CUSTOMER SATISFACTION AND CUSTOMER RETENTION OF TELECOMMUNICATION COMPANIES IN BANADIR REGION

BY

Open University of Ma aysia

CUSTOMER SATISFACTION AND CUSTOMER RETENTION OF TELECOMMUNICATION COMPANIES IN BANADIR REGION

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Pro!e"t Paper S#$%itte& in Partia F# fi %ent of t'e Re(#ire%ent of t'e &e)ree of Master of B#siness A&%inistration

ABSTRACT After the collapse of the central government in Somalia, the telecommunication industry was almost dismantled in the period (19911993). Since 1993, the telecommunication industry in Somalia has grown many folds new companies !oined the mar"et to reap the potentials of this growing industry. #ompanies wor"ed hard to introduce more innovative products to satisfy, attract and retain customers. $his study see"s to descri%e the relationship %etween customer satisfaction and customer retention of &ormud and 'ationlin", mo%ile phone operators in (ogadishu, Somalia. $he method used was descriptive correlation design. #ustomer satisfaction indicators were) price, call clarity, and value-added services. #ustomer retention is indicated %y) intention to repurchase, positive word-of-mouth, and patience towards price. *n the descriptive analysis section, customer retention was low on all aspects of) intention to repurchase, positive word of mouth, and patience towards price. $he results also showed that customer satisfaction was low satisfaction on all aspect of) price, call clarity, value2

added services. $his is accomplished through si+ chapters of this pro!ect study which includes) *ntroduction, ,iterature review, research (ethodology, -ata Analysis, -iscussion, #onclusion and .ecommendation. /revious researches of pu%lished %oo"s in this area of the study were analy0ed. $he group discussion12uestionnaire research method was used as the %asis for the research design and the results of this group discussion is analy0ed and discussed, using /earson3s ,inear #orrelation #oefficient found that customer retention it has a significant relationship with price, with call clarity and with valueadded services. $herefore, the companies that charge lower prices, and provide clear voice telecommunication system, and give %etter value-added services can %etter satisfy and retain customers than those companies who do not act to satisfy and retain their customers. $he pro!ect study ends with a summary of the findings and recommendations.

DEDICATION
* dedicate this %oo" to my lovely father Shei"h &assan 4a2ih who paid all his a%ility to educate us and gave us more and more advise to continue education until death may A,,A& give him his mercy * never forget him. * also dedicate to my %eloved wife ,ayla *. (ohamed for her invalua%le support and encouragement during the study of my (5A * never forget for her efforts, care and patients to my wor". 4inally, * dedicate to Somali people.

APPRO*AL
'ame of Student) 6666666666666666 'ame of Student) 6666666666666666 (atric. 'um%er) 6666666666666666 (atric. 'um%er) 6666666666666666 -irector, #enter for graduate Studies 7pen 8niversity of (alaysia -ear Sir, Attached is the pro!ect paper with the following chapters for your evaluation and e+amination. #hapter 1) *ntroduction #hapter 9) ,iterature .eview #hapter 3) .esearch (ethodology #hapter :) .esults and Analysis #hapter ;) -iscussion #hapter <) #onclusion and .ecommendation =e have thoroughly chec"ed our wor" and we are confident that it is free from ma!or grammatical errors, wea"ness in sentence contractions, spelling mista"es, referencing mista"es and others. =e have chec"ed with #>S >uideline for =ringing pro!ect papers and we are satisfied that our pro!ect proposal satisfies most of its re2uirements. $han" you, Student3s Signature) 66666666666666666666666 -ate) 6666666666666666 Student3s Signature) 66666666666666666666666 -ate) 6666666666666666 * have read the students3 research proposal and * am satisfied that it is in line with the #>S >uidelines for =riting /ro!ect /roposal. *t is also free from ma!or grammatical errors, sentence construction wea"ness and others.

Supervisor3s Signature 6666666666666666666666666666666

DECLARATION
'ame) 6666666666666666666666666 'ame) 6666666666666666666666 (atric 'am%er) 6666666666666666666 (atric 'am%er) 66666666666666

=e here%y declare that this pro!ect is the result of our own wor", e+cept for 2uotations and Summaries which have %een duly ac"nowledged.

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TABLE OF CONTENTS
A%stract *. -edication **. Ac"nowledgment ***. Approval *?. -eclaration ?. $a%le of contents ?*. ,ist of ta%les ?**. 1.1 1.9 : 1.3 1.: 1.; 1.< 1.A A 1.B A 1.9 , 9 9.C 9.1 9 9.9 9.3 11 9.: 19 . 13 3.C 3.1 13 3.9 3.9.1 3.9.9 3.3 3.3.1 1; 3.: 3.; *ntroduction .esearch -esign .esearch /opulation Sample Si0e Sampling /rocedure .esearch *nstrument ?alidity and .elia%ility of the *nstrument -ata gathering -ata Analysis
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*'$.7-8#$*7' 1 < < < A

1 5ac"ground of Study .esearch /ro%lem /urpose 7%!ectives of the Study .esearch @uestions $he scope of the Study Significance of the Study 7perational -efinitions of varia%les #onceptual framewor" LITERATURE RE*IE*ntroduction /rice and #ustomer .etention #all clarity and #ustomer .etention ?alue DAdded Service and customer .etention Summary RESEARC/ MET/ODOLOGY

B 9 1C

13 13 1: 1: 1; 1< 1<

3.< 1A 3.A 0 1B :.C :.1 1B :.1.1 1B :.1.9 :.1.3 9C :.1.: :.1.; 99 :.9 93 :.9.1 93 :.9.1.1 93 :.9.1.9 9; :.9.1.3 9A :.9.9 99 :.9.9.1 :.9.9.9 31 :.9.9.3 39 :.9.3 33 :.9.3.1 3: :.9.3.9 :.9.3.3 3< :.3 1 ;.C 2 <.C <.1 <.1.1 :1 <.1.9 :9 <.1.3 :9 <.9 :3

Ethical of #onsideration $he ,imitations of the Study DATA ANALYSIS RESULTS *ntroduction -emographic -ata -escription of the respondents %y gender -escription of the respondents %y age -escription of the respondents %y education level -escription of the respondents %y occupation -escription of the respondents %y mo%ile num%er operator -ata /resentation and Analysis -escription of the dependent varia%le (customer retention) #ustomer retention in terms of intention to repurchase #ustomer retention in terms of positive word-of-mouth #ustomer retention in terms of patience towards price -escription of the independent varia%le (customer satisfaction) -escription of customer satisfaction in terms of price -escription of customer satisfaction in terms of call clarity -escription of customer satisfaction in terms of value-added services $he relationship %etween customer satisfaction and customer retention $he relationship %etween price satisfaction and customer retention $he relationship %etween call clarity and customer retention $he relationship %etween value-added services and customer retention (a!or 4indings DISCUSSION *ntroduction CONCLUSION AND RECOMMENDATIONS :1 *ntroduction #onclusions /rice and customer retention in &ormuud and 'ationlin" #all clarity and customer retention in &ormuud and 'ationlin" ?alue-added services and customer retention in &ormuud and 'ationlin" .ecommendations
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1A 1B

19 91

99

3; 3B 39 39 :1 :1

.eferences :: Appendi+ :9 $A5,E /A>E :.1 :.9 19 :.3 :.: 91 :.; 99 :.< 9: :.A 9< :.B 9B :.9 3C :.1C 31 :.11 39 :.19 3: :.13 'ationlin" :.1: and :.1; &ormuud .esults correlating call clarity and customer retention in &ormuud and 3; .esults correlating value-added services and customer retention in&ormuud 'ationlin". .elating three aspects of customer satisfaction and customer retention in and 'ationlin". 4*>8.E /A>E :.1 :.9 ,*S$ 74 4*>8.ES 3< 3A &ow the respondents rated their satisfaction in terms of value-added service .esults correlating price and customer retention of &ormuud and 'ationlin" &ow the respondents rated their satisfaction in terms of call clarity &ow the respondents rated their retention to in terms of patience towards price &ow the respondents rated their satisfaction in terms price &ow the respondents rated their retention to in terms of positive word-of-mouth &ow the respondents rated their retention to in terms of intention to repurchase $he description of the respondent %y mo%ile num%er operator $he description of the respondent %y education level $he description of the respondent %y occupation 9C $he description of the respondent %y gender $he description of the respondent %y age 1B ,*S$ 74 $A5,ES

-escription of the respondents %y gender -escription of the respondents %y Age -escription of the respondents %y education level -escription of the respondents %y occupation -escription of respondents %y mo%ile num%er operato

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9C
:.3

:.: :.;

91 99 93

C/APTER ONE3 INTRODUCTION

+45

INTRODUCTION
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$his section contains the %ac"ground, pro%lem statement, purpose of study, specific o%!ectives of the research, research 2uestions, and scope of study, significant of study, operational definition and conceptual frame wor" of the study.

+4+BAC6GROUND OF T/E STUDY

*n the history of mar"eting literature, customer satisfaction has %een studied and recogni0ed as an important factor in management and mar"eting literature since 19BCs (7liver, 19BC). #ustomer satisfaction is used %y organi0ations to evaluate the 2uality of the product or services supplied to customer ('emati, 9C1C). 5efore the civil war in 1991, the ministry of /ost F $elecom services were the sole provider and the regulatory %ody of the telecommunication services. -uring the civil war (1991-1993), the pu%lic telecommunication system was almost dismantled. -espite the difficulties faced the private telecommunication companies have successfully re-esta%lished the telecommunication systems (5ashir, 9CCB). $here are studies a%out customer satisfaction in these private telecommunication companies, especially the cellular phone companies Somalia. Some of the prominent operators in the Somali mo%ile phone mar"et are) >olis $elecom &ormuud 'ationlin" Somtel *nternational $elecom Somalia $elesom Soltelco and S$#. $hese companies have proved adept at rapidly e+panding coverage through the use of Gmicrocellular networ"s in a %o+3 (5arian H. &esse, 9C1C). *n a period of an intense competition pressure, telephone service providers in Somalia, the companies are directing their efforts to improve customer satisfaction in order to attract and retain customers. $he tas" facing these companies is to focus on those activities that result in meeting or e+ceeding customer e+pectations (5ashir, 9CCB).

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*n our study focus, &ormuud $elecom is a privately owned company that was esta%lished in April 9CC9, and 'ation,in" $elecom which came into %eing on Septem%er 199A, these two telecommunication companies have head2uarters in (ogadishu especially in &owlwadag district and they %oth give fi+ed line services and mo%ile phone services. As there is no powerful governmental agency which can control the 2uality of the services of such companies whether it is appropriate to satisfy the needs of their users or not, also there is no legal contracts or restrictions to accommodate new mo%ile phone customers without regarding whether they are shifted from other mo%ile phone networ"s or not, so there is a need to conduct studies a%out customer satisfaction and customer retention in these companies. $he customer satisfaction perspective that is to %e used in this study is %ased on the theory of e+pectancy disconfirmation which is proposed %y .ichard 7liver (7liver, 19BC). *f the service meets the e+pectation, the customers are satisfied, or if the service lac"s the e+pectation, the customers are dissatisfied. #ustomer is the person or organi0ation that %uys something from a %usiness. Satisfaction is the good feeling that you have when you have achieved something or when something that you have wanted to happen does happen (7+ford advanced learner3s dictionary). #ustomer satisfaction is a conse2uence of comparison %etween reward and price %y ac2uiring it (#hurchill, Surprenant, 19B9). #ustomer satisfaction is a person3s feeling of pleasure or disappointment resulting from comparing a products performance in relation to his or her e+pectations (Iotler F Ieller, 9CC<). #ustomer satisfaction generally means the reaction of customers to the state of fulfillment and customer !udgment of the fulfilled state (7liver, 199A). $he selected definition for this study is)
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#ustomer satisfaction is a conse2uence of comparison %etween reward and price %y ac2uiring it (#hurchill, Surprenant, 19B9). 5ecause it reflects customer e+pectation compared to actual performance of the service in a given price and the satisfaction1dissatisfaction result. (easuring satisfaction could %e grouped into three categories, pricing, core services, value added services (,ee et al. 9CC1)./rice or pricing structure) refers to pricing and price schedule (Iim et al, 9CC:). According to Iotler and Armtsrong (9C1C) price is the amount of money charged for a product or service, or the sum of values that customers e+change for the %enefits of having or using the product or service. /rice is a factor that effects customer satisfaction %ecause according to &ermann (9CCA) price is an important element in the purchase and the continuity of service so is has an influence on satisfaction. #all clarity) refers to call 2uality according to customer perception (Iim et al, 9CC:). #all clarity has an influence in the satisfaction. 5ecause, call clarity is the %asic function of telecommunication services that are promised to give the customer, %y price a customer can choose another networ" %ut can also ta"e %ac" decision to remain in the current networ" due to call clarity issue (Ali et al, 9C1C).?alue added services) refers to the type and convenience of valueadded services, (Iim et al, 9CC:). ?alue added services have a significant impact on customer retention where favored additional value will "eep customers use the service of the provider and prefer to remain a regular user. 7n the other side, customer retention is defined as) #ustomer retention is a Gdeeply held commitment to re%uy or repatroni0e a preferred product or service consistently in the future, despite the situational influences and mar"eting efforts having the potential to cause switching %ehavior3 (7liver,199A). #ustomer retention is the continuity of the %usiness relations %etween the company and the customer.
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(>erpott, .ams and Schindler 9CC1). #ustomer retention is Jmaintaining the e+isting customer %ase %y esta%lishing good relations with all who %uy the company3s productK ((otiwala, 9CCB). $he selected definition is) customer retention is the continuity of the %usiness relations %etween the company and the customer (>erpott, .ams and Schindler 9CC1). 5ecause, the retention is the a%ility of the company to "eep the customer use its services for a specified period of time. $here is a term that is related to the term customer retention which the loyalty, #ustomer loyalty is the willingness of the customer to maintain their relations with a particular firm or service1product. #ustomer loyalty is viewed as the strength of relationship %etween individual3s relative attitude and repeat patronage (Silva F Lapa, 9CC9). ,oyalty can %e measured %y the intention of repurchase, recommending the product1service to other, and patience towards price (Iim F Loon, 9CC:). 5ut there is other authors consider these as %enefits of customer retention (Silva F Lapa, 9CC9).

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+4,PROBLEM STATEMENT
$he organi0ations of the modern world are going to %e customer centric and accepted customer driven initiatives and see" to understand, attract, retain, and %uild close and friendly long-term relationships with profita%le customers (Iotler, 9CC<). A variety of studies find the higher levels of customer3s satisfaction lead to greater customer loyalty (Anderson et al, 1993). $hrough increasing loyalty, it is argued, customer satisfaction helps to secure future customer retention (4ornel 1999, .ust et al. 199:). $he #ustomer satisfaction is used %y organi0ations to evaluate the 2uality of the product or services supplied to customer ('emati, 9C1C).

Since the destruction of Somali central government in 1991, a num%er of telecommunication companies have %een esta%lished to provide telecommunication services to their customers in (ogadishu, Somalia. $he telephone Service /roviders (#ompanies) are responsi%le for ensuring compliance of every customer, and there is no powerful governmental agency which can control or evaluate how those companies manage the level satisfaction of their customers. As the conte+t of this study is the overall performance of the firm, it is natural to focus on customer satisfaction as overall evaluation of future customer retention. $herefore, this study was constructed to e+plore the level of customer satisfaction of &ormuud and 'ation,in" $elecom to determine the a%ility of their future customer retention, and also the researchers e+amined the relationship %etween customer satisfaction and customer retention at &ormuud $elecom and 'ation,in" $elecom in (ogadishu, Somalia.

+4.PURPOSE OF T/E STUDY

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$he purpose of this study was to e+amine the lin"s %etween customer satisfaction and customer retention of telecommunication companies in Somalia specially &ormuud $elecom and 'ation ,in" $elecom in (ogadishu, Somalia. 5ecause, the need for such research to "now if the customers are satisfied and retained is useful for %oth the customers for their choices, and the companies for their customer retention strategies.

+40OB7ECTI*ES OF T/E STUDY

1. $o descri%e if there is a relationship %etween price and customer retention in &ormuud and 'ationlin"M 2. $o descri%e whether call clarity is related to customer retention in &ormuud and 'ationlin"M 3. $o e+amine if value added services are related to customer retention in &ormuud and 'ationlin"M

+41RESEARC/ 8UESTIONS
1. *s there a relationship %etween price and customer retention in &ormuud and 'ationlin"M 2. *s there a relationship %etween call clarity and customer retention in &ormuud and 'ationlin"M 3. -o value-added services are related to customer retention in &ormuud and 'ationlin"M

+42T/E SCOPE OF T/E STUDY

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$he study focus was on how customer satisfaction can further %e employed in improving the customer retention at telecommunication companies in (ogadishu, Somalia. $his study concerned a%out assessing the relationship %etween customer satisfaction and customer retention. $he study e+amined the impact of customer satisfaction and customer retention at &ormuud $elecom and 'ation ,in" $elecom in the year (9C19-9C13). *ts focus was especially on the impact of services price, #all clarity and ?alue added services on customer retention, and it is cross-sectional study.

+49SIGNIFICANCE OF T/E STUDY

$he study results produced data and information that is useful for understanding the effects of customer satisfaction on customer retention. $he study was made to ena%le management and operations at &ormuud $elecom and 'ation,in" $elecom Somalia to get more insight into how customer satisfaction affect on customer retention. $he findings of this study were prepared to contri%ute useful information to that which already e+ists regarding the use of customer satisfaction in customer retention. $he study was also organi0ed to %enefit other researchers to get a %asis for further research of the impact of customer satisfaction on customer retention.

+4:OPERATIONAL DEFINITIONS OF *ARIABLES

#ustomer satisfaction) is a conse2uence of comparison %etween reward and price %y ac2uiring it. #ustomer satisfaction is determined %y price call clarity and value

added services. /rice or pricing structure) refers to pricing and price schedule. #all clarity) refers to call 2uality according to customer perception. ?alue added services) refers to the type and convenience of value-added services.
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#ustomer retention) is the continuity of the %usiness relations %etween the company and the customer. #ustomer retention is characteri0ed %y intention to repurchase, positive word-of-mouth and patience towards price. *ntention to repurchase) refers to preference and the decision of the customer to %uy or use goods1services of a particular company again and again. /ositive word-of-mouth) refers to the act of recommending the product1service to other. /atience towards price) refers to the act of %eing less sensitive to the price increases.

+4; CONCEPTUAL FRAME-OR6

$his presented in the construct %elow with some ad!ustments from the study of a%out the determinants of customer retention in cellular industry of /a"istan (Ali et al. 9C1C). Customer satisfaction Customer retention

Price fairness Call clarity Value-added services

1. Intention to repurchase 2. Positive word-of-mouth 3. Patience towards price

4igure 1.1) model of customer satisfaction and customer retention Ali et al. 9C1C *n the scheme of the study depicted in figure 1.1, #ustomer satisfaction is hypothesi0ed to influence customer retention of &ormuud and 'ation,in" $elecoms. $he customer satisfaction is defined %y services price, #all clarity and ?alue added services where the customer retention is defined %y intention to repurchase, /ositive word-of-mouth and /atience towards price.

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C/APTER T-O3 LITERATURE RE*IE,45 INTRODUCTION $his chapter includes the literature related to the customer satisfaction and customer retention in telecommunication companies, especially the relation of satisfaction varia%les of) prices, call clarity, and value-added services to the customer retention respectively.

,4+ PRICE AND CUSTOMER RETENTION

/rice plays an important role in telecommunication industry (Iollman, 9CCC). $hese include not only the purchase price %ut also the call and rental charges. $herefore the more the company offers lower call rates the more customers will commit themselves to the mo%ile phone service provider thus more customers will %e retained.

.anaweera and 'eely (9CC3) hold the hypothesis that the %etter the perceived price is, the greater is the level of repurchase intentions. &owever, little research had %een conducted on the correlation %etween price perceptions and customer retention and conse2uently, they argue that future research is needed in the area. *n their study, they found there was a direct relationship %etween price perceptions and (repurchase intentions) customer %ehavioral intentions. A study in /a"istan has found significant relationship %etween price reasona%ility and customer satisfaction. $his shows that fairness of the price is the ma!or determinant of customer satisfaction and the competitive advantage to retain customers for long period of time. $he consumer can even switch if he1she find more reasona%le prices with some other cellular service provider. So the service providers

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are %ound to reduce their prices over period of time (Hawaria, *mran, =aseemullah, *shfa2 and A"ram. 9CC9). 5lery et al. (9CCB) hypothesi0ed that repurchase intention is influenced %y perceived price, and found that perceived price was negatively associated with repurchase intention. /rice is an important factor influencing customers3 usage levels and repurchase intention, especially in telecommunication sector. A study of 'o"ia Siemens 'etwor"s on ac2uisition and retention found that price in the form of calling plans and rate structure is a "ey driver that shows low satisfaction and relatively high impact on retention ('o"ia Siemens networ"s, 9C1C). $he price #ompetition %etween the telecommunication companies in Somalia has lowered the prices and this made their services reasona%ly priced to most of the Somalis. Somalia is now considered to have the cheapest international calls in Africa ;C 8S cents per minute (5ashir, 9CCB).

,4, CALL CLARITY AND CUSTOMER RETENTION

#all clarity is the %asic function of telecommunication services that are promised to give the customer, %y price a customer can choose another networ" %ut can also ta"e %ac" decision to remain a customer for the current networ" due to call clarity issue (Ali et al, 9C1C). According to Seo et al. (9CCB), geographical coverage and voice clarity are the fundamental 2uality characteristics of wireless service which affect customer contract renewal. $herefore suppliers should continuously strive to enhance voice performance and 2uality infrastructure which would in turn improve supplier %ase and performance and help to attract customers (Evans, 9CCA). A study in /a"istan found that there is a significant relationship %etween call clarity and customer satisfaction and customer retention. $his is an important point of view to retain customers %ecause in the first time if the customer chooses any company
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owing to its low prices %ut does not offer clear voice communication, finally the consumer will switch to some other cellular phone networ"s =aseemullah, *shfa2 and A"ram. 9CC9). A study made %y 'o"ia Siemens 'etwor"s (customer ac2uisition F retention study 9C1C) found that networ" coverage and voice 2uality have the highest impact on retention, and their importance is increasing. #alling plans and calling costs as well as device portfolio are also factors where consumers see the %iggest need for improvement ('o"ia Siemens networ"s, 9C1C). (Hawaria, *mran,

,4. *ALUE<ADDED SER*ICES AND CUSTOMER RETENTION

?alue Dadded services are the type or variety, and convenience and up to date value added services and has a significant impact on customer satisfaction (Iim et al. 9CC:). *n telecommunication industry special care is given to customers to develop good relationship with them. So when customer services are good enough to ma"e the customer feel valued and important to the organi0ation and the organi0ation cares a%out them, then it will guide to the enhancement of customer satisfaction (Adnan, (u0ammil and Sehrish, 9C1C). $hus, value added services will ultimately result in long term relationship with the customers, namely that is the customer retention. Iim et al. (9CC:) showed that mo%ile phone companies in order to increase their customers3 satisfaction and to have %etter customer retention, must concentrate on service variety and 2uality and provide customer-oriented services to raise customer satisfaction. *t was found that customer satisfaction changes in response to situational changes or in accordance to the nature of the goods or services consumed. A customer may %e satisfied with a variety of things including the product
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or service, the e+perience, the purchase decision, the sales person, store, service provider or even an attri%ute. (.odrigo A. /adilla, 9CC:). Iim et al. (9CC:) found that call 2uality, value added services and customer support play a ma!or role in %uilding customer satisfaction for cellular service su%scri%ers and they tend to "eep using current service as the level of customer satisfaction is high that leads to customer loyalty. &itachi #onsulting, a glo%al company for %usiness and information technology, found that adding mo%ile phone %an"ing in the pool of the value added services provided %y the cellular phone networ"s is one driver of customer retention strategies (>eorge S., Hoel 73-riscoll F Hosh ,inder 9C11). As stated in the study of Silva F Lapa (9CC9), in Sri ,an"a .esults of the 2uestionnaire survey done among 131 corporate telecom users found that most important factor in continuing an e+isting service provider was the a%ility of the service provider to add value to user3s %usiness value delivery.

,40 SUMMARY
*n the literature a%ove, following the se2uence of the study o%!ectives, we have discussed the relationship %etween customer satisfaction (varia%les of price, call clarity, value-added services) and customer retention in three sections, a section for each varia%le. $he gap was to apply this study in the conte+t of Somalia, especially (ogadishu. $he two mo%ile phone networ"s of &ormuud and 'ationlin", were selected for the study. $he conceptual framewor" is shown in figure 1.1.

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C/APTER T/REE RESEARC/ MET/ODOLOGY

.45 INTRODUCTION
$his chapter presents a detailed description of the research methodology. (ethodology refers to the detailed procedure to %e followed to reali0e the research o%!ectives. $his chapter contains the research design, research population, and sample si0e, sampling procedure, research instrument, validity and relia%ility of the instrument, data gathering procedure, data analysis, ethical consideration and limitations of study.

.4+ RESEARC/ DESIGN

$his study was conducted a descriptive correlation survey design. *t is crosssectional study and %oth 2ualitative and 2ualitative in nature. $he descriptive correlation design was used to descri%e the relationship %etween the three customer satisfaction elements and the three customer retention elements. *t is a crosssectional survey %ecause the researchers e+amined primary data collected %y using 2uestionnaires with close ended 2uestions filled %y many people in one occasion.

.4, RESEARC/ POPULATION

=hen the population is too large that a sample cannot %e drawn from whole of it, the researcher may descri%e an accessi%le population (7so F 7nen, 9CCB). 4or this study, 1CC students in S*(A- 8'*?E.S*$L were the accessi%le target population, %ecause these students are part of &ormuud and 'ationlin" telecom customers. $hey were selected %ecause they deal directly with the telecommunication pro%lems and they are very informative a%out the issues of telecommunication services, and
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they could give o%!ective answers to our research 2uestions. $hese students were from different districts in (ogadishu, and it is li"ely to find one person using &ormuud phone num%er or another using 'ation,in" phone num%er at the S*(Astudents in (ogadishu, Somalia.

.4,4+ Sa%p e Si=e

$he researchers selected a sample si0e of BC respondents. *t will %e ;CN for &ormuud users, and ;CN for 'ation,in" users.

.4,4, Sa%p in) Pro"e&#re

$he researchers used Slovene3s formula to select the respondents of the study from the population using the following formula)
N 1 + N ( e) 2

n=

=here n is the re2uired sample si0e, ' is the target population si0e and e is the standard error or level of significance, which is popularly "nown to %e OC.C; or ;N. 4or this study, ' O 1CC and so the sample si0e was calculated as follows
n= 1!! = ! 1 + 1!!(!.!") 2

*n this research the non-pro%a%ility sampling was selected, specially the purposive sampling techni2ue, %ecause our purpose was to collect focused information, and the !ustification to do so is to save time as it is limited and to save the costs

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.4. RESEARC/ INSTRUMENT

$he researchers used 2uestionnaires to collect data, the reason to choose the 2uestionnaire was our need to collect a written primary data and organi0e it for analysis. $he purpose of the 2uestionnaires was to collect information in a limited time (7so F 7nen, 9CCB) and it also gives us the a%ility to construct the 2uestions according to our research 2uestions or o%!ectives. *n the 2uestionnaire there were five 2uestions on the demographic profile of the respondents in terms of gender, age, education, occupation, and the mo%ile num%er operator. $he 2uestions were self developed from the literature that contained 9A closed ended 2uestions which were li"ert scale four point agreement scale for the dependent varia%le, and four point satisfaction scale for the independent varia%le which organi0ed as) 1; items on customer retention that were ; 2uestions for each of intention to repurchase, positive word-of-mouth, and patience towards price.

.4.4+ *a i&ity an& Re ia$i ity of t'e Instr#%ent

$he instrument developed and contained 2uestions a%out the varia%les that the research sought and the 2uestions were clearly stated and easy to answer. $he 2uestionnaire was tested %y utili0ing validity measurement techni2ues %efore the actual data collection, in addition, the help and the recommendations of the e+perts in telecommunication services was asserted to assure the validity and relia%ility of the instrument.

.40 DATA GAT/ERING PROCEDURES

25

*n the first stage the researchers re2uested and received authori0ation letter from the /ostgraduate /rogram (ogadishu 7ffice to collect research data a%out the customer satisfaction and customer retention of &ormuud and 'ation ,in" in (ogadishu. $he participants freely as"ed to fill the 2uestionnaire with complete and e+act answers without %iases. $he 2uestionnaires were then retrieved and chec"ed. .41 DATA ANALYSIS $he data was e+amined or analy0ed %y using (S/SS) to identify the relationship %etween customer satisfaction varia%les of price, call clarity and value-added services and customer retention in &ormuud and 'ationlin", (o%ile phone networ"s in (ogadishu, the data showed in num%ers on ta%les and also presented as a te+t. Ta$ e .4+3 s'o>in) 'o> t'e &ata is ana y=e& an& interprete& Mean ran)e 3.9< D :.CC 9.;1 D 3.9; 1.A< D 9.;C 1.CC D 1.A; Respon&ent %o&e Strongly agree1very satisfied Agree1satisfied -isagree1dissatisfied Strongly disagree1very dissatisfied Interpretation ?ery high &igh ,ow ?ery low

.42 ET/ICAL CONSIDERATION

$he researchers "ept the collected data anonymous, for the sa"e of participants3 security or personal1company privacy, and the researchers emphasi0ed that the data was only to %e used for academic purposes. $he researchers sought the agreement
26

of the participants %efore giving the 2uestionnaires. And the researchers also considered the situation with in which they deliver the 2uestionnaires.

.49 T/E LIMITATIONS OF T/E STUDY

$he researchers faced a pro%lem of reluctance of some respondents were not interested in filling the 2uestionnaire. *n addition researchers faced a language %arrier as some respondents had a pro%lem of poor understanding to English, so the researchers tried to translate them on spot into Somali language.

27

C/APTER FOUR3 DATA ANALYSIS RESULTS

045 INTRODUCTION
$his chapter shows descriptions of respondents3 demographic data, description of the dependent varia%le (customer retention), and description of independent varia%le (customer satisfaction), and e+ploring the relationships %etween them, and the ma!or findings, and the end of this chapter is discussions a%out the findings.

04+ DEMOGRAP/IC DATA

.espondents in this study included BC students of some main 8niversities in (ogadishu as customers of &ormuud and 'ationlin" mo%ile phone operators. $he study sample involved students of different categories (male and female, different ages, different education levels, different occupations, and different mo%ile phone operator) as descri%ed in this section.

04+4+ Des"ription of t'e respon&ents $y )en&er

$he study sample involved %oth male and female customers of &ormuud and 'ationlin" mo%ile phone operators in (ogadishu. $a%le :.1 shows respondents3 description %y gender Ta$ e 04+3 S'o>s t'e &es"ription of t'e respon&ent $y )en&er 4re2uency ?alid (ale 4emale $otal ;1 99 BC /ercent <3.B 3<.9 1CC.C ?alid /ercent <3.B 3<.9 1CC.C #umulative /ercent <3.B 1CC.C

28

$a%le :.1 indicates that males were ;1 which represent <3.BCN more than females 99 that represent 3<.9N of the respondents.

4igure :.1 -escription of the respondents %y gender 04+4, Des"ription of t'e respon&ents $y A)e 8nder this category, there were four categories of respondents as descri%ed in $a%les :.9 Ta$ e 04,3 S'o>s t'e &es"ription of t'e respon&ents $y a)e 4re2uency /ercent ?alid /ercent ?alid 1B-9; 9<-3; 3<-:; A%ove: < $otal 9A 3< 1: 3 BC 33.B :;.C 1A.; 3.B 1CC.C 33.B :;.C 1A.; 3.B 1CC.C #umulative /ercent 33.B AB.B 9<.9 1CC.C

$a%le :.9 shows that (:;N) the largest category of respondents in the sample aged 9< to 3; years, and (33.BCN) were aged 1B to 9; years, where (1A.;CN) were aged 3< to :;, and only (3.BCN) of the students were in the age a%ove :< years. $his shows that the dominant age group of the respondents in the sample is %elow 3; years old.
29

4igure :.9 Des"ription of t'e respon&ents $y A)e

04+4. Des"ription of t'e respon&ents $y e&#"ation eve

8nder this category, there were three categories of respondents as descri%ed in ta%le :.3

Ta$ e 04.3 S'o>s t'e &es"ription of t'e respon&ents $y e&#"ation eve 4re2uency ?alid Secondary -iploma 5achelor $otal 9 39 :< BC /ercent ?alid /ercent 9.; :C.C ;A.; 1CC.C 9.; :C.C ;A.; 1CC.C #umulative /ercent 9.; :9.; 1CC.C

$a%le :.3 shows %rea" ups of the whole sample into %achelor, diploma and secondary it indicates that (;A.;N) of the sample were %achelor students, and (:C.CN) of the sample were diploma students, where only (9.;CN) of the sample were secondary students that were new, in the first time to !oin the university.

30

4igure :.3 Des"ription of t'e respon&ents $y e&#"ation eve 04+40 Des"ription of t'e respon&ents $y o""#pation 8nder this category, the respondents were categori0ed into three categories of occupation as shown in ta%le :.:

Ta$ e 0403 S'o>s t'e &es"ription of t'e respon&ents $y o""#pation 4re2uency ?alid Student Employed 8nemployed $otal <C 1: < BC /ercent A;.C 1A.; A.; 1CC.C ?alid /ercent A;.C 1A.; A.; 1CC.C #umulative /ercent A;.C 99.; 1CC.C

$a%le :.: shows that the largest categories of occupation (A;N) were students and the second category of occupation (1A.;CN) were employed students, and (A.;N) were unemployed students. $his figure shows that most of the respondents were only students with no more additional activity a%ove the schoolwor".

31

4igure :.: Des"ription of t'e respon&ents $y o""#pation 04+41 Des"ription of respon&ents $y %o$i e n#%$er operator $he study sample involved %oth &ormuud and 'ationlin" mo%ile phone users in the students of S8 8niversity, (ogadishu. $a%le :.; shows respondents description %y mo%ile num%er operator Ta$ e 0413 S'o>s t'e &es"ription of t'e respon&ents $y %o$i e n#%$er operator 4re2uency ?alid &ormuud 'ationlin" $otal :C :C BC /ercent ;C.C ;C.C 1CC.C ?alid /ercent ;C.C ;C.C 1CC.C #umulative /ercent ;C.C 1CC.C

$a%le :.; indicates that the sample was e2ually distri%uted %etween the customers of the two mo%ile operators, &ormuud and 'ationlin".

32

4igure :.; Des"ription of respon&ents $y %o$i e n#%$er operator 04, DATA PRESENTATION AND ANALYSIS

04,4+ Des"ription of t'e &epen&ent varia$ e ?"#sto%er retention@

$he dependent varia%le in this study was #ustomer retention of &ormuud and 'atiolin" mo%ile phone operators in (ogadishu. #ustomer retention was %ro"en into three aspects namely *ntention to repurchase, positive word-of-mouth, and patience towards price. #ustomer retention 2uestions consisted of 1; 2uestions in the 2uestionnaire, ; 2uestions for each item. $he 2uestions were ,i"ert scaled from one to four where 1 O strongly disagree 9 O disagree 3 O agree : O strongly agree.

04,4+4+ C#sto%er retention in ter%s of intention to rep#r"'ase

#ustomer retention in terms of intention to repurchase was measured %y five 2ualitative items or 2uestions in the 2uestionnaire, each of which was ,i"ert scaled from one (strongly disagree) to four (strongly agree). .espondents were re2uired to rate their own opinions on this aspect %y tic"ing the relevant num%er in the %o+. $heir responses were analy0ed using S/SS3s summary statistics showing the means and standard deviations, as indicated in ta%le :.<

33

Ta$ e 0423 Means an& stan&ar& &eviations on 'o> t'e respon&ents rate& t'eir retention to in ter%s of intention to rep#r"'ase

In&i"ator of intention to rep#r"'ase ' Lour perception a%out price increases your intention to repurchase Lou prefer to %uy the services again and again A9 =ith respect to call clarity, you will BC AB BC repurchase the service =ith regard to value-added services, you will repurchase the service. According to overall service of the company, you are decided to repurchase it regularly Mean in&eA Source) primary data 9C13 BC

(ean 9.31

Std. -eviation 1.C3B

9.1; 9.11 9.99 9.1A ,4,+

1.C99 1.C91 1.CAC 1.CAA +4590

$he means and standard deviations in ta%le :.< suggest that the repurchase intention of the customers with respect to price perceptions was rated as low (mean O 9.31), and their preference to %uy the service again was also rated as low (mean O 9.1;). $he customers intention to repurchase with regard to call clarity was low (mean O 9.11), and with respect to value-added services, their intention to repurchase was also low (mean O 9.99), according to overall service the customers decision to repurchase the service was rated low (mean O 9.1A). *n summary the average inde+ in the ta%le :.< a%ove shows that the intention of the customers to repurchase was low with mean inde+ of 9.91 (Std. -ev. O 1.CA:), proving that the respondents rated their customer retention in terms of intention to repurchase as low retention.
34

4.2.1.2 Customer retention in terms of positive word-of-mouth #ustomer retention in terms of positive word-of-mouth was measured %y five 2ualitative items or 2uestions in the 2uestionnaire, each of which was ,i"ert scaled from one (strongly disagree) to four (strongly agree). .espondents were re2uired to rate their own retention on this aspect %y tic"ing the relevant num%er in the %o+. $heir responses were analy0ed using S/SS3s summary statistics showing the means and standard deviations, as indicated in ta%le :.A

35

Ta$ e 0493 S'o>s %eans an& stan&ar& &eviations on 'o> t'e respon&ents rate& t'eir retention to in ter%s of positive >or&<of<%o#t' Source) primary data 9C13 In&i"ator of positive >or&<of<%o#t' N ?oice 2uality ma"es you recommend others to %e customers Lou prefer to recommend the service to the others. with the variety of value-added services, you will recommend others not to switch to other BC AB 9.99 9.9C 1.CAC 1.C9: BC A9 9.93 9.:A 1.19; 1.19; Mean St&4 Deviation

companies the price is not high, thus leads to communicate others positively according to overall service, you will give a positive opinion Mean in&eA

BC

9.C9 ,4,2

1.1C; +45;5

$he means and standard deviations in ta%le :.A imply that the positive word-ofmouth of the respondents with respect to voice 2uality is rated was low (mean O 9.93), and their preference to recommend the service to the others is also rated was low (mean O 9.:A). $he respondents3 recommendations to others with regard to the variety of value-added services was low (mean O 9.99), and with respect to the price, their recommendations to others was also low (mean O 9.9C), according to overall service, their tendency to recommend the service to others was low (mean O 9.C9).

36

*n summary the average inde+ in the ta%le :.A a%ove shows that the #ustomers3 positive word-of-mouth was low with mean inde+ of 9.9< (Std. -ev. O 1.C9C), proving that the #ustomers of &urmuud and 'ationlin" rated their retention in terms of positive word-of-mouth as low retention. 4.2.1.3 Customer retention in terms of patience towards price #ustomer retention in terms of patience towards price was measured %y five 2ualitative items or 2uestions in the 2uestionnaire, each of which was ,i"ert scaled from one (strongly disagree) to four (strongly agree). .espondents were re2uired to rate their own retention on this aspect %y tic"ing the relevant num%er in the %o+. $heir responses were analy0ed as shown in the ta%le :.B

Ta$ e 04:3 S'o>s %eans an& stan&ar& &eviations on 'o> t'e respon&ents rate& t'eir retention to in ter%s of patien"e to>ar&s pri"e In&i"ator of patien"e to>ar&s pri"e N According to the 2uality of the voice, you will not consider the price
37

Mean 9.9;

St&4 Deviation 1.119

BC

As to your preference to the service, you are less sensitive to the price increases BC =ith %etter value-added services, you will not consider the price BC =ith price level change or increase, your price tolerance is good =ith respect to A9 overall telecommunication BC 9.11 ,4+2 1.C<A +45;0 9.99 9.CA 9.C9 1.193 1.C9B 1.CAC

services, you have a good tolerance towards price Mean in&eA Source) primary data 9C13

$he means and standard deviations in ta%le :.B show that the patience towards price of the customers with respect to voice 2uality was low (mean O 9.9;), and the customers tolerance towards price according to their preference to the service was also low (mean O 9.99). $he customers3 price tolerance with regard to value-added services was low (mean O 9.CA), and with respect to the price changes or increases, their price tolerance was low (mean O 9.C9), according to overall telecommunication services, their price tolerance was rated as low (mean O 9.11). *n summary the average inde+ in the ta%le :.B a%ove shows that the patience

towards price was low, with mean inde+ of 9.1< (Std. -ev. O 1.C9:), showing that the customers rated their retention in terms of patience towards price as low retention. 04,4, Des"ription of t'e in&epen&ent varia$ e ?"#sto%er satisfa"tion@ $he independent varia%le in this study was customer satisfaction of &ormuud and 'ationlin" mo%ile phone operators in (ogadishu. #ustomer satisfaction was %ro"en into three aspects namely /rice, #all clarity, and value-added services, and these varia%les were measured %y 19 2uestions, four 2uestions for each, in the

38

2uestionnaire. =ith each item or 2uestion ,i"ert scaled from one to four where 1 O very dissatisfied, 9 O dissatisfied, 3 O satisfied, : O very satisfied. 4.2.2.1 Description of customer satisfaction in terms of price #ustomer satisfaction in terms of price was measured %y four 2ualitative 2uestions in the 2uestionnaire, each of which was ,i"ert scaled from one (very dissatisfied) to four (very satisfied). .espondents were re2uired to rate their satisfaction on this aspect (price) %y tic"ing the relevant num%er in the %o+. $heir responses were analy0ed using S/SS3s summary statistics showing the means and standard deviations in ta%le :.9

Ta$ e 04;3 Means an& stan&ar& &eviations on 'o> t'e respon&ents rate& t'eir satisfa"tion in ter%s pri"e In&i"ator of pri"e $he price fitness to %enefits of using the mo%ile BC phone service $he price level of mo%ile phone service 4airness and afforda%ility of the price charged =ith price to overall service Mean in&eA Source) primary data 9C13 $he means and standard deviations in ta%le :.9 show that the customer satisfaction with price with respect to mo%ile phone service %enefit was rated as high (mean O 3.1B), the respondents3 satisfaction with price according to its level was rated as low
39

Mean St&4 Deviation 3.1B 9.CC 9.C: 9.11 ,4.. .BCB .9CC .B3: .B:9 54:02

BC BC BC

(mean O 9.CC), and their satisfaction with price fairness and afforda%ility was low (mean O 9.C:), and to overall service their satisfaction with price was low (mean O 9.11). *n summary the average inde+ in the ta%le :.9 a%ove shows that the customer satisfaction with price was low, with mean inde+ of 9.33 (Std. -ev. O C.B:<), showing that the respondents rated their satisfaction in terms of the price of &ormuud and 'ationlin", mo%ile phone operators in (ogadishu as low satisfaction.

4.2.2.2 Description of customer satisfaction in terms of call clarity #ustomer satisfaction in terms of call clarity was measured %y four 2ualitative 2uestions in the 2uestionnaire, each of which was ,i"ert scaled from one (very dissatisfied) to four (very satisfied). .espondents were re2uired to rate their satisfaction in terms of call clarity %y tic"ing the relevant num%er in the %o+. $heir responses were analy0ed using S/SS3s Summary statistics showing the means and standard deviations in ta%le :.1C Ta$ e 04+53 Means an& stan&ar& &eviations on 'o> t'e respon&ents rate& t'eir satisfa"tion in ter%s of "a " arity In&i"ator of "a " arity $ypes of call options for the networ" Availa%ility of the networ" connection $he coverage of the networ" $he voice of the networ" Mean in&eA
40

N BC BC BC BC

Mean 3.C: 9.C1 9.1C 9.C9 ,4,;

St&4 Deviation .AAC .B:9 .AC: .9<B 54:,.

Source) primary data 9C13 $he means and standard deviations in ta%le :.1C show that the respondents3 satisfaction with call clarity with respect to the types of call options for the networ" was rated as high (mean O 3.C:), their satisfaction with call clarity according to the availa%ility of the networ" connection was rated as low (mean O 9.C1), and their satisfaction with call clarity with regard to the networ" coverage was low (mean O 9.1C), and with respect to the voice of the networ" their satisfaction was low (mean O 9.C9). *n summary the average inde+ in the ta%le :.1C a%ove shows that the customer satisfaction with call clarity was low, with mean inde+ of 9.99 (Std. -ev. O C.B93), indicating that the respondents rated their satisfaction in terms of call clarity of &ormuud and 'ationlin", mo%ile phone operators in (ogadishu as low satisfaction. 4.2.2.3 Description of customer satisfaction in terms of value-added services #ustomer satisfaction in terms of value-added services was measured %y four 2ualitative 2uestions in the 2uestionnaire, each of which was ,i"ert scaled from one (very dissatisfied) to four (very satisfied). .espondents were re2uired to rate their satisfaction on this aspect (price) %y tic"ing the relevant num%er in the %o+. $heir responses were analy0ed using S/SS3s summary statistics showing the means and standard deviations in ta%le :.11

41

Ta$ e 04++3 Means an& stan&ar& &eviations on 'o> t'e respon&ents rate& t'eir satisfa"tion in ter%s of va #e<a&&e& servi"e In&i"ator of va #e<a&&e& servi"e Additional %enefit1care given to you BC (e.g. customer service) $he mo%ile phone money transfer system =ith the up to date value-added services =ith the ease to su%scri%e1change services when needed Mean in&eA Source) primary data 9C13 $he means and standard deviations in ta%le :.11 show that the respondents3 satisfaction with the value-added services with respect to additional %enefit1care given was rated as high (mean O 3.11), their satisfaction with value-added services according to the mo%ile phone money transfer system was rated as low (mean O 9.99), and their satisfaction with regard to up to date value-added services was low (mean O 9.1B), and with respect to the ease to su%scri%e and change services when needed their satisfaction was low (mean O 9.9:). *n summary the average inde+ in the ta%le :.11 a%ove shows that the customer satisfaction in terms of value-added services was low, with mean inde+ of 9.:: (Std. -ev. O C.91A), proving that the respondents rated their satisfaction in terms of valueadded services of &ormuud and 'ationlin" mo%ile phone operators in (ogadishu as low satisfaction. 04,4. T'e re ations'ip $et>een "#sto%er satisfa"tion an& "#sto%er retention $he main purpose of this study was to esta%lish whether there is a relationship %etween customer satisfaction and customer retention in &ormuud and 'ationlin",
42

Mean St&4 Deviation 3.11 9.99 9.1B 9.9: ,400 .91: .9;: .911 .BB9 54;+9

BC BC BC

mo%ile phone operators in (ogadishu. $his purpose was %ro"en into three forms of satisfaction namely price, call clarity, and value-added services. (ean indices for these three aspects as well as those for the three aspects of customer retention namely intention to repurchase, positive word-of-mouth, and patience towards price were computed using S/SS3s GtransformPcompute3 procedure after which the /earson3s ,inear #orrelation #oefficient was used to correlate these varia%les in order to answer the pertinent research 2uestions, as indicated in the su%se2uent su%sections.

4.2.3.1 T'e re ations'ip $et>een pri"e satisfa"tion an& "#sto%er

retention
$he first o%!ective of this study was to descri%e whether there is a relationship %etween price and customer retention in &ormuud and 'ationlin". $he analysis is shown in ta%le :.19

43

Ta$ e 04+,3 PearsonBs Linear Corre ation Coeffi"ient res# ts "orre atin) pri"e an& "#sto%er retention of /or%##& an& Nation inC *aria$ e ?in&i"es@ *ntention repurchase /ositive mouth /atience towards price Pri"e BC :5 9.1< ,4.. 1.C9: 54:02 C.A13 C.CCC word-ofBC 9.9< 1.C9C C.:3< C.CCA to Sa%p e BC Mean 9.91 St&4Deviation 1.CA: r va #e C.<<1 Si)4 C.CCC

/earson3s correlation coefficients in the ta%le :.19 a%ove show that price is correlated with the intention to repurchase (r O C.<<1), and with the positive word-ofmouth (r O C.:3<), patience towards price (r O C.A13). $he significance values (in terms of intention to repurchase, sig. O C.CCC positive word-of-mouth, sig. O C.CCA patience towards price, sig. O C.CCC) are all less than C.C; which is the ma+imum sig. value and it is accepted for correlating %etween varia%les, thus, as an answer to our first research 2uestion, we can conclude that there is a significant relationship %etween price and customer retention of &ormuud and 'ationlin".

04,4.4, T'e re ations'ip $et>een "a " arity an& "#sto%er retention
$he second o%!ective of this study was to descri%e whether there is a relationship %etween call clarity and customer retention in &ormuud and 'ationlin". $he analysis is shown in ta%le :.13

44

Ta$ e 04+.3 PearsonBs Linear Corre ation Coeffi"ient res# ts "orre atin) "a " arity an& "#sto%er retention in /or%##& an& Nation inC *aria$ e ?in&i"es@ *ntention repurchase /ositive mouth /atience towards price Ca " arity BC :5 9.1< ,4,; 1.C9: 54:,. C.AC9 C.CCC word-ofBC 9.9< 1.C9C C.:;: C.;9C to Sa%p e BC Mean 9.91 St&4Deviation 1.CA: r va #e C.<B; Si)4 C.CC9

/earson3s correlation coefficients in the ta%le :.13 a%ove show that call clarity is positively correlated with the intention to repurchase (r O C.<B;), and with the positive word-of-mouth (r O C.;<1), patience towards price (r O C.:;:). $he significance value in terms of intention to repurchase, sig. O C.CC9. *n terms of positive word-of-mouth, sig. O C.;9C which indicates that there is no significant relationship %etween call clarity and positive word-of-mouth. *n terms of patience towards price, sig. O C.CCC less than C.C; which indicates that there is a significant positive relationship %etween call clarity and the patience towards price. 5asing on these results, the answer to our second research 2uestion states that call clarity is not significantly correlated with customer retention in terms of positive word-of-mouth (sig. O C.;9C), %ut it is significantly correlated with customer retention in terms of *ntention to repurchase (sig. O C.CC9) and patience towards price (sig.O C.CCC).

04,4.4.

T'e

re ations'ip

$et>een

va #e<a&&e&

servi"es

an&

"#sto%er retention
45

$he third o%!ective of this study was to descri%e whether there is a relationship %etween value-added services and customer retention in &ormuud and 'ationlin". $he analysis is shown in ta%le :.1: Ta$ e 04+03 PearsonBs Linear Corre ation Coeffi"ient res# ts "orre atin) va #e< a&&e& servi"es an& "#sto%er retention in /or%##& an& Nation inC *aria$ e ?in&i"es@ *ntention repurchase /ositive mouth /atience towards price BC *a #e<a&&e& servi"es /earson3s correlation coefficients in the ta%le :.1: a%ove show that value-added services is positively correlated with all the three forms of customer retention namely intention to repurchase (r O C.A1;), positive word-of-mouth (r O C.:19), and the patience towards price (r O C.<3;). $he significance values (in terms of intention to repurchase, sig. O C.CCC positive word-of-mouth, sig. O C.C13 patience towards price, sig. O C.CCC) are all less than C.C; which is the ma+imum sig. value accepted for correlating, so we can answer our third research 2uestion %y saying that there is a significant relationship %etween value-added services and customer retention in &ormuud and 'ationlin". $o get a general picture on the nature and magnitude of the correlation %etween the three aspects of customer satisfaction and customer retention, the researchers
46

Sa%p e Mean to BC 9.91

St&4Deviation 1.CA:

r va #e C.A1;

Si)4 C.CCC

word-of- BC

9.9<

1.C9C

C.:19

C.C13

9.1< ,400

1.C9: 54;+9

C.<3;

C.CCC

:5

computed a general customer retention inde+, which then correlated with the three numerical indices on customer satisfaction. .esults of this are indicated in ta%le :.1; Ta$ e 04+13 PearsonBs Linear Corre ation Coeffi"ient re atin) t'ree aspe"ts of "#sto%er satisfa"tion an& "#sto%er retention in /or%##& an& Nation inC *aria$ e ?in&i"es@ Sa%p e Mean St&4Deviation r va #e C#sto%er retention Pri"e Ca " arity *a #e<a&&e& servi"es $he r values in ta%le :.1; suggest that the dependent varia%le, customer retention, in &ormuud and 'ationlin" is positively correlated with price (r O C.<<9) and call clarity (r O C.<1B), value-added services (rOC.A19). $he sig. values suggest that customer retention as a whole is significantly correlated with all the aspects of customer satisfaction namely price (sig. O C.CCC), and call clarity (sig. OC.CC1) and valueadded services (sig. OC.CCC). BC BC BC BC 9.91 9.33 9.99 9.:: 1.CB< C.B:< C.B93 C.91A C.<<9 C.<1B C.A19 C.CCC C.CC1 C.CCC Si)4

04. MA7OR FINDINGS

$his study was set out to esta%lish whether there is a relationship %etween customer satisfaction and customer retention in &ormuud and 'ationlim". *t was guided %y three specific o%!ectives that included esta%lishing the relationship %etween) 1) price and customer retention 9) #all clarity and customer retention 3) value-added services and customer retention.
47

-ata analysis using S/SS3s descriptive statistics, results of means and standard deviations showed that A) in the dependent varia%le (customer retention) section, the respondents rated their retention as low on all aspects of intention to repurchase (mean inde+ O9.91 Std. -ev. O 1.CA:) positive word of mouth (mean inde+O9.9<, Std. -ev. O 1.C9C) and patience towards price (mean inde+ O 9.1<, Std. -ev. O 1.C9:). 5) *n the independent varia%le (customer satisfaction) section, the

respondents rated their satisfaction as low on all aspect of price (mean inde+ O 9.33, Std. -ev. OC.B:<) call clarity (mean inde+ O 9.99, Std. -ev. OC.B93) and on the aspect of value-added services (mean inde+ O 9.::, Std. -ev. OC.91A). .esults using /earson3s ,inear #orrelation #oefficient found that customer retention in &ormuud and 'ationlin" has i) a significant relationship with price (first

independent varia%le measured %y inde+ la%eled price) with r O C.<<9, sig. OC.CCC ii) significant positive correlation with call clarity satisfaction (second independent varia%le, measured %y an inde+ la%eled call clarity) with r O C.<1B, sig. OC.CC1 ii) and significant positive correlation with value-added services satisfaction (third independent varia%le, measured %y an inde+ la%eled value-added services ) with r OC.A19, sig. OCCC.

48

C/APTER FI*E3 DISCUSSION

14+ INTRODUCTION
4irst, the findings of descriptive analysis in this study indicated that the customers were dissatisfied with &ormuud and 'ationlin" the mo%ile telecom networ"s. $he study also found that customer retention of these networ"s was low. Second, the findings of /earson3s ,inear #orrelation #oefficient analysis in this study %y o%!ective showed that there is a significant relationship %etween price and customer retention, similar to the findings of .anaweera and 'eely (9CC3) found in their study that there was a direct relationship %etween price perceptions and (repurchase intentions) customer %ehavioral intentions. &owever, little research had %een conducted on the correlation %etween price perceptions and customer retention and conse2uently, they argue that future research is needed in the area. 7n the other hand, 5lery et al. (9CCB) found that perceived price was negatively associated with repurchase intention. $his indicates that the lower price %uilds stronger customer retention. $herefore, the a%ility of &ormuud and 'ationlin" to retain their customers resides on their a%ility to charge lower prices. $he study also found there is a positive relationship %etween call clarity and customer retention similar to the study of Ali et al. (9C1C) found that there is a significant relationship %etween call clarity and customer satisfaction and customer retention. $his is an important point of view to retain customers, %ecause in the first time if the customer chooses any company owing to its low prices %ut does not offer clear voice communication finally the consumer will switch to some other cellular phone networ"s. $herefore, the customer retention of &ormuud and 'ationlin" depends on the clarity of the voice communications they provide.
49

4inally, our study found that there is a significant positive relationship %etween value-added services and customer retention. As stated in the study of Silva F Lapa (9CC9), in Sri ,an"a .esults of the 2uestionnaire survey done among 131 corporate telecom users found that most important factor in continuing an e+isting service provider was the a%ility of the service provider to give %etter value-added services to its customers. $herefore, the customer retention of &ormuud and 'ationlin" depends on the level of the value-added services they provide.

50

C/APTER SID3 CONCLUSION AND RECOMMENDATIONS

245 INTRODUCTION
$his chapter is contained of conclusions to the study findings and the researchers3 recommendations presented in relation to the study o%!ectives.

24+ CONCLUSIONS
*n this section, the researchers give conclusions to the study findings in relation to the study o%!ectives.

24+4+ Pri"e an& "#sto%er retention in /or%##& an& Nation inC

$he first o%!ective of this study was to descri%e whether there is a relationship %etween price and customer retention in &ormuud and 'ationlin" mo%ile phone operators. 5asing on /earson3s ,inear #orrelation #oefficient analysis result, it was found that there is a significant relationship %etween price and customer retention, %ased on these findings the researchers generated the following conclusion An efficient and effective pricing policy that charges afforda%le lower prices will enhance customer retention. 4or e+ample, when &ormuud or 'ationlin" charges lower prices or call rates, customers who were lowered their usage and concerned a%out the price %ecome more confident to ma"e more calls than %efore and carry on using the networ".

24+4, Ca " arity an& "#sto%er retention in /or%##& an& Nation inC
51

$he second o%!ective of this study was to descri%e whether there is a relationship %etween call clarity and customer retention in &ormuud and 'ationlin" mo%ile phone operators. 5asing on /earson3s ,inear #orrelation #oefficient analysis results, it was found that there is a significant relationship %etween call clarity and customer retention, %ased on these findings the researchers generated the following conclusion Assem%ling a clear voice communication system that is availa%le all the time through 9: hours %uilds strong customer retention. 4or e+ample, when the customer can ma"e calls at every second without disruption and finds the voice clear, he may definitely decide to use the service for ever.

24+4. *a #e<a&&e& servi"es an& "#sto%er retention in /or%##& E Nation inC

$he third o%!ective of this study was to e+amine whether there is a relationship %etween value-added services and customer retention in &ormuud and 'ationlin" mo%ile phone operators. 5asing on /earson3s ,inear #orrelation #oefficient analysis results, it was found that there is a significant relationship %etween value-added services and customer retention, %ased on these findings the researchers generated the following conclusion ?alue-added services are the %ase to %uild strong customer retention. 4or e+ample, if the customer is given more services a%ove the core service such as mo%ile money %an"ing or internet service, the customer %ecomes more interested and convinced to continue using the networ".

52

24, RECOMMENDATIONS
$his section deals with recommendations arising from the pertinent findings and conclusions of this study, following the study o%!ectives $he telecommunication companies in (ogadishu should esta%lish an efficient and effective pricing policy so that the price charged is afforda%le to enhance customer retention. 4or e+ample, when &ormuud or 'ationlin" charges lower prices or call rates, customers who were lowered their usage and worried a%out the price level %ecome more confident to spend more than %efore and carry on using the networ". $he telecommunication companies should assem%le clearer voice communication system that is availa%le all the time through 9: hours. $his helps to %uild strong customer retention. 4or e+ample, when the customer can ma"e calls at every second without disruption and finds the voice clearer, he %ecomes more satisfied to use the service and e+tend the relationship with the company. $he management of the telecommunication companies in (ogadishu should ascertain that %etter value-added services are provided to customers. 4or e+ample, if the customer is given more services a%ove the core service such as secure mo%ile money %an"ing or latest up to date and high speed mo%ile phone internet services, the customer %ecomes more satisfied and convinced to continue using the service of the networ".

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53

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3<. .odrigo, A. /., (9CC:) ,iterature review on consumer satisfaction in modern mar"eting. QonlineR, 4aculty of #ommerce and Administration, #oncordia 8niversity, Availa%le from http)11pages.infinit.net1rodrigo1satisfaction.html.

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3A. Seo, -., #. .angnathan, (9CCB). $wo level model of customer retention in the 8S mo%ile telecommunications service mar"et. %elecommunication 1olic$ 39(3-:), pp. 1B9-19<

59

APPENDID
S#rvey 8#estionnaire RESEARC/ FMBA &issertation PRO7ECT
Lou are one of the potential respondents that we hope to see" assistance in completing the survey which is designed for academic paper. $he data gathered of this survey attempts to understand ( CUSTOMER SATISFACTION AND CUSTOMER RETENTION OF TELECOMMUNICATION COMPANIES IN BANADIR@ $o this end we "indly re2uest that you complete the following 2uestionnaire regarding your opinion, your %usiness -ata and "nowledge you have to su%!ect under investigation. *t should ta"e no longer than 9C minutes of your time. Although your response is of the utmost importance to me, your participation in this survey is entirely voluntary. /lease do not enter your name or contact details on the 2uestionnaire. *t remains anonymous. *nformation provided %y you remains confidential and will %e reported only as academic format only.
1. Persona Infor%ation

Age group
Age 15-25 2636-45 46Over 56

>ender)

(ale

4emale Employed -iploma 8nemployed 5achelor

a. #urrent 7ccupation) Student %. Education ,evel) Secondary c. .esidence) d. (arital status) Single

(arried

-ivorced 'ationlin"

e. $elephone1(o%ile phone operator) &ormuud

60

2. CUSTOMER SATISFACTION 8UESTIONS3 p easeG rate yo#r satisfa"tion /,EASE $*#I *' $&E 57T $&A$ (A$#&ES L78. 7/*'*7') Note3 +H very &issatisfie&G ,H &issatisfie&G .H satisfie&G 0H very satisfie& Pri"e 8#estions3 1. $he price fitness to %enefits of using the mo%ile phone service 9. $he price level of mo%ile phone service 3. 4airness and afforda%ility of the price charged :. =ith price to overall service + , . 0

Ca C arity 8#estions 1. $ypes of call options for the networ" 9. Availa%ility of the networ" connection 3. $he coverage of the networ" :. $he voice of the networ" *a #eIA&&e& Servi"es 8#estions 1. Additional %enefit1care given to you (e.g. customer service) 9. $he mo%ile phone money transfer system 3. =ith the up to date value-added services :. =ith the ease to su%scri%e1change services when needed

3. CUSTOMER RETENTION 8UESTIONS3 p easeG rate yo#r retention PLEASE TIC6 IN T/E BOD T/AT MATC/ES YOUR OPINION3

61

Note3 + H stron) y &isa)reeG

, H Disa)reeG

. H A)reeG

0 H stron) y a)ree + , . 0

Rep#r"'ase Intention 8#estions 1. Lour price perceptions increase your repurchase intention. 9. Lou prefer to %uy the services again and again. 3. =ith respect to call clarity, you will repurchase the service :. =ith regard to value-added services, you will repurchase the service. ;. According to overall service of the company you decided to repurchase it regularly. Positive >or& of %o#t' 8#estions 1. ?oice 2uality ma"es you recommend others to %e customers 9. Lou prefer to recommend the service to others.

3. =ith the variety of value-added services, you will recommend others not to switch to other companies :. $he price is not high, thus leads to communicate others positively. ;. According to overall service, you will give a positive opinion.

Patien"e to>ar&s pri"e 8#estions 1. According to 2uality of the voice, you will not consider price. 9. As you prefer the service, you are less sensitive to the price increases.S
62

3. =ith %etter value-added services, you will not consider the price. :. As the price level changes or increases, your price tolerance is good. ;. =ith respect to overall telecommunication services, you have a good tolerance towards price.

T/AN6 YOU FOR YOUR TIME ?$he 2uestionnaire is self developed)

63