Pricing and marketing strategies in the malaysian mobile telecommunications industry

Author: Iloka Benneth Chiemelie
Published: 24/12/2013

ABSTRACT

Purpose:it has been suggested by existing literatures that the type of marketing activity adopted in the mobile industry has a direct influence on brand loyalty and purchase intention. As such, the main purpose of this paper is to review the marketing and pricing strategies adopted in the Malaysian mobile industry.

Design / methodology / approach: this is a primary research. Data for analysis was gathered through online survey. The choice of online survey is to offer responders from all over Malaysia the opportunity of participating in the study. The gathered data were analyzed with SPSS – factor analysis and multivariate regressions were conducted to prove the hypotheses.

Findings – from the analyzed data, it was found that price is a strong determinant of consumers’ choice of mobile network. This is because, consumers are demanding more value at a reduced price and are likely to switch networks if they are able to find another network provider that is capable of meeting their demand. Additionally, it was found that consumers are also willing to pay higher for new and innovative services. Consumers are also more loyal to brands that offer higher and sophisticated service value through improved services.

Originality / value: the findings offer important implications for the support of theories on pricing and marketing strategies in the mobile industry; by supporting the notion that reduced price at a higher service value is key for competitiveness in the Malaysian mobile industry.

Keywords:Malaysia, Mobile industry, pricing strategies, Marketing strategies, Service value

Paper type:Dissertation for the award of PhD

0.1 EXECUTIVE SUMMARY

Mobile telecommunication is considered one of the most outstanding inventions in history. This because, it has helped bridge the communication gap normally experienced during the olden days (before its invention), and helped pioneer the invention of other technologies such as internet. With the help of mobile telecommunications, Malaysian don’t have to worry so much about their friends abroad, as they can always be in touch with them whenever they so desires. Other advantages of mobile technology is that it can fasten information sharing, increase security, enhance privacy and contribute to overall performance of human activities.

In Malaysia, the benefits of mobile telecommunication are felt across corners. The Malaysian mobile industry helps the society in so many ways such as provision of effective and efficient communication medium, employment opportunities and development of the country. Since 2004, the Malaysia mobile telecommunication industry have experienced high growth rate as a result of fierce competition amongst the major players (Celcom, Maxis, Digi and Umobile) to increase their market shares (Mohd and Khairul, 2010).

As such, this paper aims to evaluate the pricing and marketing strategies adopted in the Malaysian mobile industry. In order to achieve this aim, the paper was divided into four chapters. The first chapter is an introduction on the topic, with highlights about the Malaysian mobile industry. This section also defines the research objectives, purpose of study, significance of study and chosen companies for study. The second chapter is a literature review about related theories on the topic. In order to make the research more significance, the review was based on overall conception of pricing and marketing strategies, and how these strategies are being applied in mobile industries. The third chapter is the research design and methodology. Under this section, chosen format for conducting the primary research was described together with models and concepts to be adopted. The final chapter is the data analysis and prove of hypothesis. This implies that gathered data were analysed in this section, and the analysis used to prove stated hypothesis.

CHAPTER 1

1.0 INTRODUCTION

Since 2004, the Malaysia mobile telecommunication industry has experienced high growth due to fierce competition between the major players (Celcom, Maxis, Digi and Umobile) to increase their market shares (Mohd and Khairul, 2010). This fierce competition has resulted in price wars within the industry, and their numerous marketing programs have helped increase the rate of mobile phone adoption in the country (Mohd and Khairul, 2010).  This high growth has also been linked with high penetration of prepaid services which was first introduced into Malaysia in the late 1990s.

The affordability and convenience of the prepaid services increased the penetration of mobile phones among the less affluent and teenage segments of the Malaysian market (KhairulAkmaliah et al., 2008). Another reason behind the high penetration is the Malaysian market’s less willingness to embrace wired (PC-based) internet communication systems like e-mail, as they are seen to be less efficient and more costly than mobile telecommunication. Due to Malaysian’s high value on opportunity to be socially connected, it became evident that a device like mobile phones with potentials of offering such values will be highly welcomed (KhairulAkmaliah et al., 2009).

During the introductory stage of late 1990s, ordering and selling of mobile contents were mainly done through mobile phone lines. By the mid-2000s, this service increased with numerous companies selling and delivering mobile contents such as ringtones – which is the tone played by mobile phones when receiving calls. The customers ordered this service through their phone and have them delivered via text-based system to their different phones.

1.1 BRIEF HISTORY

Before 1946, it was the responsibility of the Post and Telegraph Department to prove all telecommunications services within Malaysian (BursaMalaysia, 2002). The postal service was separated the same year with the creation of the Telecommunications Department in Peninsular Malaysia. In 1968, this department was combined together with the Telecommunications Departments in West Malaysia to create the Department of Telecommunications Malaysia (also known as Telekomunikasi Malaysia (""JTM'')) (BursaMalaysia, 2002).

The responsibility to provide telecommunication services in Malaysia was transferred from JTM to Syarikat Telemnkom Malaysia Berhad in 1987, and it was publicly listed in 1990. Its present name (Telekom Malaysia Berhad) was assumed in 1991. The government retained majority of the company’s share in order to ensure that the company’s polices are in line with government policies (BursaMalaysia, 2002).

In 1985, Telekom Malaysia introduced mobile services in Malaysia. Since the introduction, the Malaysian government have licenced numerous other private sector telecommunication service operators in a bid to help develop the country’s telecommunication industry and advance its infrastructures (BursaMalaysia, 2002).

1.2 INDUSTRY SIZE

The Malaysian telecommunications industry is one of the fastest growing industries within the country. This is because; mobile phone has become Malaysians favourite way to communicate. The industry’s major driver is the mobile phone segment which has huge subscriber base, high increase in international calls and increase in the usage of multimedia services and mobile data within this segment (AHK, 2011). The introduction of 3G mobile phones also played a significant role in the increase of demand within this sector.

The number of mobile phone subscribers rose to 23,374 million by 2007, with a penetration rate of 85.1 per cent. This figure was further increased to 30.3 million by the end of 2009, with a whopping penetration rate of 106.2 per cent, and it represents the highest volume of mobile phone penetration rate within South East Asia. It was reported by IDC that 5.5 million mobile phones were sold in 2008, with a similar figure experienced in 2009 in the Malaysian market (AHK, 2011).

The revenues for the mobile segment have been projected to grow at the rate of 6 per cent per annum from 2008 to 2013. Mobile data, including text messaging is also booming with an expected growth of 6% per annum. By 2007, the SMS traffic reached 57 billion in contrast with the 33 billion it had in 2006. This figured was further increased to 73 billion in 2008 and it exceeded the 100 billon mark by 2010. In addition to this increase, affordability of high tech phones and availability of services plans, internet services has also seen an increase within these years (AHK, 2011). The market share of the mobile industry is as illustrated below in relation to the three major players in the industry.

Figure (1): The market shares of major mobile telecommunications providers in Malaysia 

Source as re-adapted from: AHK (2011)

The figure (1) above illustrates that Maxis is the biggest mobile telecommunication provider in Malaysia, with a total of 39.9 per cent market share, followed by TM-Celcom with a total of 34.4 per cent and Digi with 25.7 per cent of the market share.

Furthermore, a recent survey by the Malaysian Communication and Multimedia Commission (MCMC, 2010) revealed that Malays make up 60.8 per cent of the overall mobile telecommunication subscribers in Malaysia, with the Chinese following them with 23 per cent, Bumiputra Sabah/Sarawak and Orang Asli with 8.3 per cent, Indians with 6.3 per cent and others with 1.6 per cent. Another finding by MCMC (2010) revealed that 71.5 per cent of users own only one phone, but the remaining 28.5 own more than one phone. Such indication further explains the huge contribution that the mobile telecommunication industry had on Malaysia’s 2011 GDP as illustrated in figure (2) below.

Figure (2): GDP contribution of communication and multimedia industry (2011)

Source as adapted from: SKMM (2011)

The figure (2) above reveals that Digi, TM-celcom and Maxis-Times contributed a total of 5.4 per cent of Malaysia’s total GDP in 2007, with the communication and multimedia sector contributing 6.3 per cent of the overall GDP. Such a contribution by the top three players further illustrates the significant impact of the mobile industry in Malaysia.

1.3 CHOSEN COMPANIES FOR STUDY

The chosen companies for this study are Digi, Maxis, Celcom and Umobile. The first three companies were chosen based on the fact that they dominate the Malaysian mobile telecommunications industry in terms of market share, while Umobile was included into the study because it is a new player into the industry with numerous sophisticated strategies designed to attract new customers as will be later discussed in this research.

1.4 RESEARCH OBJECTIVES

The main objective of this study is to evaluate pricing and marketing strategies adopted by mobile operators for competition within the Malaysian mobile industry. This objective will yield answers to the question by identifying and discussing theoretical concepts on pricing and marketing strategies used by mobile operators, illustrate the significance of competition in the mobile industry by comparing and contrasting between companies, and review on how operators can benefit from other strategies apart from pricing in order to be competitive and increase their revenues.

1.5 IMPORTANCE OF STUDY

As discussed earlier, the mobile industry is one of the fastest growing industries in Malaysia, but advancement in technology means that all the companies discussed are capable of offering all services being offered by their competitors. Thus, the only way to retain and gain new customers is by adopting pricing and marketing strategies designed to persuade customers to choose one brand over the other.

Therefore, this study is important because it will help to evaluate these marketing and pricing strategies in relation to how they help in customer retention, attraction of new customers and increase of brand competitiveness. The importance can be further listed in details as:

1.      It will help to elaborate why Malaysians chose a particular mobile service provider over its competitors.

2.      It will help to illustrate the importance of pricing and marketing strategies in maintaining customer loyalty in the Malaysian mobile industry.

3.      It will help to highlight the key factors that determine customer’s switch intentions in the Malaysian mobile industry.

4.      It will help to understand how service providers differentiate themselves in the Malaysian mobile industry.

1.6 STRUCTURE OF DISSERTATION

This paper is divided into seven sections, with chapter 1 covering an introduction into the research paper, while chapter 2 is a literature review on previous related research to present a scientifically and theoretically proven base for argument. Chapter 3 is the research methodology which describes the whole research data gathering process, while chapter 4 focuses on analysing gathered data. Chapter 5 is the conclusion which presents a general summary of the whole paper, followed by recommendations in chapter 6 and finally a reflection on the study. Besides the main chapters, bibliographies are also provided for all cited content, while further illustration is drawn in the appendix.

CHAPTER 2

2.0 LITERATURE REVIEW AND HYPOTHESES

A close look into academic research reveals that little interest has been shown to the topic of evaluating marketing and pricing strategies adopted by mobile telecommunication industries. Most of the researches focused on pricing as a factor that influences purchase intention in the mobile industry (Kostis and George, 2011), and the importance of branding in building strong customer loyalty within the mobile industry (Levinson, 2004; Ling, 2004). However,there are limited studies on the topic of evaluating the pricing and marketing strategies adopted within the mobile industry.

Therefore, this literature review has been designed to look deeper into these factors and further link the combined effects of marketing and pricing strategies in the mobile industry by adopting an evaluative modality. The areas touched include the pricing strategies adopted within the Malaysian mobile industry, how price sensitivity influences choice of service providers, how pricing influences switch intentions and customer retention, competitive pricing, marketing strategies adopted within the mobile industry, how marketing activities influences consumer behaviour, influence of branding in customers’ choice of mobile service provider and importance of promotion within the industry.

These discussed factors are meant to illustrate the dynamic market system of the mobile industry, and meet the research objectives of evaluating marketing and pricing strategies adopted in the mobile industry. These reviews also serve as the founding root from which hypotheses for this research was developed. It takes a comparative look into past literatures related to the topic of study in relation to the research objectives as means of developing the hypotheses for this study. Six hypotheses were developed in general, and each of these hypotheses will be tested in the data analyses section.

2.1 PRICING STRATEGIES IN THE MOBILE INDUSTRY

Price management was suggested by Shipley and Jobber (2001, p. 301) to be a critical factor in marketing and competitive strategy, and also an important determinant of performance. Price for this study is defined as the way customers judge the value offered by a specific product and it has a great influence on brand preference amongst competing brands. Forman and Hunt (2005) supports this definition by stating that pricing strategy should take important consideration in the strategic planning of a company as it has a strong influence on the company’s revenue. Price is also viewed as the most flexible elements of the marketing mix and can easily be redesigned in relation to changes in environmental conditions (Lancioni, 2005).

Hinterhuber (2004, p. 765) stated that notwithstanding the significance of pricing on a company’s revenue, both managers and researchers have shown little interest in the subject of pricing. They are fewer publications on pricing when compared with publications on other market mix elements such as promotion, place and product, as marketing scholars have devoted little interest in the subject (Kostis and George, 2011). The lack of academic research on the field of pricing is also noticeable when it comes to telecommunications service pricing, as a review of relevant literature shows limited amount of empirical studies. For example, Bernstein and Macias (2002) and Woodside (1985) studied pricing process by comparing two companies, Gupta and DiBenedetto (2007) examined the decision making for joint pricing and advertisement of optimal new products to be introduced in a competitive market, Yoon (1991) focused on pricing similar products and Pitt (1985) studied the new pricing strategies of 21 South African based companies.

Although these literatures were based on the effects of price on companies, none of the listed study was related to mobile telecommunication industry. Most pricing and marketing literatures highlights three ways for pricing products or services as: skimming pricing (products being initially priced at high rate to generate more revenue); penetration pricing (products being initially priced at low rates to help penetrate into the market); and competitive pricing (products being priced at a similar price with competitors) (Monroe, 2003; Nagle and Holden, 1995). As the telecommunication industry is service oriented, their pricing strategies are different from pricing strategies for products because, services are atypical in nature (Mitra and Capella, 1997, p. 329).

In the Malaysian mobile industry, the most commonly adopted pricing strategy is competitive pricing as all network providers are capable of offering services being offered by other competitors (Lovelock and Wirtz, 2001; Monroe, 2003; Nagle and Holden, 1995). This similarity in terms of price is as a result of intensive completion and lack of differentiation among competitors (Fill and Fill, 2005; Kasper et al., 2000) within the mobile industry. For example, the four companies being researched on are capable of providing their customers will calls feature, messaging, internet, Voip and multi-media services. Thus, the idea of a company pricing its services higher than other will result in reduced revenue as customers are likely to switch brands because they will still have the same value at a reduced price. Based on the above argument, it is hypothesized that:

HP1. Competitors are likely to adopt competitive pricing strategies as they seek to create more value for their customers.

2.2 INFLUENCE OF PRICE SENSITIVITY ON CHOICE OF MOBILE SERVICE PROVIDER

On the impact level, price sensitivity if often seen as a synonym for price elasticity (Link, 1997) and that will be the case in this study. Sensitivity of demand is the rate at which the volume of demand for a particular product or service is influenced by change in price, and it is an important strategic pricing tool (Tucker, 1966).

On the consumers’ base, price sensitivity is similar to price consciousness. This is the degree to which an individual is willing to pay additional price for a given product and unwilling to buy products that are priced at a highly unacceptable rate (Monroe, 1990). Price consciousness is related to price acceptability level and the rate at which a given price is deemed to be acceptable (Lichtenstein et al., 1988). Price conscious individuals are not willing to pay high prices for product or service acquisition if they have alternatives at lower price (Link, 1997).

Studies on price sensitivity within the telecommunication industry have revealed three forms of consumer segments (e.g. Kollmann, 2000). It was found that price sensitivity is substantially lower in the industry, on both sides of pricing (low-end and high-end). Attempt to influence consumer behaviour in the mobile industry with price change will be ineffective, making quality marketing strategies (e.g. service improvement and innovation) the success factor in this industry (Juha, 2008).

Two of the numerous factors that influence consumer’s buying behaviour are “price” and “quality” (Jacoby and Olson, 1977). This means that there is a link between the price and quality of service offered (Tse, 2001) and it’s usually visible from the level of satisfaction a customer gain by using the service. McConnell (1968) and Monroe and Krishman (1985) also supports the ideas that the relationship between price of a service and quality of the service offered determine the level of customer’s satisfaction.

The way a consumer perceives service satisfaction has also been found to influence the customer’s price sensitivity (Juha, 2008). For examples, it was stated by Fornell et al. (1996) that there can be an increase or decrease on how a customer is price sensitive as a result of the level of price satisfaction. Zeithaml et al. (1990) also stated that improving the quality of a service helps in creating customer loyalty through improved customer satisfaction. Therefore, customer’s satisfaction has to be included on studies that relate to price sensitivity. This literature is also applicable in the telecommunication industry, as Marshall (1980) stated that consumers are willing to pay above normal prices in order to have a service if there is a perceived higher value in relation to that particular service. Therefore, it can once again be hypothesized that:

HP2. Consumers are likely to stay with their current services provider irrespective of price if they view the services offered by their current provider as having more value than competing brands.

2.3 PRICE COMPETITION, CUSTOMER RETENTION AND SWITCH INTENTION

The need to understand the forms of competition taken by different brands within the same industry has been of high interest to managers and academicians alike (e.g., Allenby and Rossi, 1991; Blattberg and Wisniewski, 1989; Hardie et al., 1993; Quelch and Harding, 1996; Sivakumar and Raj, 1997). Competition between two brands is deemed as asymmetric if one brand is able to gain more by reducing price than his competitors are capable of gaining with similar price reduction. This implies that brands with higher quality are more likely to persuade consumers to switch to their products by reducing price than are brands with lower quality (Sivakumar, 2007). There have been many explanations to this phenomenon such as heterogeneity in consumer’s reservation of price differential Blattberg and Wisniewski, 1989), level of income (Allenby and Rossi, 1991), and avoidance of loss (Hardie et al., 1993).

Blattberg and Wisniewski (1989) presented an argument on the asymmetric competition theory by considering heterogeneity in consumers’ reservation of price differential (between high- and low-priced brands). He argued that as a result of the dual nature of reservation price differential and the negativity in distribution slope, there is higher tendency to switch from low quality brands when high quality brands reduce price than vice versa. Allenby and Rossi’s (1991) conducted a similar study but focused more on the role of income and rotational indifferences which result to non-homothetic decision making amongst consumers. Both studies considered high quality goods as superior and low quality goods as inferior, and drew conclusion that this indifferences are non-parallel and are close to axis representing superior goods but farther from axis representing inferior goods (Sivakumar, 2007). This creates a favourable condition for high quality products when consumers’ increase their budget constraints as they are more likely to increase the expenditure in higher quality brands than on lower quality brands. Hardie et al. (1993) supports this argument by stating that aversion of loss for quality is more than the aversion of loss for price of a specific product.

Although these studies have differences in their conclusion and view of competitive pricing and consumers’ switch intention such as Blattberg and Wisniewski’s (1989) explanation that is only applicable when reservation price differential is negative, Allenby and Rossi’s (1991) assumption that consumer’s budget can be influenced by price reduction, and Hardie et al.’s (1993) study which focused on consumers’ loss aversion for price and quality of products. There is still a common linkage between all these studies, as they all point to the idea that the prices and quality of a product will highly influence consumer’s switch intention.

Studies on consumer retention also reveal that it is more profitable for a company to retain its customers than to attract new customers (e.g. Hogan et al., 2003; Lee-Kelley et al., 2003). It was also claimed by Reichheld and Sasser (1990) that 5 per cent improvement and maintenance of customer retention can result in a subsequent 25 per cent to 80 per cent increase on profitability. This they argued to be based on the idea that loyal customers are less likely to switch brands because of price and they are likely to serve as brand ambassadors by recommending the product or service to other people (Reichheld and Sasser, 1990; Reichheld and Teal, 1996). Such findings reveal the importance of customer loyalty for business sustainability, especially within the service section (Llias and Panagiotis, 2010).

Similar in the Malaysian mobile industry, service providers are in an intensive competition with each other as they offer similar services and thus respond by deploying customer retention strategies (Egan, 2004, p. 133). This makes customer retention highly important in the industry especially due to the high saturation and maturity of the mobile industry in Malaysia.

In order to further elaborate the effects of loyalty in service industry, numerous authors have researched on the relationship between customer satisfaction and loyalty (e.g. Jones and Sasser, 1995; Sheth and Sisodia, 1999). The findings reveal that higher satisfaction level can lead to reduction in customer’s perceived benefit from a specific brand and high intention to repurchase the same brand (Anderson and Sullivan, 1993). Harris and Harrington (2000) stated that customer satisfaction is a product of companies being able to understand the needs of their customers and make necessary efforts to offer services that efficiently and effectively meet these needs. Therefore, it can be seen that there is a clear relationship between the quality of services offered and customer loyalty. A number of researchers (such as Cronin and Taylor, 1992; Hallowell, 1996) studying this relationship have concluded that the quality of a specific service is a key determinant of the level of satisfaction a customer gains from using that service.

While the Malaysian telecommunication market is slowly reaching maturity, it is noteworthy to understand that none of the three major players within the mobile industry occupy more than 40 per cent of market share (AHK, 2011). Based on this fact, it can be concluded that pricing and customer retention are key determinant on growth given the significant impact of technological advancement on service offering capabilities for the players within the industry. This implies that the more value a service provider is able to offer at a lower price, the higher the possibility of retaining existing customers. Kollmann (2000) supports this idea by stating that price plays a crucial role in telecommunication market especially within the mobile service providers.

The effect of price on customer’s repeat purchase and switching behaviour is not only based on the cost of services offered, but also include the cost of switching from one network to another (Llias and Panagiotis, 2010). For instance, the value of service can be priced high, but the cost of switching from that service provider to another service provider can limit the customer’s intention. These costs can include factors such as network coverage, language barrier, data plan and other media related factors that a customer will have to forego in order to gain the benefit of lower price from other service providers. An example in the Malaysian industry is the customer’s choice of service provider in relation to their network coverage capabilities. Customers generally prefer providers that have broad area coverage as they will offer the value of allowing customers to keep in touch with their friends and families across Malaysia. From the above discussions, the third hypotheses can be stated as:

HP3. Price of service has a great influence on customer loyalty and switch intention. 

2.4 MARKETING STRATEGIES IN THE MOBILE INDUSTRY

An important advantage of marketing communication is that it’s capable of delivering customized messages to users based on their profile and location (ThaeMin and JongKun, 2007). A good example of such is the possibility of mobile service provider to transmit traffic information and availability of nearby gas station to car drivers; update investors of changes in the stock market; or send accommodation information to travellers. This also means that contextual factors are very important in marketing communication. Leppa¨niemi and Karjaluoto (2005) stated that availability of location awareness and personalization of message can make services users more willing to accept mobile advertising. When users are feed with personalized information, they tend to view it as valuable although they might not have experienced the real value of marketing communication before.

Zeithaml (1988) defined perceived value as a customer’s overall judgment on the benefits of a product or services in relation to what is given and what is expected. Development of appropriate marketing strategies is exceptionally important in the mobile industry as the advancement in technology will help the company to create value for their services in a way that is different from the conventional method (Han and Han, 2001; Tsalgatidou and Pitoura, 2001). However, the way a company communicate its message is important as difference in terms of external factors (such as religion, race, language etc.) can influence the way customers decode the message being transmitted. Thus, it is important that this research review different ways that companies can transmit their messages in the mobile industry. For example, Malay is the official language of Malaysia and adverts are mainly in this language. However, some of the Malaysians don’t read or understand Malay (e.g. the Indian and Chinese communities). Therefore, customization of language is important to aid penetration of marketing and advertisement messages.

2.5 MARKETING STRATEGIES AND CONSUMER BEHAVIOUR

As a result of the possibility of change in consumers’ behaviour ((Featherstone, 1991) and lifestyles, consumption is now beyond the conventional process of purchasing products or services. It has become a way of expressing people’s life, identifying individuals within a certain social class, creativity and also art (Gabriel and Lang, 1995; Schmitt, 1999; Norman, 2004). Consumption now involves both experiential and instrumental outcome, which implies that the decision to purchase a given product is based on someone’s capability and the outcomes, is a certain desired position or benefit expected form using the product or service (Babin et al., 1994).

In fact, when purchase is viewed in a holistic context, three dimensions are evident in the form of the “shopping environment”, the “socio-cultural context”, and the “roles, characteristics and motivations” of the customer making purchases (Woodruffe et al., 2002). Numerous researches have also revealed that creation of awareness (marketing) for a specific product influences consumers’ behaviour for that product in relation to demographic and psychographic factors (Gilbert and Warren, 1995), efficiency (Moye and Kincade, 2002; Romero de la Fuente and Yagu¨eGuille´n, 2008), price sensitivity (Han et al., 2001; Munnukka, 2005), reference to social class (Bearden and Etzel, 1982; Escalas and Bettman, 2003), level of involvement (Michaelidou and Dibb, 2008), recognition of need (Grønhaug and Venkatesh, 1991), category of product (Mehta, 2007; Vijayasarathy and Jones, 2000) and many more. This further highlight the importance of marketing in the mobile industry as it will help in creating high customer based and keep current customers highly satisfied.

Besides, literatures on consumption have highlighted two motivators for purchase as product-oriented (based on marketing activities and information gathered about the product) and experience-oriented (based on past experience with the product) (Holbrook and Hirschman, 1982; Babin et al., 1994). Similar to previous marketing research (Batra and Ahtola, 1991; Dhar and Wertenbroch, 2000; Okada, 2005; Chitturi et al., 2007, 2008), product-oriented motive denotes the functional, instrumental and practical benefits gained by consuming a specific product, therefor it can be said to be closely related with needs and wants, and the experience-oriented motives are the perceived benefits from consuming the product such social status.

Therefore in the Malaysian mobile industry, consumers’ behaviour is highly influenced by marketing activities. This is because, customers are constantly demanding higher value at a lower prices and the more a brand is capable of communicating it’s capability to offer such, the higher the perceived value and positive influence on customers’ intention to patronize such service provider. This therefore highlighted two paradigm in consumer behaviour, which are information related and benefit related. From this perspective, it can then be hypothesized that:

HP4. Marketing strategies adopted by a service provider can influence the consumer’s decision to purchase services offered by the provider.

2.5 BRANDING AND CONSUMERS’ CHOICE IN THE MOBILE INDUSTRY

Marketing studies have shown that brands serve as powerful symbol for products, with significant social impact, and provide considerable level of loyalty from consumers (Muniz and O’Guinn, 2001; Holt, 2004). Brands that are commonly known and associated with positivity have high social value. These brands have very powerful influence on the purchase decision of consumers as they have been proven to be superior to their competing brand (Kay, 2006).

Stereotypical users of this form of brand are drawn to the brand mainly on the image represented by the brand and general perception that it will positively promote self-esteem and self-consistency (Sirgy et al., 1997; Keller, 1998; Sirgy, 1982; Fournier, 1998). The perception that influences brand decisions are set of human characteristics associated with the brand (Plummer, 1984; Aaker, 1997) as gathered from brand awareness and promotion. It provides the necessary elements for positioning the brand in consumers’ mind and increases emotional connections with the brand, preference and patronage for the brand and develops trust and loyalty (Siguaw et al., 1999).

Brand studies (e.g. Aaker, 1996; Keller, 1998) view products as a combination of product-related features, that are mainly noted within the elements that make up the core product functions being sought by consumers, and non-product-related features that are not within the normal functioning of the product or service being offered. The Keller (1998) model is a true reflection on consumers’ focus on the emotional, functional and self-expressive benefits gained from using a particular product. Thus, brand image and awareness are essential for building a successful brand (Keller, 1993, 1998; Aaker, 1997; Berry, 2000).

Recent studies have also attracted growing interest from academicians Massoud and Gupta, 2003; Barnes and Scornavacca, 2004; Park and Yang, 2006) on the penetration usage of mobile communication devices. Past studies on this field have focused on the adoption of mobile telecommunication (Leung, 1998; Gruber and Verboven, 2001; Katz and Aakhus, 2002), customer satisfaction (Woo and Fock, 1999), social effects (Katriel, 1999; Rakow and Navarro, 1993; Wei and Leung, 1999), motivators and usage patterns (Leung and Wei, 2000) and technological advancement (Thompson, 1994; O’Shaughnessy and O’Shaughnessy, 2002).

However, all the given technologies will eventually be replaced by new technologies, thus, biasness (Addis and Holbrook, 2002) and social differences (Datte`e and Weil, 2005) are the main determining factors that shape how people perceive technological evolution and develop their expectations. Perception and development of expected benefits creates some interesting issues with the adoption possibilities, making understanding of differences between consumers’ decision to choose a specific service provider in the modern-era of telecommunication important (Moore, 2002). Therefore, services marketed as being highly advanced in terms of communication solutions are likely to attract more customers that their competitors as customers seek far beyond ordinary communication services of calls and SMS.

The differentiating factors in the mobile phone industry are no longer innovative core products that are easily customizable, but other product attributes that add value to the main product (Luca, 2010). Such value adding attributes are call diverts, mail box features, internet access etc., and they are now a common service feature within the mobile industry. High competition have also resulted in fall of prices, and made mobile phone usage common within societies. Branding is the key for service providers to escape from the commodity spiral, as it offers higher values that position the services in a different dimension (Luca, 2010). In fact, when the drivers of customer values starts getting common, brand helps to increase value by adding differentiating dimensions and promoting discrimination of competing brands (Verma, 2007).

There has been strong growth rate in the mobile phone industry as a result of numerous factors such as advancement in technology, market demand and change in competition. An approximated 95 per cent of nations worldwide have mobile phone subscribers that outnumber TV network subscribers (Botelho and Pinto, 2004). In difference with other technologies, mobile communication is now seen as a necessity, especially amongst teenagers (Kasesniemi and Rautianinen, 2002; Skog, 2002) and it has become a true extension of man (Castells et al., 2004). The use and adoption of mobile phone in everyday necessities helps to enhance its positive attitude towards the role it plays in our lives. This can be attributed to individual awareness and willingness to adopt innovative changes (Rogers, 1995). This rapid adoption of mobile communication is now a challenge to other traditionally created boundaries like work vs. leisure and freedom vs. control.

Looking at it from a simple view, mass mobile adoption has been positioned differently, in relation to the benefits people get from adopting it. In reality, it is an important means of expanding communication capacity, drafting out of extra time and increased spaced relationships. It offers unlimited access to different services (Watson et al., 2002). In fact, mobile phones are now our everyday, highly observed, multipurpose and interpersonal communication device and not just a working tool (Levinson, 2004; Ling, 2004). Subscribers demonstrate contrasting phenomenon that range from demand of highly sophisticated services, price sensitivity as mentioned earlier, demand for certain services attribute and differences in lifestyle.

Although the mobile market is highly subject to customizable services, branding is still one of the strongest factors to distinguish services offerings and keep customers satisfied with services offered to the market. Based on this view, the fifth hypotheses for this academic study will be that:

HP5. Quality brand image is essential for building customer loyalty in the Malaysian mobile telecommunication industry and differentiating brand from competitors.

2.6 IMPORTANCE OF PROMOTION IN THE MOBILE INDUSTRY

Promotion is one of the means organizations adopt to create awareness for their business offerings (Rowley, 1998). It is crucial for all companies, especially those entering new markets and attracting new customers (Kotler et al., 1999). It comprises activities that communicate benefits of a particular products and it is advantageous as it eventually help to persuade customers to make purchase for that particular product. In a general sense, promotion is mainly concerned with creating awareness about a company and the product they offer to the market (Root, 1994). In a more specific view, the main aims of promotional activities are to: enhance sales; maintain and improve company share; generate and maintain great brand recognition; create favourable environment for future sales; educate and inform the market about the products; generate competitive edge over competing products and for market positioning; and improve efficiency of other marketing tools (Rowley, 1998). In accordance with Alvarez and Casielles (2005), promotion involves sets of marketing activities that are conducted periodically, with the objective of reinforcing brand awareness and creating more purchase intentions. Such promotional activities designed to create better sale include coupons, premiums, discounts, samples, and rewards. Each of these activities is designed with the intention to directly influence customer’s purchase intention about a specific company or product. The objectives of promotional activities will reach its best outcomes when it is done without expectations from the customers. Promotional activities should be well organized and easily integrated into the company’s marketing plan.

In the mobile industry, promotion is also a common phenomenon as companies must frequently offer enhanced service features, discounted price, free offers and other promotional packages in order to keep their competitors. In reference to Malaysia, the network providers also adopt this tool such as: Bonus Credit by Celcom, Digi and Maxis (where customers get a certain percentage of their monthly mobile top-up purchases as a bonus) and Free Credit Request (that allows customers to request for free credit when their credits finish at an inconvenient time). These activities have been found to influence customers’ choice of mobile service providers in Malaysia. This is because, the more freebies customers are getting the more likely they are to stay with the brand.

HP6. Promotional activities are important in building strong customer loyalty within the mobile industry.

CHATPER 3

3.0 RESEARCH METHODOLOGY

3.1 PROCEDURE

The customer loyalty in the mobile telecommunication industry has been the focus of recent study by both practitioners and academicians (e.g., Allenby and Rossi, 1991; Blattberg and Wisniewski, 1989; Sivakumar and Raj, 1997). This is because, customer loyalty is very important within this industry. It has been revealed that there is a high volume of competition between services provider, which results in these services providers spending heavily to market their services as a way of attracting new customers and retaining existing ones (del Rio-Lanza et al., 2009). Likewise, the demand and consumption of mobile telecommunication services have been strong since its inception (IDATE DigiWorld, 2007). Therefore, this primary research will focus on evaluating the marketing and pricing strategies of the Malaysian telecommunication industry, in relation to casual factors behind such moves. The framework for the research is as illustrated figure (1) below.

Figure (3): research methodology framework 

As illustrated above, the research framework was not only designed to evaluate marketing and pricing strategies adopted by mobile telecommunication industries in Malaysia, but also meant to understand consumer behaviours in relation to switching service providers. This is because, consumers are keyto the success within the industry, and understanding what makes them behave the way they do will help in evaluating the general effects of the strategies deployed by mobile service providers.

In relation to Malaysia’s mobile telecommunications industry, its significance can be attributed with increase of access to information and communication that it provides users with (Norbayah and Norazah, 2007). These benefits have yielded tremendous increase on number of mobile telecommunication subscribers in Malaysia. In accordance with the Malaysian Communications and Multimedia Commission’s (MCMC) 2005 survey on phone users, there were 16.2 million hand phone subscribers as of 31 May 2005. This figure increased by 5.3 per cent to 20.5 million by the first quarter of 2006 with 77.7 per cent penetration rate in Malaysia (MCMC, 2006). The high growth of the Malaysian mobile industry is particularly linked with high affordability, marketing strategies and increased competitions within the industry. The competition in particular is the main factor behind pricing and marketing strategies as companies adopt all possible process to persuade the market (Marriott, 2006; Bernstein, 2006). Consumers are offered high bargaining power as they have numerous alternatives. Therefore, service providers are left with no option but to competitively price their services and spend high on marketing in order to maintain their market share (Hardie et al., 1993)

.

The MCMC survey also illustrated that over two million of responders from their survey were aged 19 years old and below; 78 per cent of the users are between 20 and 49 year old while the number of users aged between 50 or above represent 1.4 per cent of the market (Lee, 2006). Majority of these 78 per cent users are typically working adults residing in Selangor, Johor and Kuala Lumpur with revenues up to RM 300 per month (Khalid, 2006). As of the time of this research, Malaysia’s mobile telecommunication industry is made of 7 companies but only four (Celcom, Maxi, Digi and Umobile) will be considered as they control the industry’s major shares (Over 90%) (Sabbir, et al., 2011).Based on guidelines from the previous survey, this research was designed to attract high response from subscribers aged 20 to 39 years old as they represent a significant percentage of mobile services users. However, other subscribers that don’t fall within this age range were also considered to eliminate biasness and increase the significance of data gathered.

3.2 DATA COLLECTION

The questionnaire for this research was designed by following guidelines from previous related researches (see appendix 1 for questionnaire). A pilot test was conducted by distributing questionnaires to 20 subscribers via e-survey. This pilot test is a measure implemented to ensure that the questionnaires meet current market approaches within the industry, in a way that is easily understandable by the targeted audience. Survey was chosen as the preferred data gathering method because it is easily generalizable and readable as they are developed based on present marketing approaches (Churchill and Iacobucci, 2005). Survey also offer users the opportunity to access high number of variables (Ma, 2007), it is also convenient, fast and a cost effect method of gathering data (Zikmund, 1999). It also reduces the biasness associated with other forms of data gathering such as interviews.

In order to determine the appropriate sample size for this research paper, Roscoe’s Rule of Thumb (Roscoe, 1975; cited in Sekaran (2003)) was adopted as the guiding criterion. The rule stated that the sample size must be larger than the sample components by a high margin. Thus, a sample of 21 question presented to 111 responders is considered appropriate for the research (as 111 is greater than 21 more than 3 times). Factor analyses and regression analyses were used for this study. Once the sample size had been determined, the developed survey was hosted online at http://freeonlinesurveys.com/ for data gathering. The reason for choosing online survey is that it would offer participation from responders all over Malaysia and it increases data computation efficiency and reduce interviewer biasness. Responders were made aware of the survey through Facebook advertisement. Advertisement was placed on Facebook, encouraging Malaysian users to participate in the survey as it would help in developing new studies within the Malaysian mobile telecommunications industry. The page returned over 4,700 thousand viewers and over 500 visitors that liked our Facebook page. A total of 120 responses were gathered, but only 111 were chosen for this research as the withheld nine responses were deemed inadequate for inclusion.  A 24/7 online customer services was also established for responders facing difficulty with any of the questionnaire to seek adequate guidelines.

The factor analyses used in this research is meant to highlight major factors that influence consumer decision making process within the industry. Of the twenty variables initially designed for this research, only seven of them were chosen for proof of hypothesis as they were the only factors with major influence on consumers’ switching behaviour (Quelch and Harding, 1996). Regression analyses adopted numerous tests to illustrate how their age (dependent variable) in relation to how many years they have used mobile services influences other factors (constants). This also helped in understanding the effects of pricing and marketing strategies adopted by mobile telecommunication industries in Malaysia.

3.3 MEASUREMENT

A self-addressed questionnaire was used and all variables contained in the questionnaire (besides demographic variables) were measured by using 7-point likertscale rating method, where responders must choose from the range of totally disagreeing to totally agreeing within the provided constants.

Totally disagree	Strongly disagree	Somehow disagree	Not sure	Somehow agree	Strongly agree	Totally agree
1	2	3	4	5	6	7

The likert rating scale above is the exact rating scale adopted for this research. This rating scale was explained in the questionnaire for responders to be aware of the choice to make and thus be more accurate with their response. Each response button also contains this scaling method in the order above to ensure that the inconveniency of responders having to scrolling up and down to review the rating scale is eliminated. The demographic variables on the other hand were measured by adopting common terms such as male and female for gender measurement.

3.4 RESPONDENTS’ PROFILE

This is a country specific research, thus the advertisement to attract responders was country specific (targeted to Malaysian IPs) only. The responders were from different states in Malaysia, with majority of them using Kuala Lumpur IPs. Since IP address is configurable, it was decided that judging responders by their IP could yield numerous limitations. Therefore, selected data were not IP specific, but country specific (Chosen from all responders). Male responders made up 56.8 per cent of the response with female racking up the remaining 44.2 per cent. The response was not race specific (thus both Malaysians and non-Malaysians can take part in the survey, as long as they reside in Malaysia and make use of the listed services providers). However, majority of the responders fall between the age of 20 to 39 and this is similar to the same research conducted by Malaysian communication and multi-media commission in 2005 (MCMC, 2005).

3.5 CODING AND ANALYTICAL INSTRUMENT

The coding was computer based with IBM SPSS data analyser. Since the research was conducted online, coding was much easier and efficient as compared with conventional research. This is because; data can be copied from the server and pasted directly into the SPSS system. This ensures high efficiency and reduces human errors compared with entering the data by manual keying it in. Missing questionnaires were coded with 9 and from overall analysis. Although 120 questions were gathered, only 111 were used for analyses as the remaining nine questionnaires were deemed insufficient for this analysis based on the fact that, they had more than one unanswered questions. E-mail were sent to the 9 responders with more than one unanswered questionnaire, and majority of them highlighted either not seeing the questionnaire or not sure of the answer as their reason for leaving it blank.

3.6 GOODNESS OF MEASURES

In order to validate the instruments, the data collected from the survey were subjected to factor analyses. A Principal component factor analyses was deployed to breakdown the large number of variables and highlight main factors for prediction purposes in the preceding multivariate and regression analysis. Furthermore, a scree plot was used to interpret the data into simpler and more understandable information. Main components were highlighted from eigenvalues that are equal to or greater than 1 and only seven of the documented 20 components meet this specification. For this research, the cut-off point for significance was 0.60 but the Kaiser-Meyer-Olkin Measure of Sampling Adequacy was 0.624, further demonstrating the high significance of data gathered for this paper. The Bartlett’s Test of Sphericity was highlight significant at 0.00. In accordance with Hair et al., (1998), selected components and factors were noted and grouped appropriately.

Reliability test was also conducted with Cronbach’s Alpha to further prove the goodness of gathered data. Sekaran (2003) stated that reliability over 0.80 is good; those within the range of 0.70 are acceptable and reliability below 0.60 is not good. The result for this analysis as shown in Table 1 is 0.629 making it acceptable. The reliability and validity of the data as proven by the factor analysis and reliability this laid down a goo base for further analyses and test of hypothesis.

3.7 MULTIPLE-REGRESSIONS

Statistical analysis was conducted to evaluate the demographic data and it was further proven to be correlated by the communalities analysis. The demographic data gathered revealed high significance between the age of the responders and their choice of networks as well as switch intention. The revaluation was that the older a responder is, then the better he is positioned to evaluate all the networks as he or she is more precise with decisions of what network to choice and purpose of choosing such network. ANOVA analysis also showed frequency of 6.101 which is highly significant as it is above the normal 0.50 proposed for regression analysis.

On the other hand, the coefficient of analysed data revealed a residual of RM 841 with respect to a particular responder (ageing between 20 t0 39 years old). This is another proves of the importance of pricing and marketing strategies within the industry, as the analyses revealed that customers are willing to pay more for higher and innovative services. This peeves way for mobile telecommunication service providers in Malaysia to inculcate service innovation as core of their principle in other to gain high customer loyalty.

3.8 LOADING

The main objective of the research which is to evaluate marketing and pricings strategies of mobile telecommunication industry was loaded into the questionnaire. The questionnaires were structured with the objective carefully planted into all the questions to ensure that responders are not diverted from the main focus when answering the questions at any time. With such approach, the significance of data was increased to a greater extent as it ensured that components meeting the eigenvalues also meet the main objectives of the research.

3.9 PROOF OF HYPOTHESIS

Once all gathered data has been analysed, an extra step was taken to prove the stated hypothesis.  The first hypothesis on the list was that consumers are likely to switch to better networks that offer higher values at lower price. This was proven by the high percentage of responders who agreed to having chosen their current services provider based on price. The second hypothesis is that great brand image has the potential to attract new customers and retain existing customers, and it was also proven by the high volume of responders that agreed to being fully committed with their current service provider irrespective of incurred cost. The final hypothesis was that consumers are willing to pay to try new innovative services that are capable of reducing their incurred price. This was a direct question and majority of the responder made known their willingness to pay and try new and innovative services from their current service provider.

3.10 DISCUSSION AND FINAL REPORT

All analysed data were fully discussed in relation to its importance in the research. This follows in line with normal approaches used in primary research. The main focus was to communicate the real findings and how these findings meet set research objectives. Therefore, the language used is simple and easy for reader to understand. Although numerical terms are also used in this research, they are well elaborated with illustrations to ensure that readers get a clear view of the topic in discussion. The whole report is generally presented by following approved methods that are contained in the main research proposal framework.

3.11 LIMITATIONS OF CHOSEN METHODOLOGY

The attributes of online survey has been discussed in numerous literatures (for example, Fricker and Schonlau, 2002; Furrer and Sudharshan, 2001; Ilieva et al., 2002; Malhotra, 2004; McDaniel and Gates, 2005; Tingling et al., 2003; Wilson and Laskey, 2003) and some of the weaknesses associated with online surveys are limitations to the value of this research paper. These limitations are as discussed below.

3.11.1 Skewed attributes of internet population: not until recently, the internet population were considered to be a true representative of the general population in countries across the globe. This lack of representativeness has been discussed widely on a great extent (for example, Fricker and Schonlau, 2002; Grossnickle and Raskin, 2001; Miller, 2001; Ray and Tabor, 2003; Wilson and Laskey, 2003). This is a limitation on choosing online survey for this research, as the internet population is viewed as not being a true representative of the general population because some people who might have contributed more significant value by answering the questionnaire might not have access to the survey. However, this limitation is of little devaluation to this research as Fricker and Schonlau (2002) have stated that differences between online and offline population is closing quickly and can be considered insignificant in the near future.

3.11.2 Sample selection and implementation: numerous research scientist frown heavily on the choice of online survey sample selection and implementation. The criticisms have been on blanket e-mailing and volunteer samples. On the side of this research, the issue is with volunteer sampling which involves people going to a particular website to answer questions in a survey. This is a limitation because unintended audience might contribute to the research and improper imputation of answers can also devalue the data gathered. For instance, a responder earning 500RM per month might input 3000RM as his/her monthly revenue in view of not exposing his actual revenue. However, this limitation can be said to have little significance as Kulp and Hunter (2001, p. 35) have argued that it is little significance to the overall research as this is also possible with offline survey.

3.11.3 Respondents’ lack of online expertise: while the internet population is viewed as becoming more representative, difficulties are still inherent with responders’ lack of familiarity with internet survey protocols. This is because, a remarkable per cent of internet users today represent the number of people that have not had access to the internet for many months and years (Greenspan, 2003). In that case, they might experience difficulties with properly entering data or seeking help from relatives and friends to fill the survey questions which will infringe the quality of the whole research.

3.11.4 Technological variations: both the type of internet connection and users’ computer configurations affect the quality of online survey. Dialup connections are more common at home than at work where broadband connections are more likely to be used (WebSiteoptimization.com, 2004). Configuration problems occur as a result of differences in size and settings of monitors, operating systems and web browsers.  Thus, questions that are properly arranged in one PC might appear disorganized in another PC (Ray and Tabor, 2003). This will then limit the response as responders can either quick or cancel the survey it they start to view it as time consuming from the size of low speed internet or confusing on the side of PC configurations.

3.11.5 Interpersonal issues: compared with offline survey, there are usually no human contact in online survey. This limits the possibility of in-depth probing that is commonly used in offline survey to gather more information (Scholl et al., 2002). Brown et al. (2001) supports this argument by stating that telephone interview offer greater opportunities for responders to pause and reflect on the questions being asked before presenting sound answers. Thus, they question how this motivational approach can be applied on the internet and demand explanations on the best motivational lever to be applied for online survey. This is another limitation to this survey as the questions where left at the mercy of the responders to read and answer.

Although numerous limitations have been identified, it is worthy to note that the survey was conducted by limiting these limitations in the best possible way. For instance, 24/hours e-mail and phone contacts were provided for responders that experience difficulties with the survey to call or send e-mail for quick assistance. Responders that didn’t answer all questions were also emailed to understand the reasons behind their inability to complete the whole survey and persuaded to go back and retake the survey. During the data analyses, questionnaires that have more than one unanswered questions were eliminated from the data analysis in order to maintain the overall quality of the research.

CHAPTER 4

4.0 DATA ANALYSIS

4.1 RELIABILITY TEST – CRONBACH’S ALPHA

In order to demonstrate the overall significance of this research paper, it is important to compute the reliability of the data gathered. Cronbach’sAlpha was developed by Lee Cronbach in 1951 as a means of measuring internal consistency of a scale or test (Mohsen and Reg, 2011). Test of reliability combines all data gathered and analysethem against its variables, determining factors and response pattern in order to determine if the data aresignificantly reliable. Conducting a reliability test is important because it showcases the internal consistency and coefficient of gathered data. For this research paper, we will place the reliability to be 50% where any score above 50% is considered reliable and those below 50% are considered unreliable.

Table (1): Crombach Alpha’s test of reliability

Case Processing Summary
		N	%
Cases	Valid	103	92.8
	Excludeda	8	7.2
	Total	111	100.0
a.       Listwise deletion based on all variables in the procedure.

From the table (1) above, it can easily be deduced that this research is reliable because, it not only meet the stipulated reliability percentage, but exceeds it in reality. This survey is considered 62.9% reliable as calculated with SPSS. Eight data were found to be missing from the overall calculation and these data are eight questions that were not attended by responders during the survey. The responders’ contributions were still considered in the data analyses as the highest number of unattended question by a specific responder is 1, making the outstanding 19 questions worthy of consideration.

4.2 FACTOR ANALYSES

The 111 data gathered were carefully computed and analysed, and the outputs of these analyses will clearly be explained in this section. By applying SPPS, the dimension reduction was carried out to explore the hidden factors associated with the 20 items analysed. Bartlett’s Test of Sphericity and Kaiser-Mayer-Olkin Measure of samplingadequacy were used to determine the validity of research, by analysing each variable according to its strength of association with other variables.

The Kaiser-Mayer-Olkin measure of sampling adequacy (KMO) was computed to illustrate if factor analysis is suitable for this research. KMO value ranges between 0 to 1 and the gathered variables must meet an overall KMO value of 0.60 in order to be considered suitable for factor analysis (Sabbir, et al., 2011). If this figure is not attainable; it is advised that the variables with the lowest anti-image value be dropped until the KMO values rises above 0.60. From the table (2) below, both the KMO obtained for this research is above 0.60, making the survey highly significant and leading to the conclusion that the chosen variables are suitable for factor analyses.

Table (2): KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.		.624
Bartlett's Test of Sphericity	Approx. Chi-Square	659.801
	Df	190
	Sig.	.000

From the table (2) above, it was further illustrated that the KMO value is significant. Another indication is the test of sphericity with 659.801 values, which implies that the overall data gathered are viable, and high chi-square value implies that the hypothesis is provable from the data gathered.

Determining the number of factors to be considered can be difficult, but the research topic made it easier by pointing out two factors to focus on. In order to determine the minimum loading acceptable for including any item into the variable, Hair et al., (1992) stated that loading with value greater than 30.0 is considered significance, and the higher the value, the greater the significance. The two values loaded into the variables are the pricing and marketing strategies of the Malaysian mobile industry. The result yielded significance between the variables and loaded values with relation to customer’s decision making process in the Malaysian mobile industry. The table (3) below illustrates this variance amongst variable by demonstrating the percentages of variable customers account for in relation to satisfying their needs and increasing their brand loyalty. From the test below, 54.9% of the responders “agree to stay with the brand no matter what change is experienced with their service”. This is below the acceptable 0.60 value and makes quality service of vital importance in consumer’s decision to stay with the brand.

Table (3): Communalities
	Initial	Extraction
Service price incurred is worth value received	1.000	.617
Will change service for better value offer	1.000	.773
Current service provider was chosen mainly on price	1.000	.718
Monitor usage to control spending	1.000	.571
Will upgrade to expensive package if price is reduced	1.000	.629
Will stay with service provider irrespective of cost	1.000	.668
Willing to pay to try new and innovative services	1.000	.694
Always updated with promotions	1.000	.808
Services are designed to suite my needs	1.000	.694
Complains and feedbacks are well handled	1.000	.769
Satisfied with overall service delivery in term of coverage, connection time, hang time, quality voice/video, speed and disruption?	1.000	.588
Feel over-loaded with marketing information sent by service provider?	1.000	.735
Would like to receive more marketing information from existing service provider	1.000	.656
Will change service provider if their customer services is not satisfactory	1.000	.728
Service is charged at a lower price compared with other networks	1.000	.740
Offer numerous services compared with other networks	1.000	.609
Proud of the service provider in terms of their brand  image	1.000	.727
Service provider is generally better than their competitors	1.000	.787
Will change service provider irrespective of cost	1.000	.721
Unlikely to switch to other competitor no matter what change is experienced with their service	1.000	.549
Extraction Method: Principal Component Analysis.

Other noticeable components from the table (3) above, is the importance of service communication within the industry. The table illustrates the communalities value for the above statement to be 0.808, which implies that keeping customers updated with latest service and promotional offerings is very important within the Malaysian mobile industry. In general, the responders don’t seem to be Satisfied with overall service delivery in term of coverage, connection time, quality of voice/video, speed and disruption as this has a communalities value of 0.588 which is significantly lower than the acceptable 0.60 value. Thus, an improvement in these areas can also create an opportunity for customer retention and revenue generation.

Further analyses with Eigenvalues as illustrated in table (3) above pin-pointed the first three components as the most significant. This implies that, all the chosen mobile service providers offers values thought to be worthy of incurred price, that consumers are likely to switch networks for higher values, and the decision to choose current service provider was mainly based on price. However, other components (4 to 7) are still considered significantly important and this claim will be further illustrated with the scree plot below.

Table (4):Total Variance Explained
Component	Initial Eigenvalues			Extraction Sums of Squared Loadings			Rotation Sums of Squared Loadings
	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %	Total	% of Variance	Cumulative %
1	4.061	20.306	20.306	4.061	20.306	20.306	3.099	15.495	15.495
2	2.261	11.303	31.609	2.261	11.303	31.609	2.460	12.298	27.794
3	2.036	10.182	41.790	2.036	10.182	41.790	1.984	9.921	37.715
4	1.544	7.719	49.509	1.544	7.719	49.509	1.792	8.962	46.677
5	1.495	7.473	56.982	1.495	7.473	56.982	1.638	8.192	54.869
6	1.280	6.399	63.380	1.280	6.399	63.380	1.409	7.043	61.913
7	1.106	5.531	68.911	1.106	5.531	68.911	1.400	6.999	68.911
8	.874	4.370	73.281
9	.781	3.903	77.184
10	.676	3.379	80.563
11	.644	3.222	83.785
12	.602	3.010	86.795
13	.562	2.809	89.604
14	.425	2.126	91.730
15	.371	1.857	93.587
16	.351	1.753	95.340
17	.303	1.513	96.853
18	.246	1.230	98.082
19	.198	.989	99.072
20	.186	.928	100.000
Extraction Method: Principal Component Analysis.

The table (4) above demonstrates that, the significance values of the components are in a descending order from the first to the last component. The cumulative percentage proved the significance of the first three components as customers are not willing to stay with their service providers if they experience change in services. Customersare also likely to switch service provider if price of services increases and customer generally don’t think their current service provider offers the best value. This increases the importance of price and marketing strategies in maintaining and increasing customer loyalty within the Malaysian mobile industry.Thus, it further proves the earlier statement above that improvement of service could pave way for attracting new customers and retaining existing customers.

Graph (1): Scree Plot of components 

The above scree plot will be used to determine factors to be retained. From the above scree plot, all components with Eigenvalue above 1 will be retained and as such, the first seven components will be retained. The term Eigenvalue is a mini translation of the German word “Eigenvert” which means “own value” or “characteristic value”. Eigenvalue plays significant role where a given matrix transform from one vector value into itself. Normally, the components to be retained are those above the point where the curve begins to flatten (the curve begins to flatten at the fifth component), but this will be extended down to 7 where the components is below 1. These 7 components are listed below.

1.      Service price incurred is worth value received

2.      Will change service for better value offer

3.      Current service provider was chosen mainly on price

4.      Monitor usage to control spending

5.      Will upgrade to expensive package if price is reduced

6.      Will stay with service provider irrespective of cost

7.      Willing to pay to try new and innovative services

From the above seven components, the key attributes that influences consumers’ understanding in evaluating the service of mobile operators in Malaysia are price and value of the service offered. In that case, it is in-line with the overall research objective which is to evaluate the marketing and pricing strategies of mobile service providers in Malaysia. These two elements can be seen loaded directly into the seven components based on the fact that they are either price or service (marketing) oriented.

There is a continued growth in the trend of building quality customer relationship and marketers are becoming more interested in retaining existing customers (Lemon et al., 2002). Numerous researches have viewed customer satisfaction as important in determining the possibility for customer retention (Bolton, 1998; Rust and Zahorik, 1993; Zeithaml et al., 1996). In accordance with Reichheld (1996), satisfaction measure represents up to 40 per cent of the differences in customer retention models. Customer retention is regarded as important factor for customer relationship management (Hoekstra et al., 1999; Reichheld, 1996), as increase in customer satisfaction and retention will yield enhancement of profits, positive word of mouth from customers and reduced marketing expenditures (Reichheld, 1996).

Thus, the seven components highlighted in the scree plot as a product of Eigenvalue evaluation further stresses on the importance of understanding customer retention in relation to their satisfaction with the service provider. This is because, when customers are satisfied with the services offered, they are more likely to be loyal with the brand and thus reduced their switch intentions.

4.3 REGRESSION ANALYSIS

4.3.1 DESCRIPTIVE STATISTICS

The first approach in the regression analyses is to describe the mean of personal data gathered in relation to their response part. As illustrated in the table (4) below, the average age of responders is between the rage of 20 to 39 (1.87). This is because, from the statistical analyses “1” was denoted to represent age of 19 and below, “2” represents 20 to 39, “3” represents 40 to 59 while “4” represents 60 and above.

Table (5): Descriptive Statistics
	Mean	Std. Deviation	N
Ages of Responders	1.87	.384	111
Average Monthly Bills Incured	1.69	.851	111
Gender of Responders	1.46	.501	111
Professions of Responders	1.70	.770	111
Service Provider Used	2.25	.958	111
Purpose of Using Mobile Telecommunication	2.36	1.333	111

Although the number is 1.87, it can be seen that it’s greater than 1 and closely similar to 2 (by approximation), thus the mean distribution is deemed to be 2 which is as described above (20-39 years old). This is also in-line with MCMC survey of 2010, which revealed that adults between the age of 20 to 49 accounts for 75.6 per cent of Malaysia’s mobile telecommunications subscribers (MCMC, 2010) – making their higher involvement in this research significant.

This is also applicable in the average monthly bill, which when approximated as 2 (denoting an average monthly expenditure of RM 300 to 500) per subscriber in relation to responders. The gender is partly parable as the figure is an approximate of 1.5 which implies that there is no much difference between the numbers of male responders to female responders. This also similar to the survey by Malaysian communication and multimedia commission which revealed that 58.6 per cent of mobile service subscribers are male with females making up the remaining 41.4 per cent (MCMC, 2010). Other information gathered from the above statistical analysis is that majority of the responders are either students or working, the major networks used by these responders are Maxis and Digi and their purpose of using these networks are mainly for personal and business related purposes.

The similarity of gathered data with the MCMC (2010) further illustrates the importance of this research. This is because, it serves as base for demonstrating that data gathered for this study are significant enough to be considered as a representative of the overall population. Thus, it neglects the limitations highlighted in the data collection method where it was discussed that the online population might not be considered as a true representative of the real population, and sampling method might result in unintended audience taking part in the study or real audience providing false information.

4.3.2 CORRELATION OF VARIABLES

Table (5): Correlations
		Ages of Responders	Average Monthly Bills Incured	Gender of Responders	Professions of Responders	Service Provider Used	Purpose of Using Mobile Telecommunication
Pearson Correlation	Ages of Responders	1.000	.298	-.074	.395	.087	.161
	Average Monthly Bills Incured	.298	1.000	-.158	.110	.085	.371
	Gender of Responders	-.074	-.158	1.000	.004	-.187	-.060
	Professions of Responders	.395	.110	.004	1.000	.041	.229
	Service Provider Used	.087	.085	-.187	.041	1.000	.021
	Purpose of Using Mobile Telecommunication	.161	.371	-.060	.229	.021	1.000
Sig. (1-tailed)	Ages of Responders	.	.001	.220	.000	.181	.046
	Average Monthly Bills Incured	.001	.	.049	.126	.189	.000
	Gender of Responders	.220	.049	.	.484	.025	.267
	Professions of Responders	.000	.126	.484	.	.335	.008
	Service Provider Used	.181	.189	.025	.335	.	.415
	Purpose of Using Mobile Telecommunication	.046	.000	.267	.008	.415	.
N	Ages of Responders	111	111	111	111	111	111
	Average Monthly Bills Incured	111	111	111	111	111	111
	Gender of Responders	111	111	111	111	111	111
	Professions of Responders	111	111	111	111	111	111
	Service Provider Used	111	111	111	111	111	111
	Purpose of Using Mobile Telecommunication	111	111	111	111	111	111

From the above table, it can be seen that there is no correlation between the age of responders and their professions. This implies that when it comes to making decision on the right network to choice, their profession is not a determining factor. On the other hand, there is a correlation between the age of responders and the service provider used as well as their monthly expenditures with significance level of18%. This is well above the normal significance level of 5% per cent, implying that the older the responder is, the more likely he or she is able to spend monthly. This is true based on visualization of the fact that more adults fall within the working class in comparison with teenagers. Since these adults are working, they earn revenues (in form of salaries or wages) and therefore, are more likely to spend as much as they so desires which contrasts their teenage counterparts that are solely dependent on their guardians to cover their service expenses. It is also believed that the subscribers are, they more they will be better positioned to make right decisions on their network of choice while the teenagers will openly accept whatever network given to them by their guardians as reflected in the correlation between ages of responders and their network of choice.

4.3.3 ANOVA

Table (6): Model Summaryb
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.474a	.225	.188	.346
a. Predictors: (Constant), Purpose of Using Mobile Telecommunication, Service Provider Used, Gender of Responders, Professions of Responders, Average Monthly Bills Incured
b. Dependent Variable: Ages of Responders

Table (7): ANOVAa
Model		Sum of Squares	Df	Mean Square	F	Sig.
1	Regression	3.655	5	.731	6.101	.000b
	Residual	12.580	105	.120
	Total	16.234	110
a. Dependent Variable: Ages of Responders
b. Predictors: (Constant), Purpose of Using Mobile Telecommunication, Service Provider Used, Gender of Responders, Professions of Responders, Average Monthly Bills Incured

Table (6) above demonstrates a regression of 0.474 between the dependent variable (age of responders) and the independent variables (constants). Table (7) on the other hand illustrated a frequency distribution of 6.101 which is significantly high in relation to the dependent variable and the constants. This illustration demonstrates a linear relationship between the age of responders and their choice of network, average monthly spending, purpose of choosing the network and gender. This can be further demonstrated as stated earlier that the older a subscriber is, the better he is positioned to distinguish between networks in relation to their service values and determine the right network to choice for specific purposes. Significantly, this can be argued to be correct as the older a subscriber is the more experience he must have gained by using different or similar mobile service providers over the years.It will eventually give the subscriber the edge to be precise in making right decisions when choosing service providers. Thus, a change in any of the constants will result in a subsequent change in the linear relationship between the constants and age.

4.3.4 COEFFICIENTS

Table (8): Coefficientsa
Model		Unstandardized Coefficients		Standardized Coefficients	T	Sig.
		B	Std. Error	Beta
1	(Constant)	1.368	.173		7.897	.000
	Average Monthly Bills Incured	.116	.042	.258	2.749	.007
	Gender of Responders	-.021	.068	-.028	-.314	.754
	Professions of Responders	.185	.044	.370	4.184	.000
	Service Provider Used	.018	.035	.046	.520	.604
	Purpose of Using Mobile Telecommunication	-.006	.027	-.022	-.236	.814
a. Dependent Variable: Ages of Responders

From the above table, the coefficient of the age in relation to average monthly bill can be determined by:

C = 0.116(1000) × 1.368(1000) × (age)

   = 116 + 1,368 × (age)

   = 1484 (age, where 1 = 19 and above, 2 = 20 to 39, 3 = 40 to 59 and 5 = 60 and above).

Responders are projected to spend up to RM 1484 per month, but averaged 500, thus leaving a residual 984 per month. This can further be supported by the residual value of (841) above which is closely related to the projected residual value. The difference can be pointed to the fact that spending power varies between consumers and averaged amount spent is represented as a grouped figure (1 = RM 100 to 299) per month rather than individual figure per month.

Table (9): Residuals Statisticsa
	Minimum	Maximum	Mean	Std. Deviation	N
Predicted Value	1.62	2.35	1.87	.182	111
Residual	-.841	1.026	.000	.338	111
Std. Predicted Value	-1.401	2.592	.000	1.000	111
Std. Residual	-2.429	2.963	.000	.977	111
a. Dependent Variable: Ages of Responders

This residual value can be clearly represented in the histogram below, where the bars represent the frequencies of the standard residual value and the superimposed curve represents the normal distributions of the residuals.

Figure (4): Residual value 

From the above histogram, it can be illustrated that age is a determining factor on the amount of money spent per individual. The illustration is that, the older an individual is, the more he is capable of spending. Such can be said to be factual as most of the teenagers are dependent on their guardian to cover the cost of mobile services used, while the adult markets are capable of affording as much services as needed because they have a good source of income in the form of personal businesses or working salaries. On the other hand, the level of need can also influence usages and this implies that the older a person is, the more likely he will need a mobile service for numerous purposes such as family, business and others.

4.3.5 PROVE OF HYPOTHESIS

Hypothesis 1:Competitors are likely to adopt competitive pricing strategies as they seek to create more value for their customers.

Component 1: pricing strategy adopted by services providers is important determinant as it will influence customer retention possibilities and switch intentions.

Table (10): Frequency distribution Statistics
		Service price incurred is worth value received	Will change service for better value offer	Current service provider was chosen mainly on price	Monitor usage to control spending	Will upgrade to expensive package if price is reduced	Will stay with service provider irrespective of cost	Willing to pay to try new and innovative services
N	Valid	111	111	111	111	111	111	111
	Missing	0	0	0	0	0	0	0
Mode		6	5a	3	3	5	6	5
Percentiles	25	5.00	4.00	3.00	3.00	4.00	4.00	4.00
	50	6.00	5.00	5.00	5.00	5.00	5.00	5.00
	75	7.00	6.00	6.00	6.00	6.00	6.00	6.00
a. Multiple modes exist. The smallest value is shown

The above frequency distribution table illustrates the importance of competitive pricing as the number of responders who “strongly agree” to have chosen their current service provider based on price make the 75 percentile of the whole responders. This implies that price is significant in customers’ choice of service providers within the Malaysian industry, and competitors must price their services competitively in order to retain their current customers and further attract new ones.

The issue of pricing was also discussed in the literature review, where it was noted that it is an important factor in determining the level of demand. In the Malaysian mobile industry, the pricing strategy adopted is highly important as the advancement in technology has ensured that all competitors within the industry are capable of offering similar services as demanded by customers. Thus, mass customization is no longer a factor for differentiation as customers look deeper into other services attributes such as the price incurred in relation to he perceived value of services.

Hypothesis 2: Consumers are likely to stay with their current services provider irrespective of price if they view the value of their services offered by their current provider to be higher than other competing brands.

Components 2: the value of services offered is essential for creating a strong consumer loyalty and reducing the possibility of consumers switching to competitors.

Table (11): Monitor usage to control spending
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Totally Disagree	5	4.5	4.5	4.5
	Strongly Disagree	5	4.5	4.5	9.0
	Disagree	28	25.2	25.2	34.2
	Not Sure	8	7.2	7.2	41.4
	Agree	25	22.5	22.5	64.0
	Strongly Agree	27	24.3	24.3	88.3
	Totally Agree	13	11.7	11.7	100.0
	Total	111	100.0	100.0

From the table above, it was illustrated that 58.5 per cent of responders don’t monitor the amount of money spent while using their chosen network. This implies that if the services are viewed as being worth the money spent, the customers are likely to ignore incurred prices and stay with the customers. Therefore, it can be stated that the value of products offered is an important determinant on customer loyalty

.

Table (12): Will stay with service provider irrespective of cost
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Totally Disagree	5	4.5	4.5	4.5
	Strongly Disagree	3	2.7	2.7	7.2
	Disagree	10	9.0	9.0	16.2
	Not Sure	18	16.2	16.2	32.4
	Agree	27	24.3	24.3	56.8
	Strongly Agree	33	29.7	29.7	86.5
	Totally Agree	15	13.5	13.5	100.0
	Total	111	100.0	100.0

The above table demonstrates the importance of creating a strong brand image as it will increase customer loyalty and retention. From the above frequency table (12), 67 per cent of responders acknowledge loyalty to their service provider irrespective of the change in price as long as service offered is worth price incurred. This can be supported by a whopping 83.7 per cent of responders who agree that their current service provider offers value that is worth incurred price. In this case, they are less likely to switch as they fell comfortable with the brand in terms of quality of service and great brand image. This illustrates that telecommunication services providers in Malaysia have developed strategic brand positioning by offering their customers with the best services available, and it is becoming beneficial to them as there is less switch intention within the market.

Table (13): Service price incurred is worth value received
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Strongly Disagree	1	.9	.9	.9
	Disagree	9	8.1	8.1	9.0
	Not Sure	8	7.2	7.2	16.2
	Agree	26	23.4	23.4	39.6
	Strongly Agree	36	32.4	32.4	72.1
	Totally Agree	31	27.9	27.9	100.0
	Total	111	100.0	100.0

Service quality has drawn attention from researchers and managers as a result of its strong influence on performance of businesses, customer satisfaction, profitability and customer loyalty. Service quality is general defined as how well the value of service received matches customer expectations (Santos, 2003).

In the Malaysian mobile industry, exceeding customers’ expectation is important in building customer loyalty. Customers must view services offered as being worth the value of incurred price and the Table (13) above further proves the hypotheses that quality of services offered is an important determinant of customer loyalty. 83.7 per cent of responders from the table above agreed to the statement “that price of service incurred is worth value received.” This means that incurred price to value obtained relationship is a key influencer on customers’ retention possibilities.

Hypothesis 3:Price of service has a great influence on customer loyalty and switch intention.

Component 3:price of service plays a significant role in customers’ decision to choose and stay with a given brand in the Malaysian mobile industry.

Table (14): Current service provider was chosen mainly on price
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Totally Disagree	5	4.5	4.5	4.5
	Strongly Disagree	6	5.4	5.4	9.9
	Disagree	30	27.0	27.0	36.9
	Not Sure	8	7.2	7.2	44.1
	Agree	25	22.5	22.5	66.7
	Strongly Agree	22	19.8	19.8	86.5
	Totally Agree	15	13.5	13.5	100.0
	Total	111	100.0	100.0

The table (14) above supports the hypothesis by the percentage of valid responders that agreed to haven chosen their current service provider based on price. A total of 55.8 per cent (combined percentage of people that agree, strongly agree and totally agree) conceded to the fact that their decision to choose their current service provider was based on price. This implies that they are price conscious and likely to switch to a better service provider if lower price is offered. This can further be supported by the number of subscribers who monitors usage of services to ensure that they are not over spending. The survey found that 58.5 per cent of responders monitor usage of their services to control their spending on mobile services. Thus, it is evident that price is essential in determining consumer loyalty within Malaysia’s mobile telecommunications market.

This hypothesis is also evident on the price of incurred services. When comparing the price of SMS and Calls per network, it can easily be noticed that there is little or no difference between networks. For instance, DIGI and Maxis charge RM0.5 per SMS within networks and RM0.10 per SMS to other networks in Malaysia. While Celcom charge RM0.10 within networks and RM0.15 to other networks in Malaysia and all networks have a family and friends offer which charge as low as 0.01 per SMS. Thus, it can clearly be seen that customers’ decision to choose Maxis and DIGI instead of Celcom could be price oriented.

Hypothesis 4:Marketing strategies adopted by a service provider can influence the consumer’s decision to purchase services offered by the provider.

Component 3: stresses on the importance of service innovation and quality marketing as means of persuading customers to purchase services.This implies that companies can gain more customers and increase their sales volume by introducing new and innovative services into the market.

Figure (5): Willingness of responders to pay for new and innovative services

This is a straightforward analysis with 64.7 per cent of responders agreeing to this hypothesis. It implies that marketing strategies are important in gaining competitive edge, and mobile service providers should develop quality marketing strategies geared towards making the market aware of these new and innovative services. On the other hand, the responders are willing to pay more in order to have to try these new services, thus, creating a means for more profit generation.

This is also in line with the theoretical framework discussed above, where it was stated that marketing communication is an important tool for creating service awareness and convincing customers to choice a particular brand over others in the Malaysian mobile industry. This is because, it helps to usher reasons why a brand is strategically better than others and provide customers with new features that offer less price value.

Hypothesis 5: Quality brand image is essential for building customer loyalty in the Malaysian mobile telecommunication industry and differentiating brand from competitors.

Component 5:Good brand image is important for communicating brand value and positioning in the Malaysian mobile industry.

Figure (6): Willingness of responders to stay with service provider irrespective of cost

The importance of a good corporate image cannot be over emphasized as was expressed in the review of literature above. This is because;companies with quality brand image are usually associated with higher obtainable value than their customers. Thus, brand image is important for customer satisfaction and retention in the Malaysian mobile industry.

The above argument can be supported by the high number of responders who “agree,” “strongly agree” and “totally agree” that they will stay with their current service provider irrespective of price incurred. The reason behind such strong connection with their service provider can be linked to perceived quality brand image. This is because; the more a customer associates a brand with quality, the higher the perceived brand and brand loyalty.

Hypothesis 6:Promotional activities are important in building strong customer loyalty within the mobile industry.

Component 6:As part of the advertisement concept, promotional activities are important for customers to feel a sense of belonging towards a brand and be informed about new service offerings in the Malaysian mobile industry.

Figure (7): Willingness of responders to upgrade to expensive packages if price is reduced

The above figure above figure illustrates the importance of promotional tools in the Malaysian mobile industry. Customers want services providers to offer them discounted prices by reducing the cost of their expensive services (such as international calls and internet services), and they are willing to upgrade or buy these services if price is reduced.

From the above analyses, it have been illustrated that the proposed hypothesis are practical as they are in-line with gathered data. Thus, it further shades light on the importance of proper marketing and pricing strategies within the Malaysian mobile industry as they are essential in consumers’ decision making process. It was illustrated that the Malaysian mobile telecommunication service providers understands this and have drafted numerous measure to ensure that their consumers are always satisfied. This was shown in their unwillingness to switch to another service provider irrespective of increase in price, their satisfaction with value obtained in relation to price incurred, and their willingness to pay for higher valued services.

However, the analyses also illustrated that price is a determining factor in their decision making process as majority of the responders agreed to have chosen their current network based on price and are conscious of their spending. This implies that they are likely to switch for high valued services with lower price. Thus, it stresses the significance of competitive pricing within the industry as a means of building brand loyalty.

The Malaysian mobile industry has seen numerous changes since conception, and these changes were highlighted to be related with differences in terms of services offered, consumer choices and other factors (MCMC, 2010).  But the industry has continued to sour within these differences as a result of the high penetration of mobile telecommunication within the country. In that case, it is important that companies keep a tab with the growth of the industry in its different dimensions, in order to better understand ways to properly evaluate the marketing and pricing strategies of their competitors as a means of repositioning themselves to gain better competitive advantage. This research paper has laid a great foundation for such approach by highlighting the determining factors, analysing these factors and recommending ways to achieve such measures for any specific company within the industry. Earlier tests conducted on reliability also proved this research paper to be highly reliable in terms of data gathered and analyses performed.

5.0 CONCLUSION

Since the emergence of marketing, majority of the world leading brand have adopted customer focus in their service and product development as they seek new means to satisfy their customers’ needs better (Doyle, 2000). This case have been of no difference in the Malaysian mobile industry, as intensive competition has left competing brands with no option but to draft sophisticated marketing approach as a means of maintaining their market shares. From this research, some of these marketing and pricing approaches adopted within the Malaysian mobile industry are:

1.      Competing brand adopt competitive pricing within the industry.

2.      Competitors within the industry adopt value adding strategies.

3.      Direct marketing approaches such as SMS and rewards are common within the industry.

Competitive pricing is common within the industry because all the competitors are capable of offering services provided by other competing brands (Lovelock and Wirtz, 2001; Monroe, 2003; Nagle and Holden, 1995). For instance, all the studied companies offer calling, SMS and internet services. Thus, customers will focus more on the cost of their services rather than the type of services, as they have all been identified as worthy providers of mobile services. This creates a complex competitive situation for the brands, as the rate of switch intention in relation to pricing can be increase as illustrated in the study. Competitive pricing a great pricing strategy becauseit offers competing brands the opportunity to retain their customers and possibly increase their market share if other competing brands decide to increase the cost of their services in the future.

Secondly, it was noticed that most of the brands within the Malaysian mobile industry adopt value adding marketing strategies. As competing brands offer similar price, customer have less switch intention and the best marketing approach to increase their switch intention would be increasing the value of service offered. This was proved in the proof of hypotheses (2) where it was demonstrated that 58.5 per cent of responders agreed that they will stick with their current service provider irrespective of price if they view it as offering higher value than their competitors. In that case, it can be seen that the choice of value added services as a marketing strategy in the industry is the right approach as customer loyalty will be increased if they view the brand as offering high value.

In order to communicate the pricing and marketing strategies demonstrated in the above paragraphs, it was noticed that mobile providers in the Malaysian mobile industry frequently communicate their service value to their customers view SMS and direct marketing. They also offer numerous promotional options to increase customer loyalty and further add more value to their services. As discussed in the earlier review of literature, numerous researches have revealed that creation of awareness (marketing) for a specific product influences consumers’ behaviour for that product in relation to demographic and psychographic factors (Gilbert and Warren, 1995), efficiency (Moye and Kincade, 2002; Romero de la Fuente and Yagu¨eGuille´n, 2008), price sensitivity (Han et al., 2001; Munnukka, 2005), reference to social class (Bearden and Etzel, 1982; Escalas and Bettman, 2003), level of involvement (Michaelidou and Dibb, 2008), and recognition of need (Grønhaug and Venkatesh, 1991). This case was also proven by the high volume (67.3 per cent) of responders who agree to be willing to pay for new and innovative services. This implies that frequent marketing and promotional activities is important for increasing market shares of competing brands within the industry.

From the above discussion, it can be seen that the Malaysian mobile industry have been right with the pricing and marketing strategies adopted within the industry and this can be viewed as a result of their successful research and understanding of customer needs. While numerous strategies have been adopted within the industry, a striking revelation is that most of the services providers offer similar strategies. This implies that competitiveness is high within the industry and competitors must keep tab with latest trends in pricing and marketing strategies in order to offer their customers more reasons to stick with their brand.

In conclusion, it can be stated that competition is high within the Malaysian mobile industry. This intensive level of competition has been viewed as a result of advancement in technology which have changed customer needs and further increased sophistication in their demand for mobile service. In that case, mobile service providers are left with no option but to increase their level of competitiveness through numerous marketing and pricing strategies as discussed in this research paper. Thus, marketing and pricing strategies can be said to be a vital tool for increasing the market shares of competing brands. This case was proven by the finding which revealed similarity in the marketing and pricing strategies adopted within the industry as all competing brands adopted similar pricing and marketing strategies in order to increase their customers’’ loyalty as customers will view all the brands as being almost the same.

6.0 RECOMMENDATIONS

The three key elements revealed from the data analyses are that:

1.      Majority of the customers chose their network provider based on price.

2.      Majority of the customer view price incurred as being worth service received.

3.      Majority of the customer are willing to pay for to try new innovative services and view quality marketing strategies that keep them updated with latest development as being essential.

These three findings pose numerous challenges for the mobile industry. This is because, customers that are price continuous are not likely to remain loyal with the brand when they see other services that offer more value at reduced cost. On the other hand, the mobile industry cannot continue to adopt price reduction as a means of gaining competitive advantage as it will be disadvantageous to the industry in both long- and short-run. Additionally, customers think that price incurred is worth the value received. This becomes a problem when it comes to attracting new customers as majority of the current customers will not be willing to change their service provider. Finally, the issues of innovation and strategic marketing programs have financial consequences for the mobile industry. While service innovation provide better solutions for customer demands, it comes at a hefty price and it should also be noted that not all resources spent on innovation is not guaranteed to yield success because some innovative ideas can eventually fail when implemented in the market.

Thus, a solution for solving these issues becomes inevitable as it is vital for the survival of the mobile industry and profit maximization. Therefore, it is recommended that the mobile service providers in Malaysia should shift from adopting price as a means of gaining competitive advantage and focus on adopting innovation as a means of gaining competitive advantage. While innovation is viewed as being costly, the factual element in this recommendation is that the cost forinnovating a new service that adds value to existing service can be incorporated into the price of the services, and as the findings reveal, customers are willing to pay more to try new innovative services. This shift will benefit the industry in generally because it will increase their profit level and the extra money made can then be invested into innovation and creativity. Once a successful new service has been developed, it will be marketed at higher price than current services in the market and the industry will regain all invested costs. Thus, a shift from pricing to innovation as a means of competition is arguably the right course that the industry should adopt.

7.0 REFLECTION

As an introduction to this reflection, it must be noted that finding the right article for evaluating marketing and pricing strategies within the mobile industry was not easy. However, having the opportunity to undertake this research was a delight as it provides numerous memorable moments.

Once the topic of dissertation was chosen, the next step was to draft a proposal. The hefty nature of this research topic immediately came into view during the proposal drafting section. It was essential that the research paper meet all requirements especially word counts for each chapter but previous studies found in relation to the topic was not encouraging and it also triggered frustration from the side of the author. In search of the right source, academic research websites such as Emeraldinsight.com and SPRS.com came into view in almost an instant.

About fifty six related research papers were chosen for this research and downsizing the original one hundred and thirty two gathered papers to ensure focus on the topic of discussion. Reading fifty six research papers with some of them accounting for forty to sixty pages was not funny at all as it required physical, mental and psychological strength from the side of the author. At certain point, the author had to sacrifice leisure time and forfeit meals to ensure that all the chosen papers were reviewed. Once the author had gathered enough information, the literature review was then written. However, the challenge was not close to being over.

The main difficulty came during the design of questionnaire, data gathering section and data analyses section. Although the researcher had engaged in numerous other primary researches, this particular research was a very difficult one and questionnaire design nearly turned a nightmare. The first difficulty experienced was the type of questions to ask and how to ask those questions in simple and common English that will be easily understandable by the responders. Initially 30 questions were drafted but it had to be put through rigorous screening process and later reduced to 20 questions. However, it came to the notice of the researcher that some of these questions were written in advanced English. Thus, the task of rewriting the whole question in an easy to understand English without shifting from the research objective quickly became evident. As there is no option or possibility of omitting the data section of the research, the writer had no option but to do whatever it takes in order to ensure quality data gathering for the research.

At this stage, it seemed that the further the task is reduced the more the remaining tasks become difficult. After numerous contemplations on the best way to gather data for this research, online survey was chosen as it would allow response from responders throughout Malaysia; which would have been difficult if face-to-face method was chosen as a result of the associated transportation and distribution cost. At this stage, the next step was to design the online survey and find the right means for gathering the required data. The first thing here was to host a website online where the survey will be hosted for responders to view. Freeonlinesurvey.com was chosen as the name sounds popular, easy to memorize and unique.

A programmer was paid to program the survey as contained in appendix (1) below. The reason for paying a program was due to the writer’s unfamiliarity with programing. All the contents were then programed and hosted in the website (which was made available for 24/7 for data gathering). During the programing section, a code was implemented into the whole programming to ignore all response from IPs thatare not registered in Malaysia. By so doing, it ensured that all response for the research was only from Malaysian people. While the issue of IP can be trespassed by users who use PROXY sites for surfing, it was also put into consideration. The site was programmed to block all opening of the site from all proxy users.

Definitely the responders for this research will not fly from the winds, thus the researcher had to do what is best for attracting responders. This resulted in additional cost. The chosen advert platform was country specific. That is, the survey was advertised to only Malaysian Facebookers. By so doing, it ensured that reach of audience is increased and thus increase response possibilities. Up to this moment, it still sound unbelievable to say  that a total of 544 people liked the Facebook page, and this people had a total of 473, 942 friends on Facebook who saw our advertisement on their Facebook Page, but only 385 people visited the site with just 120 people partaking in the survey. Such is the difficulties involved in online survey as the numbers of people who see the advert does not reflect the number of people who will be willing to view the advert. Some of the reasons behind such difference have been explained in the limitation of chosen methodology above.

The fun part of conducting online survey is the ease at which the gathered data is imputed into the system for analyses. The data can be copied and pasted directly into the SPSS system for analyses and such approach reduced typing errors that can be associated with inputting the data manually. SPSS was adopted for the data analyses as it is one of the widely used statistical analyses software for business research. Another cost was incurred in purchasing the SPSS software from IBM.com. Although a huge of amount of money (approximately 1,000 USD) was spent for this research, it is worthy to note that the value gained is worth the expenditure. After the data analyses, it can easily be seen that the whole research is coming to conclusion and thus, it was a joy knowing that the struggle is finally yielding benefits.

The analysed data were then documented and explained in the research. These data were also adopted for proving hypotheses. From the data analyses, it was found that the findings from this research are similar with the findings from the same research as conducted by the Malaysian Communication and Multimedia Commission (2010). Such findings are similarity in age of mobile users, expenditure and location which makes the whole research valuable. All citations had to be compiled individually from the fifty six related papers that were used for this research. That was another nightmare and it took two stressful days to finish all the compilations.

Finally, it can be seen that the whole research is now over. There was mixed feelings at this stage. The feeling of joy from the research being over and another of sadness from the fact that an opportunity to conduct this kind of research once more might not be close or could never come in a whole lifetime. While this research is considered as being stressful, it offered numerous opportunities for learning and implementing new things and such opportunities triggered moments of joy; considering that knowledge acquire and put into practice by yourself is worth knowledge given to you by other people. In essence, readers are advised to seem more than just human effort while reading this research, but to look deeper into the emotional and psychological resources applied to produce such a wonderful piece of work. For the rest of the researcher’s life, this paper will forever be considered a lifetime achievement and an opportunity that changed numerous things in his life with relation to believing that “nothing is impossible” and “once you believe in something and put all your efforts in it, you will eventually end up achieving it”. Thank you for reading this.

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9.0 APPENDICES

Appendix 1: Questionnaire used for this research

SURVEY TO EVALUATE MARKETING AND PRICING STRATEGIES OF MALAYSIA’S MOBILE INDUSTRY