1020313

INTERNSHIP REPORT

Autumn 2013

An Internship Report Presented in Fulfillment of the Requirements for the Degree

Bachelor of Business Administration

Assessment of customer loyalty for Banglalink

Submitted by

Minhaz Alam Chowdhury

ID: 1020313

Submitted to

Abul Khair Jyote

Lecturer, Marketing

Department of Business School

Independent University, Bangladesh

AN ASSESSMENT OF CUSTOMER LOYALTY FOR BANGLALINK

MINHAZ ALAM CHOWDHURY

1020313

LETTER OF TRANSMITTAL

Date: 5th December, 2013

Abul Khair Jyote

Lecturer, Marketing

Department of Business School


Subject: Submission of Internship Report.

Dear Sir,

It is a great pleasure and privilege to present the internship report titled Assessment of

customer loyalty for Banglalink, which was assigned to me as a partial requirement for the

competition of Bachelors of Business Administration degree.

It is my great pleasure to work for the second largest telecom company on Bangladesh and

gain an in-depth knowledge on how this industry runs. Throughout the study I have tried with

the best of my capacity to accommodate as much information and relevant issues as possible

and tried to follow the instructions as you have suggested. I tried my best to make this report

as much informative as possible.

I am grateful to you for your guidance and kind cooperation at every step of my endeavor on

this report. I shall remain deeply grateful if you kindly take some pen to go through the report

and evaluate my performance.

_______________________


ID: 1020131




1020313

LETTER OF ENDORSEMENT

The Internship Report entitled Assessment of customer loyalty for Banglalink, has been

submitted to the Office of Placement & Alumni, in partial fulfillment of the requirements for

the degree of Bachelor of Business Administration, Major in Marketing, Faculty of Business

Administration on 5th December, 2013 by, Minhaz Alam Chowdhury ID: 1020313. The

report has been accepted and may be presented to the Internship Defense Committee for

evaluation.

______________________

Abul Khair Jyote

Internship Supervisor




1020313

ACKNOWLEDGEMENT

First of all I would like to thank my honorable supervisor Mr. Abul Khair Jyote, who helped

me to select a nice topic for my internship report according to my job.

I am highly grateful & like to express my sincere thanks to Riviera Ho Rathore , HR &

Administration Director, Banglalink who permitted me to Internship on such a prestigious

organization.

I am preparing the report Assessment of customer loyalty for Banglalink. I am very much

obliged for cordial cooperation from employees of marketing department of Banglalink. As I

was selected the marketing department. I want to express my whole hearted gratitude to

them for their precious cooperation without which, it would not been possible to bring the

report in present form.

I would like to thank Mr. Ahmed Minhazul Arefin, IR Senior Assistant Manager, Marketing,

my internship supervisor. I could not prepare this report without his help. And also Mr.

Shamnoon Muheb Chowdhury, Manager, High Value and International Roaming.

___________________


BBA



1

MINHAZ ALAM CHOWDHURY 1020313

CONTENTS THE REPORT....................................................................................................................................................... 3

1.1 INTRODUCTION ................................................................................................................................... 4

1.2 ORIGIN OF THE REPORT.................................................................................................................. 5

1.3 WORK SCHEDULE ............................................................................................................................... 5

1.4 OBJECTIVES OF THE STUDY .......................................................................................................... 5

1.5 METHODOLOGY OF THE STUDY .................................................................................................. 6

1.6 SCOPE OF THE REPORT ................................................................................................................... 6

1.7 LIMITATIONS ........................................................................................................................................ 7

BANGLADESH TELECOM INDUSTRY .................................................................................................... 8

2.1 BACKGROUND OF THE INDUSTRIES ......................................................................................... 9

2.2 KEY HIGHLIGHTS.............................................................................................................................. 13

2.3 BANGLADESH - KEY TELECOM PARAMETERS 2012 - 2013 ................................... 14

2.4 THE PLAYERS ..................................................................................................................................... 15

2.5 THE MARKET SHARE ..................................................................................................................... 17

BANGLALINK ................................................................................................................................................... 18

3.1 BANGLALINK DIGITAL COMMUNICATIONS LIMITED. .................................................. 19

3.2 MISSION AND VISION OF BANGLALINK ............................................................................... 21

3.3 CORE VALUES.................................................................................................................................... 21

3.4 CONSUMER ANALYSIS ................................................................................................................... 22

3.5 BRAND INVENTORY ........................................................................................................................ 23

3.6 BRAND PORTFOLIO ........................................................................................................................ 24

3.7 SUMMARY OF COMPETITOR ANALYSIS................................................................................ 25

3.8 SWOT ANALYSIS OF BANGLALINK .......................................................................................... 26

BANGLALINK INTERNATIONAL ROAMING ................................................................................... 28

4.1 ROAMING .............................................................................................................................................. 29

4.2 ROLE OF MARKETING .................................................................................................................... 31

4.3 BASIC ROAMING SERVICES ......................................................................................................... 32

4.4 BASIC ROAMING PARTNERSHIP............................................................................................... 33

4.5 INTERNATIONAL ROAMING PROCESS FLOW CHART ................................................... 34


2


MY ROLES & DUTIES AS AN INTERN ................................................................................................. 35

5.1 MY DUTIES ........................................................................................................................................... 36

5.2 SUMMARY OF DUTIES .................................................................................................................... 40

THE RESEARCH .............................................................................................................................................. 41

6.1 INTRODUCTION ................................................................................................................................ 42

6.2 STATEMENT OF THE PROBLEM ............................................................................................... 45

6.3 PURPOSE OF THE STUDY ............................................................................................................. 45

6.4 LITERATURE REVIEW.................................................................................................................... 46

6.5 RESEARCH DESIGN AND METHODOLOGY........................................................................... 63

6.6 CONCEPTUAL FRAME WORK ..................................................................................................... 64

6.7 HYPOTHESIS AND RESEARCH QUESTIONS ........................................................................ 65

6.8 DATA ANALYSIS ................................................................................................................................ 66

6.9 CONCLUSION AND RECOMMENDATIONS............................................................................ 71

REFERENCES .................................................................................................................................................... 73


3


PART 1

THE REPORT


4


1.1 INTRODUCTION

The number of mobile subscribers has been increased dramatically. Over the last few years,

the number of mobile subscribers in Bangladesh has been more than or close to more than

doubling on an annual basis. The subscriber base had reached 98.593 million by mid-2013

and is continuing to grow at a fast rate. And the strong growth seemed likely to continue with

the drive that has been developed on the back of the government's deregulation process. The

competitive environment has further intensified due to the entry of new operators into the

market. Individually, Bangladeshs leading mobile operator, Grameenphone, has 41.009

Million customers, Banglalink has 25.848 Million, Robi has 21.291Million and Airtel has 7.3

Million subscribers. On the other side, Citycell, Bangladesh oldest mobile operator, has

added 1.6 Million subscribers. The reasons behind this growth rate was largely due to

declining call rates, falling prices of handsets and rising competition among operators.

Consequently, the mobile phones become cheaper and affordable for people in the country

with the increase in disposable income that improves the quality of life in Bangladesh. People

are showing interest in new technologies like Internet service on mobile phone. Besides,

mobile companies are also adding new technologies in their services as a result more and

more customers are buying mobile phones.

Thus it becomes a high concern for the companies to stay alive and win the market share by

making the customer more loyal to their firms. As competition increases, customers

bargaining power gets stronger, and building trust and image becomes more important,

companies should put more focus on factors affecting loyalty among consumers. For this

reason, the objective of the study is set to establish a frame work which will identify the

impact of customer loyalty of mobile phone operators through communication, pricing, VAS,

Convenience, Sales Promotion and Customer care. Besides, in the context of Bangladesh, no


5


research works has ever been conducted in these mentioned areas. Therefore, it is obviously a

commensurate step for the researcher to examine the impact of the independent variables, on

customer loyalty in the mobile phone operator industry in Bangladesh.

1.2 ORIGIN OF THE REPORT

This report is an internship report prepared as a requirement for the completion of the

BBA program. The primary goal of the internship was to provide an on the job exposure to

the student and an opportunity for translation of theoretical conceptions in real life situation.

The students are placed in enterprises, organizations, research institutions as well as

development projects. In this connection, after the completions of the BBA program, I was

assigned to the Marketing Department of Banglalink for practical orientation. I chose the

topic An assessment of customer loyalty for Banglalink for my internship report under the

supervision of Mr. Ahmed Minhazul Arefin. And also guided by Mr. Shamnoon Muheb

Chowdhury. Manager, High Value & International Roaming.

1.3 WORK SCHEDULE

Company Department Joining Date Exit Date

Banglalink Digital

Communications LTD.

Marketing

International Roaming

15th September

2013

14th

December

2013

1.4 OBJECTIVES OF THE STUDY

The objective of the study is to gather practical knowledge on telecom industry and

operation. This internship gives us a chance to co-ordinate with the theoretical knowledge


6


and the practical experience. The following are of objective for internship in a telecom

company:

To apply theoretical knowledge in the practical field.

To know the international roaming operation.

To know the process of international roaming agreements and how it runs.

1.5 METHODOLOGY OF THE STUDY

For smooth and accurate study everyone has to follow some rules & regulations. The study

inputs were collected from two sources:

Primary sources Secondary sources

Practical desk work

Face to face conversation with the

line manager and other employees.

Direct observations

Annual report of Banglalink.

Files & Folders

Guide Books

Websites

Different journals by various

employees from different departments

of Banglalink.

1.6 SCOPE OF THE REPORT

The report covers the aspects of international roaming, and a conclusive research with the

assessment of customer loyalty for Banglalink.


7


1.7 LIMITATIONS

There were certain limitations while conducting the study. These are summarized below:

Work pressure in the office was another limitation restricting this report from

being more detailed or analytical.

Confidentiality of information was another barrier that hindered the study.

Every organization has its own secrecy that is not revealed to someone outside

the organization. While collecting data at Banglalink, personnel did not

disclose enough information for the sake of confidentiality rule of the

organization.


8


PART 2

BANGLADESH TELECOM

INDUSTRY


9


2.1 BACKGROUND OF THE INDUSTRIES

Bangladesh was the first South Asian country to adopt cellular technology back in 1993 by

introducing Advanced Mobile Phone System (AMPS). In fact, the first mobile license was

issued back in 1989 but it took several years to launch the services. The network coverage

and number of subscribers had remained very limited due to exorbitantly high subscription

cost and call tariff.

In 1996, the then government led by Prime Minister Shiekh Hasina, considering the

monopolistic environment prevailing in the sector, awarded three GSM licenses aimed at

breaking the monopoly and making the cellular technology affordable to the general masses.

Since then, the country's cellular industry never looked back, now it has turned into the

largest infrastructure provider during the last decade as sub sector within telecom sector. This

sub-sector has created new opportunities by generating employment, facilitating education

and health services for common people.

The mobile communications sector in Bangladesh is one of the fastest growing industries and

has helped boost the economic and social development in the country in three main ways:

By providing value-added services and creating employment from direct/indirect

firms in the telecommunications sector

Increased productivity in businesses as a result of mobile phone usage

Increasing the involvement and engagement of its population with news and current

affairs

This is borne out by key economic indicators. "The inflow of foreign direct investment (FDI)

grew by 26 per cent with telecommunication sector making highest growth in the 2008-09


10


fiscal years over that of the previous fiscal. A total of around US $ 430 million was invested

in the country's telecommunication sector, particularly by fast-growing mobile phone

companies in FY 09," a recent study of Bangladesh Bank reveals. Investment from this

industry as of December 2008 stands around BDT 30,000 (Thirty Thousand) crore.

Contributions of mobile industry to the National Exchequer are worth more than BDT 20,000

(Twenty Thousand) crore, as of December '08. It has generated direct and indirect

employment of 6,75,000 (six lakh seventy five thousand) people till 2006-07 FY which has

increased further in recent years.

The mobile phone sector has also made possible the availability of data enabling services

across Bangladesh. Mobile internet has helped, and will likely continue, to bridge the digital

divide between people with access to information and services, and those without paving the

way for materializing the dream of "Digital Bangladesh". This is especially also given the

greater mobile coverage reaching 97% of the population which extends into areas beyond the

fixed-lines network.

The cellular industry has influenced everyday-life of the millions and made communication

easier which has great impact on the economy of the country. As of today, the industry, all by

itself contributes 8% of the National Revenue (2008) and invested highest amount of FDI

(59%) as per the Bangladesh Bank report (2008).


11


Following are some highlights of the contributions of the telecom sector of Bangladesh:

Growth over a decade - from 1997 to July'09:

Access to telecom was only four lac people, tele-density less than 0.4% in 1997

At present about 47.97 Million (4.7 crore) people have access to affordable

telecommunication services and tele-density is more than 32%.

Telecom voice market in Bangladesh is dominated by Mobile phone sub-sector and its

percentage is 97% while PSTN (land phone) is 3 % only, of which BTCL represents 2% and

all private PSTN is 1%.

Telecom Market Scenario (EoQ1 '08):

Total Telecom Penetration is 26.73%

Total Mobile Penetration is 25.95%

Total internet Penetration is 0.3% (2006).

Improved life and business Support:

Lifestyle includes stock/agri info, telemedicine, news update, utility bill payment,

SMS & MMS etc.

Business includes access to internet, mobile e-mail, data access, SMS banking, mobile

fax, Edge/GPRS, International Roaming etc.

Providing services at affordable price:

Call charges - one of the lowest in the world


12


Low income group can now afford mobile phone services across the country.

Internet : the step forward is dependent on mobile industry

Internet penetration in Bangladesh is the lowest in the region

Among the 6 million internet users, approx. 90% uses Mobile internet which means more

mobile penetration will create more internet access for the people of Bangladesh

Increased mobile penetration will help in upward access to Voice & Data, E-health service

for 24hours in remote areas. It opens the door for Medical advice, E-education - access to

educational information, E-Governance, E-payment, E-banking and Agri-service - access to

agriculture information.

Bangladesh was the first South Asian country to adopt cellular technology back in 1993 by

introducing Advanced Mobile Phone System (AMPS). In fact, the first mobile license was

issued back in 1989 but it took several years to launch the services. The network coverage

and number of subscribers had remained very limited due to exorbitantly high subscription

cost and call tariff.


13


2.2 KEY HIGHLIGHTS

Bangladeshs mobile market passed 100 million subscribers in early 2013 as

penetration reached 67%.

This had been preceded by a five-year period in which the country saw mobile

subscriber numbers grew almost 20 times.

Of the mobile operators, GrameenPhone was far and away the leader, claiming 41

million subscribers, or 41% of the total mobile subscriber base, by end-2012, despite

the best commercial efforts of its five competitors.

Airtel Bangladesh and Robi Axiata had both seen rapid growth in their respective

mobile subscriber bases during 2012.

Coming into 2013, internet user penetration remained relatively low and internet

subscription rates were even lower.

Although broadband internet remains almost non-existent in Bangladesh, following

the granting of a number of WiMAX licences, there were early signs that the market

was about to change as the new WiMAX services were rolled out and started to attract

customers.

At the same time, mobile internet was playing a major role in providing online access

to the nation, as mobile operators offered 2.5G-based services for connecting to the

internet.

The fixed-line market experienced a major setback in the first half of 2010 when the

regulator shut down five operators; the action had been taken as part of a major move

against illegal VoIP services.

The market had effectively recovered from the setback by 2012 and a number of

cancelled fixed-line licences had been revalidated.


14


The first 3G licence in the country was awarded to the state-owned operator, Teletalk,

which duly launched its 3G offering in September 2012.

The 3G licensing for private operators was expected to see an auction take place in

early 2013.

2.3 BANGLADESH - KEY TELECOM PARAMETERS 2012 - 2013

Category 2012 2013

Fixed-line services:

Total No. of subscribers 1.6 million 1.7 million

Internet:

Total No. of subscribers 400,000 500,000

Mobile services:

Total No. of subscribers 99 million 112 million


15


2.4 THE PLAYERS

Company Brief Introduction

Grameenphone

Widely known as GP, is the leading telecommunications service provider in Bangladesh.

With more than 40.33 million subscribers (as of January 2013), Grameenphone is the

largest mobile phone operator in the country. It is a joint venture enterprise between

Telenor and Grameen Telecom Corporation, a non-profit sister concern of the

internationally acclaimed microfinance organization and community development bank

Grameen Bank. Telenor, the largest telecommunications company in Norway, owns

55.8% shares of Grameenphone; Grameen Telecom owns 34.2% and the remaining 10%

is publicly held. With the slogan Go Beyond, Grameenphone promises its customers to

bring the best of communication technologies so that they can Go Beyond.

Banglalink

The second largest cellular service provider in Bangladesh after Grameenphone. As of

April 2012. Banglalink had 1.03 million connections until December, 2005. The number

of Banglalink users increased by 257% and stood at 3.64 million at the end of 2006,

making it the fastest growing operator in the world of that year. In August, 2006,

Banglalink became the first company to provide free incoming calls from BTTB for both

postpaid and prepaid connections. On August 20, 2008, Banglalink got past the landmark

of 10 million subscriber base.

Robi

Formerly Aktel, is a joint venture between Axiata Group Berhad, Malaysia (70%) and

NTT DoCoMo Inc, Japan (30%). Robi is one of the largest mobile phone operators in

Bangladesh with more than 20 million subscribers as of August 2012.

Robi boasts of the widest international roaming service in the market, connecting over

500 operators across 207 countries. It is the first operator in the country to introduce

GPRS. Robi uses GSM 900/1800 MHz standard and operates on allocated 12.8 MHz

frequency spectrum.


16


Airtel

A GSM-based cellular operator in Bangladesh. Airtel is the sixth mobile phone carrier to

enter the Bangladesh market, and originally launched commercial operations under the

brand name "Warid Telecom" on May 10, 2007. Warid Telecom International LLC, an

Abu Dhabi based consortium, sold a majority 70% stake in the company to India's

Bharti Airtel Limited for US$300 million. Bharti Airtel Limited took management

control of the company and its board, and rebranded the company's services under its

own airtel brand from December 20, 2010. The Bangladesh Telecommunication

Regulatory Commission approved the deal on Jan 4, 2010. Bharti Airtel made a fresh

investment of USD 300 million to rapidly expand the operations of Warid Telecom and

have management and board control of the company. This is the largest investment in

Bangladesh by an Indian company. Dhabi Group continues as a strategic partner

retaining 30% shareholding and has its nominees on the Board of the Company.

Tele Talk

A GSM based state-owned mobile phone company in Bangladesh. TeleTalk started

operating on 29 December 2004. It is a Public Limited Company of Bangladesh

Government, the state-owned telephone operator. TeleTalk provided GPRS and EDGE

internet connectivity and from 14 October 2012 HSDPA/3G which is the latest cellular

information service . Teletalk is the first operator in the country that gave BTTB (now

BTCL) incoming facility to its subscribers. Teletalk is the 6th mobile phone operator in

Bangladesh with more than 1.897 million subscribers as of May 2013.

City Cell

The first mobile communications company of Bangladesh. It is the only CDMA network

operator in the country. As of 1 March 2008, Citycell's total mobile subscriber base is

1.56 million, up 137 per cent or 680,000 from two years ago, giving it the best growth

rate of the company till date. Citycell is currently owned by Singtel with 45% stake and

the rest 55% owned by Pacific Group and Far East Telecom. By the end of 2007

Citycell had refurbished its old brand identity and introduced a new logo and corporate

identity; the new logo is very reminiscent of the old logo. However the slogan has

remained unchanged "because we care". As of April 2012, Citycell has 1.801 million

subscribers.


17


2.5 THE MARKET SHARE

GP 42%

Banglalink 26%

Robi 22%

Airtel 7%

Citycell 1%

Teletalk 2%

bangladesh Telecom industry. (june 2013)


18


PART 3

BANGLALINK


19


3.1 BANGLALINK DIGITAL COMMUNICATIONS LIMITED.

Banglalink digital communications limited is fully owned by telecom ventures ltd.

(previously Orascom telecom ventures limited) of Malta, which is a fully owned subsidiary of

global telecom holding s.a.e. (formerly known as Orascom telecom holding s.a.e.)

(www.orascomtelecom.com). Following business combination in april 2011 between

Vimpelcom ltd and wind telecom s.p.a, Vimpelcom owns 51.92% shares of global telecom

holding s.a.e. (formerly known as Orascom telecom holding s.a.e.). Vimpelcom

(www.vimpelcom.com) is one of the worlds largest integrated telecommunications services

operators providing voice and data services through a range of traditional and broadband

mobile and fixed technologies in Russia, Italy, Ukraine, Kazakhstan, Uzbekistan, Tajikistan,

Armenia, Georgia, Kyrgyzstan, Laos, Algeria, Pakistan, Burundi, Zimbabwe, Central African

Republic, Canada and bangladesh. Vimpelcom is headquartered in Amsterdam, the

Netherlands and listed as an ad on the New York stock exchange under the symbol "VIP".

Since Banglalinks launch in February 2005, its impact was felt immediately: overnight

mobile telephony became an affordable option for customers across a wide range of market

segments.

Banglalinks success was based on a simple mission: "bringing mobile telephony to the

masses" which was the cornerstone of its strategy. Banglalink changed the mobile phone

status from luxury to a necessity and brought mobile telephone to the general people of

Bangladesh and made a place in their hearts. The mobile phone has become the symbol for

the positive change in Bangladesh.

This positive change that is quite correctly attributed to banglalink, has become the corporate

positioning of banglalink and is translated in their slogan "making a difference" or "din


20


bodol"- "making a difference" not only in the telecom industry, but also through its products

and services, to the lives of its customers. This corporate stance of "making a difference" has

been reflected in everything banglalink does.

Banglalink attained 1 million subscribers by December 2005 and 3 million subscribers in

October 2006. In less than two years which is by December 2007, banglalink overtook Aktel

to become the second largest operator in Bangladesh with more than 7.1 million customers.

Banglalink currently has 27.07 million subscribers as of June 2013, representing a market

share of 25.7%.

Banglalinks growth over the preceding years have been fuelled with innovative products

and services targeting different market segments, aggressive improvement of network quality

and dedicated customer care, creating an extensive distribution network across the country,

and establishing a strong brand that emotionally connected customers with banglalink.


21


3.2 MISSION AND VISION OF BANGLALINK

Mission

Banglalink understands customer needs best and will create and

deliver appropriate communication services to improve peoples lives

and make them easier.

Vision

To become one of the worlds leading telecom operators providing

the best quality services to our customers.

3.3 CORE VALUES

All employees of Banglalink demonstrate the following values in their day-to-day activities

to ensure making a difference in every area of operations:

Straightforward We say what we do & we do what we say

Reliable A promise made is a promise kept

Innovative Whatever we do will be useful and useable

Passionate We always deliver with honesty and passion

Banglalink Digital Communications Ltd.

Type Subsidiary

Parent http://en.wikipedia.org/wiki/Image:Flag_of_Egypt.svgVimpelcom-Russia

Founded 1999

Headquarters http://en.wikipedia.org/wiki/Image:Flag_of_Bangladesh.svgTiger House, House # SW(H)04, Gulshan Avenue, Gulshan Model Town, Dhaka, Bangladesh

Area served 62 districts and 447 thanas

Industry Telecommunication

Products Telephony

Slogan Start something new

Website http://www.Banglalinkgsm.com


22


3.4 CONSUMER ANALYSIS

Target Marketing

Its important to remember that the focus of marketing is people. If accompany is

concentrating its efforts on its product or profit only, it will miss the mark. The term target

market is used because that market that group of people is the bulls eye at which you aim

all your marketing efforts.

Market Segmentation Of Banglalink

The purpose for segmenting a market is to allow the marketing/sales program to focus on the

subset of prospects that are most likely to purchase it is offering. If done properly this will

help to insure the highest return for the marketing/sales expenditures.

Banglalink deals in an oligopoly market structure. Here the mobile companies have little or

no difference in commodities they sell. Therefore the packaging and marketing positioning

plays a vital role in business success.

Banglalink has segmented its market by using multiple bases. It has primarily done that

because of demographic aspect. The key factors here are:

Gender

Income

Occupation

Banglalink then went for Behavioral segmentation, based on:

User status

User rate


23


3.5 BRAND INVENTORY

Identification of Brand Elements

Elements Details

Brand

names

Like any brand element, Banglalink brand

name is chosen with the six general criteria of

memorability, meaningfulness, likability,

transferability, adaptability, and protectability in

mind.

URLs

URLs (uniform resource locators) specify

locations of pages on the web and are also

commonly referred to as domain names.

www.banglalinkgsm.com

Logos and

symbols

Characters

Slogans

Start Something New

Jingles

Banglalink jingles are musical messages written around the brand ; typically composed

by professional songwriters, they often have enough catchy hooks and choruses to

become almost permanently registered in the minds of listenerssometimes whether

they want them to or not!

Packaging

From the perspective of both the firm and consumers, Banglalink packaging has

achieved a number of objectives:

Identify the brand

Convey descriptive and persuasive information

Facilitate product transportation and protection

Assist at-home storage

Aid product consumption

Color Banglalink has made a familiarity with the color

combination of its brand.

ORANGE, BLACK (tiger stripes) And

White


24


3.6 BRAND PORTFOLIO

Banglalink Brand Name Details

Post Paid BANGLALINK INSPIRE Banglalink inspire brings special new features for

post-paid subscribers with remarkably low call rates,

along with the many fnf numbers and many other

services and facilities!

BANGLALINK SME Banglalink SME package offers attractive tariffs and a

complete package customized to suit the needs of

small and medium enterprises. It is a very simple

package that will help your business flourish by

minimizing the cost of your communication.

Pre-Paid BANGLALINK DESH 10 paisa/10 seconds in banglalink fnf numbers, 24

hours

Sub Brand BANGLALINK DESH EK RATE 18 paisa/10 second to all operators, 24 hours

BANGLALINK DESH EK RATE DARUN 12 paisa/10 second to any number, 24 hours

BANGLALINK DESH 7 FNF Lowest 10 paisa/10 second in 7 fnf numbers

1 SECOND PULSE Banglalink has introduced 1 second pulse for its

customers. The new banglalink desh 1 second

package provides customers 1 second pulse to any

operator any time of day. This means customers will

now only pay as much as they talk and the charge is

only 2 paisa/sec any time in any local number.

BANGLALINK DESH 10 FNF To accommodate your big list of friends, banglalink

presents 10 fnf package. Now you can enjoy 4.5

paisa/10 seconds to one special banglalink number

and as low as 9 paisa/10 seconds to 9 fnfs (any

operator)!

BANGLALINK

PRE- PAID BANGLALINK DESH

DESH RONG

BANGLALINK DESH EK RATE

BANGLALINK DESH EKRATE DARUN

BANGLALINK DESH 7 FNF

1 SECOND PULSE

BANGLALINK DESH 10 FNF

POST-PAID

BANGLALINK INSPIRE

BANGLALINK SME


25


3.7 SUMMARY OF COMPETITOR ANALYSIS

It is a cutthroat market in the telecom industry; currently there are four key players in the

market, GP, Banglalink, Airtel, Robi. As Banglalink is 2nd

in the industry, the competition is

high. The company has to be both defensive and aggressive in the business.

The table below will show the basic differences between the key companies.

Company Name Market Share Logo

Grameen Phone 42

Banglalink 26

Airtel 7

Robi 22

City Cell 1

TeleTalk 2

The Companies and their respective market share:

GP 42%

Banglalink 26%

Robi 22%

Airtel 7%

Citycell 1%

Teletalk 2% Bangladesh Telecom

marketshare


26


3.8 SWOT ANALYSIS OF BANGLALINK

Strengths:

Banglalink has some separate strength by which it is rapidly increasing its market share and

attracting customer.

Low call rate

Aggressiveness

Large network coverage

Large investment

Low SIM rate

Good number of media partner

Weakness:

It also has some weakness by which its performance is being greatly hampered.

Bad reputation Sheba

Network Coverage

Opportunities:

Banglalink is not in good position comparing with other telecom Organization yet. But still it

has various opportunities .Proper utilization of these opportunities can make them number

one telecom organization in Bangladesh.

Good amount of reinvestment

Good support from mother company

High technological networking system


27


Large number of customer

Could develop new product

Profit margin will be good

Could seek best supplier deals

Threats:

There also some future threats for Banglalink, which can kick off Banglalink from

operations. So, Banglalink should tactfully overcome these threats

Existing competitor

Increase of SIM tax

Legislation could impact.

Existing core business distribution risk.


28


PART 4

BANGLALINK

INTERNATIONAL

ROAMING


29


4.1 ROAMING

Roaming is defined as the ability for wireless customers to automatically make and receive

voice calls, send and receive data, or access other services when travelling outside the

geographical coverage area of their own home network, by means of using a visited

network.

(International) Roaming enables the clients of one network operator to use the services of

another operator where both networks have a commercial agreement in place to permit this,

once all testing and technical implementation are completed.

The roaming process is split into two main phases where different activities are carried out. In

the pre-commercial phase the agreement is negotiated plus the network and IT elements are

implemented and tested. When these activities are successfully completed, then commercial

roaming can begin and customers can use each others networks.

While in most cases roaming involves bi-lateral, two-way roaming, in some cases, unilateral

or one way roaming takes place either for technical or commercial reasons.

Three frequent service classifications encountered in roaming namely GSM, International

GPRS Roaming and 3GSM Roaming. The following are the definitions of these service

classifications and further details about implementing these services are given in their

respective sections.

GSM shall mean the Global System for Mobile Communications and future evolutions

thereof (e.g. including but not limited to, GSM, DCS, PCS and UMTS or its equivalent), as

defined by the relevant technical specifications of the European Telecommunications

Standards Institute ("ETSI"), Third Generation Partnership Project ("3GPP") and/or other


30


standards development organizations together with other relevant documents and the

Permanent Process Documents, as recognized by the GSM Association;

"International GPRS Roaming" shall mean international General Packet Radio Service

Roaming, providing packet mode transmission between PMNs and Interworking with

external networks. International GPRS Roaming allows the service subscriber to send and

receive data in an end-to-end packet transfer mode, without utilizing network resources in

circuit switched mode, outside of their HPMN. For the avoidance of doubt, and in

accordance with the relevant licensing requirements, International GPRS Roaming shall not

prevent the user's operation of other GSM Services.

"3GSM Roaming " shall mean temporary granting of GSM services (see under GSM above)

by a PMN other than the HPMN. International 3GSM roaming allows the serviced

subscriber to send and receive data in an end-to-end packet transfer mode outside their

HPMN and also make outgoing and incoming circuit switched connections, such as voice

calls.


31


4.2 ROLE OF MARKETING

The role of the Marketing team within Roaming is to design effective promotional initiatives

that incentive the increase of usage among the roamers, both Inbound (visiting roamers) and

Outbound (own customers). It is also responsible for maintaining all the company updated

with the latest roaming information.


32


4.3 BASIC ROAMING SERVICES


33


4.4 BASIC ROAMING PARTNERSHIP


34


4.5 INTERNATIONAL ROAMING PROCESS FLOW CHART


35


PART 5

MY ROLES & DUTIES AS

AN INTERN


36


5.1 MY DUTIES

Internship Details

Company Department Joining Date Exit Date

Banglalink Digital

Communications LTD.

Marketing,

International Roaming

15th September

2013

14th

December

2013

I was the intern in the marketing department, Roaming team. My roles and responsibilities

were the following:

1. Documentation

2. Maintaining the daily revenue tracking


37


My role of Documentation is explained in the below table.

Document Name Document Purpose My Role

AA12

In conjunction with AA.13 and AA.14

comprise the GSMAs standard international

roaming agreement for operators who would

like to establish BILATERAL international

roaming services. AA.12 contains the general

terms and conditions that binds the 2 parties.

I would go through the

documents and get the

document signed by both

parties. And update the

DATA BASE for future

reference.

AA13

Begins with the description on agreement

management principles on how to update

roaming agreement; i.e. Info on Billing Data,

Settlement Procedure, Testing, and Fraud.

AA.13 is the common annexes that binds the

2 operators in a Bilateral roaming

arrangement






reference.


38


Document Name Document Purpose My Role

AA14

Contains operator specific information, some

of the information is classified as Operator

Confidential, such as the Inter-Operator

Tariff.






reference.

IR21

Contains operator specific technical details;

i.e. GSMA roaming database for each

operator






reference.

CLL

CLL Commercial Launch Letter

NRTRDE

Fraud prevention document Get the documents signed

and update DATA BASE

3G

High speed internet roaming agreement

between parties.

Get the documents signed


General

Roaming

The regular roaming agreement, which is

services such as VOICE CALL, SMS,

GPRS.

Get the documents signed



39


My role of Maintaining Daily Revenue Tracking is explained below:

I would get raw data from a Banglalink source, and divide the total revenue among VOICE

CALL IN and OUT, SMS IN and OUT, and GPRS data unit used.

Then input the data and compile daily revenue in MS EXCEL. The table below shows the

calculation.

SERVICE VOICE CALL SMS GPRS

IN OUT IN OUT DATA

USAGE 100 min 60 min 40 Unit 60 Unit 5 GB

REVENUE 1000 1200 200 480 100 2980

REVENUE/UNIT $10 $20 $5 $7 $20

*All values are not real.


40


5.2 SUMMARY OF DUTIES

The diagram below will summarize my internship duties in Banglalink.

INTERN

DOCUMENTATION REVENUE

TRACKING

AA12 DAILY

REVENUE

AA13

AA14

IR21

CLL

MONTHLY

REVENUE


41


PART 6

THE RESEARCH


42


6.1 INTRODUCTION

Economic growth in Bangladesh has contributed significantly to improvements in the quality

of life and spending power of an increasing share of the population (Hossain, 2010a). Today,

telecommunication is an inseparable part of our everyday life. Besides telephone, now-a-days

mobile phones are playing a great role to communicate from one place to another place. The

phone is not only used for making calls, among many other functions it is used for

communicating through text-messages, multi-media messages, as well as to connect us to the

internet. The opportunities that lie in the telecom market seem endless and the growing

demand for mobile telephony systems is creating a world-wide market. Actors in this industry

are seeking the most profitable markets throughout the world.

In Bangladesh, mobile phone services are the fast growing services in telecommunication

industry. This sector has been showing an inspiring growth for the last few years. The

number of mobile phone subscribers has steadily increased and many have begun to think

that having a mobile phone is a necessary, not a luxury (Hossain, 2010b). It is projected that

Bangladesh will be the third biggest telecom market in Asia after China and India (Uddin and

Akhter, 2012; Hasan, 2008). The total number of Mobile Phone subscribers has reached

98.593 million at the end of February 2013 (BTRC, 2013). More than half of the people of

Bangladesh have been engaged in using mobile phone services. This enormous market

coverage by Wireless Telecom Industry has proved that, though the Peoples Republic of

Bangladesh is a country of a growing economy with a very low per-capita income, buying

power of customer could not impose any hinder on peoples consumption of cellular data

transmission technologys services provided by the service providing operators in this

industry. Actually the market of Bangladesh, up to now, has enjoyed the wireless


43


infrastructure of remote voice communication in two main methods known as Code-Division

Multiple Access (CDMA) and Global System for Mobile communications (GSM).

However, there are only six service providing operators namely, Grameen Phone Limited

(GP),

Banglalink Digital Communications Limited (Banglalink), Robi Axiata Limited (Robi),

Airtel Bangladesh Limited (Airtel), Teletalk Bangladesh Limited (Teletalk) and Pacific

Bangladesh Telecom Limited (Citycell) in this industry. The mobile phone subscribers of

different company are shown in Table 1.Citycell is the sole service provider in CDMA

method and other five operators provide services to their customers in GSM method. Mobile

phone operators provide voice service and Value Added Services (VAS) including Short

Message Service (SMS), Multimedia Message Service (MMS), ringtone, games, electronic

transaction and web browsing. Different foreign companies: Telenor of Norway, Axiata

Group Berhad of Malaysia, NTT DOCOMO INC from Japan and Abu Dhabi Group and

SingTel Group were attracted to this growing market.

It is well accepted that customer satisfaction is both a goal and a marketing tool for customer-

centered companies, (Kotler and Keller, 2012). Oliver (1997) defines customer satisfaction as

the consumers fulfillment response. He also considers customer satisfaction as a judgment

that a product or service feature, or the product or service itself, provides a pleasurable level

of consumption related fulfillment. In other words, customer satisfaction is the customers

evaluation of a product or service in terms of whether that product or service has met their

needs and expectation (Zeithaml et al., 2008). It is believed that increasing levels of

customer satisfaction can be associated with customer loyalty. Loyalty is a deeply held

commitment to rebuy or repatronize a preferred product or service in the future despite


44


situational influences and marketing efforts having the potential to cause switching behavior

(Kotler and Keller, 2012).

The situation makes mobile telecommunication companies not only to promote their service

quality, but also change their marketing core strategy to holding their existing customers by

enhancing and optimizing the customer loyalty (Hao et al., 2009). On the one hand, the

companies have to invest quite much time and money to attract new customers and this

process always go through a longer time period associated with uncertainty and risks. On the

other hand, the cost of attracting a new customer is estimated to be five times the cost of

keeping a current customer happy (Kotler and Keller, 2012). So it becomes significant for

telecom companies to identify factors of services that affect on customer loyalty and in turn

creates loyal customers by satisfying them in the context of Bangladesh.

Operators Active Scribers (million)

Grameen Phone Ltd. (GP) 41.009

Banglalink Digital Communications Ltd (BANGLALINK) 25.848

Robi Axiata Ltd. (ROBI) 21.291

Airtel Bangladesh Ltd. (AIRTEL) 7.3

Teletalk Bangladesh Ltd. (TELETALK) 1.692

Pacific Bangladesh Telecom Ltd. (CITYCELL) 1.459

Total 98.593

Table1: Active Subscribers (BTRC 2013)

This present study aims to explore the influence of customer satisfaction (towards services

offered by the mobile telecom operators) on customer loyalty. Specifically, this study tries: to

find out customers satisfaction with a variety of services provided by operators; to find out

the interrelationship between satisfaction of services (communication, price, value added

service, convenience, sales-promotion and customer service) and customer loyalty.


45


6.2 STATEMENT OF THE PROBLEM

In this competitive telecom industry, customer retention is one of the most important factors

for the telecom companies in order to sustain in this market. It has been found that many

subscribers switch their mobile operator frequently. And this causes damages to the current

mobile operator.

So in order for telecom companies to have a smooth run, it must obtain loyal customers. And

the statement of the problem for this study is; making an ordinary customer to a loyal

customer.

6.3 PURPOSE OF THE STUDY

The purpose of this study is to find what factor can make an ordinary customer in to a loyal

customer. In doing so this paper can help the telecom companies to put emphasis on the

variables, preferred by the customers and increase the customer loyalty.


46


6.4 LITERATURE REVIEW

Like every research this research paper variables and there are two major types of variables;

dependent variables and Independent variables. Firstly let us understand what a variable is; a

variable is an object, event, idea, feeling, time, or any other type of category you are trying to

measure. There are two types of variables-independent and dependent variables. An

independent variable is exactly what it sounds like. It is a variable that stands alone and is not

changed by the other variables you are trying to measure. For example, someone's age might

be an independent variable. (What are Independent and Dependent Variables?, 2011) Other

factors (such as what they eat, how much they go to school, how much television they watch)

are not going to change a person's age. In fact, when you are looking for some kind of

relationship between variables you are trying to see if the independent variable causes some

kind of change in the other variables, or dependent variables. Just like an independent

variable, a dependent variable is exactly what it sounds like. It is something that depends on

other factors. For example, a test score could be a dependent variable because it could change

depending on several factors such as how much you studied, how much sleep you got the

night before you took the test, or even how hungry you were when you took it. Usually when

you are looking for a relationship between two things you are trying to find out what makes

the dependent variable change the way it does (What Is Services Marketing?, 2012).In this

paper the independent variables are Reliability, Assurance, Tangibles, Empathy, and

Responsiveness. Moreover, the dependent variables are customer satisfaction. Moreover, the

title of this paper is An assessment of Customer Loyalty for Banglalink. so lets break

down the title for a more transparent understanding. The main theme of this paper is to find

out how to make customer satisfaction possible and attain CUSTOMER LOYALTY.


47


The Concept of Customer Loyalty

The need for customer loyalty in business has been recognized by many scholars. Customer

loyalty is one of the most frequently discussed subjects in the marketing and service literature

(Eshghi et al., 2007; Heskett and Sasser, 2010). There is a plethora of definitions of loyalty

and/or customer loyalty in the extant literature. Customer loyalty is customer repeating

purchase intention to some specific products or services in the future (Jones et al., 1995). It is

making customers feel committed: When the benefits are meaningful to them, they will stay

on (Grossman, 1998). Loyalty is used to describe the willingness of a customer to continue

patronizing a firms goods and services over a long period of time and on a repeated and

preferably exclusive basis, and voluntarily recommending the firms products to friends and

associates (Lovelock, 1996). Customer loyalty is the result of an organizations creating a

benefit for customers so that they will maintain and increasingly repeat business with the

organization (Anderson and Jacobsen, 2000). From the forgoing, loyalty in GSM market is

concerned with the length of time and the frequency with which customers stay and remain

on a network. The longer the time a customer remains on and the more frequently a customer

patronizes a GSM network, the more that customer becomes loyal. It is therefore the desire of

all GSM firms in Bangladesh to retain large number of their customers on their networks.

Customer loyalty provides the foundation for a companys sustained competitive edge.

Different researchers have given credence to the reason why developing customer loyalty is

beneficial to firms, including GSM providers. Developing and increasing loyalty is a crucial

factor in companies growth and performance (Reichheld, 1996 and Lee and Cunningham,

2001). Customer loyalty is one of the key factors and can help a company achieve long-term

success (Andres, 2007). The significance of customer loyalty is that it is closely related to the

companys continued survival and to strong future growth (Fornell, 1992). Hence, for a


48


company to maintain a stable profit level when subscription level has reached saturation

point, the market is mature and competition is fierce, a defensive strategy which strives to

retain existing customers is more important than an aggressive one (Fornell, 1992 and Ahmad

and Buttle, 2002). Ndubisi (2005) and Pfeifer (2005) point out that the cost of serving a loyal

customer is five or six times less than a new customer. Walsh et al. (2005) state that it is

better to look after the existing customer before acquiring new customers. From the above, it

is evident that a telecom firm that promotes customer loyalty has a lot to benefit from. The

current saturated level of GSM growth and intense competition in Bangladesh has left the

operators with no option other than seeking to maintain the existing customers and lock them

into loyalty. Bulk of the current marketing efforts by these firms is aimed at retaining and

making customers loyal.

Determinants of Customer Loyalty

Since customer loyalty has become paramount for organizations, a major concern is to find

out the determinants or drivers of customer loyalty (Kumar et al., 2011). This section

discusses the determinants of customer loyalty.

Service Quality

Defining the concept of service quality the most important criteria in the economic

development of international companies, whereas under different circumstances it has been

prevented the emergence of a universal definition ( Reeves and Bednar, 1994). In addition, it

is difficult to define the service quality as opposed to the quality of good. The general

definition of Quality is Satisfying customers requirements. (Ghobadian et al., 1994) The

definition of service quality from the customers viewpoint is as follows (Parasuraman et al.,

1998). Service quality is an inference regarding the superiority of a product or service based


49


on a rational assessment of characteristics or attributes, or an affective judgment or emotional

response similar to an attitude

It is a critical element of customer perceptions. In the case of pure service (e.g. health care,

etc) service quality will be dominant element in the customers evaluation. (Valarie A.

Zeithaml, Mary Jo Bitner, 2011)

RELATION BETWEEN COMMUNICATION AND CUSTOMER LOYALTY

'Improving customer loyalty' has been the traditional mantra of the call center since inception.

As economic and regulatory pressures continue to squeeze the enterprise, however, the need

to ensure customer satisfaction has reached a tipping point and has made the art of customer

communications a tenuous proposition. Too often, customer service professionals are

consumed with efforts to put out the fires of dissatisfaction, spending the majority of their

time resolving customer complaints and problems. Few call centers have embraced the idea

of proactive customer care ' the ability to reach out to customers before they have a chance to

become a frustrated and dissatisfied incoming caller.

As call centers become more ingrained in strategic initiatives, they require innovative

thinking and models that leverage proactive customer outreach programs that are cost-

effective and efficient at mitigating customer service issues before they arise. Customer

notification services can be an ideal solution for companies looking to deliver customer

welcome calls, payment reminders, new service/upgrade information and various other

personalized and value-added touches.

By proactively making contact at each step in the customer relationship lifecycle, businesses

can engender heightened customer loyalty while diffusing potentially frustrating situations


50


and more effectively allocating agent time and resources.

When a customer purchases goods or services, he or she begins an interaction and ongoing

business relationship with the enterprise. Good businesses recognize the potential for

profitably lies in how it maintains and strengthens the customer relationship over time.

Results are generated when the enterprise makes it easy for a customer to do business with it.

Because customers generally place significant value on the quality and speed of interactions,

the quicker and easier the enterprise can make it for the customer, the more likely he or she

will remain a loyal consumer.

Inbound calls consume the majority of the bandwidth that most call centers have, impacting

staffing and costs. The inability to preempt inbound inquiries can also have a negative impact

on customer satisfaction as well. The more times a customer has to call to resolve a problem

or obtain information, the more likely he or she is to become frustrated or dissatisfied with

the business, jeopardizing the relationship. As many wireless, credit card and ISP companies

have learned over the past few years, increased customer frustration leads to churn. Given the

enormous economic and competitive pressures most businesses face, combined with the

mounting choices consumers have, preventing customer churn has become a mantra readily

embraced across all industries.

To combat frustration and customer churn, more companies are seeking ways that will enable

them to effectively communicate with the customer while significantly reducing the number

of inbound calls a contact center receives. Companies can no longer wait for the customer to

initiate the dialog regarding products and services. To effectively communicate with the

customer and diffuse the potential for negative interactions, companies need to alter

traditional businesses practices and become more proactive in the customer communication


51


arena.

For companies in any industry, a good proactive, outbound customer communications

program can be a tremendous competitive advantage. It increases customer loyalty and

retention while lowering the costs affiliated with manual or agent-based outreach. Proactive

customer care is a practice that is designed to preempt inbound calls and lessen call volume

by delivering valuable information to the customer before the need to call into a call center

arises. As with any worthwhile customer care endeavor, the first step in proactive

communication is to develop an understanding and knowledge base about the target audience.

Customer preferences should be the driver behind all proactive communications campaigns.

As demonstrated by the tremendous support and advocacy of the do-not-call list, consumers

don't want to be bothered by outbound calls of limited value. Customers need to feel as if

they are in control of how they receive communications, and deciding when, where, how and

how often they are contacted. Proactive customer care means providing customers with

options that let them control the means of communications and can be achieved by letting the

customers opt-in to such services.

Providing multiple avenues for the receipt of information provides new opportunities for

proactive customer care. Customers need to be able to tailor the means of communications by

having a device preference opt-in. Enabling a customer to tailor the means and time of

message delivery puts him or her in control of proactively receiving the information, making

repetitive calls to the call center unnecessary.

Proactively pushing the information to the customer on his or her terms lessens inbound call

volume and deflects the opportunity for frustration to set in, an important step in increasing

customer loyalty.


52


Generating customer loyalty usually means giving customers what they want. Proactive

customer communications follow this mantra by giving customers control options, varying

from how they want to be contacted to when they want it; it also means they have an

opportunity to complete transactions rather than merely receiving information.

Providing customers with the relevant information they need deflects the potential for

inbound calls. Organizations across all industries have the opportunity to provide proactive

customer care. Following are some examples.

Proactively pushing information to customers, such as account balances and expected ship

dates, alleviates the flood of routine calls that can oftentimes cripple productivity. As a result,

call centers will be able to dedicate more time to the critical problem calls and inbound

inquiries that need to be attended to due to threat of client loss.

The call center units of the enterprise are undergoing a transformation. While federal

regulations such as the do-not-call list have hampered the marketing practices of the call

center, increased competitive pressures have forced the customer care business units to

reexamine their business practices to reduce customer churn. Enterprises increasingly need to

recognize that the path to profitability often lies in maintaining and strengthening the

business relationships with customers. Customers place significant value on the quality and

speed of interactions. When these standards of measure are not met, customer frustration

results, a step in the direction of losing that customer's business.

As businesses in industries such as the credit card and wireless markets continue to see their

products and services become commoditized, the mitigating factor in achieving profitably is

increasingly becoming customer service. A happy customer is a loyal customer, and a loyal

customer tends to be a profitable customer


53


RELATION BETWEEN PRICING AND CUSTOMER LOYALTY

Price is the amount of money charged for a product or service, or the sum of the values that

customers exchange for the benefits of having or using the product or service (Kotler and

Armstrong, 2010). In a competitive market, service providers are expected to compete on

both price and quality of services and also it is necessary for the service providers to meet the

consumers requirements and expectations in price and service quality (Melody, 2001).

Nowadays, due to breathtaking competition, the telecommunication service providers tend to

offer innovative services as well as competitive prices just to attract handful magnitude of

customers (Haquea et al., 2011). Price plays a vital role in telecommunication market

especially for the mobile telecommunication service providers (Kollmann, 2000). The price

here is not limited to price of a SIM card, but also covers the price of recharge voucher, call

rate, SMS charge, the Internet charge, price of phones, and so on. A network with lower

prices has a high tendency to attract a large subscriber base leading to an impressive market

and financial performance. Kollmann (2000) states that income from the number of call

minutes determines the basic commercial success for the network providers. He also adds that

the success of the telecommunication sector in a market place largely depends on continuing

usage and pricing policies, which need to be considered on several levels. The implication of

this is that offering a high service quality is not sufficient to attract and retain customers in

the telecom market; offering the service at an attractive and affordable price is equally

necessary to achieve a competitive advantage in the market. Specifically, price has been used

by all the firms in the GSM market of Bangladesh, as a strategic tool both to attract new

subscribers and more importantly to retain current ones. In the market, where it is difficult to

perceive any significant difference in the service quality of most of the GSM firms, price


54


competition has become widespread and an important competitive tool. However, the reality

of the price competition in the market is existence of price war with subscribers traversing

from one network to another to take advantage of the latest price cut, thereby giving no room

for any loyalty to be developed. The poser is can price be used to achieve customer loyalty in

the telecommunication market? In the study concerning the behavior of mobile

telecommunication consumers, it was found that the loyalty of individual customers is

affected by price considerations (Bolton and Drew, 1991). This finding was also corroborated

by Athanassopoulos (2000) and Varki and Colgate (2001), whereby customer satisfaction

from pricing was found to positively affect overall customer satisfaction. GSM firms in

Bangladesh should charge tariff that is fair and acceptable to their subscribers, taking into

cognizance their price sensitivity. This is because there is a relationship between the level of

customer loyalty and price sensitivity. According to Xia et al. (2007) price fairness refers to

consumers assessments of whether a sellers price is reasonable, acceptable or justifiable.

Customers are satisfied and become loyal when they feel that the price they pay corresponds

to the quality of service they receive. Choi et al. (2006) found that disloyal customers were

more price sensitive, in the sense that changes in price motivated them to move to other

organizations, whereas loyal customers were not affected by price. Martn-Consuegra et al.

(2007) also found that perceived price fairness influences customer satisfaction and leads to

loyalty.


55


Theoretic model of relationship between service price and customer loyalty

After performing theoretical studies of relationship between price and customer loyalty, it can

be stated that service price is one of the customer satisfaction factors though it is not analyzed

enough. Following Consuegra, Molina and Esteban (2007), earlier performed research did not

show price factor impact to customers satisfaction and loyalty. Based on Consuegra, Molina

and Esteban (2007), Darian et.al. (2001), Henning-Thurnau et.al. (2002), Wong and Zhou

(2006) and works of other scientists, a conclusion could be made that service price has impact

to customers satisfaction and loyalty. On the other hand, it is stated that striving to determine

relationships between service price and customers loyalty the most acceptable is Consuegra,

Molina and Esteban (2007) prepared integrated model of price, satisfaction and loyalty.

Henning-Thurnau et.al. (2002) and other scientists state that satisfaction is the most important

factor having influence on customers loyalty. It could be noted that analyzing satisfaction in

the context of relationship marketing scientists state that in long term relationships a

customer expects not only high quality from the main service but also additional rewards

from continuing relations. Maintaining Henning - Thurnau et.al. (2002) opinion, confidence,

social and exclusive viewpoint rewards have influence on customers satisfaction. Based on

these attitudes, satisfaction will be measured through rewards of relationship. Confirming the

opinion of Henning-Thurnau et.al. (2002), Wong and Zhou (2006), it is stated that obligation

is one of the main dimensions of relationship marketing having influence on customers

satisfaction and hence customer loyalty.


56


RELATION BETWEEN VALUE ADDED SERVICE(VAS) AND CUSTOMER LOYALTY

Customer satisfaction level can also be influenced by VAS, for example, GPRS, Media file

sharing, news updates and so on. Finally, technology innovation refers to the feature where in

the service provider rolls out new technology on a regular basis.

Quality is conformance to requirements (Crosby, 1996). Quality is the comparison of

perceived performance and expected performance (Kang, 2006). Service quality is the

customers overall impression of the relative inferiority/superiority of an organization and its

service offerings (Bitner et al., 1990). The firm's ability to create and sustain competitive

advantage depends upon the high level of service quality provided by the service provider

(Yoo and Park, 2007). Therefore, providing a consistently high quality service quality can

differentiate one GSM provider from others. Theoretically, positive relationships between

service quality, customer satisfaction, and customer loyalty are well documented in the extant

literature. Services Quality is considered as a major determinant in customer retention and

building value relationship (Venetis and Ghauri, 2004). Service quality results in repeated

sales and increased market share, which leads to customer loyalty (Buzzell and Gale, 1987).

Providing a high service quality can lead an organization to charge premium price (Brown et

al., 1992). High service quality enhances customers favorable behavioral intentions while

simultaneously reduces their unfavorable intentions (Zeithaml et al., 1996). The implication

of the above discussion is that with high service quality, GSM customers are attracted, and

when happy and satisfied, and have an increased propensity to stay longer with their GSM

service provider. Empirical findings have shown positive relationships existing between

service quality and customer satisfaction, on one hand and between service quality and

customer loyalty, on the other hand in a number of industries. For example, Elnan and

Andersen (1999) found a positive relationship between service quality and customer


57


satisfaction in the bus industry in Norway. Coner and Gungor (2002) found that service

quality would lead towards more loyal customers in the Turkish Metropolitan retail market.

Turel and Serenko (2006) found that perceived service quality and perceived value are the

key constructs affecting the customer's satisfaction with mobile services. Satisfaction in turn

leads to customer loyalty. Zeithaml et al. (2008) develop a conceptual model that correlates

service quality, customer satisfaction and customer loyalty. The model shows that service

quality results from reliability, assurance, responsiveness, empathy and tangibles. Service

quality is determined by reliability, responsiveness, assurance, empathy, and tangibles

(Parasuraman et al., 1985). These can be considered as the determinants of the broad service

quality, but what are the specific determinants of telecommunication service quality?

Jahanzeb and Tasneem (2011) discuss these under the following broad headings:

communication guarantee, settlement service, value added service (VAS) and technology

innovation. Communication guarantee results when the quality of network of the service

provider is satisfactory and there are negligible rates of call failure. The settlement service

refers to the prompt and accurate billing service that also enhances customer satisfaction.


58


RELATION BETWEEN CUSTOMER CARE AND CUSTOMER LOYALTY

Customer service is a process that takes place between a buyer, a seller, and third party and

can influence demand in the market (Innis and La Londe, 1994). The third party may include

companies that have been licensed by a marketing company to provide customer service.

Customer care is used in a wider sense and goes far beyond the traditional role of customer

service and support; it encompasses all the functions along the entire service delivery value

chain (Katz et al., 1998). Customer service is a system of activities that comprises customer

support systems, complaint processing, speed of complaint processing, ease of reporting

complaint and friendliness when reporting complaint (Kim et al., 2004). Customer service is

one of the most important considerations in the evaluation of a supplier (Jackson et al., 1985).

A supplier's reputation for good service attracts potential customers and keeps existing

customers loyal. Good service additionally provides protection from price competition

(Hartley, 1989). Customer service can produce customer behaviors that can indicate whether

a customer will remain with or defect from an organization (Zeithaml et al., 1996).

Specifically, the high levels of competition among service providers in Bangladesh

necessitate adoption of different customer service techniques to satisfy and retain the

customer. The effectiveness of the level of customer service will enhance customer retention

and reduce switching between and among service providers (Oyeniyi and Joachim, 2008).

Therefore, customer service includes all help and assistance GSM providers offer to

customers directly or indirectly prior to, during, and/or after purchase to provide exciting

customer experience with their products. If well leveraged, it has a potential to offer a

competitive advantage to GSM service providers and make them to attract and retain

customers. GSM providers in Bangladesh provide customer through toll free customer care

line, help desk and websites. Because of its convenience, cost free and availability, majority


59


of subscribers in Bangladesh are most likely to be served by their network providers through

toll free customer care line. McDougall and Levesque (2000) found that all

telecommunication service providers in Malaysia differentiate themselves a high level of

customer service and this has become the most important and significant driver in customer

satisfaction. Lucas (2005) is of the opinion that by providing excellent customer service and

dealing with dissatisfaction as soon as it is identified, companies can ensure that customers

remain loyal and keep coming back. From the foregoing discussion, GSM providers, in

addition to the provision of a high service quality and offering of an attractive and fair price,

should also pay more than a passing attention to the delivery of high and effective customer

service/care. They should invest substantial resources on infrastructure, information

technology (IT) and human resources that would provide leverage for effective and quality

customer care. They should remember that the entire idea of customer care in the telecom-

sector is about delivery exciting customer experience.


60


RELATION BETWEEN SALES PROMOTION AND CUSTOMER LOYALTY

Sales Promotions

It has been established in literature that only consumers with repeat purchases are profitable

(Nagar, 2009). It is not every repeat purchase that is connected to consumers commitment of

a brand. However, consumers commitment is important for a repeat purchase. Therefore,

business operators need to develop marketing programmes that will not only reinforce

customers commitment but also encourage repeat purchases. A part of the functions of sales

promotion is not only to reinforce commitment of consumers but to encourage repeat

purchases. Effects of sales promotion on consumer behavior have been widely studied in

literature (Nagar, 2009). Sales promotion has effects on various aspects of consumers

purchase decisions such as brand choice, purchase time, quantity and brand switching (Nijs,

Dekimpe, Steenkamps and Hanssens, 2001); consumers sensitivity to price (Bridges,

Briesch and Yim, 2006).

However, whether the effect of consumer loyalty and purchasing behavior could be

moderated by sales promotions has not yet been examined extensively. Regardless of a

widespread interest in the relationship between sales promotion and purchasing behavior,

most studies of this kind focus on the effect of sales promotions on choice at the time they are

offered (DelVecchio, Henard, Freling, 2006). Only a few have investigated the lag effect of

sales promotions on brand preference and the resultant buying behavior once the promotion

campaign is rescinded.

Sales promotions could be in form of

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