VODAFONE Servqual

8/16/2019 VODAFONE Servqual

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MAHARAJA AGARSEN INSTITUTE OF

TECHNOLOGY

Masters of business administration

Seri!e mar"etin#

ASSIGNMENT

Submitted to$

Submitted b%$

Ms& Niti"a S'arma (ra#%a

C'aud'ar% )*+,-

.'a%a /ad'0a )*12-


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An"it S'arma ) -

Mitu3 Rana )*++-

ABSTRACT

With the introduction of privatization in the telecom sector of India several private and foreign

telecom service providers have entered in Indian telecom industry which has given birth to cut

throat competition amongst banks for acquiring large customer base and market share.

Companies have to deal with many customers and render various types of services to its

customers and if the customers are not satisfied with the services provided by the companies

then they will defect which will impact company’s brand image as well as financial stability, also

it is very costly and difficult to recover a dissatisfied customer. ince the competition has grownmanifold in the recent times it has become a herculean task for organizations to build loyalty, the

reason being that the customer of today is spoilt for choice. It has become imperative for both

public and private sector telecom service providers to perform to the best of their abilities to

retain their customers by catering to their e!plicit as well as implicit needs. "any at times it

happens that the companies fail to satisfy their customer which can cause huge losses and there

the need of this study arises. #he purpose of this research article is to e!amine the customer

satisfaction among group of customer towards the public sector telecom industry in India. tudy

is cross sectional and descriptive in nature. #he researcher tries to makes an effort to clarify the

Customer ervice satisfaction in Indian #elecom ector. $escriptive research design is used for

this study, where the data is collected through the questionnaire. #he service quality modeldeveloped by %eithamal, &arsuraman and 'erry ()*++ has been used in the present study.

INTRODUCTION

-ccording to &hilip otler, /satisfaction is a person’s feelings of pressure or disappointment

resulting from product’s perceived performance (outcome in relation to his or her e!pectations.

Customer satisfaction is the level of a person’s felt state resulting from comparing a product’s

perceived performance (outcome in relation to the person’s e!pectations0.

#his satisfaction level is a function of difference between perceived performance ande!pectations. If the product’s performance, e!ceed e!pectation the customer highly satisfied or

delighted. If the performance matches the e!pectations the customer is satisfied. If the products

performance fall shorts of e!pectations the customer is dissatisfied 'usinesses need to attract and

establish a customer market and would need to retain it through satisfaction. #hat is the key to its

business performance (1ohnson et al. 2333. In order to attain this goal, a company should have a

high satisfaction rate from its clients. #he increasing competition, whether for profit and non4


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profit purposes, is forcing the business sectors to pay much and more attention to satisfying

customers ("anagement library, 233+. 5esearchers suggest that increased levels of customer

satisfaction and loyalty are frequently attributed or linked to positive outcomes for a firm

(Colgate, )***. "easurement of the rate of customer satisfaction is also a measurement of how

products and services supplied by a company meet or surpass customer e!pectation.

Companies use the following methods to measure customer satisfaction.

) Complaints and suggestion system6 companies obtaining complaints through their

customer service centers, and further suggestions were given by customers to satisfy their

desires.

2 Customer satisfaction surveys6 5esponsive companies obtain a direct measure of

customer satisfaction by periodic surveys. #hey send questionnaires to random sample of

their customers to find out how they feel about various aspects of the company’s performance and also solicit views on their competitor’s performance. It is useful to

measure the customer’s willingness to recommend the company and brand to other

persons.

7 Lost Customer Analysis6 Companies should contact customers who have stopped

buying or who have switched to another supplier to learn why this happened.

8 Consumer Beavior !s Consumption Beavior" Consumer behavior refers to the

manner in which an individual reaches decision related to the selection, purchases and

use of goods and services. Walters and &aul says that, consumer behavior is the processwhereby the individuals decides what, when, how and from whom to purchase goods 9

services. Consumer behavior relates to an individual person ("icro behavior whereas

consumption behavior relates to and to the mass or aggregate of individuals ("acro

behavior consumers behavior as a study focuses on the decision process of the individual

consumer or consuming unit such as the family. In contrast the consumption behavior as

a study is to do with the e!planation of the behavior of the aggregate of consumers or the

consuming unit. Consumer is a pivot, around which the entire system of marketing

revolves. #he study of buyer behavior is one of the most important keys to successful

mark

Introduction to Telecom Industry

Indian telecommunication Industry is one of the fastest growing telecom industries in the world.

It is the second largest telecom network on subscriber basis. #he e!tensive growth and hyper

competition have resulted in lowest tariff rates. India is the third largest internet user4base with


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over )7: million as of 1une 23)2. "a;or sectors of Indian telecom industry include telephony,

internet and television broadcasting.

#elecommunication has been recognized all over the world as an important tool for socio4

economic tool for development. It has a greater part in economy of nation. #elecommunication

acts as a catalyst in the growth of various sectors of economy. million subscribers in the year 23)). India has the

world=s second4largest mobile phone user base with over *2*.7: million users as of "ay 23)2. It

has the world=s third4largest Internet user4base with over )7: million as of 1une 23)2.

#he telecom industry has witnessed significant growth in the subscriber base over the last

decade, with increasing network coverage and competition induced a decline in tariff and rapid

growth in the subscriber base. #his growth has attracted many new and foreign operators to the

industry and kept competition increasing.

&ost liberalization in )**3’s the telecom sector made open to the private players. $uring this

time Indian telecom industry underwent high pace of market liberalization and growth to become

most competitive and one of the fastest growing sector. -part from rapid growth it also helped a

in a great deal towards ma!imization of consumer benefits, evident from huge fall in tariffs.

With a subscriber base of more than *2* million, the mobile telecommunication system in India

is second largest in the world, with dominance of ?" technology with +3@ of total subscriber

base. #he remaining 23@ of share is stabilized by C$"- technology for time being. 'y "ay

23)2 the country had *2* million mobile subscribers, up from 77A3 million ;ust before 83

months. #he mobile market was continuing to e!pand at the rate in e!cess of 83@ coming into

23)3.

-ccording to the data provided by "inistry of state for communications and I#, as of Bovember

23)2, India has :, 7>,>A8 base transceiver stations. -mong those, *2,2)2 stations

provide7?mobile services. 83 districts, >)3districts are covered by 7? services

as of Bovember 23)7.

#he country is divided in to multiple zones roughly across state boundaries called as circles.

Currently there are total 27 telecom sectors which are categorized as, -4category, '4category, C4

category and "etros. India primarily follows the ?" mobile system, in *33 "z bandD recent

operators also operate in )+33 "z band. #he dominant players of Indian telecom industry are


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-irtel, Eodafone, 'BF, 5eliance, -ircel, Idea and #ata $*.AA@ and rural with 7*.22@, "inistry of #elecomand I# is has taken all measures to fill this gap. #he lower #eledensity in rural area is witnessing

a greater opportunity to the players in the market.

Telecom Industry in India

H #he telecom industry is one of the fastest growing industries in India. India has

Bearly233 million telephone lines making it the third largest network in the world

-fter China and -.

H With a growth rate of 8A@, Indian telecom industry has the highest growth rate in

the+world.

H "uch of the growth in -sia &acific Wireless #elecommunication "arket is spurred


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'y the growth in demand in countries like India and China.

H IndiaGs mobile phone subscriber base is growing at a rate of +2.2@.

H China is the biggest market in -sia &acific with a subscriber base of 8+@ of the total

ubscribers in -sia &acific.

H Compared to that India’s share in -sia &acific "obile &hone market is >.8@.

H Considering the fact that India and China have almost comparable populations, India’

low mobile penetration offers huge scope for growth.

!ODA#ON$ INDIA

Eodafone India, formerly Eodafone Jssar and utchison Jssar, is the third largest mobile

network operator in India after -irtel and 5eliance Communication by subscriber base. It is

based in "umbai, "aharashtra. It has appro!imately )8:.8+ million customers as of $ecember

23)2.

In 1uly 23)), Eodafone ?roup agreed terms for the buy4out of its partner Jssar from its Indian

mobile phone business. #he firm paid KA.8> billion to its Indian counterpart to take Jssar out

of its 77@ stake in the Indian subsidiary. It will leave Eodafone owning :8@ of the Indian

business, while the other 2>@ will be owned by Indian investors, in compliance with Indian law.:@ held by Fi a

hing oldings in utch4Jssar for K)).) billion, piping 5eliance Communications, indu;a

?roup, and Jssar ?roup, which is the owner of the remaining 77@. #he whole company was

valued at $ )+.+ billion. #he transaction closed on + "ay 233:. It offers both prepaid and

post4paid ?" cellular phone coverage throughout India with good presence in the metros.

Eodafone India is a member of the Eodafone ?roup and commenced operations in )**8 when its

predecessor utchison #elecom acquired the cellular license for "umbai. #he company now has

operations across the country with over )A3 million customers. Eodafone India has firmly

established a strong position within the Eodafone ?roup too, making it the largest subscriber base globally. #his ;ourney is a strong testimony of Eodafone’s success in a highly competitive

and price sensitive market.

Eodafone India has been awarded the "ost -dmired #elecom


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the "obile ervices Category. In another survey conducted by Bielsen, Eodafone India was the

only telecom player in the #op )3 G"ost J!citing Mouth 'rands’ in India. Eodafone India also

features in the #op )3 G"ost #rusted 'rands in India’ for 23)), in a survey conducted by a

leading financial daily.

!odafone India !ision"

#he Eision statement of Eodafone India is as follows6

/


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&'() Organi*ational Cart of !odafone India"

Business Head

O.D West

O.D East

O.D North

O .D South

Resourcin

HR Business

Partners

Learning &

Developmen

t

HR SER!"ES

Regulato

r# Head"hie$

Operating

O%cer

"hie$

"ommercia

l O%cer

Human

esourc

4ire!tors

5O4AFONE IN4IA

artin Pieters '"EO(

E)tern

al

*+airs

,echnolog

# Head

Enterpris

e Head

-eneral

"ouncil

Head


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#uture +lans" ,Steps ta-en today. sould inspire tomorro/0

In Eodafone sustainability is a ;ourney not an ob;ective. Eodafone have a future oriented

framework to achieve its sustainable development. ome of the important future plans of Eodafone India are as below6

• Eodafone has the future plan to launch 8? services and improving the services.

• Eodafone suggest future -B$5


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satisfaction (&eters and Waterman, )*+2. It is said that satisfaction is a function of customer’s

belief about fair treatment (unt, )**). Customer satisfaction has become important due to

increased competition as it is considered very important factor in the determination of bank’s

competitiveness ('artell, )**7D aron et al. )**8. atisfaction is a post purchase evaluative

;udgment associated with a specific purchase decision (Churchil and uprenant, )**2. #he

customer satisfaction is indispensable for the successful survival of any organization. Continuous

measurement of satisfaction level is necessary in a systematic manner (Chakravarty et al.)**>D

Chitwood, )**>D 5omano and anfillipo, )**>.

#o measure customer satisfaction with different aspects of service quality, &arasuraman, Ealerie

%eithaml and 'erry developed a survey research instrument called J5EP-F. It is based on

the premise that the customers can evaluate a firm’s service quality by comparing their

perceptions of its service with their own e!pectations. J5EP-F is seen as a measurement

tool that can be applied across broad spectrum of service industries. In its basic form, the scale

contains 28 perception items and a series of e!pectation items, reflecting the five dimensions of

service quality. #heir findings suggest that, in reality, J5EP-F scores measure only twofactors6 intrinsic service quality (resembling what is termed functional quality and e!trinsic

service quality (which refers to the tangible aspects of service delivery and /resembles to some

e!tent what ?ronroos refers to as technical quality0.?eneric dimensions customers use to

evaluate service quality are credibility, security, access communication, understanding the

customer, tangibles, reliability, responsiveness, competence, courtesy.

Serv3ual Scale

&arasuraman et al., ()*++, )**) developed J5EP-F instrument to measure the dimensions

of service quality that is frequently used by researchers. It consists of 28 items that are compiled

into five dimensions6 tangibilityD reliabilityD responsivenessD assurance and empathy. #his studyapplied five dimensions of service quality that are e!plained as under6

H Relia4ility6 #his dimension shows the consistency of services towards performance and

dependability.

H Tangi4les6 It shows the physical aspects of the services as physical facilities, appearance of

personnel and tools 9 equipment used for provision of services.

H Responsiveness6 It reflects the willingness or readiness of employees to provide quick services

to customers.

H Assurance6 #his dimension indicates the employees’ knowledge, courtesy and their ability to

incorporate trust and confidence.

H $mpaty6 #his dimensions shows the magnitude of caring and individual attention given to

customers.


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#igure5(" $6pectation5Outcome $6perience of Customers Source" 7enerated

Ligure ) reflects e!pectation4outcome e!periences of customers among bank customers.

Customer satisfaction leads to better profitability by retaining e!isting customers and to attractnew ones. Jvery organization deploys a reasonable amount to have satisfied customers. atisfied

customer leads to delighted customers that eventually create the sense of brand loyalty among

customers.


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Serv3ual 2uestions

Lor actual survey respondents, instructions are also included, and each statement is accompanied

by a seven4point scale ranging from /trongly -greeQ:0 to /trongly $isagreeQ

)0.


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>. J!cellent telecom operators provide cheap call rates and value added services

II' Relia4ility"

:. When e!cellent telecom companies promise to do something by a certain time, they do.+. J!cellent telecom companies will have reliable network coverage while roaming as well

*. When a customer has a problem, e!cellent telecom companies will show a sincereinterest in solving it.

)3. J!cellent telecom companies will have zero call dropping.)). J!cellent telecom companies will have simple, reliable and transparent billing methods

III' Responsiveness"

)2. Jmployees of e!cellent telecom companies will tell customers e!actly when services will

be performed)7. Jmployees of e!cellent telecom companies will give prompt service to customers.)8. Jmployees of e!cellent telecom companies will always be empathetic and willing to help

customers.

I!' Assurance"

)A. #he behavior of employees in e!cellent telecom companies will instill confidence in

customers.)>. Customers of e!cellent telecom companies feel safe in doing online recharge and bill

payments):. Customers of e!cellent telecom companies will feel their phone always receives high

signal strength.)+. Jmployees of e!cellent telecom companies will be highly skilled and knowledgeable to

solve customer=s problems efficiently.

!' $mpaty"

)*. J!cellent telecom companies will give customers individual promotional offers.23. J!cellent telecom companies will have operating hours convenient to all their customers.2). J!cellent telecom companies are willing to ad;ust in mobile plans according to

customers’ needs.J!cellent telecom companies will have their customer’s best interests at heart.

#hese findings do not undermine the value of %eithaml, &arasuraman, and 'erry’s achievement

in identifying some of the key underlying constructs in service quality, but they do highlight thedifficulty of measuring customer perceptions of quality. -nne mith notes that the ma;ority of

researchers using J5EP-F have omitted from, added to, or altered the list of statements

purporting to measure service quality.

OB8$CTI!$ of te study


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#he main ob;ective of the study is to measure service quality of the telecom sector in India,

especially Eodafone Cellular with the help of J5EP-F "odel.

Lollowing are the ob;ectives of the study6

•

#o study the relevance and impact of cellular services quality provided by Eodafone Indiaon the consumers’ satisfaction level.

• #o figure out the most important dimensions of service quality in Eodafone India that

may affect consumers’ satisfaction level.

• #o measure the current level of satisfaction in Eodafone India’s consumers.

• #o make recommendations to the company based on the findings and analysis to enhance

the service quality level.

R$S$ARC9 %$T9ODOLO7:

#he questionnaire was formulated using the J5EP-F method. #he questionnaire was then

forwarded to )33 respondents through mail. #he area of study was restricted to $elhi BC5 only.owever, only :A responses were received from them because only :A@ of the targeted

respondents were using services from Eodafone India.

sing 22 items of the J5EP-F instrument, the research paper studied the e!pectations and

perceptions of the consumers of Eodafone India.

In the designed questionnaire, a seven point Fikert scale was used under which point ()

indicated strongly disagree and on the other hand point (: showed strong agreement. -s the

research paper was used to study the e!pectations and perceptions, there was no ;udgment on the

basis of correctness.

#INDIN7S AND ANAL:SIS

In this research paper, following hypothesis was formulated to test the quality of services by

Eodafone India.

) R J!pectations and perceptions of consumers are equal in conte!t of Eodafone India

3 R &erceptions of consumers are lower than the e!pectations from the services of Eodafone

India.

ere ) is the null hypothesis on which test will be applied. -nd 3 is the alternate hypothesis

otherwise. In the applied t4test, we have used a critical value of )');. Bow, if the results are less

than the critical value then the null hypothesis would be re;ected and therefore the alternate

hypothesis would be accepted.


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,*BLE /0 1NWE!-H,ED SER21*L Score

*verage ,angi3le SER21*L score *&6,,,*verage Relia3ilit# SER21*L score *&2,7888*verage Responsiveness SER21*L

score

*&668888888

*verage *ssurance SER21*L score *&6,*verage Empath# SER21*L score *&61

,O,*L SER21*L S"ORE 4.5/4655444*ER*-E SER21*L S"ORE 6.75/457

Lrom the graph depicted below, we can see that the average J5EP-F score for each

dimension of the J5EP-F model is less than one. #his shows that what a consumer e!pects

from the services is greater than how he perceives the actual services provided to him. ence,

there is a gap between the e!pectations and perceptions of the consumers.

Bow analyzing the same through the t4test where the e!pectations and perceptions of the

consumers are taken into account for all the 22 items and the result for each dimension of the

J5EP-F model is analyzed. #he following results were obtained6


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Tan#ibi9it%t:Test$ (aired T0o Sam;9efor Means

Variabl

e 1

Variabl

e 2

ean 4.584.6855

57

ariance/.5967

//./:84

;8

O3servations 7; 7;

Pearson "orrelation6.546/

/4H#pothesit( t@o?tail;./4E?

65

t "ritical t@o?tail/.99;

84

We can see that the critical value i.e. the p4value that we obtained for #angibility is less than the

p4value we have selected for the test. ence, we re;ect the null hypothesis and accept the

alternate hypothesis. #his means that the physical facilities, equipment, personnel and

communication materials of Eodafone India are lower than the customer’s e!pectations.

Re9iabi9it%t:Test$ (aired T0o Sam;9efor Means

Variabl

e 1

Variabl

e 2

ean8./4:5

574.8944

44

ariance./8

9;/.4466

9

O3servations 7; 7;

Pearson "orrelation6.;:;:

/

H#pothesi


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D$ 78

t Stat8.;:5

7/

P',=>t( one?tail 9E?65

t "ritical one?tail

/.55;7

67

P',=>t( t@o?tail/.:E?

6;


84

We can see that the critical value i.e. the p4value that we obtained for #angibility is less than the

p4value we have selected for the test. ence, we re;ect the null hypothesis and accept the

alternate hypothesis. It implies that the ability to perform the promised services dependably and

accurately by Eodafone India is lower than the e!pectations of the customers.

Res;onsienesst:Test$ (aired T0o Sam;9efor Means

Variable

1

Variabl

e 2

ean8.46

4.;::

:9

ariance./9589

5;/.:8//

/

O3servations 7; 7;

Pearson "orrelation

6.579;6/

/:4H#pothesit( t@o?tail9.4876E

?6:

t "ritical t@o?tail/.99;84

855

In this case as well we can see that the & value we got after the t4test of the 5esponsiveness is

less than the critical value of 3.3A that we have selected for the test. o, we will re;ect the null

hypothesis and accept the alternate hypothesis. It implies that perceived service quality through


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responsiveness is not matching with the e!pectations. #he service providers at Eodafone India

are not readily willing to help customers and provide prompt service.

Assuran!et:Test$ (aired T0o Sam;9e

for Means

Variabl

e 1

Variabl

e 2

ean8.4444

444.;944

44

ariance.85/7

//.595

:;

O3servations 7; 7;

Pearson "orrelation6.5::8

;;H#pothesit( t@o?tail8.8E?

67


84

We can see that the & value after the t4test of the -ssurance that we got is less than the critical

value of 3.3A that we have selected for the test. o, we will re;ect the null hypothesis and accept

the alternate hypothesis. It implies that the knowledge and courtesy of employees and their

ability to convey trust and confidence is lower than what it is e!pected out of them.

Em;at'%t:Test$ (aired T0o Sam;9efor Means

Variabl

e 1Variabl

e 2

ean8./:44

444.8744

44

ariance.6;95

:;/.4//7

79

O3servations 7; 7;Pearson "orrelation 6.578;


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:7H#pothesit( t@o?tail.69E?

67


84

In case of Jmpathy as well, the & value derived after the t4test is less than the Critical value of

3.3A. o, in this case as well we will re;ect the null hypothesis and accept the alternate

hypothesis. It implies that the perception regarding the care, individualized attention given to

customers at Eodafone India is less than the e!pectations of the customers.

Conclusion < Recommendations

-fter analyzing the results of the J5EP-F with the help of the graph as well as the t4test we

can say that the perceptions of the Customer regarding the service quality of Eodafone India is

less than his e!pectations of what an e!cellent #elecom company should be. o, Eodafone India

cannot be categorized as an e!cellent telecom company as per the responses we have received

from the customers. It is not meeting the e!pectations of the customers on any of the parameters,

namely, #angibles, 5eliability, 5esponsiveness, -ssurance and Jmpathy. #his means that6

• #he physical facilities, equipment, personnel and communication materials of Eodafone

India are below the customer’s e!pectations.

• #he ability to perform the promised services dependably and accurately in case of

Eodafone India is below the e!pectations of the customers.

• #he service providers at E


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providing timely services according to the promise made, more willingness to help customers

and providing individual attention.

Limitations of te Study

Completing this research paper was not that easy. #here were certain limitations that we had to

face. #hese are discussed below6

• #he tudy was based in $elhi and BC5 only. If we could have gathered responses from

the respondents from outside $elhi then our results would have been more accurate.

• #he sample size for our research was small where only :A@ of the customers responded

to the questionnaire.• Customers did not show interest in filling the questionnaire. It took a lot of effort to

convince them to fill the questionnaire.

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