"ASSESSMENT AND ANAYSIS OF CUSTOMER SATISFACTION WITH SERVICE DELIVERY OF MTN, KUMASI" NAME: FRANCIS KWAKU DOGBE

Transcription

1 "ASSESSMENT AND ANAYSIS OF CUSTOMER SATISFACTION WITH SERVICE DELIVERY OF MTN, KUMASI" By NAME: FRANCIS KWAKU DOGBE A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirements for the degree of COMMONWEALTH EXECUTIVE MASTER OF BUSINESS ADMINISTRATION October, 2011

2 DECLARATION I hereby declare that this thesis is the result of my own work except references cited that have been duly acknowledged. It has never been submitted for the award of any degree. Francis Kwaku Dogbe... Name Signature Date Certified by: S.A. Kyeremanteng. (Supervisor) Signature Date Prof. I. K Dontwi (Dean IDL) Signature Date.

3 DEDICATION I specially dedicate this work to my lovely mother Petrina Yawa Adzimah and to all who inspired and encouraged me.

4 ACKNOWLEDGEMENT I express my deepest gratitude to my Father Almighty God in heaven whose grace and mercy, I could not have come this far in life. To my supervisor, S.A. Kyeremanteng, I owe you a special dept of thanks for excellent support and guidance that enabled me to produce this work on time. I also thank my colleague staff at MTN-Kumasi Nhyiaeso branch for their support. Madam Charity Armoh also deserves a special gratitude for her immense financial support throughout this work not forgetting my special friend and brother, Kojo Abiw-Abaidoo and his wife for their moral support. And to anybody who in one way or the other helped me out with this work, I say, God Richly Bless You All

5 ABSTRACT This work sought to access and analyze customer satisfaction with service delivery at MTN Ghana. Kumasi MTN office, Nhyiaeso was purposively chosen for this work. The main problem for this study was to ascertain whether customers are satisfied with service delivery of MTN Ghana. The objectives of the study were to determine the impact of customer satisfaction on the performance of MTN Ghana through service quality, to ascertain the dimension of service quality which have caused customers to be satisfied or dissatisfied using the SERVQUAL model, analyse the effect of customer satisfaction on the current operation of MTN, ascertain whether or not customer satisfaction affect the individual staff any way and finally provide the requisite recommendations to improve customer satisfaction strategies of MTN. A structured questionnaire was developed, pretested and personally administered to targeted subscribers and staff of MTN at the Nhyiaeso office. A total of 120 respondents were contacted; 100 subscribers and 20 staff. A survey method was adopted. The findings indicated both customers and staff were in agreement with the high score for the five service quality dimensions. Customers found tangibility to be the best option followed by assurance, empathy, reliability and responsiveness. Relationship between staff and customers were mutual and cordial in terms of service delivery. It is recommended that managers should work at improving the service quality of reliability and responsiveness to be ahead of competition.

6 TABLE OF CONTENT Page TITLE PAGE DECLARATION ii DEDICATION iii ACKNOWLEDGEMENT..iv ABSTRACT v LIST OF FIGURES LIST OF TABLES CHAPTER ONE GENERAL INTRODUCTION 1.0 Introduction Background of the Study Statement of the Problem Objectives of the Study Research Questions of the Study Significance of the Study Scope of the Study.8

7 1.7 Limitations of the Study Research Methodology Data Collection Sample Design Organization of the Study 10 CHAPTER TWO LITERATURE REVIEW 2.0 Introduction Concepts and Theoretical Framework Defining Customers Types of Customers Concept of Customer Satisfaction Dimensions of Customer Satisfaction Attitude and satisfaction Satisfaction with Attribute-specific and overall Performance Magnitude of Satisfaction Customer Satisfaction as a Process and an Outcome Customer Satisfaction in Mobile Telecom Companies in Ghana Total Quality Management.19

8 2.6 Conceptual Framework Servqual and Rater Objections to Servqual instrument Service Quality Measurement Consequences of Poor Quality Service Managing Service Quality Service Quality Significance and Drivers of Service Quality Development of Mobile Telecommunication Definition and Brief Historical Perspective Players and Role of Mobile Telecommunication Brief Historical Overview of Ghana s Telecom Industry Overview of MTN.37 CHAPTER THREE RESEARCH METHODOLOGY 3.0 Introduction Data Sources Primary Data Secondary Data 39

9 3.3 Sample and Sampling Techniques Data Collection Instrument Data Analysis Limitations to Data Collection.43 CHAPTER FOUR DATA ANALYSIS, DISCUSSIONS AND PRESENTATIONOF RESULTS 4.0 Introduction Demography of Respondents Analysis of Service Quality Dimensions Reasons of Choosing MTN Analysis of Service Quality Dimensions of customers Tangibility Dimension Reliability Dimension Responsiveness Dimension Assurance Dimension Empathy Dimension Response from Staff.62

10 CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.0 Introduction Summary of Findings Findings from Service Quality Dimensions Findings on Impact of Customer Satisfaction on Performance Findings from the Paired Sample Test of Differentiation Findings on Effects of Customer Satisfaction on Operations of MTN Findings on Customer Satisfaction effects on Individual Staff Conclusion Recommendations Service quality delivery Comparison of MTN to their Competitors Vigorous Study of MTN Service Quality Dimensions Suggestion for further research.74

11 LIST OF FIGURES Figure 4.1: Age Group of Respondents.48 Figure 4.2: Alternative Service Provider of Customers 50 Figure 4.3: Service Quality Dimension by Staff...66 Figure 4.4: Comparison of Service Quality Levels 67

12 LIST OF TABLES Table 4.1: Gender of Respondents..46 Table 4.2: Number of years with Company..49 Table 4.3: Level of Education and Occupation of Customers.51 Table 4.4: Customers Reasons for Choosing MTN..52 Table 4.5: Comparison of MTN to Other Networks 54 Table 4.6: Descriptive Statistics on the Tangibility Dimension by Customers 56 Table 4.7 Descriptive Statistics on the Reliability Dimension of Customers..57 Table 4.8: Descriptive Statistics on Responsiveness Dimension of Customers.59 Table 4.9: Descriptive Statistics on Assurance Dimension of Customers...60 Table 4.10: Descriptive Statistics on Empathy Dimension by Customers..61 Table 4.11: Customer Service Drivers in Telecom Industry..62 Table 4.12: Effects of customer relationship to MTN 64 Table 4.13: Summary of Pair Sample Test of Differentiation between Customers and Staff Perception 68 Table 4.14: Chi-Square Confirmation on impact of Satisfaction on Performance of MTN 69

13 CHAPTER ONE GENERAL INTRODUCTION 1.0 Introduction In this chapter, the background to the study is given, a statement of the research problem is made, the objectives of the study are spelt out, research questions are posed; the significance of the study captured, followed by the scope and limitations of the study; a brief research methodology is provided and the disposition/structure of the study outlined. MTN, arguably the leading mobile telecommunications company in the emerging markets of Africa and the Middle East, entered the Ghanaian market following the acquisition of Investcom in MTN is the market leader in the increasingly competitive mobile telecommunications industry in Ghana in terms of market share, quality human resource, solid financial/assets base, countrywide dispersion of computer networked offices, product quality and diversity, and very importantly, responsible corporate citizenship activities. MTN's network coverage is extensive, covering all ten regional capitals and many rural and remote areas. MTN has always been the industry leader The landscape of the Ghanaian Telecommunication industry has however; seen dramatic changes in almost the last decade ( ). New companies both local and foreign have emerged some as start-ups others through mergers or acquisitions. Notable among them are the Vodafone Ghana, Millicom Ghana Ltd (tigo) and Airtel Ghana to

14 mention a few; all virtually offering similar products in the industry. In another dimension, the liberalization of the economic environment has intensified the competition leading to the influx of operators hence the need to ascertain each company s performance in the last decade or so and the resulting effectiveness of its competitive strategies adopted through service quality delivery and the ardent impact on customer satisfaction. It is therefore not out of place to make a safe claim that each company s performance in the last decade reflects the effectiveness of its customer service activities. On this premise, the concepts of customer satisfaction with quality service delivery of MTN, its importance and impact on corporate performance are now considered. 1.1 Background of the Study Leah (2005) opined that customer satisfaction is the holy grail of success for businesses in the customer service industry. The goal of every successful business is to maintain a high level of customer satisfaction by providing their clientele with value added transactions through positive customer service interactions. In turn the customer's expectation is to feel important and assisted during the interactions that ultimately lead to their desired end result. Customer service representatives are often trained to know the basic elements of providing excellent customer service. They are taught to listen, to be patient, tolerant and above all else helpful. A person with a short fuse or quick temper is not a good candidate for a customer service position dealing with a wide array of personalities.

15 Companies often monitor their employees to make sure they consistently abide and apply by all of the rules and standards they want to convey as a means of executing and maintaining good customer service practices. Customer service representatives are the quintessential front line greeters and hand shakers at the core of every business. They keep the customers informed and happy since a business cannot sustain without a healthy clientele. A good experience means a happy customer and a happy customer is every business's best asset. Zeithaml (2000) stressed that leveraging service quality has been shown to assist in both the retention and expansion of the existing customer base; thus in an attempt to establish a competitive advantage, marketing practitioners often seek to differentiate their service offering upon service quality. Spreng & Mackoy (1996) indicated that service quality and customer satisfaction are inarguably the two core concepts that are at the crux of the marketing theory and practice. According to Shemwell et al., (1998) in today s world of intense competition, the key to sustainable competitive advantage lies in delivering high quality service that will in turn result in satisfied customers. The customer s overall satisfaction with the services of the organization is a function of all the encounters/experiences of the customers with that organization. Similar to service quality, customer satisfaction can occur at multiple levels in an organization, for example, satisfaction with the contact person, satisfaction with the core service and satisfaction with the organization as a whole.

16 In the mobile telecommunication sector customers are not that loyal to one particular service provider, especially when they are not receiving value for money kind of service. This is evident with some customers subscribing to more than one mobile telecommunication network. Hence, contemporary companies are forced to consider how to create a loyal customer base that will not be eroded even in the face of fierce competition. Therefore, the mobile telecommunication companies must realize the necessity of studying and understanding various antecedents (viz. service quality, switching cost, trust, corporate image, and customer satisfaction) of the customer loyalty which might help them to develop a loyal customer base (Sharp & Sharp, 1997). This work is therefore an exploratory study to unearth quality service delivery on customer satisfaction in the mobile telecommunication industry and to channel future research in customer service in Ghana. 1.2 Statement of the Problem Weimer (2010) mentioned that good customer service is an expectation held by the customer regarding the manner in which they are treated by anyone representing the company. Consumers want and expect to be addressed in a respectful and professional manner when dealing with any situation, problem, complaint, question or assistance that may arise pertaining to any aspect of their business relationship A negative customer service experience often leads to a dissatisfied or disgruntled customer; and an unhappy customer can tarnish the name and reputation of a company by generating negative feedback. Customer service is a standard in customer satisfaction, so consumers expect to have their issue managed while being addressed in

17 a polite and in a timely manner. Customers want efficient, well trained people representing the businesses they deal with routinely. Being impolite, outspoken, disconnected or refusing to listen to a customer does not reflect a positive image for the company or its expectations of good client service. The focus must always remain on the customer and their needs first making them feel valued. The statement of the problem is that there is a widespread dissatisfaction with the general quality service delivery of the mobile telecommunication companies in spite of the increase in subscriber growth rate; notwithstanding, this growth trend could not be attributed to customer satisfaction. According to the National Communication Authority (NCA) Report (2009) the growth trend in the industry is fundamentally due to the substantial growth in investment and expansion of network access during the last decade. The research therefore sought to evaluate the extent of customer satisfaction ensuring efficiency and effectiveness of the quality of service delivery using the appropriate and approved mechanisms. 1.3 Objectives of the Study Customer s satisfaction is a considerable part of business, which makes it important to properly and correctly assess its effectiveness and efficiency. It is upon this premise the general objective of the research was to assess and analyze customer satisfaction with service delivery in MTN Ghana to the ever increasing competition in the mobile telecommunication industry through Customer Service. The specific objectives were to:

18 1. To determine the impact of customer satisfaction on the performance of MTN Ghana through service quality; 2. To ascertain the dimensions of service quality which have caused customers to be satisfied or dissatisfied using the SERVQUAL Model; 3. Analyze the effects of customer satisfaction on the current operations of MTN; 4. Ascertain whether or not customer satisfaction affects the individual staff in any way; and 5. Provide the requisite recommendations to improve the customer satisfaction strategies of MTN. 1.4 Research Questions of the Study In order to attain the above set objectives of the study the following research questions were posed: 1. What is the impact of customer satisfaction on the performance of MTN Ghana? 2. What are the dimensions of service quality which have caused customers to be satisfied or dissatisfied using the SERVQUAL Model? 3. What are the effects of customer satisfaction on the current operations of MTN? 4. Has customer satisfaction affected the individual staff of MTN Ghana in any way? 1.5 Significance of the Study

19 The output of this study contributes to knowledge and literature in the subject is under investigation. It is immensely useful as a source of reference to researchers, academics, students, policy makers, marketing professionals and other stakeholders interested in how quality service delivery is impacting on Customer Satisfaction in the business world in developing country as Ghana. To the management of MTN Ghana, the findings and results in this study provides a more reliable scientific measure and perspective for describing and evaluating the level of their customer satisfaction with the services they deliver. It also serves as a source of information that brings to the fore the switching intentions of their current and potential customers. Therefore providing the empirical support for management strategic decisions in several critical areas of their operations, and above all, provide a justifiably valid and reliable guide to designing workable service delivery improvement strategies for creating and delivering customer value, achieving customer satisfaction and loyalty, building long-term mutually beneficial relationship with profitable customers and achieve sustainable business growth in Ghana. To policy makers like government agencies such as the Ministry of Communications and the National Communications Authority, the finding and results of this study provides insights and a more reliable guide to monitoring the impact of the operations of Ghana s Mobile Telecommunication Companies. It also serves as a yardstick for measuring partly their respective policy goals and objectives. It serves as assistance to the NCA among other things to facilitate the availability of quality equipment to consumers and operators, to ensure that communications systems operators achieve the highest level of efficiency in the provision of

20 communications services; ensuring that the mobile operators are responsive to customer and community needs, and that customers interest is protected. To stakeholders like investors, shareholders, employees, pressure groups, consumer associations, etc., the study provides information that suggests to the improvement in service delivery of the respective mobile telecommunications in Ghana. 1.6 Scope of the Study The study was conducted within the framework of assessing and analyzing customer satisfaction through the quality service delivery in the Ghanaian Mobile Telecommunication industry. The study was carried out at the MTN branch in Kumasi, specifically located at Nyhiaeso. It is a case study approach of one particular mobile telecommunications company (i.e. MTN Ghana) and does not cover other mobile telecommunication companies to reflect the entire industry evaluation to customer care. Hence the result will not be generalized but its findings will be placed in the relevant context of the individual mobile telecommunication company studied. 1.7 Limitations of the Study The main limitations of this study are constraints of resources, access, and time. The finance and material resource needed for a sample size for this study is inadequate. Even though Mobile telecommunication and also MTN as a single company nationwide study would have been more appropriate, there are constraints of financial resources and

21 unavailability of data as well as materials which will not make it possible to undertake nationwide study. Language is another access limitation as it is difficult translating some questions and statements into the local dialects perfectly because of the limited vocabulary of the local dialects. The unwillingness of management of MTN to release information which help enrich the study and also establish a strong validity and reliability. Furthermore, it is very difficult to access certain information that may be useful for the research. In addition, the researcher has to combine academic work with his regular profession. Moreover, costs in terms of printing, photocopying, binding as well as opportunity cost incurred without the requisite bursary from government. 1.8 Research Methodology Data Collection The sources of materials for the study were both primary and secondary. Primary data were collected by the use of a structured questionnaire which were designed and administered to customers and employees of the organization alike, for information on

22 the general perception of customer satisfaction by the Kumasi branch of MTN in the Ashanti Region. Scheduled Interviews were another medium through which primary data were obtained. Secondary materials were extracted from relevant textbooks, newspapers, reports/articles, journals, bulletins and documents presented by government agencies and policy planners Sample Design The purposive simple random sampling method was used in attaining the sample size, by basically concentrating on MTN, Kumasi branch in the Ashanti Region for the study. Due to time and limited resources constraints, a proportion of the organization s customers and staff were sampled for input for this work. 1.9 Organization of the Study The study is organized into five chapters. Chapter one is the introductory chapter that covers the Background to the study, Problem statement and Purpose of the study, Research questions Significance of the study, Limitations of the study, and organization of the study. Chapter two dealt with review of relevant literature. It covers mobile telecommunication and its role, state of telecommunication in Ghana, mobile telecommunication, Concepts and Theoretical Framework: customer, customer satisfaction, significance of customer satisfaction, customer satisfaction models, service and service quality; significance of service quality; service quality models, brief overview of MTN and chapter summary. Chapter three is the Research Methodology section. It focuses on the research designs, data sources: population, sample size and sampling technique, research instruments and data collection. Chapter

23 four is presentation of data and analysis of results and findings. Chapter five is the summary, conclusion and recommendations. CHAPTER TWO LITERATURE REVIEW 2.0 Introduction This chapter is devoted to the relevant literature review on the views required to connect to the research objectives on customer satisfaction on the service quality delivery; and for the purpose of orderly presentation; the study reviewed related literature such as those

24 which impinged on the research problem, definition and measurement of service quality, customer satisfaction and its management and improvements. Literature Review provides the foundation upon which a research is built to confirm, compliment, counter or establish any new trends that possibly might have emerged. This research proceeds accordingly to review literature that is relevant to the research topic 2.1 Concepts and Theoretical Framework Defining Customers According to (2011), a customer is a person who purchases goods or services from another; buyer; patron; or a person one has to deal with. Rust et.al.,(2000) opined that the term customer is commonly used to refer to end-users of a product. A customer refers to individuals or households that purchase goods and services generated within the economy. Smith (1997) indicated that historically, the word customer is derived from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her "custom," meaning expected purchases in the future. Hayes (1997) revealed that customer is a generic term referring to anybody who receives a service or product from some other person or group of people. Customer needs may be defined as the goods or services a customer requires to achieve specific goals. Different needs are of varying importance to the customer. Customer expectations are influenced by cultural values, advertising, marketing, and other communications, both with the supplier and with other sources.

25 Both customer needs and expectations may be determined through interviews, surveys, conversations, data mining or other methods of collecting information. Customers at times do not have a clear understanding of their needs. Assisting in determining needs can be a valuable service to the customer. In the process, expectations may be set or adjusted to correspond to known product capabilities or service. It is important to identify the types of customer surveyed when reporting customer satisfaction results. In this study the customers of concern are the individual consumers/users who subscribe to the services of MTN Ghana. 2.2 Types of Customers Hunter, (2010) stated that in retail, the idea of focusing on the best current customers should be seen as an on-going opportunity. To better understand the rationale behind this theory and to face the challenge of building customer loyalty, there is the need to break down shoppers into five main types: Loyal Customers: They represent no more than 20 percent of our customer base, but make up more than 50 percent of our sales. These people are the ones who can and should influence ones buying and merchandising decisions. Nothing will make a Loyal Customer feel better than soliciting their input and showing them how much their views are value. Discount Customers: They shop our stores frequently, but make their decisions based on the size of our markdowns. Impulse Customers: They do not have a particular item at the top of their To Do list, but come into the store on a whim. They will purchase what seems good at the time.

26 Need-Based Customers: They have a specific intention to buy a particular type of item. Wandering Customers: They have no specific need or desire in mind when they come into the store. Rather, they want a sense of experience and/or community. 2.3 Concept of Customer Satisfaction Berkman and Gilson (1986) stated that customer satisfaction is recognized as being of great importance to all commercial organizations because of its influence on repeat purchase behavior and word-of-mouth recommendations In general terms; customer satisfaction is seen as the essential determinant of business success (Moore et al., 1998). On the other hand, as competition has increased, customer satisfaction has been identified as a determinant of market share, return on investment and cost reduction (Burch et al., 1995). Nauman (1995) referred to several studies that had found that it costs about five times as much in time, money and resources, to attract a new customer as it do to retain an existing customer. This creates the challenge of maintaining high levels of service, awareness of customer expectations and improvement in services and products. Satisfaction reinforces positive attitudes toward the product/service, leading to a greater likelihood that the same product/service will be purchased again and that dissatisfaction leads to negative product/service attitudes and lessens the likelihood of using the same product/service again (Assael, 1987) Dimensions of Customer Satisfaction Sureshchandar et al., (2002), emphasized in a study that customer satisfaction is a multi

27 dimensional construct as in quality. Taylor and Baker (1994) also concluded that service quality and customer satisfaction are separate constructs. Whilst satisfaction indicates the state of a customer s psyche, quality refers to the state of a business resources and efforts. Whiteley, (1991) differentiated product and service quality by defining the former as What you get and the latter as How you get it. This is in agreement with Grönroos (1990) two-dimensional aspects of service quality (technical quality the quality of what is delivered; and the functional quality the quality of how the service is delivered). Whereas customer satisfaction could be seen as the outcome of the difference between customer s perception and expectation of service quality, it should not be forgotten that factors such as price, packaging and situational factors such as the service encounter, would also influence satisfaction Attitude and satisfaction Hence, Zeithaml and Bitner, (1996) define service quality as the way in which the whole service experience is performed. Their model of customer perceptions of quality and customer satisfaction hypothesized that satisfaction is more of an attitude and this attitude would influence perceptions of service quality, which in turn would influence purchase intentions (service quality leads to satisfaction and eventually purchase intentions. Failure to provide reliable service may result in customer dissatisfaction and possible defection. This is based on the premise that a satisfied customer will continue to maintain a relationship (Hallowell, 1996) and that relationship will lead to loyalty and longevity. Zeithaml, et al., (1990) arrived at the same idea by looking at the probable behaviour of the dissatisfied customer. They maintain that a dissatisfied customer is likely to switch to a competitor and may inform others of the bad experience.

28 2.3.3 Satisfaction with Attribute-specific and overall Performance: Satisfaction can be related to a specific attribute of a product or service (Cronin & Taylor 1992). Viewing satisfaction as attribute specific or overall performance depends on what one is interested in. If the interest is more of achieving marketing value, then attribute-specific would provide more useful insights to practitioners as to the extent to which a specific attribute of a service meets customer expectations or desires. Conversely, if the interest is focused more on achieving academic value, then overall performance measure would provide more academic value as it gives more useful information to academics and other stakeholders for the purpose of generalizations that call for attention to further research. In this study customer satisfaction is related to the overall performance of services delivered by mobile telecom networks in Ghana because we want to treat it basically from academic perspective with managerial implications Magnitude of Satisfaction According to Kotler & Keller (2006), customer satisfaction does not only prevent customer complaints but more importantly it is meeting and even exceeding customers expectations The point is that no complaints or dissatisfaction is not synonymous with customer satisfaction. This view has its roots in motivation theory of Herzberg Fredrick (1968). The mere fact that things do not go wrong and customers do not complain does not mean that they are satisfied with the product or service received. Conversely, customers can be dissatisfied with some things about an

29 organization, but satisfied with the organization s product or service offerings Satisfaction is therefore holistic/total (Kotler & Keller 2006, p.144) and can be in different magnitudes since customers can be extremely/very highly satisfied or delighted to just satisfied, and extremely dissatisfied to dissatisfied. In this study satisfaction is defined in both negative and positive magnitudes, from very satisfied to very dissatisfied Customer Satisfaction as a Process and an Outcome One area that has received considerable debate in customer satisfaction literature is whether customer satisfaction should be defined as an outcome or a process. Many early definitions conceptualized satisfaction as a process which is currently the dominant view held by most scholars (Oliver, 1980, Parasuraman et al., 1988). The process perspective presupposes that customer satisfaction is a feeling of satisfaction that results from the process of comparing perceived performance and one or more predictive standards, such as expectations or desires (Khalifa & Liu 2002). This perspective is grounded in the expectancy disconfirmation theory proposed by Richard Oliver (Oliver 1980). The customer is satisfied if the performance of product/service is equal to his/her expectations (positive disconfirmation) and he/she is dissatisfied if the product/service performance is perceived to be below his/her expectation (negative disconfirmation). If expectation exceeds perceived performance, the customer is highly satisfied. By taking satisfaction as a process these definitions do not focus on satisfaction itself but things that cause satisfaction, the antecedents to satisfaction, which occur primarily during the service delivery process (Vavra 1997).

30 More recent studies view satisfaction as an outcome or end result during the process of the consumption of a service; it is viewed as a post-purchase experience (Vavra 1997). This view has its roots in motivation theories that postulate that people are driven by the desire to satisfy their needs (Maslow, 1954) or that their behaviour is directed at the achievement of relevant goals (Vroom, 1964). In this way satisfaction is perceived as a goal to be achieved and can be described as consumer fulfillment response (Rust & Oliver, 1994). In the context of this study, customer satisfaction is defined from process perspective because we believe that in Ghana s mobile telecom market, customers evaluation of mobile telecom services takes place primarily during the service delivery process and continues, but not just an outcome that customers strive to achieve. 2.4 Customer Satisfaction in Mobile Telecom Companies in Ghana The state of customer satisfaction with service delivery is not clear as there is scanty documentation of the issue. According to a discussion paper on telecom developments and investments in Ghana (Frempong & Henten, February 2004, p.3), the authors noted that the goals set by government have only partly been met especially with respect to the development in rural areas and the quality of service is still low and has even deteriorated on some indicators. There is, therefore, a widespread dissatisfaction with the general telecom development in Ghana among users as well as policy decision makers and administrators. However, the industry has witnessed tremendous developments in the last decade as a result of the substantial growth in investment that has generated incredible increase in subscriber growth rate for all the mobile telecom operators in the industry by

31 December 2007 (ITU 2008; Africa ICT indicators 2007). This seems a success story, and there are high hopes that the service quality delivered by the MTN Ghana meets customer expectations, ideal service, or satisfaction. 2.5 Total Quality Management One of the major values customers expect from bankers, credit unions and other organization is high product and service quality. Most of the clients will no longer accept or tolerate average quality. If companies want to stay in the race, let alone be profitable, they have no choice but to adopt total quality management (TQM). Total Quality Management (TQM) is an organization wide approach to continuously improving the quality of all the organization s processes, products and services (Kotler, 2006). According to General Electrical s former chairman, Welch Jr., quality is our best assurance of customer, allegiance, our strongest defence against foreign competition, and the only path to sustained growth and earning (Welch, 1982). Product and service quality, customer satisfaction, and company profitability are intimately connected. Higher levels of quality result in higher levels of customer satisfaction which support higher prices and (often) lower costs. Greising (1994), states the bottom-line orientation forces companies to make sure that the quality of the product offering is in fact the quality consumers actually want. 2.6 Conceptual Framework This section of the study explores the relationships among service quality, service performance, and customer satisfaction within the context of the mobile telecommunication industry. The proposed conceptual model is based on five existing

32 service factors. Berry et al. (1985) provide a strong foundation for understanding the attributes of service quality. Their original qualitative study identified ten key dimensions of service quality, each of which relates not only to the service consumed, but also to the customers confidence in those providing the service. These included: tangibles, reliability, responsiveness, competence, courtesy, credibility, security, access, communication and empathy. Over the years Berry et al. (1985) fused the list to five broader categories Servqual and Rater Although widely referred to as SERVQUAL, Tenner and DeTorro (1992) coined the acronym RATER to describe the five elements which makes them more easily to remember. These are: Reliability: ability to perform the promised service dependably and accurately. Assurance: the knowledge and courtesy of employees and their ability to inspire trust and confidence. Tangibles: The physical facilities, equipment, and appearance of personnel. Empathy: The caring, individualized attention, and appearance of personnel. Responsiveness: The willingness of staff to help customers and provide prompt service. According to Zeithaml et al. (1990), the various statistical analyses conducted in constructing SERVQUAL revealed considerable correlation among items representing several of the original ten dimensions for evaluating service quality. SERVQUAL methodology has come to dominate the literature in relation to the evaluation of the service quality construct. SERVQUAL has been applied over the years in a wide variety

33 of sectors. Finn and Lamb, (1991), Teas, (1993) evaluated on retail shopping stores; Babakus and Boller, 1992 did research on public utilities, hospitals. Cronin and Taylor (1992) on financial services sector, Walker (1996) on the tourism sector. Gabbie and O Neill (1996) applied SERVQUAL on the hotel industry and more recently Sultan and Simpson (2000) did one on the international airline sector. In developing countries, SERVQUAL has been applied in the audit industry in Malaysia (Ishak et al, 2006) and in the ports of Nigeria (Ugboma et al, 2004). The construct of service quality as conceptualized in the service marketing literature centers on perceived quality, defined as a consumer's judgment about an entity's overall excellence or superiority (Zeithaml, 1987) Objections to Servqual instrument While the SERVQUAL instrument has been widely used, it has been subjected to various criticisms (Asubonteng et al., 1996). The criticisms include the use of difference scores, dimensionality, applicability and the lack of validity of the model, especially with respect to the dependence or independence of the five main variables (Babakus and Boller, 1992: Carman, 1990; Cronin and Taylor, 1992). Others include the fact that it does not address the service-encounter outcomes (Gronroos, 1990; Mangold and Babakus, 1991). Although the developers of SERVQUAL initially considered service quality to comprise functional (process) and technical (outcome) dimensions, its instrument does not include any measure of the technical quality dimension. Essentially, technical quality has been

34 neglected in efforts to study and measure service quality. SERVQUAL has been challenged on a number of grounds. One stream of objections suggest that absolute measures of attitudes provide a more appropriate measure of quality than explanations based disconfirmation models (Cronin and Taylor, 1994). Cronin and Taylor (1992) conclude that current performance best reflects a customer's perception of service quality and that expectations are not part of this concept. They perform an empirical test with four alternative service quality models: SERVQUAL: Service quality = performance - expectations Weighted SERVQUAL: Service quality = importance (performance - expectations) SERVPERF: Service quality = performance Weighted SERVPERF: Service quality = importance performance From the results of their empirical investigation they conclude that the unweighted SERVPERF measure (performance only) performs better than any other measure of service quality. Despite Parasuraman et al.'s (1988) initial claim that their five service quality dimensions are generic, it is generally agreed that this is not the case, and that the number and definition of the dimensions varies depending on the context. When measuring the quality of accounting firms, Freeman and Dart (1993) conclude that service quality is a seven-dimensional construct. Robinson and Pidd (1998) propose 19 dimensions of

35 service quality in the context of management science projects. According to Robinson (1999), developing separate instruments depending upon the purpose and context of the service quality measurement may be the most fruitful way forward. Since the understanding of service quality is so limited it seems unrealistic to be aiming for a global measurement approach until a much better understanding is obtained. According to Stauss & Weinlich (1997), a closer look, however, reveals some deficits of attribute-based quality measurement (like SERVQUAL). First, the data collected by these methods cannot completely reflect the customer's quality perception. Second, the respondents are forced to aggregate their quality experiences in a problematic way. A customer of a bank asked to evaluate the friendliness of customer contact employees of a bank is forced to tick a single point on a scale even if he/she had contacts with three employees whose behaviour and friendliness differed considerably. Third, as the quality items are formulated in a necessarily abstract manner, survey results are not particularly concrete (Bitner et al., 1985). 2.7 Service Quality Measurement According to Wilson et al (1994 pg. 31) quality is about listening to our customers and delivering more than what they expect. It is about paying attention to the smallest details and getting to the smallest details and getting it right for the first time every time. Most importantly, quality is a continuous process that involves employees. By making small improvements every day, we can make real progress and deliver increasingly higher level of customer value and satisfaction. Quality allows us to measure and compare our performance against the best in class. It sets the standard, for our support services and

36 enables us to focus on training and development on the most important areas. In terms of service quality dimension, Zeithmal et al (2000 pg. 82) emphasize that customers do not perceive quality as an un-dimensional concept. It is customers assessment of quality which includes perceptions of multiple factors. Buttle (1996, pg. 102) in European Journal of marketing SERVQUAL state that researcher have found that consumers consider five dimensions in their measurement of service quality. 2.8 Consequences of Poor Quality Service Weimershirch et al. (1994) comments that, it is important for management to recognize the different ways that the quality of a firm s product or service can affect the organisation; and to take these into account in developing and maintaining a quality assurance programme. He outlined some of the major ways that poor quality affects an organisation to include the following: Loss of business: failure to devote adequate attention to quality can damage a profit oriented organizations image and lead to a decreased share of the market, or it can lead to increased criticism and controls from a government agency or non profit organisation Liability poor quality may create potential liability for a firm due to damages or injuries resulting from either faulty design or poor services. Productivity productivity and quality are often closely related. Poor quality can adversely affect productivity during the production process through rework. Conversely, improving and maintaining good quality can have a positive effect on productivity.

37 Costs poor quality service increases certain costs incurred by the organisation. They include payments of discount to customers to offset the inferior quality, rework costs, warranty cost, replacement cost. 2.9 Managing Service Quality Kotter (2000) pointed out that service firms may win by delivering consistently higher quality service than competitors by exceeding customers expectations. Customers compare the perceived service to find whether the service meets exceeds their expectations. What exceeds expense use the service provided again? A model is thus presented: Model of Service Quality Gaps There are seven major gaps in the service quality concept, which are shown in Figure 1. The model is an extention of Parasuraman et al. (1985). According to the following explanation (ASI Quality Systems, 1992; Curry, 1999; Luk and Layton, 2002), the three important gaps, which are more associated with the external customers, are Gap1, Gap5 and Gap6; since they have a direct relationship with customers. Gap1: Customers expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management. Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardisation and an absence of goal setting.

38 Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork. Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and propensity to over-promise. Gap5: The discrepancy between customer expectations and their perceptions of the service delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations are influenced by the extent of personal needs, word of mouth recommendation and past service experiences. Gap6: The discrepancy between customer expectations and employees perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers. Gap7: The discrepancy between employee s perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service providers.

39 2.10 Service Quality In measuring customer satisfaction with service quality, it is significant to examine the service quality concept, its importance and the dimensions it has. Service quality has been a difficult-to-define concept that has aroused considerable interest and debate in the research literature. This is because the meaning of quality can be referred to in

40 many attributes such as the experience of the service encounters, or moments of truth, the evidence of service; image; price, and so on. These form the customer s overall perceptions of quality, satisfaction and value (Zeithaml and Bitner, 1996). There are a number of different "definitions" as to what is meant by service quality. Since service quality is basically defined from customer perspective and not the manufacturer s, it is usually referred to as customer perceived quality. The concept of consumer-perceived quality (CPQ) was first defined by Gro nroos in 1982 as the confirmation (or disconfirmation) of a consumer s expectations of service compared with the customer s perception of the service actually received. One definition that is commonly used defines service quality as the extent to which a service meets customers needs or expectations (Asubonteng et al., 1996). Parasuraman, Zeithaml and Berry support the same view, defining the concept of service quality as a form of attitude, related, but not equivalent to satisfaction, that results from a comparison of expectations with perceptions of performance. Expectations are viewed as desires or wants of customers, i.e. what they feel a service provider rather than offer (Parasuraman et al., 1988). Although service quality has been perceived for a long time to be an outcome of customer cognitive assessment, recent studies confirm that service quality involves not only an outcome but emotions of customers. It is argued that during the consumption experience, various types of emotions can be elicited, and these customer emotions convey important information on how the customer will ultimately assess the service encounter and subsequently, the overall relationship quality (Wong 2004, p. 369). Edvardsson (2005) maintains that customer perception of service quality is

41 beyond cognitive assessment as it is formed during the production, delivery and consumption of services and not just at the consumption stage. This is made possible as customers play their role as co-producers by carrying out activities as well as being part of interactions influencing both process quality and outcome quality. Again on the role of service quality Berry et al. (2002) emphasizes that managing the total customer experience. Therefore an emotional reaction is part of a quality and favourable experience (Cronin, 2003; Sherry, 1998). This is consistent with the findings of Mano and Oliver s (1993) on utilitarian and hedonic consumption judgments, who argue that...satisfaction is naturally tied to cognitive judgments and to affective reactions elicited in consumption (Mano and Oliver, 1993). Wong (2004) found that negative emotions have a stronger effect on satisfaction with quality than positive emotions. The concept of service quality from the customer perspective, thus perceived service quality, is not a mistake simply because in the words of the guru the consumer, of course, perceives what he or she receives as the outcome of the process in which the resources are used, i.e. the technical or outcome quality of the process. But he or she also, and often more importantly, perceives how the process itself functions, i.e., the functional or process quality dimension. Thus, the technical quality and functional quality dimensions of perceived service quality emerge. (Gronroos, C., 2001 p.151) Significance and Drivers of Service Quality

42 Delivering excellent service quality is widely recognized as a critical business requirement (Voss et al., 2004a; Vilares and Coehlo, 2003). It is not just a corporate offering, but a competitive weapon (Rosen et al., 2003) which is essential to corporate profitability and survival (Newman and Cowling, 1996). Many authors agree that in today s dynamic market place and market space, organization no longer compete only on cost but more importantly on service/product quality In a competitive marketplace where businesses compete for customers, delivering quality service is seen as a key differentiator and has increasingly become a key element of business strategy (Heskett, J.L., et al., 1997; Kotler 2006). On the drivers of service quality, the most widely used model is the Service- Profit Chain (SPC), first proposed by Heskett et al., (1994). It provides one of the most powerful and widely supported perspectives on this issue. Overall, the SPC sees organizational internal features as driver of employee satisfaction, which drives service quality which is also identified as an antecedent of customer satisfaction which in turn drives customer loyalty and retention that eventually leads to profitability and growth Development of Mobile Telecommunication Definition and Brief Historical Perspective Mobile Telecommunication refers to the exchange of information, ideas and thoughts through the medium of a mobile phone, telephone or wireless network. According to the World International Property Organization (n.d), a mobile communications system/network refers generally to any telecommunications system which enables wireless communication when users are moving within the service

43 area of the system. A typical mobile communications system is a Public Land Mobile Network (PLMN). Until the invention of modern technology, the use of semaphore, flags, heliograph, relay runners; riders and criers, smoke signals, drum, and light signals; message-carrying pigeons, and even the postal system were the traditional long-distance communication media ( downloaded on 10th August 2008). According to Balasubramanian et al., (2002, p. 349), the first transmission involving a single mobile platform occurred in June 1898, when Marconi transmitted a radio signal over 42 miles between a French naval vessel and the Wimereux shore station. The first transmission between a mobile transmitter and a mobile receiver occurred in July 1898 when aboard the Royal Navy warship Juno, Marconi received messages from the warships Alexandra and Europa at ranges of up to 45 miles. The first mobile telephone call occurred in June 1946, when a truck driver in St. Louis, Missouri, placed a telephone call using a handset from under his vehicle s dashboard. Utilities, truckers, and news reporters rapidly adopted this technology and nearly 100 cities and highway corridors and access to mobile telephone service by The technologies were very expensive then. The cellular phone concept that currently supports the bulk of mobile communication was developed in 1947 at Bell Laboratories. Today there are many different types and kinds of mobile phones that are used with supporting network for communication. These mobiles have different features and powerful capabilities. Apart from the basic use of making and receiving calls and messages; some can be used to play music, video, games, store considerable amount

44 of personal data, access banking services with internet capabilities ( s, e- order/procurement etc), among other uses. Mobile communications systems have been developed because of the increasing need to free users to move away from fixed telephone terminals without impairing availability of users. Mobile technology has rapidly developed from first generation (1G), second generation (2G), third generation (3G) to beyond third generation (3.5G and 4G) mobile technology that uses digital wireless technology that supports faster display of multimedia and global roaming Players and Role of Mobile Telecommunication Mobile communication network providers, in delivering services to customers, operate in an environment that involves purposeful relationships and interactions between several actors in many activities and with different resources. Some of the players in mobile telecom industry providing services to the customers at their various locations are: the mobile operator who provides the location positioning infrastructure that tells where the customer is; the content provider that delivers the information; the supplier that combines the information with the location information and makes it location relevant; and the platforms through which the customers can access the services (Harter 2000). Therefore it appears that any mobile telecom network needs to have several key players along its value chain in delivering services to its customers (Pura M. 2005). Mobile telecommunication plays a major role in today s information technology-driven world of business. Nigel Scott et al., (2004, p 14 &15) observe that one might expect most calls to be related to economic issues; research confirms that at present in Africa, it is social uses that drive phone use amongst the poor. "Chatting" and "keeping in touch are the most common use of phones. This is of value because it

45 strengthens social capital through improved networking with friends and family. Other social calls concerning urgent matters (e.g. funerals and festivals) and financial matters (e.g. call to family members working in cities to ask for money) rank highly and business and official/government matters currently rank the lowest. Calls enable people to save time, increase production (business), diversify (e.g. crops, goods in shops), and to get news. Together this means that phones have a positive impact on improved incomes, reduced risk, and an improved sense of well-being. Some of the roles played by mobile telecommunication are: It is an enabler of Mobile commerce and promotes dissemination of useful information to entrepreneurs and enhancing business creation (Adjei Boadi R. & Gause Shaik A. 2006; Sahlfeld M. 2007; Nodh & Nodh 2007). It is a source of employment for many people whose jobs are created and/or facilitated directly or indirectly by the existence of mobile telecommunication (Adjei Boadi R. & Gause Shaik A. 2006). It is a significant source of revenue not only for its business operators but also to governments through taxes paid by income earners in the mobile telecom industry (Adjei Boadi R. & Gause S. A. 2006). It is a cheap means of communication and therefore cost-effective since it reduces the cost of travel. (Nodh & Nodh 2007) It enhances the convenience of instantaneous communication. Mobile phones were introduced so we could communicate when "on the move" and the capabilities have now expanded beyond their initial function for talk: you can now use mobile phones to access/receive a range of information wherever you are. A mobile phone allows you to be accessible at all times, wherever you are. It can help improve communication between

46 staff and customers, particularly business to business customers that may involve travelling (Adjei Boadi & Gause 2006). Some of the arguments raised against the use of mobile phones are that: It elicits more unwanted calls as a result of being accessible from anywhere in the country. There is a potential cost of using a mobile phone for business, and the costs will be so high as to damage their business. This is a potential danger, particularly when employees are using business mobiles, as there is a risk that some employees could misuse the phone raising bills massively. It is hazardous to the human health in that it causes difficulty in concentration when driving, fatigue, and headache; cancer, increase reaction time in a time driving, fatigue, and headache; cancer, increase reaction time in a time driving, fatigue, and headache; cancer, increase reaction time in a time-dependent manner, infertility in man, infertility in man, and many other diseases. The use of mobile phones increases the risk of road accidents that could have never happened without phones ( Brief Historical Overview of Ghana s Telecom Industry Until 1994, Ghana s telecommunication industry was monopolized by the incumbent-government corporation, Ghana Post, Telephone and Telegraph (PTT). Between 1994 and 2000, Ghana moved from a government controlled PTT to a competitive telecom environment that allowed strong internet and mobile telecom network providers to operate. This was as a result of the deregulation of Ghana s telecommunications sector in 1994 under the Accelerated Development Program 1994-

47 2000 (ADP 2000) when the Government announced a five-year comprehensive restructuring of the industry. The main policy objectives of the program were formulated with the assistance of the World Bank, consultants and other stakeholders, and aim to: Achieve a density between 1.5 and 2.5 lines per 100 people; Improve public access in rural and urban areas, through the provision of payphone facilities (public and private); Expand the coverage of mobile services; Promote Ghanaian ownership and control of telecommunications companies; and Retain an overall public regulatory control of the sector through the creation of a single agency: the National Communications Authority (NCA). The ADP adopted the following strategies to achieve the above-stated policy objectives: The authorization of two national network operators: Ghana Telecom and a new independent operator; Support of new financing: arrangements which promote investment in new telecommunications infrastructure throughout the country; and Privatization of Ghana Telecom through the sale of a strategic stake to an international operating company combined with measures to broaden share ownership in Ghana (Addy-Nayo, 2001; Frempong and Henten 2004) Overview of MTN The MTN Group formally took over Ghana s leading mobile telecommunications service provider, Areeba, a year after it purchased Investcom LLC, Areeba s parent company.

48 Areeba Ghana is thus now to be known as MTN Ghana. MTN acquired Investcom in July Investcom s takeover added five million more customers to MTN and increased the number of countries where the Group operates mobile networks to 21. Until August 2005 when Investcom bought into Scancom Ghana Limited, the original owners, Areeeba Ghana was known as Spacefon. After the takeover, it maintained the combined name of Spacefon Areeba for several months before Spacefon was dropped. Since its incorporation into the MTN Group, Areeba Ghana has focused on a previous roll out backlog, commissioning more than 280 base stations during the last three months of 2006, improving service and call quality and strengthening network infrastructure. The company has launched several innovative services into the Ghanaian market, a trend the company executives say will continue. Market penetration of mobile telecommunications services in Ghana is growing exponentially. As at December 2005, Areeba s total subscription was 955,000. Currently, the network commands a clientele well over two million spread across the 10 regions of the country. The increase in mobile phone use in Ghana is a reflection of the growing trend of the industry in Africa. A recent survey by the International Telecommunications Union (ITU) found that Africa has become the world s fastest mobile phone market. The report indicated that over the last five years, the continent s mobile phone use increased at an annual rate of 65 percent, twice the global average. Africa gained more than 13 million new subscribers in 2003 alone. Established in Johannesburg, South Africa in 1993 MTN has grown from a local to a global mobile service company. In 1998 it had 4.1 million subscribers in South Africa but

49 as at 2009 it had 50 million subscribers in 21 countries in Africa and the Middle East. It has 13 million subscribers in Nigeria, its largest market on the continent: nine million in South Africa and 2.9 million in Ghana, its third largest market in Africa (NigeriaDailyNews.com, 2010). CHAPTER THREE RESEARCH METHODOLOGY 3.0 Introduction

50 This chapter looked at the methodology employed to achieve the objective of the study. It focused on the population, sampling, research instrument; administration of questionnaire etc. under consideration is the staff and valued customers of MTN (GH) Ltd Kumasi main branch located at Nhyieaso in the Kumasi metropolis were targeted. 3.2 Data Sources The study will make an extensive use of both primary and secondary sources of information from the MTN (GH) Ltd employees and its customers Primary Data The primary sources of data will include information that were gathered from the questionnaires that were administered to the respondents and structured interviews that was conducted with the top management members of the company at the branch. The advantage of using primary data is that, they are more reliable since they come from the original sources and are collected especially for the purpose of the study Secondary Data The secondary sources of data included MTN (GH) Ltd annual reports, brochures and manuals. A number of both published and unpublished materials on customer service in the telecommunication industry and effects from journals and articles as much as possible were used. Data collected from the secondary sources significantly complemented primary data and enhanced the interpretation of the results (Batsa, 2008). 3.3 Sample and Sampling Techniques Two separate samples were selected based on staff and valued customers of the organization. The sampling techniques used in this study were purposive and simple random sampling. The purposive sampling was adopted because the intension was to gain

51 an insight into the customer service phenomenon, hence the need to choose personnel who were well versed in the industry. Purposive sampling was also used to select which branch of the organization to visit for the study. This is guided by the fact that even though there are other branches within the Ashanti regional capital of Kumasi to be preferred for the study, all them could not be chosen for the study. Simple random sampling was important to the study, since the study was intended to ensure some randomness and representativeness in the sample. The selection of the respondents for the study was guided by sampling procedure: the process involving sampling frame identification and the determination of relevant sample size. At the targeted branch, stratified random sampling was used to select staffs for the study. This was guided by the structure of leadership that is in use by the organization at the Nhyieaso branch. This method of sampling therefore ensured that staffs in the clerical/technical, supervisory and managerial categories were contacted. Prior to the administration of the questionnaire, manager of the Nhyieaso branch was conducted for permission and staff list of the branch obtained. Names of staff were randomly selected from the various levels. The number of staff picked from a particular level depended on the number of staff. Also the customers were chosen from all the classified customer groups: for example salaried workers, retail, small and medium enterprises as well as corporate clients using the simple random sampling method. This was intended to ensure representativeness in the sample. While at the branch, customers that come to do business were counted and a tenth of each of the customers was approached and the purpose of the study explained to him/her. This was repeated until the number of respondents was obtained in the selected branch (Nhyieaso) that was visited.

52 Table 1 Guide: sample size and technique for selecting respondents Sample Method Required Target Group Estimated Number Sample Selected Technique used Staff Clerical/Technical Supervisory 5 4 Questionnaire Top Management 2 1 Interview Customers Individual Customer Corporate Customers 30 5 Questionnaire Total The non-probability sampling method of random sampling, specifically, Quota Sampling, was adopted in the selection of the sample size for the staff at the office chosen. This method ensured that representative samples of all the known elements of the population occur in the sample. 3.4 Data Collection Instrument The main instruments that will be used to collect information for the study were the questionnaire and interview schedule (structured). Questionnaires were given out to both staff and customers at the selected branch of the organization. A total of one hundred and

53 twenty (120) respondents comprising staff and customers were given questionnaires. The questionnaire was administered to both corporate and retail customers as well as individual customers. The questionnaire was structured to consist mainly of closed ended and Liker-type of questions in order to elicit feedback from respondents about what their experiences with MTN in terms of facilities, customer service, and product innovation, how responsive and competitive the organization is. The questions that were designed for the external clients (external customers) were structured around specific criteria based mainly on customer service, and whether or not MTN is the best of choice. Other information collected include how long respondents have been with the organization, how the organization was responding to competition with regards to access to product innovation, and customer base among others. These were the main areas around which data gathered from clients were analyzed. Responses categories mainly range from strongly disagree, disagree, neutral, agree to strongly agree. Customers were asked to rate their responses on how they compare MTN with other competitors in the Telecommunication industry of Ghana. Here the respondents were to choose either of the following: the Best, Better than most, same as most, Not as good as most or don t know in instances where they cannot decide. Few interviews (structured) were also conducted. Personal observations were also made throughout the data collection period. Care was taken in order not to be biased but to come out with objective interpretations of what was observed. 3.5 Data Analysis The raw data obtained from a research is useless unless it is transformed into information for the purpose of decision making (Emery and Couper, 2003). The data analysis involved

54 reducing the raw data into a manageable size, developing summaries and applying statistical inferences. Consequently, the following steps were taken to analyze the data for the study. The data was edited to detect and correct, possible errors and omissions that are likely to occur, to ensure consistency across respondents. The data was then coded; to enable the respondents to be grouped into limited number of categories. The Microsoft Excel software was used for this analysis. Data was presented in tabular form, graphical and narrative forms. In analyzing the data, descriptive statistical tools such as bar graph, pie charts etc. 3.6 Limitations to Data Collection Some of the respondents saw the exercise as a waste of time as they put it and for that matter were not prepared to compromise few minutes of the precious time as it were to answer the questions. It took more than three months to get the approval and a further delay caused by the department in charge of required information is also worth mentioning. It was also with difficulty and a lot of resources getting the questionnaire that was given to the staff back, taking cognizance of the busy schedule of staff. 3.7 Overview of MTN Kumasi. MTN, Ghana is a Multi-National Telecommunication company operating in 21 countries. MTN Ghana has three Business Units with Kumasi being part of the Northern Business Unit. The core business of MTN is the provision of communication service, both voice and data. MTN Ghana metamorphosed from the analog to GSM to GPRS then to EDGE network. Currently the company run on 3.5 G (3 rd Generation) network and was the first to introduce the technology in the country. MTN is the number one telecommunication company in Ghana with about 53% market share according NCA.

55 MTN Ghana provides both postpaid and prepaid service to suit the different segments of the market. This study focuses on the prepaid segment of the market. The company has different call and data plans to suit different customer needs. MTN has more products and service than any other mobile network in the country. Services ranging from, voice mail, voice sms, collect call, smart clip, conference call among others. Due to the intense competition in the industry, the company now sells customized and subsidized items like Modems, smart phones, laptops and low end handsets to provide one-stop communication facility for customers. Deviating from its core business, MTN now operate Mobile Money which gives customers the chance to receive and transfer money via the mobile phones and recently launched insurance service. These services are geared towards customer. MTN as other company is faced with customer churn due to the competitive nature of the industry and the impending Mobile Number Portability which allow customer to maintain their numbers on another networks. MTN has about 6 service centres to provide customer service and serves as sales points for customers. Besides these service centres are the 24 hour call centre and connects stores established in areas where service centres are not available. These are all put in place to make sure customers get access to our products and services and also to have their problems resolved. MTN as any other company have to deal with the problem of customer churn in the mist of stiff competition\

56 CHAPTER FOUR DATA ANALYSIS, DISCUSSIONS AND PRESENTATIONOF RESULTS 4.0 Introduction In this chapter the research questions are answered by analyzing data collected from both primary and secondary sources. 4.1 Demography of Respondents

57 The demography of respondents were found to have a firm view of the background of respondents used and to ascertain the facts whether they qualified to form the respondent for the study. Table 4.1: Gender of Respondents Detail/Sex Male Female Total Customers (83.33%) Staff (16.67%) Total 79(65.83%) 41(34.17%) 120 Source: Field survey, August 2011 Table 4.1 shows the sex and the category of respondents for the study. The study is composed of percent of the respondents being the customers of MTN and percent being staff of the company. On the gender, it is made up of mainly males as compare to their female counterparts. The male is made up of percent whiles the female sample is also this distribution of sex is mainly attributed to the sample technique for the distribution of questionnaire to respondents.

58 Figure 4.1: Age Group of Respondents Years Years Years Years Years Years Years Years Source: Field survey, August 2011 On the age of respondents, as shown in Figure 4.1, the study is mainly respondents between years which constitute percent, follow by those in years representing percent, years represents percent and years also constitute 5 percent. Clearly, the analysis shows that, the higher the age dimension the less the number of respondents chosen.

59 Table 4.2: Number of years with Company Customers Staff Total 0-2 Years (27.50%) 2-4 Years (22.5%) 4-6 Years (10.83%) 6-8 Years (28.33%) Over 8 Years (10.83%) Total Source: Field survey, August 2011 All the respondents were found to have spent some quiet number of years with the company. As indicate in Table 4.2, percent of the entire respondents have spent up to 2 years working with MTN, 22.5 percent have work with MTN for 2-4 years, percent have work for 4-6 years, have work for 6-8 years and only percent have work with MTN for over 8 years

60 Figure 4.2: Alternative Service Provider of Customers Tigo Source: Tigo Airtel Vodafone Expresso Glo Airtel Vodafone Expresso Glo Field survey, August 2011 Clearly, Figure 4.2 shows that, the customers of MTN also use alternative services from their competitor. Most of the customers also subscribe to the services of Airtel, follow by Tigo and Vodafone, Expresso also with none of the respondents subscribing to glo. This is due to the fact that, glo mobile telecommunication has not start its operation in Ghana.

61 Table 4.3: Level of Education and Occupation of Customers Self Professional Student Total Employed University and Above (25%) Diploma (37%) Professional Training (9%) Secondary Education (15%) Middle Sch./Basic (10%) None (0%) Total 34(34%) 47(47%) 19(19%) 100 Source: Field survey, August 2011 The level of education of the customers chosen for the study reveals that, those with university constitute 25 percent, diploma also constitute 37 percent professional training, secondary and middle/basic also constitute 9 percent, 15 percent and 10 percent respectively, with none of the respondents having none, which shows that, all the respondents have some sort of formal education 4.2 Analysis of Service Quality Dimensions In this analysis a five point Liker scale has been used to assigned weight to the items used to find descriptive statistics for the study

62 Don t Know/Strongly Disagree Not as good as Most/Disagree Same as most/uncertain Better than most/agree The Best/Strongly Agree Reasons of Choosing MTN Customers of MTN choose the services of MTN due to some specific reasons. Every customer investigates and assesses the benefits of a company before subscribing to the services of the company, especially in face of several substitutes for the clients. Due to these, customers were asked to show their extent of agreement in choosing the services of MTN. Table 4.4: Customers Reasons for Choosing MTN Detail Mean Std. Dev. It offers high rate of interest on premiums Understands my needs Provides efficient services Offers prompt cashing/shorter queue time Wider range of service Personalizes services Community minded/socially responsible Source: Field survey, August 2011 Table 4.4 shows a general agreement of the various reasons of which customers choose the services of MTN. Since most of these means were above 4.0, it indicates that, customers agreed to the notions such as the provision of efficient services, offers prompt

63 cashing and shorter queue time, wider range of services, personalize services and the community minded thus socially responsible. These means indicate that, customers by and large agreed these items which form the basis of their reasons for choosing the services of MTN. However, MTN offers high rate of interest on premiums and that of Understanding the needs of customers were not totally agreed among the customers, this lead to a mean of 3.61 and 3.85 which shows that, largely, customers were uncertain about these items.

64 Table 4.5: Comparison of MTN to Other Networks Detail Mean Std. Dev. Screening criteria for policies Vigorous advertising campaign Ability of MTN to respond to competition Branch Proximity Introduction of innovative products/development of new products and services Fee charges for service provided Easiness to do business with Treating customers as individuals Helping customers with their finances Opportunity to complain Ability to resolve complaints on schedule The physical environment of MTN Services are very efficient and reliable Responding to changes in the market Source: Field survey, August 2011 Competition among service providers in the telecom industry compare service providing companies to give out their best to customers. On these grounds a comparison of service provision can be done since these companies provide homogenous services to the customers. As indicate in Table 4.5, MTN recorded some services to be better than their counterparts in the industry providing the same services. From the Table 4.5 Screening criteria for

65 policies recorded a mean value of 1.36 which shows that, respondents generally do not know if such service is done, likewise Easiness to do business with also recorded the same low mean of 1.82 which suggests that, the respond to this question were dominated by either don t know or not as good as most. Fees charges for service provided also recorded to be of not as good as most which also shows that, MTN charges could be higher than their competitors for the same work done. On the other hand, other comparison items such as Branch Proximity, Treating customers as individuals, Helping customers with their finances, Ability to resolve complaints on schedule and services are very efficient and reliable were all comparatively dominated by same as most which shows that MTN do not do much of these items to satisfy their customers more on than what they might be receiving from other competitors. In as much as the above discussed items were performing lower comparatively to the competitors of MTN in the same industry, some items were also performing better than that of their competitors. As clearly shown in Table 4.5, the rest of the items all record a mean value of more than 4.0, which can be explain that, these items were dominated by being either the best among its competitors or better than most service providers Analysis of Service Quality Dimensions of customers After a careful study of the five service quality dimensions, the five point of likert scale of assigning weight to the extent of agreement as used previously in the analysis of the customers reasons for choosing MTN were used for the discussion.

66 Tangibility Dimension The tangibility dimension of MTN deal with the physical nature of MTN both the infrastructure and the appearance of the employees of the company, in this study, state of art equipment, professionalism and appearance of employees, visually appealing of physical facilities and modernization of equipment for service delivery were considered. Table 4.6: Descriptive Statistics on the Tangibility Dimension by Customers Detail Mean Std. Dev MTN has up-to-date or state of the art equipment MTN employees are professional and always appear neat Physical facilities and interior décor are visually appealing Equipments and materials for service delivery are modern and efficient Average 4.20 Source: Field survey, August 2011 All the items used for the discussion of the tangibility for MTN have a mean above 4.0. This shows that, in terms of tangible assets of the company, MTN is doing better of its service quality delivery. Averagely, the tangibility dimension had an average of 4.20, representing 84 percent. A mean of 4.20 indicate that, customers agreed to the assertion that, the service quality delivery of MTN is satisfy which results in a quality delivery of an appreciable 84 percent Reliability Dimension

67 Reliability deals with the ability of the company to provide services as schedule time, keeping of accurate records of customers, sincere interest in solving problems of customers and the customer s satisfaction with the quality of service provided. Table 4.7: Descriptive Statistics on the Reliability Dimension of Customers Detail Mean Std. Dev. MTN provides services at scheduled times as promised MTN employees keep accurate records of customers When you have a problem MTN shows a sincere interest in solving it Customers are satisfied with the quality of service provided by MTN MTN insists on error-free records MTN performs the service right the first time Average 3.68 Source: Field survey, August 2011 On the reliability dimension, most of the items were not agreed upon by the customers of MTN. Clearly it indicates that, MTN is not doing enough to increase its reliability of service provision to its customers. On the item MTN employees keep accurate records of customers was found to be consistently disagreed among the customers. This might be attributing to the fact that, as a telecommunication company keeping records of customers to large extent becomes sometimes costly since such information will not be useful in the day to day operation of the company. The items MTN provides services at scheduled times as promised, When you have a problem MTN shows a sincere interest in solving it and Customers are satisfied with the quality of service provided by MTN

68 were all mainly record to have dominated by uncertain by the respondents. Perhaps this might also be attributing to the fact that, customer might not be able to measure these items with a comparison to other service providers. It was found that, customers agreed on insist on error-free records and the performing the services right the first time. All these record a mean of more than 4.0 and show a consistency of a general agreement among respondents. In all customer measure for the reliability shows that, MTN provide a service quality level of 3.68 representing 73.6% Responsiveness Dimension The ability of the company to deal with complaints of clients, promptness of services, willingness to offer help to clients and made known when and where exactly services will be executed formed the responsiveness dimensions of a company. Table 4.8: Descriptive Statistics on Responsiveness Dimension of Customers Detail Mean Std. Dev. MTN response to client complaints at the right time Employees of MTN tell customers exactly when service will be performed Employees of MTN gives you prompt service Employees of MTN are always willing to help you Employees of MTN are never too busy to respond to your request Average 3.63

69 Table 4.8 gives a wider form of a general uncertain about the service delivery of MTN on the responsive dimension. As clearly shown, customers were not receiving services as thought to be, out of all the service items provided, with the exception of Employees of MTN gives you prompt services all the remaining items were scored below 4.0 indicating inconsistency in the extent of service provision from MTN. Customers indicate that, the services they have received from their service provider has an overall average for the responsiveness dimension to be 3.63, which constitute a service provision of percent Assurance Dimension This study assurance of service deal with the confidence instill in customers by employees of MTN, safeness of transaction, consistency of courteousness of staff and knowledgeable of staff to answer customers queries. Table 4.9: Descriptive Statistics on Assurance Dimension of Customers

70 Detail Mean Std. Dev. The behavior of employees in the Company instills confidence in you You feel safe in your transactions with the company Employees of MTN are consistently courteous with customers Employees in the company have the knowledge to answer your questions Average 4.15 Source: Field survey, August 2011 Comparatively, Table 4.9 indicates that, assurance dimension has a general agreement among the customers of the company. This reveals a better service delivery on this dimension to customers of MTN. From the table, it is found that, almost all the items received a consistent agreement of mean more than 4.0, resulting in an overall service provision of 4.15, constituting percent of service delivery of MTN Empathy Dimension

71 Empathy is the ability to share another s feelings as one s own i.e. to be in the shoes of another, understanding the customers needs as well as giving individual attention to customers. Table 4.10: Descriptive Statistics on Empathy Dimension by Customers Detail Mean Std. Dev. The company gives you individual attention The company has operating hours convenient to customers MTN employees show concern when queue get too long Employees of MTN understand the specific needs of customers Average 3.94 Source: Field survey, August 2011 With regards to empathy, the above table depicts that customers of MTN hold the view that MTN actually has about 3.94 level of quality. This may be attributed to the MTN staff have the interest of their customers at heart by giving them individual attention, understanding the specific needs of customers and operating hours convenient to customers to satisfy them. Again as the competition within the industry becomes very keen a lost customer means lost revenue and for that are more conscious of customers needs. This results in staff treating customers individually to ensure their loyalty to company s services. 4.3 Response from Staff

72 The table below gives the customer service drivers in the industry from the perspective of staff of MTN, which indicates the extent of which these drivers are agreed upon by the staff of MTN and has a positive impact on the operations of the company. Table 4.11: Customer Service Drivers in Telecom Industry Detail Mean Std. Dev The degree of customer relationship is high in the industry in Ghana Your company enjoys some sort of monopoly in the industry in Ghana Your company charges higher rates for their services among the operators in the industry in Ghana Customer retention is good do you agree There has been pressure from the NCA in recommending measures to respond to customer needs The proliferation of mobile telecom networks in Ghana in recent times has fuelled competition for customers Increased customer awareness and sovereignty has brought about competition among operators Source: Field survey, August 2011 Staff of MTN was consistently insisting on an agreement to the detail items for the study, which resulted in an average of 4.0 and above. Clearly it was found that, the degree of customer relationship is high in the industry in Ghana recorded the highest mean among all the items. This result is as a result of the high competition among service providers in this industry, of which greater customer relationship leads to loyalty, especially in the face of the number portability, where a customer can change service provider as an when

73 he/she wishes has compare service providers to increase their service quality delivery in the industry. Staff of MTN also agreed that, the company has enjoys some sort of monopoly in the industry in Ghana which also had a mean of 4.16 as well as retention being recorded to be good for MTN. Moreover, staff admits the fact that, proliferations of the service providers have also lead to the competition on the market for customers. In all, the customer service derivers in the industry were by and large agreed by the staff. However, these drivers have also lead to the provision of better service to the customers and give them the edge to change service provider in the case of unsatisfactory of service quality delivery. Table 4.12: Effects of customer relationship to MTN Detail Mean Std. Dev.

74 There has been reduced customer base There has been reduced revenue base The market share of the company has reduced There has been decline in service charges There has been enhanced customer service There has been loss of customer revenue or waiver of charges There has been reduced profit margin Wider array of products have been developed Frequent staff training for improved customer relationship Charge higher rates to make profit Expanded branch network Vigorous advertising campaign (Outdoor, print and electronic) Establishment of a corporate service center to serve exclusively the needs of our corporate clients Introduction of an ultra-modern customer contact center The creation of the office of the service manager to man the service Our response to the competition through the massive expansion project has been carefully matched with other resources such as IT infrastructure and human resources Source: Field survey, August 2011 In the midst of high level of competition among service providers in the telecom industry, customer services and relationship will eventually have keen effects on the services of the service providers. As indicate in Table 4.12, staff of MTN believes that, they are mainly uncertain of the effects of their customer relationship, such as reduced customer base,

75 reduce in revenue base, reduce in market share, decline in service charges and the reduce in profit margin. A general response of uncertain among the above effects indicates that, staff might not have direct access of measuring these outcomes directly. Notably, all the negative effects of the customer relationship tend to be mainly uncertain. On the other hand, the rest of the items were agreed by the staff of MTN such as enhance in customer service, development of wider array of products, frequent training for improved customer relationship, expanded branch network, vigorous advertisement, ultra-modern customer contact center and response to competition through massive expansion projects to match with other resources were all agreed with a mean score of more than 4.0. This shows that, the effects of customer relationship has positively impact on the operations of the company which eventually leads to the satisfaction level of customers and hence increased customer based for the company. Figure 4.3: Service Quality Dimension by Staff

76 Tangibility Reliability Responsiveness Assurance Empathy Source: Field survey, August 2011 From the perspective of the staff of MTN, delivering of service quality was noted to be high across all the service dimensions. As shown in the figure above, tangibility recorded the highest among all the dimensions with a mean of 4.48 i.e percent indicating a better service delivery in the physical tangible assets of MTN. Assurance also was found to be of the same level of service delivery as that of tangibility with a mean of 4.48, thus percent. Responsiveness follow with a mean of 4.47 representing percent of service delivery, likewise, a high level of service quality shows that, on the part of staff delivery of service quality is paramount on their daily dealing with the customers. Empathy and Reliability were also scored an average of 4.43 and 4.39 respectively which indicate a better service delivery on the part of the staff of MTN. Figure 4.4: Comparison of Service Quality Levels