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Saudi Arabia Mobile Phone Service Providers in Saudi Arabia: Students' Customer Satisfaction Badr Alharbi Centre for Strategic Economic Studies Faculty of Business and Law Victoria University Melbourne, Australia Submitted in fulfilment of the requirements of the degree of Doctor of Business Administration Oct, 2013 Abstract The mobile phone services sector in Saudi Arabia, whether in terms of its total subscription numbers or volume of usage, is a booming market with extensive reach across all sections of consumers. There are now three mobile phone providers in the KSA and the competitive environment will require careful management by the companies to attract and retain customers, especially young customers, as the industry continues to be privatised. But the Saudi mobile phone services market has not yet been subjected to a comprehensive study outlining the factors that influence Saudi customers in their choice of service provider and their decision to either retain or terminate their subscription with a particular provider. This study examines customer satisfaction, choice of service provider and usage characteristics of young Saudis, with a cross- sectional survey of data gathered through self-reported questionnaires from 323 students at universities in Riyadh, Jeddah, Dammam and other cities. The results show that STC was the most popular provider followed by Mobily and Zain. Majority of the students were dissatisfied with their service providers due to poor pricing and service quality, and one-third of the customers intended to terminate their contracts after expiration date. Minimum cost service packages, lower rates of call, and free allowances on the contract for social calls were significant predictors of the intention to change provider. Inferential statistics revealed that gender is a relevant demographic factor in determining the respondents' satisfaction and usage characteristics, whereas location is was tangentially related to satisfaction due to a gender skew in some locations. Males tended to pay their own bills and use their phone more than females for social calls than business/education, and males were more likely to change their providers when their contract expired. ii It is recommended that high quality mobile phone services should be designed and marketed specifically to satisfy the needs and expectations of the rapidly expanding generation of young Arab users. As gender exerted a significant influence, market segmentation with relationship marketing tactics targeted towards males may be useful, because males tend to be more demanding about service quality and concerned about their relationships with the service provider. A stakeholder analysis based on qualitative data from focus groups and/or face-to-face interviews is recommended to expand the findings of this study and explain the subjective motivations driving customer choice/retention of service provider and the differences between men and women in their satisfaction and usage patterns. in Student Declaration Doctor of Business Administration Declaration "I, Badr alharbi, declare that the DBA thesis entitled Mobile Phone Service Providers in Saudi Arabia: Student Customer Satisfaction is no more than 65,000 words in length including quotes and exclusive of tables, figures, appendices, bibliography, references and footnotes. This thesis contains no material that has been submitted previously, in whole or in part, for the award of any other academic degree or diploma. Except where otherwise indicated, this thesis is my own work". Signature . Date f f$ - tt> - _/* * 3 iv Acknowledgements Writing this dissertation has been a steep learning curve, both in terms of academic knowledge and personal experience, and many have contributed to my efforts in climbing that curve, which at times seemed quite formidable. First and foremost, my two supervisors, Dr Dana Nicolau and Dr James Doughney must be acknowledged for their guidance and, more importantly, consistent support. Whenever ideas were hard to formulate and words eluded me, they were ready with their advice to help tackle issues of both content and clarity. Thank you for your guidance and help in formulating my vague ideas into a coherent research study. While they may have not contributed to the words written in this dissertation, the emotional support, encouragement and love of my family sustains the effort I put in every page of this thesis. Thanks to my wonderful wife for her unconditional support and understanding in this endeavour. It has meant more than anything to me to know that you will always be there to support me, even in tough times. My children must be commended for their patience and understanding, as I travelled and busied myself in this research, and had little time to spend with them. I gratefully acknowledge the funding given by the Saudi government which made my DBA work possible. v Conference and journal publications Badr Alharbi, Customer Choice in Mobile Service Providers in Saudi Arabia, Australian and New Zealand International Business Academy (ANZIBA) on April 12-14, 2012 in Adelaide, Australia Badr Alharbi, Customer Choice in Mobile Service Providers in Saudi Arabia, International Journal of Business and Social Science, Vol. 3 No. 18 - September 2012 vi Contents Title i Abstract ii Student Declaration iv Acknowledgements v Conference and journal publications vi List of Figures x List of tables xi Chapter 1 INTRODUCTION 1 1.1 Introduction 1 1.2 Research Background 2 1.3 Statement of the Problem 12 1.4 Research Questions and Hypotheses 13 1.5 Significance of the Study 17 1.6 Structure of the Dissertation 19 Chapter 2 LITERATURE REVIEW 22 2.1 Introduction 22 2.2 Theoretical Framework 23 2.3 Theoretical Approaches for Customer-Centric Research 24 2.3.1 Co-creation 24 2.3.2 Relationship Marketing 26 2.3 Customer Retention and Churn 28 2.5 Factors Affecting Customer Retention/Churn 34 2.5.1 Customer Loyalty 34 2.5.2 Customer Satisfaction 39 2.5.3 Customer Trust 41 2.5.4 Emotional Attachment 42 2.6 Attributes Affecting Choice of Mobile Phone Services 44 2.6.1 Service Quality 44 2.6.2 Pricing 46 2.6.3 Value Offers 47 2.6.4 Brand Image 48 2.7 Contextual Factors 50 2.7.1 Demographic Factors 50 2.7.2 Cultural Dimensions 55 2.8 Summary 58 Chapter 3 METHODOLOGY 60 3.1 Introduction 60 3.2 Research Design 60 3.3 Population and sample 65 3.4 Data Collection 71 3.5 Validity, Reliability and Accuracy of Data 73 vu 3.5.1 Validity 73 3.5.2 Reliability 75 3.5.3 Coding Errors and Missing Values 76 3.6 Measurements and Hypotheses 76 3.6.1 Questionnaire items 77 3.6.2 Hypotheses 80 3.7 Statistical Analysis.... 82 3.7.1 Pearson's Chi-Square 83 3.7.2 Kruskal-Wallis Test 84 3.7.3 Binary Logistic Regression 84 3.7.4 Odds ratio 85 3.7.5 Hierarchical Cluster Analysis 86 3.8 Summary 87 Chapter 4 RESULTS 88 4.1 Introduction 88 4.2 Descriptive Statistics: Demographic Profile 88 4.2.1 Respondents' Demographic Profile 88 4.2.2 Relationships between Demographic Variables 90 4.3 Descriptive Correlation: Research Questions 92 4.4 Influence of Gender on Mobile Phone Use 92 4.4.1 Relationship between Gender and Loyalty/Satisfaction 93 4.4.2 Relationship between Gender and Choice of Mobile Service Provider 104 4.4.3 Relationship of Gender with Mobile Usage Characteristics 112 4.5 Influence of Location on Mobile Phone Use 123 4.5.1 Relationship between Location and Loyalty/Satisfaction 124 4.5.2 Relationship between Location and Choice of Mobile Phone Provider 132 4.5.3 Relationship between Location and Mobile Usage Characteristics 136 4.6 Factors Affecting Choice of Mobile Phone Service Providers 146 4.7 Sources of Information Used by Respondents 149 4.8 Hypotheses Testing 150 4.9 Summary 156 Chapter 5 DISCUSSION AND IMPLICATIONS 158 5.1 Introduction 158 5.2 Discussion 158 5.2.1 Influence of Gender 159 5.2.2 Influence of Location 164 5.2.3 Factors Affecting Choice of Mobile Phone Service Provider 168 5.2.4 Sources of Information about Mobile Phone Service Providers 170 5.3 Implications 170 5.3.1 Academic Research on Saudi Mobile Phone Services Market 171 5.3.2 Practical Context of Saudi Mobile Service Market 176 5.4 Summary 182 vm Chapter 6 CONCLUSION 184 6.1 Introduction 184 6.2 Research Summary 184 6.3 Strengths and Limitations 187 6.4 Future Research 189 REFERENCES 195 APPENDIX A-INFORMATION 2098 APPENDIX B-QUESTIONN AIRE 212 IX List of Figures Figure 1 Mobile service market growth- total subscriptions, 2001 - 2010, Saudi Arabia 4 Figure 2 Telecom sector revenues in Saudi Arabia 6 Figure 3 Relationships between factors identifying churn of mobile phone users 29 Figure 4 Impact of relationship marketing tactics on customer loyalty 30 Figure 5 Business leaders' concept of customer loyalty 36 Figure 6 Definition of customer loyalty by business managers, comparative data, 2004 and 2007 36 Figure 7 Loyalty drivers, customer view and enterprise view 37 Figure 8 Location of Riyadh, Jeddah, and Dammam in Saudi Arabia 66 Figure 9 Respondents' gender and their problems with current mobile service provider 95 Figure 10 Respondents' gender and problems with Mobily 96 Figure 11 Respondents' gender and problems with STC 97 Figure 12 Respondents' percentage distribution by gender and tried service provider 99 Figure 13 Percentage distribution of respondents by gender and intention to change provider. 101 Figure 14 Percentage distribution of respondents by gender and reasons for changing service provider 104 Figure 15 Median scores for the eight items that affect choice of service provider 107 Figure 16 Median scores for eight items
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