Measuring Relationship Quality towards the Generation Y Market in the Mobile Telecommunications Industry - an Empirical Study

By Mirpuri, Dimple G.; Narwani, Sangeeta A. | Journal of Services Research, October 1, 2012 | Go to article overview

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


INTRODUCTION

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.

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). The per-capita discretionary spending of Hong Kong's Young Premium Consumers is between US$3300-US$4500 and is forecasted to increase to US$4900-US$7300 by 2016 (Hedrick-Wong, 2008). They have a very unique behavior to the older generations with research showing that a lot of what they purchase represents their self-expression (Hendrick-Wong, 2008). Therefore they are a group that craves individualistic style (Twenge, 2006). So the products and services they tend to choose represent their selfimage (Twenge, 2006). They are comfortable with technology and most of their socializing takes place online. Their mobile devices are a part of their personal selves and a mobile telecommunication service that connects them with the world and people around them is a vital companion to them. Due to their lack of commitments, these young people tend to spend more for their mobile lifestyles (Acikalin et al, 2009). More than 70% of them cannot do without their phones as they believe it expresses their identity (Haste, 2005). They also use their mobile devices to communicate in many different ways. For example, in Britain, over 30% of them use their mobile phones to surf the internet and text their friends (Haste, 2005). In Asia, the forecast is that these young mobile users will spend over US$13 billion on data services including mobile tv and surfing the web (O'Doherty et al, 2007). It is clear that globally the young consumer is a very important market for mobile telecommunications firms. Therefore firms in this industry must focus on this generation as a key objective for growth and sustainable competitive advantage.

RELATIONSHIP MARKETING

The term Relationship Marketing (RM) was coined in 1983 by Leonard Berry, it has over 26 different definitions (Harker, 1999). These definitions however have similar terminology including attracting, maintaining, enhancing profitable relationships and terminating unprofitable ones (Gronoos, 1994; Harker, 1999). At that time Relationship Marketing was said to be a paradigm shiftin Marketing (Ballantyne et al, 2003; Gronroos, 1994; Gummesson, 1997; Palmer, 1996). …

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