Measuring Relationship Quality towards the Generation Y Market in the Mobile Telecommunications Industry - an Empirical Study
Mirpuri, Dimple G., Narwani, Sangeeta A., Journal of Services Research
The young consumer today has a variety of choices when it comes to buying products and services. In services such as the provision of mobile telecommunications services, young consumers are becoming a big part of the market. However, the industry is becoming highly saturated and the fight for market share is gaining strength. Firms need to start finding ways to build customer loyalty with the young consumer. The purpose of this study is to look into whether the creation of relationship quality will lead to customer loyalty from young consumers. The study uses a quantitative method of analysis by surveying 257 young consumers aged 18-31. This group was surveyed randomly using a geographic cluster sampling technique and questionnaires were administered personally to individuals from this age group. The survey was conducted in Hong Kong, China where the proportion of the young is about 21.5% of the overall population. Sub-groups included those in the older generations aged 25 and above. Findings of the research done in measuring relationship quality reveal that mobile telecommunications firms must work hard to build a strategy around the key constructs of relationship marketing for a successful relationship marketing strategy with young consumers. There is a positive correlation between relationship quality and customer loyalty. Therefore if firms provide relationship quality to young consumers, they will remain loyal to them. At the same time, findings show that service quality does not directly lead to customer loyalty so without the key practice of relationship marketing, customer loyalty will be hard to achieve in this industry on the basis of providing good service quality alone. Limited research exists exploring the practice of relationship marketing towards the young consumer and although there is research on young consumers and their use of mobile phones and mobile telecommunications, this research will provide value to firms operating in the mobile telecommunications industry in deciding how much to invest in relationship marketing.
Keen competition in the mobile telecommunications industry since the early 1990s has accelerated considerably (Bohlin et al, 2004). The overall mobile telecommunications industry has an annual revenue of US$900 billion and holds about 1.5% of the world's GDP (Vodafone Group Plc Annual report, 2011). Over 80% of the world's population has a mobile phone which is about 5.6 billion consumers worldwide and approximately 75% of these consumers are in emerging markets like India and China (Vodafone Group Plc Annual report, 2011). This change has led to many mobile telecommunications service firms, in both B2B and B2C configurations, to focus on building long term relationship with their consumers.
The specific direction taken was to build strategies upon the constructs of relationship quality which has been studied in a variety of different industries including tourism and hospitality, banking, lifelong learning and other general services (Roberts et al, 2003; Narwani, 2007; Liang and Wang, 2007; Martin-Consuegra et al, 2006; Leverin and Liljander, 2006; Wang et al, 2004; Xevelonakis, 2005; Jang et al, 2006; Harker, 1999; Jham and Khan, 2008). This research builds upon a framework of relationship quality constructs and measures the variables and their links to customer loyalty particularly towards young consumers.
The Generation Y (also known as the 'now' generation or 'echo boomers' include a younger group of consumers that are between the ages of 18- 31 years of age. This group of consumers are a very important market to businesses today because of their large spending power (Hedrick-Wong, 2008). The youth population in many Asian Markets are an important and affluent part of society including in emerging markets like India and China (Hedrick-Wong, 2008). In Hong Kong, where this study is taking place, the youth are a very profitable market (Hedrick-Wong, 2008). …