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African Journal of Business Management Vol. 4(12), pp. 2402-2408, 18 September, 2010 Available online at http://www.academicjournals.org/AJBM ISSN 1993-8233 ©2010 Academic Journals

Full Length Research Paper

Determinants of consumer retention in cellular industry of Pakistan Jawaria Fatima Ali1, Imran Ali1,2*, Kashif ur Rehman2, Ayse Kucuk Yilmaz3, Nadeem Safwan4 and Hasan Afzal5 1

Department of Management Sciences, COMSATS Institute of Information Technology, Lahore Pakistan. 2 IQRA University Islamabad, Pakistan. 3 Department of Aviation Management, School of Civil Aviation, Anadolu University, Eskisehir, Turkey. 4 FUIEMS, Foundation University Islamabad, Pakistan. 5 Independent Researcher, Hong Kong. Accepted 9 June, 2010

Cellular industry of Pakistan has grown many folds in recent years. Many new entrants have also joined the market to reap the potentials of this growing industry. This situation has originated a hyper competition among major cellular service providers in Pakistan. Companies are working hard to introduce more innovative and eye-catching products to attract customers. The companies with large consumer base are striving to reduce their switching costs. However the main concerns of the cellular service providers is to retain the existing customers. This research is designed to find out the determinants of consumer retention in cellular industry of Pakistan. This is an exploratory study based on primary data which was collected from University students of Pakistan. The study found user friendliness, price reasonability and call clarity as strongest determinants of consumer retention in cellular industry of Pakistan. Although the findings of this study are specific to cellular industry in Pakistan, these may be generalized to any other market passing through transitional phase of rapid growth and characterized by low paying capacity of customers. Key words: Customer satisfaction, consumer retention, switching cost, cellular industry, Pakistan. INTRODUCTION Cellular industry of Pakistan is growing at a high annual growth rate. This tremendous growth has attracted many national and international cellular services providers. Cellular companies battling for supremacy and profits have started to focus on consumer retention than on acquisition. The growth rate shows that number of subscribers have increased from 68,000 in 1996 to 3.3 million by the end of 2003; since then the subscriber base has heaved to reach 80 million in early 2007 and exceeded 95 million in 2009 (PTA). The tremendous growth in Telecom industry is still a vacant room to be penetrated. The telecom sector has finally started to make make progress despite of all belated regulations. This will change the trends in this emerging market. Cellular growth time period in Pakistan which lasted for almost five years (2003 - 2008), broke almost all global record from network coverage to number of subscriber. Pakistanis have welcomed and enjoyed these cheap, quick, better and inexpensive ways of communication over older landline-based infrastructure. As Valdecantos (2009) noted, the mobile telephone market of Pakistan has been experiencing 100% sustainable growth rate for some years now. This growing industry has not only attracted the business community, but also academic researchers. Numbers of studies have been conducted in cellular industry in different countries, ranging from engineering to marketing aspects of cellular services industry. Currently, researchers are focusing on the ways to satisfy and retain customers due to saturation in major markets of the world. Cellular service providers are not only

*Corresponding author. E-mail: imranalinim@gmail.com. Tel: 92-321-5041925. Fax: 92-42-9203100.

Ali et al.

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focusing on new customers for maintaining their financial performance but are also striving to retain the existing customers. Many researchers have linked consumer retention with sustainable financial performance for...
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