CONSUMER PREFERENCE AND SATISFACTION TOWARDS VARIOUS CELLPHONE SERVICE PROVIDES CHAPTER-I INTRODUCTION CONSUMER A consumer is an individual who purchase or has the capacity to purchase goods and services offered for sale by marketing institutions in order to satisfy personal or household needs,wants or desires. According to a statement made by Mahatma Gandhi, ‘consumer refers to the following, “A consumer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an outsider to our business.
He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so”. So consumer is like the blood of our business and also a satisfedcustomer is a word of mouth advertisement of a product / services. The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of effective consumer demand, producers would lack one of the key motivations to produce to sell to consumers.
Typically, when business people and economists talk of consumers, they are talking about the person as consumer, an aggregated commodity item with little individuality other than that expressed in the decision to buy or not to buy. However, there is a trend in marketing to individualize the concept. Instead of generating broad demographic profiles and psycho-graphic profiles of market segments, marketers have started to engage in personalized marketing, permission marketing, and mass customization.
There is increasing backlash from the public over use of the label “consumer” rather than “customer”, with many finding it offensive and derogatory. Consumer choice is a theory of microeconomics that relates preferences for consumption goods and services to consumption expenditures and ultimately to consumer demand curves. The link between personal preferences, consumption, and the demand curve is one of the most closely studied relations in economics. Consumer choice theory is a way of analyzing how consumers may achieve equilibrium between preferences and expenditures by maximizing utility as subject to consumer budget constraints.
Preferences are the desires by each individual for the consumption of goods and services that translate into choices based on income or wealth for purchases of goods and services to be combined with the consumer’s time to define consumption activities. Consumption is separated from production, logically, because two different consumers are involved. In the first case consumption is by the primary individual; in the second case, a producer might make something that he would not consume himself. Therefore, different motivations and abilities are involved.
The models that make up consumer theory are used to represent prospectively observable demand patterns for an individual buyer on the hypothesis of constrained optimization. Prominent variables used to explain the rate at which the good is purchased (demanded) are the price per unit of that good, prices of related goods, and wealth of the consumer. The fundamental theorem of demand states that the rate of consumption falls as the price of the good rises. This is called the substitution effect.
Clearly if one does not have enough money to pay the price then they cannot buy any of that item. As prices rise, consumers will substitute away from higher priced goods and services, choosing less costly alternatives. Subsequently, as the wealth of the individual rises, demand increases, shifting the demand curve higher at all rates of consumption. This is called the income effect. As wealth rises, consumers will substitute away from less costly inferior goods and services, choosing higher priced alternatives. CONSUMER SATISFACTION
Every human being is a consumer of different produces. If there is no consumer, there is no business. Therefore, consumer satisfaction is very important to every business person. According to Philip Kotler consumer satisfaction is defined on, “personal feeling of pleasure resulting from comparing a product’s pursued performance in relation to his /her expectations”. Consumer attitude measurements are taken on either potential buries or existing client’s buries in order to identify their characteristics. Why should the competent market engineer conduct consumer research?
Consumer’s surverys can provide the researcher with a wealth of information, valuable of the marketing funchion. Detailed information regarding the customer in a market will provide the basic platform for all marketing decisions. Marketing decision maker needs descriptive information about the total potential unit and dollar sales in each segment. Perhaps the most important one is that a seller need to be aware of the relevant objective and need of consumer and how their objectives might best reserved by the products.
Customer satisfaction, a term frequently used in marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals. ” In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses.
It is seen as a key performance indicator within business and is often part of a balanced scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. “Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers’ expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. . . These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective. ” Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. “In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction.
When customers have high expectations and the reality falls short, they will be disappointed and will likely rate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel even though its facilities and service would be deemed superior in ‘absolute’ terms. ” The importance of customer satisfaction diminishes when a firm has increased bargaining power. For example, cell phone plan providers, such as AT;T and Verizon, participate in an industry that is an oligopoly , where only a few suppliers of a certain product or service exist.
As such, many cell phone plan contracts have a lot of fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms. PURPOSE “Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty. “Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is two fold. ” 1. “Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the company’s goods and services. ” 2. “Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firm’s customers will make further purchases in the future.
Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes. ” On a five-point scale, “individuals who rate their satisfaction level as ‘5’ are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as “The percentage of surveyed customers who indicate that they would recommend a brand to friends. When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage. ) “Individuals who rate their satisfaction level as ‘1,’ by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction. ” MARKET The term market is derived from Latin Word ‘Mercatus’, which means ‘totrade’ that is purchasing and selling of goods.
It also means merchandise truthic place of business. According to Pyle, “Market includes both place and region in which buyers and sellers or in free competition with one another”. A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers. It can be said that a market is the process by which the prices of goods and services are established.
For a market to be competitive, there must be more than a single buyer or seller. It has been suggested that two people may trade, but it takes at least three persons to have a market, so that there is competition on at least one of its two sides. However,competitive markets, as understood in formal economic theory, rely on much larger numbers of both buyers and sellers. A market with single seller and multiple buyers is amonopoly. A market with a single buyer and multiple sellers is a monopsony. These are the extremes of imperfect competition.
MARKETING Marketing includes all the impacts involved in the exchange process of transferring the possession and ownership of goods or services from the producer to the ultimate consumer’s. Marketing is the process of communicating the value of a product or service to customers. Marketing might sometimes be interpreted as the art of selling products, but selling is only a small fraction of marketing. As the term “Marketing” may replace “Advertising” it is the overall strategy and function of promoting a product or service to the customer.
The American Marketing Association defines marketing as “the activity ,set of institutions,and processes for creating, communication, delivering,and exchanging offerings that have value for customers,clients,partners,and society at large. ” From a societal point of view, marketing is the link between a society’s material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. The process of communicating the value of a product or service through positioning to customers.
Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value. MARKETING FORMULA A)The foremost step is business aims at profit. B)For profit making he can sell the products. C)For selling the product he should create customers.
D)For creating the customer’s, customer’s needs of preferences to beidentified and satisfied. E). To satisfy the customer’s new product to be produced. Marketing is trying to learn, * Who buy the products or services? * How do they buy? * When do they buy? * Where do they buy? * Why do they buy? * How often they buy? It is otherwise called understand and predict human actions in their buying role. A marketer is act as consumers while them purchasing any goods/services, and try to market that product to an ultimate consumer. So, marketingis starts with consumer and ends with consumer. So, today’s market is called on consumer market.
It can be defined on,“All the individuals and households who buy goods and services for personal consumption. SKILLS OF MARKETERS Marketers have 4 main skill sets that they bring to an enterprise: 1)Opportunity Identification: Marketing begins before there is a product to sell. Many people think marketing is just selling whatever comes out of the manufacturing plant. It’s the job of marketing to decide WHAT comes out of the manufacturing plant in the first place. Before a business can make money there must be opportunities for money to be made and it’s marketing’s job to define what those opportunities are.
Marketers analyze markets, market gaps, trends, products,competition, and distribution channels to come up with opportunities to make money. 2) Competitive strategy/positioning: Markets consist of groups of competitors competing for a customer’s business. The job of marketing is to decide how to create a defensible sustainable competitive advantage against competitors. Marketers conceive strategies, tactics, and business models to make it hard if not impossible for competition to take away customers from their business. 3) Demand generation/management It’s the job of marketing to create and sustain demand for a company’s products.
Marketers manage demand for a company’s products by influencing the probability and frequency of their customer’s purchase behavior. 4)Sales: The ultimate goal of marketing is to make money for a business. In most company’s sales is a different discipline and department from marketing. But in order for sales people to have any long term success in a company they must be led by marketing. The better job a company does of identifying opportunities, creating a differential sustainable competitive advantage, and generating demand for their products the easier it will be for sales people to make sales.
MARKET SHARE OF PUBLIC AND PRIVATE INDUSTRY The fixed line and mobile segments serve the basic needs of local calls, long distance callsand the international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messaging, Internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. TheGSM,CDMA,WLLservice providers are all upgrading them to provide 3G mobile services.
Along with improvement in telecom services, there is also an improvement in manufacturing. In the beginning, there were only the Siemens handsets in India but now a whole series of newhandsets, such as Nokia’s latest N-series, Sony Ericsson’s W-series, Motorola’s PDA phones,etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators,Camera’s, etc.
The value added services provided by the mobile service operators contribute more than 10% of the total revenue. THE GLOBAL CELLULAR MOBILE INDUSTRY Global telecom sector Earnings visibility Earnings growth is being driven by improving pricing conditions, stabilizing operating trends, aggressive cost cutting initiatives, a positive regulatory environment, strong wireless growth, and new market opportunities. This has translated into greater visibility of forward earnings as evidenced by recent increased analyst upgrades within the sector. Merger synergies
Given the substantial amount of excess capital available in the sector and in private equity we expect to see additional merger and acquisition activity, albeit at a slower pace than recently witnessed. Global telecom M;A deals over the past two years have reflected market expansion but have also had a positive effect on the buyers’ balance sheets. Partnering companies have begun realizing their synergies through cost reductions and economies of scale. In the US, the largest three companies now account for over 70% of the sector market cap; this compares to 34% in 1990.
Trends in bundled services are also paving the way for additional M;A activity. Sector consolidation will further increase the importance of stock selection. METHODS TO CUSTOMER SATISFACTION Companies use the following methods to measure customer satisfaction. 1 ) Complaints and suggestion system: Companies obtaining complaints through their customer service centres, and further suggestions were given by customers to satisfy their desires. 2) Customer satisfaction surveys: Responsive companies obtain a direct measure of customer satisfaction by periodic surveys.
They send questionnaires to random sample of their customers to find out how they feel about various aspects of the company’s performance and also solicit views on their competitor’s performance. It is useful to measure the customer’s willingness to recommend the company and brand to other persons. 3 )Lost Customer Analysis: Companies should contact customers who have stopped buying or who have switched to another supplier to learn why this happened. 4 )Consumer Behavior Vs Consumption Behavior:
Consumer behavior refers to the manner in which an individual reaches decision related to the selection, purchases and use of goods and services. Walters and Paul says that,consumer behavior is the process where by the individuals decides what, when, how and from whom to purchase goods ; services. Consumer behavior relates to an individual person (Micro behavior) where asconsumption behavior relates to and to the mass or aggregate of individuals. (Macro behaviour) consumers behavior as a study focuses on the decision process of the individual consumer or consuming unit such as the family.
In contrast the consumption behavior as a study is to do with the explanation of the behavior of the aggregate of consumers or the consuming unit. Consumer is a pivot,around which the entire system of marketing revolves. The study of buyer behavior is one of the most important keys to successful mark. 1. 2. IMPORTANCE OF CONSUMER SATISFACTION The needs to satisfy customer for success in any commercial enterprise is very obvious. The income of all commercial enterprise is derived from the payments received for the products and services supplied to its customers.
If there is no customer there is no income and there is no business. Then the coreactivity of any company is to attract and retain customers. It is therefore no surprise that Peter Drucker the renowned management Guru, has said “to satisfy the customers is the mission and purpose of every business”. Satisfaction of customer is essential for retention of customer’s and for continuous sales of the products and services of the company to customers. This establishes the needa for and the importance of customer satisfaction. The satisfaction of consumers is different from onto another.
Became, each consumer has the different behaviour in their life. So, the marketer satisfy the consumer, he must very well know the behaviour of consumer. 1. 4. CONSUMER BEHAVIOUR The term consumer behaviour may be defined as the behaviour that consumer displays in searching for purchasing, using, evaluating, producing,services and ideas which they expect will satisfy their needs. In other words, “It is a study of physiological, social, physical, behaviours of all potential customer as they become aware of evaluation, purchase and consumption and ell other about products and services” 1. 5. OBJECTIVES OF THE STUDY: * To study the evaluation of cell phones with particular reference to India. * To ascertain the attributer which influenced the customer’s in selecting a particular cell phone services provider. * To study the consumer’s satisfaction towards different cell phone service providers. * To assess the problems faced by the cell phone users in services. * To offer valuable suggestions to improve the services of cell phones in each companies. INRODUCTION TO TELECOM INDUSTRY The Indian Telecommunications network with 110. 1 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world and represents unique opportunities for U. S. companies in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005,is expected to reach 250 million in 2007. According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by2007. The wireless subscriber base has jumped from 33. 69 million in 2004 to 62. 57 million in FY2004- 2005.
In the last 3 years, two out of every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54. 6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2. 5 million new subscribers per month by 2007. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country. . 6. NEED OF THE STUDY Exchange of information becomes the necessity of life to a common man. In the modern world an individual tends to communicate anything to everything right from the place where he/she stands. Even while riding vehicle he / she wants communicate within a fraction of second at quick speed with clear voice,without any disturbance. Like line crossing, out of order, etc. most of which lack in the connection given by the department of tele-communictions. Cell phones emerges as a boon quench such a thirst, the by providing facilities,which a common man cannot imagine.
Though cell phone industry has its originin the recent past and the growth has been excellent Day by day many new competitors enter the market with new attractive schemes, provide additional facilities, add new features to existing ones, reduce the charges her incoming and outgoing calls, introduce varieties of handsets,models a healthy competition that benefits the subscribers. Hence in this context, it is important to study the functioning of cellular phone services and the utilization of their services by the telephonesation. 1. 8. STATEMENT OF PROBLEM
In our country the growth of service marketing especially mobile phone industry is still in its infancy stage, as compared to the industrially advanced countries. It is for the fact that the economy of our country has been in the developing stage. There are various mobile phones services provider’s in our country and they are playing an essential role in fulfilling the needs of the customers. Now-a-days, the customers are more dynamic. Their taste, needs and preference can the changing as per current scenario. Hence the development of cellular industry mainly depends on the customer satisfaction.
However the following questions may arise regarding customer satisfaction. CHAPTER II REVIEW OF LITERATURE India is the world’s fastest growing industry in the world in terms of number of wireless connections after China, with 811. 59 million mobile phone subscribers. According to the world telecommunications industry, India will have 1. 200 billion mobile subscribers by 2013. Furthermore, projections by several leading global consultancies indicate that the total number of subscribers in India will exceed the total subscriber count in the China by 2013.
In 1850 experimental electric telegraph started for first time in India between Calcutta (Kolkata) and Diamond Harbor (southern suburbs of Kolkata, on the banks of the Hooghly River). In 1851, it was opened for the use of the British East India Company. Subsequently construction of telegraph started through out India. A separate department was opened to the public in 1854. Dr. William O’Shaughnessy, who pioneered the telegraph and telephone in India, belonged to the Public Works Department, and worked towards the development of telecom.
Calcutta or the-then Kolkata was chosen as it was the capital of British India. In early1881, Oriental Telephone Company Limited of England opened telephone exchanges at Calcutta (Kolkata), Bombay (Mumbai), Madras (Chennai) and Ahmedabad. On the 28th January 1882 the first formal telephone service was established with a total of 93 subscribers. From the year 1902 India drastically changes from cable telegraph to wireless telegraph, radio telegraph, radio telephone, trunk dialing. Trunk dialing used in India for more than a decade, were system allowed subscribers to dial calls with operator assistance.
Later moved to digital microwave, optical fiber, satellite earth station. During British period all major cities and towns in India were linked with telephones. In the year 1975 Department of Telecom (DoT) was responsible for telecom services in entire country after separation from Indian Post ; Telecommunication. Decade later Mahanagar Telephone Nigam Limited (MTNL) was chipped out of DoT to run the telecom services of Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for private investment.
In1995 TRAI (Telecom Regulatory Authority of India) was setup. This reduced the interference of Government in deciding tariffs and policy making. The Government of India corporatized the operations wing of DoT in 2000 and renamed Department of Telecom as Bharat Sanchar Nigam Limited (BSNL). In last 10 years many private operator’s especially foreign investors successfully entered the high potential Indian telecom market. Globally acclaimed operators like Telenor, NTT Docomo, Vodafone, Sistema, SingTel, Maxis, Etisalat invested in India mobile operators. Wireless Communication
Pager Services Pager communication successful launched in India in the year 1995. Pagers were looked upon as devices that offered the much needed mobility in communication, especially for businesses. Motorola was a major player with nearly 80 per cent of the market share. The other companies included Mobilink, Pagelink, BPL, Usha Martin telecom and Easy call. Pagers were generally worn on the belt or carried in the pocket. The business peaked in 1998 with the subscriber base reaching nearly 2 million. However, the number dropped to less than 500,000 in 2002.
The pager companies in India were soon struggling to maintain their business. While 2-way pagers could have buffered the fall, the pager companies were not in a position to upgrade their infrastructure to improve the ailing market. The Indian Paging Services Association was unable to support the industry. Pager companies in India also offered their services in regional languages also. However, the end had begun already. By 2002, Motorola stops making or servicing pagers. When mobile phones were commercially launched in India, the pager had many advantages to boast.
Pagers were smaller, had a longer battery life and were considerably cheaper. However, the mobile phones got better with time and continuously upgraded themselves. Mobile Communication First mobile telephone service on non-commercial basis started in India on 48th Independence Day at country’s capital Delhi. The first cellular call was made in India on July 31st, 1995 over Modi Telstra’s MobileNet GSM network of Kolkata. Later mobile telephone services are divided into multiple zones known as circles. Competition has caused prices to drop and calls across India are one of the cheapest in the world.
Most of operator follows GSM mobile system operate under 900MHz bandwidth few recent players started operating under 1800MHz bandwidth. CDMA operators operate under 800Mhz band, they are first to introduce EVDO based high speed wireless data services via USB dongle. In spite of this huge growth Indian telecom sector is hit by severe spectrum crunch, corruption by India Govt. officials and financial troubles. In 2008, India entered the 3G arena with the launch of 3G enabled Mobile and Data services by Government owned MTNL and BSNL. Later from November 2010 private operator’s started to launch their services.
Broadband communication After US, Japan, India stands in third largest Internet users of which 40% of Internet used via mobile phones. India ranks one of the lowest provider of broadband speed as compared countries such as Japan, India and Norway. Minimum broadband speed of 256kbit/s but speed above 2Mbits is still in a nascent stage. Year 2007 had been declared as “Year of Broadband” in India. Telco’s based on ADSL/VDSL in India generally have speeds up to 24Mbit max while those based on newer Optical Fiber technology offer up to 100Mbits in some plans Fiber-optic communication (FTTx).
Broadband growth has been plagued by many problems. Complicated tariff structure, metered billing, High charges for right of way, Lack of domestic content, non implementation of Local-loop unbundling have all resulted in hindrance to the growth of broadband. Many experts think future of broadband is on the hands of wireless factor. BWA auction winners are expected to roll out LTE and WiMAX in India in 2012. Next Generation Network (NGN) Next Generation Networks, multiple access networks can connect customers to a core network based on IP technology. These access
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