Role of Advertisement in Retaining Customers of Mobile Telecommunication Companies in Pakistan MARIAM JAMSHED Th is M aster Thesis is carried out as a part of the education at the University of Agder and is therefore approved as a part of this education. However, this does not imply that the University answers for the methods that are used or the conclusions that are drawn. University of Agder, 2010-06-11 Faculty of Economics Social Sciences Department of Economics and Business Administration | P a g e i Acknowledgement s First of all I would like to thank God Almighty, who gave me strength and wisdom to complete this research in the best possible way. I would like to express my deepest gratitude to my supervisor Prof. Andreas Falkenberg for his valuable advice, encouragement and feedback during the period of writing this thesis. I am grateful to him for his special support and assistance for this project. Needless to say that I have learned a lot from his advice and guidance based on the vast knowledge and expertise that he has in the field of marketing management. My sincere thanks are due to the individuals who contributed to this study by giving their valuable time and participation in questionnaire surveys at remote locations. I am deeply indebted to W.M. Rohan Laksiri, whose continuous assistance and encouragement in setting the format of the thesis, the technical support and for being my “Thesaurus” has made this work possible towards the end. Last, but not the least, my sincere thanks to all my friends and colleagues who have cooperated for my research and made it a success. Thank you all. Mariam Jamshed 10th June 2010. | P a g e ii Abstract The telecommunications industry is a high velocity industry in the current business context. With this boom, even the competition in the developing countries like Pakistan the demand for mobile usage has significantly increased in the last few years. This emerging trend in demand and high profitable industry, leads to more and more mobile service providers who are investing for infrastructure facilities to provide their service more successfully. The network providers face a greater challenge in retaining their customers because the customers have many options and they may switch their brand to another for seeking better service, more benefits and higher satisfaction. At the same time, the service providers in order to retain its customers should focus on the marketing strategies through which they reach its customers. A right medium will help the service providers to retain their current customers. Therefore, this study is focused to identify the role of advertising on customer retention of the mobile telecommunication network’s customers. Accordingly, the advertisement has been divided into two independent variable attractiveness of advertisement and exposure to advertisements and customer retention has been identified as the dependent variable. This study is conducted in Pakistan to evaluate whether customers advertisement has an impact on customer retention or not within the mobile phone service. The descriptive research design can be identified as the basic research approach. The sample includes the youth of Pakistan represented by the student. The sample size is of 196 mobile phone users from Lahore, Pakistan. Survey method is used for collecting data. The structured questionnaire is used for collecting data from the customers and both qualitative and quantitative analytical techniques are used to analyze the data and to form conclusions. | P a g e iii Table of Contents Contents Acknowledgements........................................................................................................... ii Abstract ........................................................................................................................... iii Chapter 1 Introduction ...................................................................................................... 1 1.1 Introduction ................................................................................................................. 1 1.1.1 Background of the Study ........................................................................................................................ 1 1.2 Problem Identification ....................................................................................................... 2 1.3 Objectives of the Study ...................................................................................................... 5 1.3.1 Demarcation .......................................................................................................................................... 5 1.4 Conceptual Framework ..................................................................................................... 5 1.4.1 Independent Variables ........................................................................................................................... 6 Relative attractiveness of advertisement and Exposure to advertisement: ..................................................... 6 1.4.2 Dependent Variable ............................................................................................................................... 7 Customer retention: ........................................................................................................................................ 7 Chapter 2 Literature Review .............................................................................................. 8 2.1 Customer Retention in Theory ......................................................................................... 10 Source: Jobber, 2004 .................................................................................................................................... 10 2.1.1 Targeting Customers for Retention ..................................................................................................... 10 2.1.2 Internal Marketing .............................................................................................................................. 11 2.1.3 Bonding ............................................................................................................................................... 11 2.1.4 Promise fulfillment .............................................................................................................................. 11 2.1.5 Building Trust ...................................................................................................................................... 11 2.1.6 CRRCM (Customer Retention and Relationship Commitment Model) ................................................ 11 2.2.1 Advertisement ...................................................................................................................................... 14 2.3 Attractiveness and Exposure of Advertisements .............................................................. 15 2.3.1 Advertisement Assessment Process ..................................................................................................... 16 2.4 Impact of Advertising on Customer Retention ................................................................. 18 Chapter 3 Research Methodology ................................................................................... 24 3.1 Methodology .................................................................................................................... 24 3.2 Research Approach .................................................................................................... 25 3.3 Research Strategy ............................................................................................................ 28 3.3.1 Surveys ................................................................................................................................................ 29 3.4 Sampling Plan .................................................................................................................. 29 | P a g e iv 3.5 Contact Methods .............................................................................................................. 30 3.6 Data Analysis ............................................................................................................ 30 3.6.1 Background of Telecommunication in Pakistan .................................................................................. 30 3.6.2 Growth of Telecom Industry ................................................................................................................ 31 3.6.3 Mobilink .............................................................................................................................................. 32 3.6.4 Ufone ................................................................................................................................................... 33 3.6.5 Telenor ................................................................................................................................................ 34 3.6.6 Warid Telecom .................................................................................................................................... 35 3.6.7 ZONG .................................................................................................................................................. 36 Chapter 4 Data Presentation and Analysis ....................................................................... 38 4.1 Introduction ....................................................................................................................