a vital issue because competitors are many, either through the online media or mobile phone shop, and high competition has an adverse effect on profit margins of the company. According to Roush (2004), the global mobile phone industry is becoming more competitive than ever, and some carriers, such as Cingular Wireless, have been scrambling to retain existing market share. Therefore, both attracting new customers and maintaining existing customers are the important tasks for the market extension. It is not only increasing market share but also gaining opportunity in high competitive market. Furthermore, a supplier is also essential. Due to the direct relationship with customers, it interrelates between two stages of decision making processes which are information search and post-purchase behaviour (Lancaster and Reynolds, 2004). Thus, it can lead to repurchase of the customers by providing suitable suggestion and services. In this regard, McKenna (1991) reports that, "Customers think about products and companies in relation to other products and companies. What really matters is how existing and potential customers think about a company in relation to its competitors. Customers set up a hierarchy of values, wants, and needs based on empirical data, opinions, word-of-mouth references, and previous experiences with products and services. They use that information to make purchasing decisions" (p. 43).

It can be seen that, in recent years, a mobile phone has become a basic need for many people, almost comparable on the level of clothing or accommodation for people's lives. For these consumers, mobile phones would certainly be difficult to live without (Harkin, 2003). Interestingly, the mobile phone is not just only used for communication but also designed for other users' needs including entertainment and fashion. Moreover, mobile phone's features are developed continuously by mobile phone manufacturers for persuading consumers in many ways such as e-mail, internet, Global Positioning Systems (GPS), and Multimedia Messaging Service (MMS). According to Wouters and Wetzels (2006), "In the last decade several new communication channels have emerged for marketers to choose from, such as Short Message Service (SMS), Multimedia Messaging Service (MMS), and I-mode. In particular SMS is one of the fastest risers. SMS provides the opportunity to deliver short messages (160 alpha numeric characters) to mobile phones. These messages can also contain data packages like ring tones and logos. In a short period of time, this form of communication has become widely accepted, especially among the youth" (p. 209).

Today, the mobile phone industry also relies heavily on telephone "personality," or the degree to which the service is customizable, to better target customers (Proctor and Vu, 2005). In addition, mobile phone marketers seeking to compete in the international marketplace must take into account specific cultural factors in their product promotion efforts. In this regard, Jacko and Sears (2003) report that, for example, German and Chinese mobile phone users require different strategies for documentation and training that are related to cultural differences that can be predicted by classical culture models. In terms of relationship management, identifying what customers want and need at a given point in time and communicating an effective message to gain their business is key, of course, and recent initiatives by some mobile phone companies in the Asian marketplace have proven highly successful in this regard. According to Chung and Sherman (2002), between 10 and 60% of the customers targeted in well-designed relationship management campaigns in emerging markets sign up for the offer they receive, a healthy figure that is far more than the 5 to 20% norm in developed markets. While relationship marketing efforts in emerging marketplaces represented just 11% of the worldwide total in 2000, that figure has been growing by 35% a year since then (Chung and Sherman, 2002). These authors suggest that there are two fundamental reasons for this level of growth:

Consumers in developed markets have wearied of unsolicited mail, sales calls, and spam, but for many consumers in emerging markets, personal attention from companies is still a novelty, and a welcome one.

Success in relationship marketing depends more on applying its principles creatively than on marshaling massive databases, complex software, and armies of experts (Chung and Sherman, 2002).

According to Chung and Sherman, "In emerging markets, we have seen substantial value accrue to companies that effectively used whatever skills and data were at hand. One mobile-phone operator in Asia, for example, cut customer churn by more than 40% by offering a special discount to just the customers identified as the most likely to cancel" (p. 62). This straight-forward but highly effective application of relationship marketing techniques in an enormously dynamic industry suggests that many more opportunities await mobile phone marketers that are sufficiently savvy to keep a close eye on consumer wants and needs and to take the steps necessary to retain existing market share while seeking to capture additional share through innovative relationship marketing techniques.

The recent launch of the iPhone is proof-positive that mobile phone technology continues to advance and this industry will likely continue to grow and enjoy increasing economies of scale in the future. In this environment, identifying what mobile phone consumers want and need at a given point in time represents a challenging endeavor to be sure. Nevertheless, though the challenges are great, the rewards are as well and even small but savvy marketers can reap the benefits of a well-managed target marketing regimen. For example, Mckenna reports that, "As the markets have fragmented, more players are able to achieve a recognized position for themselves even without the resources of Sony, Apple, or Federal Express. Remember, even the giants were once small and unknown. Multiple positioning opportunities exist within every industry. A distinct, market position is attainable even in a crowded marketplace" (emphasis added) (p. 43). In this regard, a large number of mobile phone manufacturers have attempted to gain market opportunities from this industry in recent years, and as a result, the mobile phone industry represents an interesting topic for studying in order to further analyse the presence of customer relationship and its effect on this industry in general and on mobile phone consumers in Bangkok, Thailand in particular. Indeed, Thailand represents a shining economic, social and political star in Southeast Asia, and it is reasonable to suggest that the nation's current economic progress will continue in the future. In this environment, time is of the essence in developing effective relationship… READ MORE

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