Identify critical factors affecting the customer switching behavior for mobile service providers in vietnam

VIETNAM NATIONAL UNIVERSITY-HCM CITY INTERNATIONAL UNIVERSITY  IDENTIFY CRITICAL FACTORS AFFECTING THE CUSTOMER SWITCHING BEHAVIOR FOR MOBILE SERVICE PROVIDERS IN VIETNAM In Pa

VIETNAM NATIONAL UNIVERSITY-HCM CITY

INTERNATIONAL UNIVERSITY



IDENTIFY CRITICAL FACTORS AFFECTING THE CUSTOMER

SWITCHING BEHAVIOR FOR MOBILE SERVICE PROVIDERS IN

VIETNAM

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

In International Buisiness Major

By

Ms: Lam Thi Cam Tam

ID: MBA05036

Advisor: LE THANH LONG, PH.D

International University - Vietnam National University HCMC

August 2014

IDENTIFY CRITICAL FACTORS AFFECTING THE CUSTOMER

SWITCHING BEHAVIOR FOR MOBILE SERVICE PROVIDERS IN

VIETNAM

In Partial Fulfillment of the Requirements of the Degree of

MASTER OF BUSINESS ADMINISTRATION

In IB major

by Ms: Lam Thi Cam Tam ID: MBA05036 International University - Vietnam National University HCMC

August 2014

Under the guidance and approval of the committee, and approved by all its members, this thesis has been accepted in partial fulfillment of the requirements for the degree Approved:

I had a great fortune to study under supervision of Dr Le Thanh Long I am very grateful for his guidance and encouragement His profound knowledge provided

me with an opportunity to broaden my knowledge and to finish this thesis

My gratitude is dedicated to my classmates and friends who always stand beside one and give me the valuable support and recommendation

Last but not least, special thanks also to my family for their ever-present love and support

Lam Thi Cam Tam

Ho Chi Minh 2014

LIST OF ABBREVIATION

Plagiarism Statements

I would like to declare that, apart from the acknowledged references, this thesis either does not use language, ideas, or other original material from anyone; or has not been previously submitted to any other educational and research programs or institutions I fully understand that any writings in this thesis contradicted to the above statement will automatically lead to the rejection from the MBA program at the International University – Vietnam National University Ho Chi Minh City

Abstract

The target of this study is to identify the factors affecting switching behavior

in using the mobile service in Vietnamese subscribers In the conceptual framework model, there were six factors impact to switching behavior including price, service quality, customer lock-in, switching cost collected in two group factors customer satisfaction and switching barrier follow previous hypothesis Demographic characteristic relate to the level of impact behavior, it is associated with six factors above as intervening variable were also hypothesized to affect switching behavior

The target population for study was the subscribers in Ho Chi Minh City The author applied quantitative approach as the major method to conduct the study with main statistic technique consisting factor analysis, regression, path analysis The result found from the study provided clearer understanding for mobile service providers in Vietnam bases on the experimental evidence It gets whole information from mobile subscribers shown that switching behavior was directly affected by price, switching cost and indirectly by customer satisfaction Besides, the switching behavior was also indirectly affected by relationship demographic features

With a full overview of switching behavior in telecommunication services in Vietnam, discovering factors impact to switching behavior will be a premise for building strategic marketing and new development of products that Vietnamese providers From that, plans face with potential competition risk from foreign competitor in future is being prepared

Keywords: switching behavior, mobile services provider, satisfaction failure, alternative attractiveness, brand attractiveness, social influences, switching barrier, and perceived switching cost

Table of Contents Contents

List of Tables ix

List of Figures xi

Chapter 1 - INTRODUCTION 1

1.1 Background of the study 1

1.2 Telecommunication industry in Vietnam 2

1.3 The Problems statement 4

1.4 Objectives 6

1.5 Rationale 7

1.6 Scope of research 8

1.7 Thesis structure 9

Chapter 2 – LITERATURE REVIEW 12

2.1 Switching behavior 12

2.2 Impact of switching behavior 13

2.3 Factors can affect to switching behavior 15

2.4 Conceptual framework model for the research 22

Chapter 3 – RESEARCH METHODOLOGY 25

3.1 Research method 25

3.2 Research sample 25

3.3 Research Methodology 27

3.4 Data collection 30

3.5 Data analysis Techniques 32

3.5.1 Descriptive statistics 32

3.5.2 Factor analysis 33

3.5.3 Multiple regression 33

3.5.4 Path analysis 33

3.6 Validity Test 34

3.6.1 Factor analysis for independent variable 34

3.6.2 Factor analysis for Dependent variable 37

Chapter 4 - DATA ANALYSIS AND ACHIEVED RESULTS 41

4.1 Demographic characteristic of the sample 41

4.2 Reliability Test 46

4.3 Descriptive statistics of variable 48

4.4 Factor analysis to Switching behavior 50

4.4.1 Multiple regression 50

4.4.2 Factor affects to customer satisfaction 51

4.4.3 Factor affects to switching barrier 54

4.4.4 Factor affects to switching behavior 55

4.5 Direct and indirect effects of independent on switching behavior 57

Chapter 5 - Conclusions and recommendations 61

5.1 Conclusions 61

5.1.1 Problem recognized from the result of the research 62

5.1.2 Relationship between switching behavior with influence factors 65

5.1.3 Recommendation 68

5.3 Business strategies implies 70

5.2 Research limitation 71

5.4 Suggestions for future research 72

References 74

APPENDIX A (English Questionnaires) 80

APPENDIX B (Vietnamese Questionnaires) 86

APPENDIX C (Cronbach‟s Alpha) 92

APPENDIX D (Factor loading) 114

APPENDIX E (Regression Analysis) 129

List of Tables

Table 3 1: KMO and Bartlett's Test for Independent variables 34

Table 3 2: Total Variance Explained for Dependent variables 35

Table 3 3: Rotated Component Matrix of Independent variables 36

Table 3 4: Reliability coefficients of Independent variables arrange follow components 37

Table 3 5: KMO and Bartlett's Test for Dependent variables 37

Table 3 6: Total Variance Explained for Dependent Variables 37

Table 3 7: Reliability Coefficients of Dependent Variables 38

Table 3 8: Rotated Component Matrix of Dependent variables 39

Table 4 1: Trends 3G on mobile internet 46

Table 4 2: Interpreting strength of Pearsons correlation 47

Table 4 3: Reliability Coefficients of Independent Variables 47

Table 4 4: Reliability Coefficients of Dependent Variables 48

Table 4 5: Descriptive Statistics of Independent variables 48

Table 4 6: Descriptive Statistics of dependent variables 49

Table 4 7: Pearson correlation between independent variables 51

Table 4 8: Correlation coefficients between independent variables and its dependent variables 52

Table 4 9: ANOVA results on effect of independents on Customer satisfaction 52

Table 4 10: Correlation coefficients between independent variables and switching barrier 54

Table 4 11: ANOVA results on effect of independents on switching barrier 54

Table 4 12: Description and variables‟ Correlation of independents on switching behavior 55 Table 4 13: ANOVA results on effect of intermediate variables on switching

bahavior 56 Table 4 14: Coefficients between dependent variable and SWB 56 Table 4 15: Description and variables‟ Correlation of independents on switching behavior 57 Table 4 16: ANOVA of independents on switching behavior 58 Table 4 17: Coefficients between the independent variable and SWB 59

List of Figures

Figure 1 1: Market shares (subscribers) of mobile phone service providers 3

Figure 1 2: The growth of mobile subscribers in Vietnam from 2004 to 2013 4

Figure 2 1: Suggested model 23

Figure 3 1: Progress of researching 31

Figure 4.1: Ratio respondents about providers 42

Figure 4 2: Distribution follows charge form 42

Figure 4 3: Distribution rate of Subscriber base on gender 43

Figure 4 4: Distribution rate of Subscriber base on age 44

Figure 4 5: Distribution rate of Subscriber base on income 44

Figure 4 6: Distribution rate of type of career 45

Figure 4 7: Number of subscriber distributed on education background of total sample 46

Figure 4 8: The practice model of switching behavior 60

Chapter 1 - INTRODUCTION

1.1 Background of the study

Nowadays, there have been many mobile providers with many different service packages given consumers in Vietnam, so Vietnamese consumers have many solutions for choosing mobile providers In order to receive the best service and maximizing the benefit, satisfaction and minimizing the cost, the consumer usually considers changing more suitable mobile service providers (MSPs) It has increased the pressure of MSPs which must supply services creating satisfaction for their customers to remain and attract customers back or switch to their brand Moreover, the upcoming introduction of mobile number portability (MNP) to control all mobile subscribe by the government will to emphasize the appearance of a transition period

in the mobile telecommunication services market

Therefore, understanding and evaluating what affect customer switching behavior is important Because a customer‟s switching behavior results in the loss of the future revenue stream from that customer In particular, switching by a service customer is a loss for a firm‟s high-margin sector of its customer base (Depend Liang, 2012) The cost associated with acquiring new customers, including account setup, credit check, and promotion expenses, can be as much as five times the cost of customer retention efforts (Keaveney, 1995; Peter, 1998) From that, explaining customer behavior why customers choose to stay or switch to their mobile service provider (MSP) in Vietnam become an essential topic for researching

1.2 Telecommunication industry in Vietnam

Beginning with a mobile provider in Mobifone brand in 1993, telecommunication

in Vietnam officially flow with at telecommunication industry in the world By itself contribution, Mobifone or mobile service in general in Vietnam opened a new age of information and communication technology plays a role of infrastructure platform to create tools and utilities for developing other sectors as well as improving quality of people's life Telecommunications has been seen as one of the major factors promoting economic growth in Vietnam It has proven to be a positive role in promoting development of socio - economic structure, community life and activities

of organizations and individuals

Although formed later than other countries in the region and the world, the mobile telecommunications market in Vietnam developed to a breakneck speed in recent years Appearance of Vinaphone brand in 1997 created multiform choices of customers with mobile provider services In 2000, with Viettel brand opened a competitive period on the Vietnam telecommunication market A small wave of subscribes moved from Mobifone to Vinaphone, from Mobifone to Viettel, from Vinaphone to Viettel besides increasing amount of new subscribes of these providers With one mobile network from the early days, there have been six MSPs on the market

Furthermore, with the growth of mobile technology faster, shorten cycle technology, cost advantages due to declining investment is a challenge with the old MSP Vinaphone It broke the single position of Vinaphone With 6 competitors on the market which apply primarily policies on price cuts and promotions constantly, it has made a wave of subscribes move from one provider to another or using many numbers of many providers at the same time becoming more and more popular

phenomenon This situation shows that switching behavior of customer is the necessary note to providers

For a long time, the mobile network in Vietnam has developed in the race of increasing the number of subscribers The account of subscribes base reached 140 million threshold at the present But the area of growth has slowed in width, while in

2012, only incurring 12 million subscribers The market seems saturated and the network operators are turning to non-voice services on 3G services to increase revenue Beside there are a phenomena of switching behavior among of providers in Vietnam from 2009 to now Figure 4 presented that:

Figure1 1: Market shares (subscribers) of mobile phone service providers

(Source: White book of Vietnam 2010, 2011, 2012, 2013)

In the context of countries which the mobile telecommunications market appearing strong competition and open markets significantly reduced the advantage of monopoly position, with the involvement of multiple vendors, using the competitive strategy mixed strategies including rates, quality basic services, value added services , advertising promotions, discounts and customer care, replacement services OTT, giving them more and more choices, with moving to another provider which are more

attractive than sustainable impact on the subscriber‟s mobile networks Mobile telecommunications market in Vietnam is in fierce competition with the faster growth

of mobile technology shorten cycle technology, cost advantages due to declining investments, which has resulted in the opportunity for new service providers to enter the market, and the challenge for service providers present Therefore, more and more customers have more choice, it is also means that businesses will face many difficulties in retaining patrons and attract new users to the service

Deputy Minister Le Nam Thang said previously the number of subscribers in Vietnam is estimated over 160 million But as soon as the MIC policy prohibits the sale of SIM account with the development of the new subscriber network has been significantly reduced Currently only 91 million subscribers and charges incurred numbers used here is consistent with the current market

1.3 The Problems statement

The ratio of 145 million subscribers/100 people in Vietnam (2012 and over 15.5 million 3G subscribers-the statistics from Wireless Intelligence) is considered as the ratio of saturated mobile subscribers (Figure 1)

Figure1 2: The growth of mobile subscribers in Vietnam from 2004 to 2013

(Source: White book 2013)

Therefore, the expansion of the market through increasing the number of subscribers is hard work Currently, the number of subscribers currently reached saturation point and no longer charges for its own advantage Any business attempting

to find and create new customers will meet difficulties and have to spend more on advertising forever Therefore, whether these customers stay or switch to another subscribers will not only vital but also be a competitive advantage of each particular mobile network

The flows of wave of moving mobile subscribers to the providers to the other providers has been repeated in telecommunication industry in Vietnam after each campaign on promoting of providers From 2008 to 2012, the amount of the Vinaphone‟s subscribers switched from Vinaphone provider to Viettel provider by the cheap policy of Viettel However, there has been a change in the number of subscribers switching from Vinaphone, Mobifone or Vietnammobile to Viettel when these providers change competitive strategy in many efforts of making something different

Facing with an increasing rate of customer defection, giant wireless service providers have directed a relentless flood of pitches, including free phones, upgrades, and free minutes to „„sweeten the deal‟‟ and lock-in customers However, assuming that customer defection can be controlled by providing financial incentives is fundamentally flawed There is no research evidence to suggest that customer loyalty

is driven by financial incentives On the contrary, extant literature indicates that customer loyalty is in fact driven by a multitude of interrelated factors Therefore, a solid understanding of these factors must proceed „„intervention‟‟ strategies aimed at curtailing customer defection Hence, the purpose of this research is to develop and test a model that aids further understanding of the determinants of switching behavior

in the mobile telecommunication industry Such a model will have significant strategic implications for firms in this intensely competitive industry

The biggest challenge faced by telecommunication industry is the process of leaving one mobile phone provider for another Therefore, losing a customer is a serious setback for the firm of losing the benefits Then, the firm needs to invest resources in attracting new customers to replace the ones it has lost by advertising, promotion, initial discounts Peter and Verhoef (2001) shows that it can cost five times more to acquire a new consumer than to retain an old one Consequently, retaining the current consumer base is much more attractive than searching for new consumers

Recognizing the importance of the issue, I decided to select and research

topics: “Identify critical factors affecting the customer switching behavior for

mobile service providers in Vietnam”

1.4 Objectives

In fact, the factors affecting customer switching behavior for mobile phone service in Vietnam will be an urgency and immense significance not only for each mobile network particular activities, but also for mobile communication industry in

our country to answers to question: “How to keep AND attract Vietnamese

customer in telecommunication sector, nowadays?”

With the target above issues, this research will examine consumer‟s behavior

switching to use telecom services from Vietnamese by:

 Finding out which factors influent to Vietnamese‟s switching behavior to mobile service providers

 Finding out which key factors can affect mostly to switching behavior to

The purpose of the research is to contribute for evaluate impacts and tendency about behavior switching:

- What to do growth up customers‟ believe and factors that affect customer behavior in staying or switching with a MSP? Particular attention is the reasons why they matter for telecommunications providers, this topic will be discussed by identifying variables have impact switching behavior in choosing any MSP

- Which factor focus on customer churn (customers‟ decision to leave a service provider)?

The main findings of the analysis will be presented along with the conclusions, including recommendations to MSPs based on an improved understanding of the factors affecting customers‟ propensity to stay with a provider or switch to another From that, specific intervention strategies of network operators in Vietnam suggested with the adjustment marketing solutions for telecommunication services to remain and keep customers in the next years out of potential foreign providers when Vietnam implements full WTO agreements in 2015

1.5 Rationale

In the telecommunications services market, especially the market share of mobile, there is always have high growth rates despite the economic crisis Vietnamese users are evaluated adapt to technology quickly, and increasing routine use data services on mobile when there are the active support of the growth of cheap smartphone devices Supposing that consumers spend value-added services related to mobile data on the mobile will be increasing, it is more important that they always want to stay with a provider Research all the factors affecting the consumer behavior

of mobile data services should be done in order to find out what factors can influence

the consumer stimulus Vietnam and keep major providers for them There will be solutions helping to develop business strategy suitably with the trend and increasing customers for telecommunication service providers So:

- The research carried out will contribute a more complete picture of consumer perceptions of the mobile data services and consumer motivation it clearer and more realistic

- Research results are one of the few references to the agencies in planning management policies to develop mobile services in depth, ensure quality, meet the requirements of use, confirmed the ability to compete with free data services on the Internet

- Research results such as an image reflect the desire of the customers or the business units in the practice view really taking place Having a looking at it may bring a key factor of growth, what factors constraining the acceleration of data services mobile broadband in Vietnam Since then, these telecom companies have the facility to build plans, packaging solutions in business operations per unit

1.6 Scope of research

The research scope will be collected the information from the major city is Ho Chi Minh City Because, Ho Chi Minh city is the area which has the largest density of mobile subscribers, full of providers, the adaptation with a rapid speed of the oriented consumer changing And, objects get survey is mobile phone subscribers from 16 ages

to 60 ages At the age, the demand of consumers can use telecommunication services and adapt regular of owning mobile phone subscriber by individual identity

In figure 1 (Chapter 1) showed a clarity shift, change or disappear with the

Besides, in figure 2 (Chapter 1) also displayed a rate of slowdown increasing with the number of mobile subscribers from 2012 onwards Another way to increase the number of mobile subscribers in Vietnam in terms of overall telecom sector will not

be as powerful as the previous year The growth of each provider will focus on the movement of subscribers from provider to another provider The wave of conversion occurs when providers have impact factors It could be price, service quality, decreased switching barrier Each provider has its own strategy to attract customers

on the basis of the impact of different behaviors As a result the study of impact to switching behavior will be considered for any subscribers of all providers in the purpose of the fully assess all impacts of the switching behavior of mobile subscribers

in Vietnam

Collecting data with survey questions is considered as the primary data Reference from secondary data such as: reports or annual report of Vietnam Information and Communication Technology - White Books, statistic data of telecommunication companies in Vietnam will add for studying

1.7 Thesis structure

The organization of the study includes five chapters In which, chapter 1 comprised the general overview of problems of the study have been taken care This chapter also answers the question what motivates the author to carry out this research The research purpose, scope and implication of the research were made clearly as well

Chapter 2 will give whole the base of literature review related to switching behavior In this chapter, the author will introduce some model of factors which affect

to switching behavior in telecom sector of many Asian countries from many researchers By comparing and analyzing base on these review researches, the author

will give a model of suitable factors which its adoption to measure in Vietnamese mobile subscribers

Chapter 3 is the presentation about the research method, the way that the study will be conducted The method was built with integrated approach between qualitative methods and qualitative methods However, the quantitative method was the major method of the research The theoretical basis and data base of a telecommunications service sector is fragment of theoretical model recommended In this section, questionnaire design, unit of analysis, sample size and measureable scale will be clearly indicated

Chapter 4 is the report of the analyzed data and the result from them This chapter recorded the main concern about finding from the practice data by statistical techniques as descriptive statistics, reliability, explanatory factor analysis, correlations, multiple regression and path analysis It is the conclusion for the suitability of the model suggested with real influenced factors on switching behaviors of mobile subscriber

Chapter 5, the final section will give the link of existing laws of the telecom service market through surveys and reports in the chapter 4 From that, it will be integrated with the other reports of trends of the market in future to provide a closer view about current situation And more important, once research questions had been answered and research hypothesis had been testified, the author implicated a suggested suitable developing strategies for remain mobile subscribers in Vietnam Since then, the author has proposed some solutions to adapt the new trend in the market towards MSPs in Vietnam

Chapter summary

This chapter is considered very important as the first step of study that provides the overview of the dissertation It starts with background relating to switching behavior of mobile subscribers in the Vietnam context with a trend of the high competition The competition will be stronger and stronger when the MNPs policy (keeping the number of subscriber not switch another provider) applied in 2017 Platform of the research based on literatures supplied in chapter 2 related to switching

behavior in the telecommunication sector

Chapter 2 – LITERATURE REVIEW

Switching behavior in telecommunication sector in Vietnam appeared clearly when monopoly provider has not existed (supplied in chapter 1) Therefore, the understanding the culture of consumer switching behavior in Vietnam market will be

a base of providers who build the effective business strategy in the telecommunication industry This required knowledge about switching behavior of consumer on the literature was evaluated These concepts and theories are used as foundation for analysis, suggestions and solutions in the study model The theories help us understand how and why they are applied for the study From that the research model is built up like the final target to examine the real relationship between influent factors with switching behavior in the mobile market in Vietnam

2.1 Switching behavior

Switching behavior could be interpreted as a behavioral dimension (Cosmos Antwi-Boateng, 2013) Or “Service switching involves replacing or exchanging the current service provider with another service provider”, Bansal and Taylor (1999) also adopted a behavioral approach to switching in their definition In other word, switching as “such endings where the supplier (or the customer) is substituted for another alternative” follow Tahtinen and Halinen (2002) defined

With the target to adapt the satisfactory level of the consumers with any product or service, consumers begin a consumer behavior by switching the providers

or companies supply them which have suited with their favorites (following M.Sathish 2011) For example, a customer might move funds from one bank to another if she is dissatisfied with the customer service at the first Consumer-switching behavior is an ever-present danger for a business - if you don‟t keep your

customers satisfied, your competitors might directly benefit Another matter is that consumer switching is a serious threat for businesses that offer continuously delivered services, according to the “Handbook of Developments in Consumer Behavior,” by Victoria Wells and G R Foxall For example, banks, cellular-service providers and insurance companies offer continuous service to customers After such businesses drop the ball, their customers are likely to avoid further problems by switching to competitors that have better reputations

Therefore, switching behavior refers to replacing the current service provider

with another In context of Vietnam mobile service, it is also able to switch from one service provider to another while still continue to use the service category It can be the positive contribution for switching intention before having an actual switching action in the future Therefore, service switching is as the situation where the mobile service users have the intention to switch their present service provider and/ or have switched from one service provider but continuing to use the same service (Farzana Q Habib, 2011)

2.2 Impact of switching behavior

For example, customers might abandon your business because the low-quality service don't meet their needs, forcing them to opt for one of your competitors Or they might abandon your business because they believe the poor service isn't worth what you‟re charging In this case, they might do without the type of service you‟re providing rather than opt for a competitor Either way, you lose When your product

or service is no longer new and exciting to consumers, they might leave just and your business will be threatened by consumer-switching behavior

Switching behavior can become the important element for increasing or decreasing productivity and profitability in the service business (Rehana Kouser,

2009) The facing the problems of not only attracting new customer but also retaining the resisting one has been significant challenges to MSPs Like the method to attract new customers to fill a hole of losing old customers moving other providers, the current provider will spend more and more on the marketing and promotion budgets including new packages and reduction of the service charges Although, the cost is becoming too much high to remain competent but still most of the MSP are not able

to prevent the customers from switching from their services

KyoungAe Kim (2011) explained that when customers elect to continue the relationship with their service provider, they evaluate sunk costs from the existing channel, as well as relationships with alternative channels If no alternative that can provide better outcomes exists, customers will elect to maintain the existing relationship On the contrary, customers have sufficient motivation to break off the existing relationship and engage in a new alternative relationship

It is clearly with the current situation in Vietnam mobile‟s market, there are difficulties for finding new customers of the MSPs When the ratio of 123.7 million subscribers/100 people in Vietnam (White book, 2012), is considered as the ratio of saturated mobile subscribers Therefore, the expansion of the market through increasing the number of subscribers is hard work Besides, the state tightened subscribe to user management makes it important to expand the number of subscribers harder Solutions packages for mobile network operators are very much applicable in the past, but all prices downward Therefore, the increasing in the number of subscribers rises only very little profit In other words, the increasing of the density of promotion for mobile phones is no longer trendy Expanding value-added services such as mobile data trend is expected to grow very strongly by two factors driving the rapid growth of smartphones are cheap and low 3G package And also the fact that,

this trend through the contribution from data revenue increased and now accounts for over 40% of the total revenue of the network As a way to recover ARPU, MSPs are making hard efforts to develop new services and convergence services Therefore, it is natural for each MSP to endeavor to minimize its churn-out rate and to maximize its churn-in rate (Daihwan Min; Lili Wan, 2009) Rehana Kouser have view about MSP

is trying to formulate the customer oriented strategies, to achieve high customer retention and attracting new customers by creating value using new customer to limit switching behavior to other provider and constantly pulled customer from other to them In order to achieve this target, MSPs need to understand the factors that affect customer switching Some factors will be given to discus and examine by referencing some studies have been carried out to find out the factors that influence the decision

to retain with the same product of mobile service or to adopt another product of mobile service

2.3 Factors can affect to switching behavior

In Vietnam, the context has being also happened by fierce competition of many MSPs like U.S.A, Korean, China, Pakistan, and EU Mobile markets have been facing challenge of switching wave from mobile subscribers in the recent years Many researches evaluate impacts of factors belong to particular condition of each country; group factors effect to switching behavior is also different Reference from many different researches, Dong-Hee-Shin and Won-Young-Kim‟s model showed that it owns characteristics which appeared in most of models of other researches It is model contained the most feature factors lead switching behavior in a logic ordering Applying this model to study the Vietnam market can be recognize necessary factors

in the suitable social context as Vietnam with switching behavior in the telecommunication industry

The model about factors impact to switching behavior in the telecommunication industry in the studying of Dong-Hee-Shin clearly showed that

customer satisfaction and perceived switching barrier are factor directly impact

intention to switch However, there are more detail factors indirectly impact to behavior switching through effectiveness to customer satisfaction factor and perceive

switching barrier In which, there is the impact of price and service quality into the level of customer satisfaction Besides, switching cost and customer lock-in impact

into level of perceived switching barrier

In fact that, it was also adverted in model of Moon-Koo Kim (2004),

switching behavior is the result of customer satisfaction failure and switching barrier

In which, service quality (call quality, value-added services, customer support) lead

to customer satisfaction and switching cost (loss cost, move-in cost) plus

international relationship lead to switching barrier In 2009, Daihwan Min and Lili

Wan also recognized factors such as customer satisfaction, switching cost, and

customer loyalty affect to switching behavior Although, Yi-Fei Chuang (2011) had

the quite different view about pull-and-suck effects in switching intentions in Taiwan mobile sector, it still includes subscriber satisfaction, switching cost

Based on the similar in context of price and quality of service in Vietnam, the model of Dong-Hee-Shin matched a general element for the powerful effect that price and quality has on customer satisfaction When investment for quality of network coverage area of Viettel has focused from first days give an effective result of increasing number of

2.3.1 Customer satisfaction

Customer satisfaction generally means customer reaction to the state of fulfillment, and customer judgment of the fulfilled state (Moon-Koo Kim quote from

Oliver, 1997) Oliver (1997) defines satisfaction as a pleasant past-purchasing experience from a product or service with expectancy of the customer

Jahanzaib & Jabeen (2007), Pengfei Cheng & Xinmei Liu (2007), Daihwan Min & Lili Wan (2009) or William Jen (2010), and Rehana Kouser (2012) also found that customer‟s satisfaction is strongly affected on switching behavior In which, core service failure is a part of forming customer‟s satisfaction failure Pricing is also considered a main reason of customer‟s satisfaction which the customer leaves from one service provider to another as it is in the unsuitable policy Moreover, Ho Kyun Shin, Andrey Kima, Chang Won Lee (2011) indicated that subscribers consider price and service quality are the most valuable attributes But it is associated service quality like one of element impact to customer satisfaction not need be separated And perceived value becomes the important predictor of satisfaction and customers‟ behavioral intention (William Jen, 2011) Or, Moon-Koo Kim (2004) presented in his model with effects of customer satisfaction (call quality, value-added services, customer support) on customer loyalty Or Rehat Ali Khan (2012) also emphasized call rate, lower SMS , better service quality and service reliability are parts that affect customer‟s level of satisfaction resulting in either customer retention or switching to another better service It is clearly that a high satisfy tend to demonstrate a high likely

or repurchase and higher tolerance to price increases by providers or price decreases

by competitors (Priyanka Gautam, 2011; Yi-Fei Chuang, 2011)

Therefore, if one factor as customer satisfaction is not adapted to values of service quality or satisfaction of price, it is likely that as customer satisfaction failure, switching behavior has sign of beginning

Pricing is also considered a big reason of customer‟s satisfaction which the

customer leaves from one service provider to another as it is in the unsuitable policy

existing in Vietnam or Korea Therefore, based on research of Ho Kyun Shin, Andrey Kima, and Chang Won Lee (2011) indicated that subscribers do not consider the MNP service an import attribute, while price and service quality are the most valuable attributes Lee and Murphy (2005) indicated that price is the top switching determinant and more important than service quality and loyalty programs That is, changes in price perceptions may cause the loyalty-switching transition In the telecommunications sector, perceived monetary value is a key factor explaining both intentions to use and usage level of mobile services (Kim, 2011) A good price structures can be present at the price tolerant scheme Price tolerance is the degree to which a customer can bear the price of using cellular service according to level of satisfaction (Rehana Kouser, 2012) It is explained that amount of money which customer are willing pay connection fee for using cellular service as the way of sharing with factors such as technology, services, maintenance and taxes, … By this method, a profit of service providers will be contributed If an unfair price policy from providers is given, customers tend to switch to other

Service quality

“Quality is the extent to which the customers or users believe the product or service surpasses their needs and expectations” – (Gitlow, 1989) “Quality is the total composite product and service characteristics of marketing, engineering, manufacture and maintenance through which the product in use will meet the expectations of the customer” – (Feigenbaum, 1986) In earlier studies on mobile telecommunication services, service quality has been measured by call quality, pricing structure, network coverage quality, mobile devices, value-added services, convenience in procedures, and customer support (Kim, 2000; Gerpott,2001; Lee & Freick, 2001) Following Dong-Hee-Shin, service quality in the telecom industry is an

important indicator to assess a firm's performance, it is considered as a consumer's overall impression of the relative efficiency of the organization and its services By basing on SERVQUAL instrument developed by Parasuraman (1988) to identifies perceived quality in differences between customer expectations and perceptions factor analysis through tangible, reliability, assurance, and empathy dimensions, which are generic across service contexts the study show that differences exist between the network operators and how the perceived difference affected switching intention by hypothesized that higher levels of service quality are associated with higher levels of customer satisfaction In other way, the main factor determining customer satisfaction

is the customers‟ own perceptions of service quality (Zeithamal & Bitner, 1996)

Therefore, service quality failure can be lead to Customer satisfaction failures can become a contributing factor to a customer switching away (Tax, 1998) Service quality failures make a bad perceived value Other way, perceived value has attracted significant attention from marketing scholars in general Perceived value is one of the showing of “Core service” based on equity theory When analyze “service quality and customer switching behavior in China‟s mobile phone service sector”, Dapeng Liang (2013) show one of seven critical factors lead customers to switch mobile phone service providers is core service failure Or it is exactly that, service quality success is the guarantee of the quality core services to satisfy customer requirements

2.3.2 Switching barrier

And switching barrier (William Jen, 2010; Moon-Koo Kim, 2004; Dong-Hee Shin, 2008) have the impact of switching cost and international relationship Furthermore, Priyanka Gautam, 2011 found that due to the moderating role of switching barriers with loyalty in the context of mobile services is not a unified construct but rather one with at least two distinct dimensions: repurchase likelihood

and price tolerance Moreover, there are many types of group service packages or preferential service packages for some special objects used as an invisible tie to remain or promote switching between competitors in the recent years It is implemented base on investment of interpersonal relationship The switching barrier refers to the difficulty of switching to another provider that is encountered by a customer who is dissatisfied with the existing service, or to the financial, social and psychological burden felt by a customer when switching to a new carrier (Moon-Koo Kim, 2004 follow Fornell, 1992) Therefore, the higher the switching barrier, the more a customer is forced to remain with his or her existing carrier According to a previous study, the switching barrier is made up of switching cost, alternative attractiveness, habit and interpersonal relationships

Switching cost

In Paul T Mburu‟s study (2012), a definition of Jackson (1985) about switching cost as the psychological, physical and economic costs a customer faces in changing a supplier Switching costs, such as the investment of time, money, and effort, in customers‟ perception make it difficult to change providers (of Ranaweera & Prabhu, 2003 in Yi-Fei Chuang‟s study, 2010) Switching cost means the cost incurred when switching, including time, money and psychological cost (Dick & Basu, 1994), and is defined as perceived risk, insofar as there are potential losses perceived

by customers when switching carriers, such as losses of a financial, related, social, psychological, and safety-related nature (Murray, 1991) Or other hand, switching cost is as the cost occurred when a customer replaces the current supplier with another (of Porter, 2008 in Daihwan Min‟s study, 2009) Switching cost can be delivered from all cost of switching procedure for new provider (Chen & Hitt 2002), and also the monetary loss when customers must offset the contract to the existing

performance-provider Klemperer (1987) classified switching costs into three types: transaction, learning, and artificial or contractual switching costs Transaction costs refer to the financial costs incurred when a customer ends an existing relationship with one provider and begins a new relationship with another Learning costs takes a place when a customer has to put in effort to reach the same level of comfort and facility with the new product or service as the old one Artificial or contractual costs are those that are deliberately created by a service provider To sum up, switching cost plays a significant role in the satisfaction or dissatisfaction of switching link This factor is a key to reduce the switching barrier and motivate competition for meliorating service quality

Switching cost was highlighted as the important role plays in customer retention or switching behavior in researches of Keaveney (1995), Lee et al (2001), Chen & Hitt (2002), Kim et al (2004), Daihwan Min et al (2009), Yi-Fei Chuang (2011) and Farzana Q Habib et al (2011) The level of switching costs moderates the link between satisfaction and loyalty (desiring staying or switching a service provider), especially, belonging to market structure If the market has a single or overwhelmingly large share provider (for example, a monopoly provider of local telephone service), there should be little effect of switching costs on the relationship between satisfaction and brand loyalty That is, a customer not dissatisfied with high switching costs will not switch; or a customer will switch if there are dissatisfied and low switching costs

attitude and the behavior of repurchase Moon-Koo Kim (2004) In other word, it is willingness to remain as a customer of the current Mobile Network Operators,

“despite situational influences and marketing efforts having the potential to cause switching behavior” (Daihwan Min, 2009 use from Oliver‟ definition, 1999) Following Dong-Hee-Shin while subscriber lock-in is often regarded as a concept similar to switching barrier, the distinction is clear: subscriber lock-in is a supply-side variable describing providers' efforts to create switching barriers, whereas the perceived switching barrier is a demand-side variable describing consumer perception

The higher the cost of switching carriers within a particular market, the more the subscriber is captured, or locked into the provider may be able to increase the service price without a significant loss of subscribers, providing the service price increase does not exceed the cost of switching providers This approach forces subscribers to balance switching costs with the benefit of saving money in a competitor's aftermarket Switching costs thus generates consumer lock-in, allowing firms to earn above-competitive, monopoly profits While markets with high switching costs serve to retain existing subscribers, this supports the reputation effects

If provider known that they seduce potential subscribers and retain existing subscribers become an economic axiom that lower switching costs force competition for initial subscribers and liberate second period subscribers from a particular aftermarket

2.4 Conceptual framework model for the research

The model will be considered follow the proposed model (Figure 6) for this study The author‟s goal is to examine the influence of antecedent variables on the model switching behavior This model consists of the most important variables that

barrier are dependent variables The independent variables are service quality, price, alternative attractiveness, customer lock-in Each of these factors will be stated in a hypothesis to examine their potential influence on switching behavior of mobile service users in Vietnam At particular of the context in Vietnam, factors which given

in the model is suitable

Figure2 1: Suggested model

Research Hypotheses: Based upon Theoretical framework the researchers try to test

the following hypotheses:

H1 + : Dissatisfaction of service quality has significant effect on decreasing customer

satisfaction

Conclude elements: Network coverage, customer support system, value-added service

H2 + : Dissatisfaction of Price has significant effects on decreasing customer

H4+

H6+

Switching cost

Perceived Switching barrier Customer satisfaction H5+

Conclude elements: bond level, promotion, policy price follow object

H3 + : Low level of switching cost has significant effect on decreasing switching

barrier

Conclude elements: alternative function, alternative quality, and alternative service

H4 + : Low level of customer lock-in has significant effect on decreasing switching

barrier

Conclude elements: contractual commitments, bundling services, loyalty programs

H5 + : Low level of customer satisfaction has significant effect on increasing the

Chapter summary

By combination of analyzed models in previous researches, the chosen model corresponds with the context of Vietnam market In which, price, quality are always popular factors impact to consumer behavior when they are factors affect to customer satisfaction Some factor can be test factors to find more or adjust impacts for switching behavior such as switching barrier (detail are customer lock-in and switching cost) By sampling method presented in chapter 3 will help us to find out which factor is real and strongest impact to switching behavior

Chapter 3 – RESEARCH METHODOLOGY

In base on of the chosen model in chapter 2, item of factors will be changed or added in the model in the meaning of the concordance with the context of Vietnam market The goal of this chapter is to find the influence of antecedent variables on the mentioned study model of key factors: customer satisfaction, switching barrier In which, more detail factors affect indirectly as price, service quality, switching cost, customer lock-in

3.1 Research method

In purpose of research, it can be distinguished on functions or techniques applied With this study, survey is the business research techniques applied in The method will be used to find out which factor can be key impact on switching behavior

of mobile subscribers in Vietnam Because of less all collected information from variable sources such as mobile providers, other magazine, other or newspaper for understanding behavior of mobile subscribers on the impact to switching reflection

So, the study to investigate over secondary data sources as well as primary data sources in conduct the interview and survey to solve problem as reliability and validity

3.2 Research sample

Usage data in quantitative research to test scientific theories by surveys from mobile services subscribers based the technology acceptance model and relevant theories The target population for this study was mobile subscriber in Ho Chi Minh City, aged from16 to 60 Because of diversity in population structure of Ho Chi Minh City, it is represented characteristics for the total mobile subscribers in Vietnam market The population of mobile subscribers in Ho Chi Minh City is 18,799,000

Therefore, researcher uses an adjusted method for the large sample If we assume that the data is categorical with whole the major variable, the minimum sample size (corrected) is calculated such as:

in Malaysia‟s multimedia super-corridor region While, KyoungAe Kim chose method mail the survey to all members that had employed internet communities, an invitation to participate in the web-based survey over a two-week period And the result of participation had 359 users responded and only 344 cases could be used for the analysis The method collect data of Yi-Fei Chuang based on a large sample size and collected randomly of 1100 questionnaires, the rate questionnaires responded is

873 (79.36% of sample size) but the objects for this study only concentrate post-paid mobile telephone subscribers These researchers did not randomly select the respondents because of its convenience It will not be a good way to present characters for whole population in Vietnam which have had major pre-paid subscribers, it is a way that Sample size is from 350-520 customers from chosen cities of Pakistan, Korea, China and U.S with the period of a month