CUSTOMER LOYALTY: THE CASE OF MOBILE PHONE USERS IN UNIVERSITI UTARA MALAYSIA

This research att empts to examine the relationships between service quality, switching barriers and brand image and customer loyalty in the Universiti Utara Malaysia sector. Based on the theoretical model, a comprehensive set of hypotheses were formulated and a methodology for testing them was outlined. These hypotheses were tested empirically by means of questionnaires to demonstrate the applicability of the theoretical model. The results indicate that service quality, switching barriers, and brand image are separate constructs that combine to determine loyalty, with service quality and switching barriers exerting a stronger infl uence than brand image. Hypotheses H1, H2 were supported, while hypothesis H3 was rejected.


Introduction
Customer loyalty has become more important as technology is undergoing rapid changes in the telecommunications sector.Customers know what is available elsewhere, and at other locations, and may be willing to travel farther for a bargain.A critical issue for the continued success of an organization is its capability to retain its current customers and make them loyal to its brands (Dekimpe, Steenkamp, Mellens & Abeele, 1997).Loyal customers build businesses by buying more, paying premium prices, and providing new referrals through positive words over time (Ganesh, Arnold & Reynolds, 2000).Loyalty research in services is an important area to study (Gremler, 1995).In fact, in telecommunications companies 2-4 per cent of their customers are lost monthly; disloyal customers can amount to millions of lost revenue and profi t.In telecommunications services, it is frequently pointed out that once customers have been acquired and connected to the telecommunications network of a particular operator; their long-term relations with the focal operator are of greater importance to the success of the company in competitive markets than they are in other industry sectors (Gerpott , Rams & Shindler, 2001).
In the case of Malaysia, numerous studies have been carried out with regards to customer loyalty in several services sectors.According to Nilson (2007) on a sample of 220 bank customers in Malaysia, multiple regression analysis assessed the impact of customer loyalty on four key constructs of marketing relationship (trust, commitment, communication and confl ict handling).The fi ndings of the study show that the four variables possess a signifi cant eff ect and are able to predict a good proportion of the variance in customer loyalty.Moreover, they are signifi cantly related to each other.Chang and Ernest's, Satisfaction and loyalty: Customer Perceptions of Malaysian Telecommunication Service Providers (2009) -was done by utilizing a two-part research method.The fi rst part utilized an in-depth interview method to obtain the variables used in the second part of the study.The second part consisted of a questionnaire distributed to 125 respondents.A factor analysis was also carried out.The fi ndings indicated that important variables for satisfaction included supporting services, products (handiness, reliable coverage, friend, and family lines) and promotional eff orts of the fi rm; while for loyalty, they refer to convenience, services, satisfaction and cost.
The fi ndings suggest that telecommunication service providers should look beyond price wars to keep their customers satisfi ed and loyal.As market growth slows or as markets become more competitive, fi rms are more likely to att empt to maintain their market share by focusing on retaining current customers.In this context, the main objective of this research is to examine the relationships between customer loyalty and service quality, switching barriers and brand image in Universiti Utara Malaysia.For this purpose, there are three specifi c objectives of this research: (a) To examine the relationship between service quality and customer loyalty, IJMS 18 (2), 43-66 (2011) 45 (b) To determine the relationship between switching barriers and customer loyalty, and (c) To determine the relationship between brand image and customer loyalty.This research att empts to answer the following questions:  Is there any relationship between service quality and customer loyalty? Is there any relationship between switching barriers and customer loyalty? Is there any relationship between brand image and customer loyalty?
With the description of the research already introduced, the literature review will focus on discussions and ideas in previous studies related to customer loyalty and the factors aff ecting it.There are several defi nitions of customer loyalty.Customer loyalty is defi ned as a customer who repurchases from the same service provider whenever possible, and who continues to recommend or maintain a positive att itude towards the service provider (Bloem er, Ruyter & Wetz els, 1999;Gremler & Brown, 1999;Shoemaker & Lewis;1999, Kandampully & Suhartanto, 2000).According to Wong and Sohal (2003a) customer loyalty appears to consist of three separate dimensions, namely; the behavioural, att itudinal and cognitive dimensions.Customer loyalty has been generally described as occurring when customers:


Repeatedly purchase goods or services over time.


Hold favourable att itudes towards goods or services, or towards the company supplying the goods or services (Wong & Sohal, 2003b).
It should be noted however, that customer loyalty has been studied for several decades by marketers, but it is not a well understood phenomenon (Gremler, 1995).Furthermore, there is no consensus on the most appropriate way to measure loyalty.
There are three groups of studies that refl ect both the major approaches to defi ning and/or measuring customer loyalty and the limitation of these approaches.The three groups are: (a) Loyalty as repeated purchase behaviour (e.g., Liljander & Strandvik, 1993)
The fi rst approach is to treat loyalty as either an actual purchase behaviour or as repeat purchase intentions.This approach has long been criticized for leading to spurious loyalty (Day, 1969), while the composite approach lacks theory (Jacoby & Chestnut, 1978).
Customers may be loyal due to high switching barriers or lack of real alternatives.Customers may also be loyal because they are satisfi ed and thus want to continue the relationship.
History has proven that most barriers to exit are limited with regard to durability; companies tend to consider customer satisfaction as the only viable strategy in order to keep existing customers.Several authors have found a positive correlation between customer satisfaction and loyalty (Bearden, Teel et al., 1980;Bolton & Drew, 1991;Fornell, 1992;Anderson & Sullivan, 1993).Customer loyalty is a buyer's overall att achment or deep commitment to a product, service, brand, or organization (Oliver, 1999).Customer loyalty falls into two broad categories: The behavioural and the att itudinal.As a behaviour, customer loyalty has been measured as the long-term choice probability for a brand, including hardcore, loyalty and repeat purchase probability.Att itudinal approaches focused mainly on brand recommendations, resistance to superior products, repurchase intention, and willingness to pay a premium price.Oliver (1999) defi nes loyalty as a deeply-held commitment to re-buy products/services consistently in the future, thereby causing repetitive same brand or same-brand set purchasing.The customer's att itude toward a service or product (brand) including att itudinal preference and commitment has a greater impact on forming loyalty.Goodwin and Gremler (1996) cite quality in the relationship as a necessary element in defi ning loyalty.Earlier studies of factors aff ecting customer loyalty usually set the focus on customer satisfaction and the switching barrier (e.g., Dick & Basu, 1994;Gerpott , Rams & Schindler, 2001;Lee & Cunningham, 2001).Customers experiencing a high level of satisfaction are likely to remain with their existing providers and maintain their subscription.However, according to some research, customer satisfaction, while positively infl uencing customer loyalty, is not always a suffi cient condition, and, in some cases, fails to produce the expected eff ect.Hence, these researchers suggest that it is necessary to analyse other potentially infl uential factors.
It is in this context that the concept of the switching barrier was proposed (Jones, Mothersbaugh & Bett y, 2002).From previous studies about customer loyalty and the factors aff ecting it such as service quality, switching barriers, and brand image, researchers gave diff erent defi nitions of customer loyalty.However, there were some things that were similar among their defi nitions, such as repeatedly purchased goods or services over time; and holding favourable att itudes towards a good or service, or towards the company supplying the goods or service.The diff erences between their defi nitions are the factors aff ecting customer loyalty, for example the factors aff ecting loyalty to cars is much diff erent from the factors aff ecting loyalty to mobile phones or any product that is consumed daily, monthly or yearly, as mentioned by Jun and Bin (2005).

Factors Aff ecting Customer Loyalty
Customer loyalty is characterized by repurchasing and not by transferring the product/service through market fl uctuation.There are many factors that aff ect customer loyalty.In the telecommunication industry, according to the opinions of experts and the literature on previous studies, the eff ects of customer loyalty can be assessed in these aspects: service quality, switching barriers, and brand image "the customers' switching cost requirement, quality requirement and service requirement for the telecommunication business" (Zhijian, Xu & Li, 2005).

Service Quality and Customer Loyalty
Service quality in the telecommunications industry is an important indicator to assess a company's performance.Service quality in telecommunications has mainly been researched on technical and/ or corporate strategies (Douligeris & Pereira, 1994;Gruber, Abdou, Richards & Williams, 1986;Jung, 1996aJung, , 1996b;;Lim, Widdows & Park, 2006;Lynch, Buzas & Berg, 1994;Takahashi, 1988).Due to the inherent intangibility, inseparability, heterogeneity and perishability of characters, service quality can be defi ned as a consumer's overall impression of the relative effi ciency of the organization and its services.
The dominant conceptualization and measurement of service quality has been the SERVQUAL instrument developed by Parasuman et al., 1988).SERVQUAL identifi ed the determinants of perceived quality and indicated through arithmetic the diff erences between customer expectations and perceptions across 22 measurement items.
Using factor analysis, SERVQUAL is further condensed into tangible, reliability, assurance and empathy dimensions, which are generic across service sectors.However, a number of authors investigated the number of dimensions and the stability of the items across diff erent industries through empirical tests-and concluded that the fi ve component factor structure was not confi rmed in any of the research samples.This implies that service quality att ributes are contextdependent and should be selected to refl ect the service environment investigated.Cronin et al. (1992Cronin et al. ( , 2002) criticized SERVQUAL's poor reliability and argued that expectation is neither suffi cient nor a necessary condition, and therefore identifi ed a performance-only measurement, called the SERVPERF instrument.The results of existing studies on service quality suggest that defi nitions of service quality in mobile telecommunication sett ings are quite diverse, and do not seem to fi t any single existing quality model.In this study, for the sake of brevity, the modifi ed SERVPERF instrument has been adapted for the mobile telecom industry (Zhijian, Xu & Li, 2005).

Switching Barriers and Customer Loyalty
The switching barrier refers to the diffi culty of switching to another provider that is encountered by a customer who is dissatisfi ed with the existing service, or to the fi nancial, social and psychological burden felt by a customer when switching to a new carrier (Fornell, 1992).Therefore, the higher the switching barrier, the more a customer is forced to remain with his or her existing carrier.According to a previous study, the switching barrier is made up of the switching cost, the att ractiveness of the alternatives, and interpersonal relationships (*).Switching cost means the cost incurred when switching, including time, money and psychological cost.Jackson (1985) categorized switching costs as psychological, physical, and economic in nature.
In addition to objectively measurable monetary costs, switching costs may also pertain to the time and psychological eff ort involved in facing the uncertainties of dealing with a new service provider.
According to Burnham's (1998) review and typology, switching costs were broadly grouped into three categories: procedural, fi nancial and relational, Att ractiveness of the alternatives means the reputation, image and service quality of the replacing carrier, which are expected to be superior or more suitable than those of the existing carrier.Interpersonal relationship means a psychological and social relationship that manifests itself as care, trust, intimacy and communication.Switching barriers lock customers in their initial decisions, which hand market power to the service supplier.Thus, suppliers can hinder customers from switching to their rivals for a relatively low price and can segment and discriminate their customers with varying levels of willingness to pay.No matt er how, suppliers can exploit their customers.
Switching costs are partly consumer-specifi c (Shy, 2002).For this reason, a switching cost can be seen as a cost that deters customers from demanding a rival fi rm's brand.The economic or fi nancial switching cost is a sunk cost which appears when the customer changes his/her brand, for example the costs of closing an account with one bank and opening another with a competitor, and the cost of changing one's long-distance telephone service (Klemperer, 1987) or the costs of changing one's GSM operator.

Brand Image and Customer Loyalty
Oliver (1999) proposes that eventual customer loyalty is a role of perceived product superiority, personal fortitude, social bonding, and their respective synergistic eff ects.Further analysis of Oliver's discussion tends to suggest that loyalty is not commitment, but rather that loyalty is an aspect of commitment labeled as an att itudinal or emotional component of commitment (Meyer & Allen, 1991, 1997;Meyer et al., 1993;Ogba, 2008).A brand's image often infl uences a customer's expectations and consequently his/her satisfaction with a product or service.Brand image pertains to the perception or the mental picture a customer holds of a brand and is formed through his/her response, whether reasoned or emotional; an organization's image, on the other hand, is an important variable that positively infl uences marketing activities.Image is considered to have the ability to infl uence customers' perceptions of the goods and the services off ered (Zeithaml & Bitner, 1996).Thus, image will have an impact on the customers' buying behaviour.The objective is to arouse a positive aff ective response to the brand in the customers, such that they buy brands for their physical att ributes and functions, and the symbolic meanings associated with the brand, product or service.During its formation, the customer's experiences, feelings and trust will infl uence the image.Nguyen and Leblanc (2001) claim that corporate image is related to the physical and behavioural att ributes of the fi rm, such as business name, architecture, variety of products/services, and to the impression of quality communicated by each person interacting with the fi rm's clients.
From marketing literature regarding goods we have learned that brand reputation has been defi ned as a perception of quality associated with the name (Aaker & Keller, 1990).Corporate image in service-marketing literature was identifi ed as an important factor in the overall evaluation of the service and the company (Grönroos, 1984); (Gummesson & Grönroos, 1988); (Bitner, 1991).Apart from image as a function of the accumulation of purchasing/consumption experience over time, most organizations also provide complex and noisy informational environments (e.g.advertising, direct marketing, or PR) in order to att ract new customers and keep the existing ones.In the Perceived Quality Model (Grönroos, 1988) perceived quality is a function of expected quality (generated from market communication, image, word-of-mouth, and customer needs) and experienced quality (generated from technical quality and functional quality).Mobile telecommunications markets can be divided by the type of services provided and by the telecommunications network used (Gerpott et al., 2001).

Hypotheses and Structural Model
H1: Service quality has a positive relationship with customer loyalty.H2: Switching barriers has a positive relationship with customer loyalty.H3: Brand image has a positive relationship with customer loyalty.analysis, result of reliability and procedure.There are two types of customer loyalty-for company and for product.This research focused on customer loyalty for product, and also on three factors namely, service quality, switching barriers, and brand image.Thus, three hypotheses were considered to determine the relationship between those factors and customer loyalty.Furthermore, customer loyalty was the dependent variable, and other factors were the independent variables.
The population of this research was composed of the staff and student users of mobile phones in Universiti Utara Malaysia (UUM).
The population size was 28,790 users.Based on Sekaran (1992), the sample size of this research, was 378 users.The convenience sampling method was used.Convenience samples are the most common form of sampling designs in social science research (Mohr, 1990) and provide researchers with an acceptable database to use statistical inference techniques.This approach to sampling design is also common in services marketing.The questionnaires were distributed at the library and the Student's Aff airs Department where students would gather in the foyer between classes.
There we re two main sections in the questionnaires.The fi rst section was the demographic characteristics of the respondents.These characteristics were: age group, gender, education, marital status, and career.The second section of the questionnaire was pertaining to the dependent variable-customer loyalty, and the three independent variables-service quality, switching barriers and brand image.There were thirty-fi ve questions in this section, eight questions for customer loyalty, eleven questions for service quality, eight questions for switching barriers, and eight questions for brand image.Measures for independent and dependent variables used a fi ve-point Likerttype response format, with "strongly disagree" and "strongly agree".The users recorded their assessment of the items on fi ve-point Likerttype scales (1= strongly disagree, 2= disagree, 3= neutral, 4= agree, 5= sThe questionnaires were pretested with twenty users of mobile phones consisting of staff and students at Universiti Utara Malaysia.The purpose of the research was explained to the users of mobile phones in an eff ort to facilitate the users' feedback, suggestions, and answering of the questions.The users suggested that some words in the questions were not clear or straight forward.Except for these comments, the results of the pretest indicated that, on an overall level, the questions were realistic, clear, and easy to follow.Following the pretest, the unclear words and sentences were revised.
The descriptive analysis and correlation of the variables customer loyalty, service quality, switching barriers, and brand image in this research used three hypotheses to assess the relationship between the independent variables and the dependent variables.This research described the degree of the relationship between all the independent variables and the dependent variables.Regression analysis was also used for the investigation of the relationships between the variables.

Reliability Results
The result of the reliability test is as per table below: The reliability t est was conducted using the Coeffi cient Cronbach's Alpha which is a measure of reliability or internal consistency.
A value of Cronbach's Alpha of .50 or above is consistent with the recommended minimum values as stated by Nunnally (1967).Cronbach's Alpha indicated the reliability for each factor as follows: customer loyalty .778,service quality .785,switching barriers .757,brand image .810.Therefore, the research results can be accepted as stated by Nunnally (1978).
The sample consisted of students (87.3%), staff (12.0%) and lecturers (0.7%).All the results are shown in the table below: Table 3 exhibits the correlation coeffi cients between all variables.All independent variables are correlated signifi cantly with customer loyalty.The correlation is signifi cant at the 0.01 level (2-tailed).
The criterion used for the level of signifi cance was set a priori.The relationship must be at least signifi cant at **p< 0.01.Table 3 shows that there is signifi cant correlation between customer loyalty and service quality, (r=0.561,p=0.000<0.01),a strong positive signifi cant correlation between customer loyalty and switching barriers, (r=0.516,p=0.000<0.01).Therefore, it can be said that there is a strong positive signifi cant correlation between customer loyalty and switching.Also, there is a signifi cant correlation between customer loyalty and brand image, (r=0.382,p=0.000<0.01).This shows that there is a moderate positive signifi cant correlation between customer loyalty and brand image.

Regression Analysis
The linear regression procedure examines the relationship between a dependent variable and a set of independent variables.This research also analysed the relationship between customer loyalty and service quality, switching barriers, and brand image using regression analysis, and the results are as shown in Table 4.As expected, the results of all the independent variables are positively correlated with customer loyalty.However, the correlation on brand image is not statistically signifi cant.This implies that customer loyalty and brand image are unrelated.But the correlation on service quality and switching barriers are statistically signifi cant.This means that IJMS 18 (2), 43-66 (2011) 55 customer loyalty, service quality and switching barriers are related.
The research investigated the infl uence of service quality, switching barriers, and brand image.As expected, service quality (β = 0.392, t-value=3.843,p < 0.01) and switching barriers (β = 0.232, t-value = 2.301, p < 0.001) had a signifi cant and strong positive infl uence on customer loyalty.However, brand image had no signifi cant infl uence on customer loyalty (β = 0.004, t-value = 0.044, p = 0.965) at the 0.05 level.Thus, hypotheses H1, H2 were supported, while hypothesis H3 was rejected.The research found that the proposed model explained a signifi cant percentage of variance in loyalty (R Square=34%).

Discussion
In hypotheses H1, H2, and H3 the research investigated the infl uence of service quality, switching barriers, and brand image on customer loyalty.The Pearson coeffi cient for the relationship between customer loyalty and service quality is .561,so there is a moderate and positive relationship between customer loyalty and service quality.The fi nding is supported by Huan et al. (2005) and Aydin and Ozer (2004); the hypothesis (H1) is accepted.Service quality also has a signifi cant impact on customer loyalty in what appears to be call quality, valueadded services, and customer support.This suggests that, while mobile carriers have improved call quality over the past several years through massive equipment investments, call clarity and coverage, according to customers' perceptions, still remain important.In addition, mobile carriers must concentrate their eff orts on developing value-added services to increase enjoyment and convenience.In the area of customer support, carriers must strive to minimize customer inconvenience by speedily processing customers' complaints through a variety of systems and channels.
The Pearson coeffi cient for the relationship between customer loyalty and switching barriers is .516.Thus there is a moderate and positive relationship between customer loyalty and switching barriers.As a result, switching barriers are positively related to customer loyalty.Switching barriers are positively and signifi cantly related to customer loyalty (p = 0.023 < 0.01) and based on the results of previous studies by Huan et al. (2005) and Aydin. S and Ozer. G (2004) the hypothesis (H2) is accepted and supported.Switching barriers have signifi cant impact on customer loyalty which appeared to be switching costs such as loss cost, move-in cost, and interpersonal relationships.
Carriers must continuously develop customer-reward programmes that concretely compensate customers, such as mileage programmes and price discounts, in order to increase loss cost and move-in cost.Furthermore, interpersonal relationships between carrier and customer are factors that retain customers, even when competitors try to win them over with lower prices or off ers of other conveniences.
The Pearson coeffi cient for the relationship between customer loyalty and brand image is .382,and therefore, there is a relationship between customer loyalty and brand image, although it is low and positive.
Regardless of the weakness of the correlation, it still shows a positive relationship between customer loyalty and brand image.Brand image is not statistically signifi cant.(p = 0.965 > 0.01) and based on the results of previous studies by Aydin and Ozer, ( 2004) hypothesis (H3) is rejected.Although it is not signifi cant, the analysis results indicate that corporate image aff ects customer loyalty positively.The general experience of marketing professionals also verifi es that such an eff ect is valid.The situation can be explained by the general characteristics of the Malaysian mobile phone market, since the purchasing power of subscribers is less than in developed countries, and the indirect tax rate in the brands sector is relatively higher in Malaysia.Consequently, the most important factor for the decisionmaking process of subscribers is the services provided by the operator compared to cost.The operator's image has no signifi cant eff ect on customer loyalty in the Malaysia brands sector.

Recommendation
Several new ideas arose whil e pursuing this research which led to the following recommendations.Service quality and switching barriers are two important routes to customer loyalty for most service companies, either in retaining or att racting customers.
Research related to the importance of service quality and switching barriers in att racting new customers to the company and how this may change between diff erent service industries is in dire need.In the emerging paradigm of relationship marketing, there is a need to understand the importance of service quality and switching barriers in retaining customers.This research focused on the impact of brand image, switching barriers, and service quality on customer loyalty.One problem of estimating the existing customers' experience with the company and their perception of it is the closeness of the two constructs.This may create a validity problem.Research related to construct, i.e., fi nding good measures of service quality, brand image, switching barriers and loyalty, is therefore required.This research covered 34% of the areas of the factors aff ecting customer loyalty, so there emerged a number of some recommendations and advice:

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To employ other variables such as commitment, satisfaction, and trust as factors aff ecting customer loyalty.

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To replicate the investigation, to explain other regions or countries in order to obtain a broader view and analysis.

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Conduct an in-depth research about the profi tability of loyal customers in comparison to the costs of retaining them.

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Explore if responsiveness to the marketing eff orts really have an eff ect on the customers' buying behaviour.

Conclusion
In this research, the relati onships between customer loyalty and service quality, switching barriers and brand image are examined.To this end, the data was analysed by correlation and regression analysis.
The results of the regression analysis show that all the factors have positive eff ects on customer loyalty.For example, the eff ect of service quality on customer loyalty stems from positive relations between service quality and factors such as brand images and switching barriers.Although it is not signifi cant, the analysis results indicate that brand image positively aff ects customer loyalty.The general experience of marketing professionals also verifi es that such an eff ect is valid.The situation can be explained by the general characteristics of the Malaysian mobile phone market, as the purchasing power of the subscribers in Malaysia is less than those in developed countries.
Customer loyalty is a dependent variable in regression analysis.The objective of regression analysis was to determine which of the three factors would have the most important infl uence on customer loyalty.Of the three relations which were hypothesized to infl uence customer loyalty; service quality and switching barriers were signifi cantly and positively related, while brand image was not signifi cant.
The Pearson coeffi cient for the positive relationship between customer loyalty and service quality is .561.This tells us that, just as predicted, as service quality increases, customer loyalty increases.The Pearson coeffi cient for the positive relationship between customer loyalty and switching barriers is .516.Therefore, as switching barriers increase, customer loyalty increases.In conclusion, service quality and switching barriers are important predictors of customer loyalty.These fi ndings indicate that switching barriers and, to a lesser extent, service quality are crucial factors for customer loyalty rather than brand image.Generally, as discussed above, the fi ndings show that service quality is a necessary but insuffi cient condition for customer loyalty to emerge and to exist.In addition, consistent with previous research, brand image, service quality and especially switching barriers should be taken into consideration in formulating strategies for developing customer loyalty.

End Note
(*) While prepaid cards infl uence customers to churn in some major countries, the situation diff ers in Korea where prepaid card usage for mobile telecommunication service is less popular, with only a small proportion of users, including foreigners.

Figure 1 .
Figure 1.Theoretical framework of the relationship between service quality, switching barriers, and brand image and customer loyalty.

Table 1
Reliability Results

Table 2
Demographic Results

Table 4
Regression Matrix