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An executive summary for managers and executive readers can be found at the end of this article.
Drivers of satisfaction and loyalty intention in the use of mobile services
Consumer loyalty has been a main goal of marketers for the past decade. Marketers have invested a great amount of their resources to develop loyalty programs. However, a recent article raised a question about the effectiveness of loyalty marketing in practice (Capizzi and Ferguson, 2005). The article suggested a well‐designed loyalty program with strong value propositions as a key factor of successful loyalty marketing. To develop an effective loyalty program, it is imperative to understand the process of consumers' loyalty decisions. Given that consumers' needs and value propositions vary across different types of products and service, the current study focuses on the process of loyalty decisions in the context of mobile services.
In the new millennium, consumers can go to market with the “mobility” that new technology has brought to consumers' daily lives – for example, Wireless Application Protocol (WAP) and a 3G mobile communication system. Owing to the rapid development of mobile technology, usage of mobile phones has extended from voice communications to the internet. Propagation of mobile internet technology and m‐commerce applications opens a great opportunity for mobile service carriers. Nevertheless, surveys on US consumers' perceptions of mobile service show that the level of satisfaction is much lower for mobile service carriers compared to other service sectors (Consumer Report, 2005; McKinsey Quarterly, 2004). In fact, 35 percent of US mobile subscribers in 2004 reported that they were considering switching mobile service carriers (Consumer Report, 2005). Such findings suggest that mobile service carriers need to be aware of drivers of customer satisfaction and loyalty intention in order to build effective business strategies for customer retention.
Previous studies identified determinants of consumers' loyalty for mobile services in foreign markets (e.g. France (Lee et al., 2001), Germany (Gerpott et al., 2001), and South Korea (Kim et al., 2004)). Few studies, however, investigated effects of various service attributes on consumers' decision making in the US mobile market. Because of the different levels of market development and distinct consumer behavior in foreign markets, study findings may provide only limited application to the US market.
In recognition...