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Abstract
The purpose of this paper is to verify the relationships among service quality, perceived value, customer satisfaction, and customer loyalty in mobile phone service. The study conducted an empirical research. A total of 384 mobile phone users' responses were collected from Seoul in Korea. The findings show that service quality positively influences customer loyalty. In addition, perceived value and customer satisfaction positively affects customer loyalty respectively. For customers with high perceived service quality, perceived value, and satisfaction, they have a strong loyalty.
Keywords: customer loyalty; service quality; perceived value; customer satisfaction
© Hyung Seok Lee, 2010
INTRODUCTION
The introduction of mobile phones in everyday life has dramatically changed lifestyles worldwide. More than 3 billion people use mobile phones for personal and business purposes (The Korea Herald, December 22 2008). In addition, many subscribers use mobile phones to surf the Internet, watch movies, do their shopping, and make financial transactions, among others. In particular, most Koreans use mobile phones on a daily basis, giving the country one of the highest subscription rates in the Asia-Pacific region. According to the International Telecommunication Union (ITU), the number of mobile phone subscribers in Korea reached 43.5 million in 2007, indicating that 90.2 individuals out of every 100 had access to mobile phone services. Furthermore, Korea's telecommunications market is expected to grow by 3.9% to $53.1 billion in 2010, helped by expanding wireless internet services and a recovery in the advertising industry. In addition, the number of mobile phone subscribers is expected to increase by 2.8% in 2010 from a year earlier, reaching a penetration rate of 101.1%. The mobile phone penetration rate refers to the number of active mobile numbers as a percentage of a specific population (The Korea Herald, November 13, December 15 2009).
As the mobile phone service market is already saturated, service providers need to implement marketing strategies focusing on customer retention, rather than on acquiring new subscribers to increase market shares (Turel and Serenko, 2006). As such, Korean mobile carriers have also realized the importance of customer-oriented marketing strategies, which could help them to maintain their competitiveness and profitability by preventing existing customers from churning to other carriers. This retention-based competition has intensified through the elimination of switching barriers, which allows users to...