Services, Recovery, Switching, and Continuity

By

Mosad Saber Abd El-Rahman

DBA_1st year_2nd Term

Assignment no. 3

Presented to

Prof. Dr. Ehab Mohamed Abouaish

The Commerce College Cairo University March, 2013

CONTENTS
1. PART 1: Basics, Definition and concepts .......................................................................... 2 1.1 Definition of Service in Marketing ............................................................................ 2 1.2 Characteristics of Services ........................................................................................ 3 a) Intangibility ............................................................................................................ 3 b) Heterogeneity/Variability ......................................................................................... 3 c) Perishability ............................................................................................................ 3 d) Inseparability/Simultaneity of production and consumption ......................................... 4 1.3 Types of Services .................................................................................................... 4 1.4 Difference between Goods and Services .................................................................... 4 1.5 Services Recovery ................................................................................................... 5 1.5.1 Introduction to Service Recovery ........................................................................... 5 1.5.2 Service Recovery on Customer Loyalty .................................................................. 6 1.5.3 The Service Recovery Paradox .............................................................................. 6 1.5.4 Common Service Recovery Mistakes ..................................................................... 7 1.6 Switching in Marketing ............................................................................................ 8 1.6.1 Brand switching ................................................................................................... 8 1.6.2 Customer Switching ............................................................................................. 8 1.6.3 Switching Costs ................................................................................................... 9 1.7 Services Continuity................................................................................................ 10 2. PART 2: Current Research streams................................................................................. 11 2.1 Services Marketing and The 7 Ps of Services Marketing ........................................... 11 2.2 The effects of service recovery on consumer satisfaction: .......................................... 13 2.3 Customer Switching Patterns .................................................................................. 14 2.4 Consumer Switching Behavior ................................................................................ 14 2.5 Brand Switching Matrices ...................................................................................... 15 3. PART 3: Applications ................................................................................................... 16 3.1 Services marketing in banking and financial sector ................................................... 16 3.2 Customer-switching behavior in mobile phone industry ............................................. 16 4. REFERENCES ............................................................................................................ 18
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1. PART 1: BASICS, DEFINITION AND CONCEPTS 1.1 Definition of Service in Marketing The world economy nowadays is increasingly characterized as a service economy. This is primarily due to the increasing importance and share of the service sector in the economies of most developed and developing countries. In fact, the growth of the service sector has long been considered as indicative of a countrys economic progress. Economic history tells us that all developing nations have invariably experienced a shift from agriculture to industry and then to the service sector as the main stay of the economy. This shift has also brought about a change in the definition of goods and services themselves. No longer are goods considered separate from services. Rather, services now increasingly represent an integral part of the product and this interconnectedness of goods and services is represented on a goods-services continuum. Many scientists and organizations defined the service (s) in marketing, definition of service according to Murti Sumarni (2002) is an activity or an advantage which can be given by a party to another party which is mostly intangible and cannot affect ownership, and its production or is not related to any tangible product. A service is also an activity or series of activities of more or less intangible nature that normally, but not necessarily, take pace in interactions between the customer and service employees and/or physical resources or goods and/or system of the service provider, which are provided as solutions to customer problems (Gronroos, 1990).

According to Kotler (1997) service is an action or an activity which can be offered by a party to another party, which is basically intangible and cannot affect any ownership. Service may be related to tangible product or intangible product.

Furthermore; Zeithamal et.al.(1996) give a limitation of service by stating that service is all economic activities whose output is not a physical product or a construction is generally consumed at the time it is produced, and provides added value in forms (such as convenience, amusement, comfort or health).

Services, Recovery, Switching, and Continuity

On the other hand, Steinhoff (1979) further states that the raw material of services is people. The main material of service is in fact people; nevertheless, there are many other supporting factors from the raw material of service such as advanced tools, clean, secured, comfortable physical environment, accurate, advanced, and up to date technology and service.

Lamb et.al. (2001) also mention that service has several unique characteristics, which differ it from the others, namely intangible, inseparability, heterogeneity, perishability.

Handi Irawan D (2002) also states that one important characteristic of service is it is produced and consumed at the same time. Therefore, customers satisfaction on service depends on interaction process or time when costumers and service provider meet. Finally the American Marketing Association defines services as - Activities, benefits and satisfactions which are offered for sale or are provided in connection with the sale of goods. 1.2 Characteristics of Services The defining characteristics of a service are: a) Intangibility Services are intangible and do not have a physical existence. Hence services cannot be touched, held, tasted or smelt. This is most defining feature of a service and that which primarily differentiates it from a product. Also, it poses a unique challenge to those engaged in marketing a service as they need to attach tangible attributes to an otherwise intangible offering. b) Heterogeneity/Variability Given the very nature of services, each service offering is unique and cannot be exactly repeated even by the same service provider. While products can be mass produced and be homogenous the same is not true of services. eg: All burgers of a particular flavor at McDonalds are almost identical. However, the same is not true of the service rendered by the same counter staff consecutively to two customers. c) Perishability Services cannot be stored, saved, returned or resold once they have been used. Once rendered to a customer the service is completely consumed and cannot be delivered to
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another customer. eg: A customer dissatisfied with the services of a barber cannot return the service of the haircut that was rendered to him. At the most he may decide not to visit that particular barber in the future. d) Inseparability/Simultaneity of production and consumption This refers to the fact that services are generated and consumed within the same time frame. Example: a haircut is delivered to and consumed by a customer simultaneously unlike, say, a takeaway burger which the customer may consume even after a few hours of purchase. Moreover, it is very difficult to separate a service from the service provider. Eg: the barber is necessarily a part of the service of a haircut that he is delivering to his customer. 1.3 Types of Services a) Core Services: A service that is the primary purpose of the transaction. Eg: a haircut or the services of lawyer or teacher. b) Supplementary Services: Services that are rendered as a corollary to the sale of a tangible product. Example: Home delivery options offered by restaurants above a minimum bill value. 1.4 Difference between Goods and Services Given below are the fundamental differences between physical goods and services:

SN 1 2 3 4

Goods A physical commodity Tangible Homogenous Production and distribution are separation from their consumption

Services A process or activity Intangible Heterogeneous Production, distribution and consumption are simultaneous processes Cannot be stored Transfer of ownership is not possible

5 6

Can be stored Transfer of ownership is possible

Services, Recovery, Switching, and Continuity

1.5 Services Recovery 1.5.1 Introduction to Service Recovery Jochen Wirtz discussed service recovery as an umbrella term for systematic efforts by a firm to correct a problem following a service failure and to retain a customers goodwill. Service recovery efforts play a crucial role in achieving (or restoring) customer satisfaction and loyalty. In every organization, things may occur that have a negative impact on relationships with customers. The true test of a firms commitment to satisfaction and service quality isnt in the advertising promises, but in the way it responds when things go wrong for the customer. Success in this area includes employee training and motivation. Simon Bell and James Luddington have found that although complaints generally tend to have a negative effect on service personnels commitment to customer service, employees with a positive attitude toward service and their own jobs may be more likely to view complaints as a potential source of improvement and to explore additional ways in which they can help customers. Kotler mentioned that Service recovery can turn angry customers into loyal ones. Companies should take steps not only to provide good service every time but also to recover from mistakes when they occur Effective service recovery requires thoughtful procedures for resolving problems and handling disgruntled customers. It is critical for firms to have effective recovery strategies, because even a single service problem under the following conditions can destroy a customers confidence in a firm:
The failure is totally outrageous (e.g., blatant dishonesty on the part of the supplier). The problem fits a pattern of failure rather than an isolated incident. The recovery efforts are weak, serving to compound the original problem rather than correct it.

The risk of defection is high, especially when a variety of competing alternatives is available. One study of customer switching behavior in service industries found that close to 60 percent of all respondents who reported changing suppliers did so because of a service failure: 25 percent cited failures in the core service, 19 percent reported an unsatisfactory encounter with an employee, 10 percent reported an unsatisfactory response to a prior service failure, and 4 percent described unethical behavior on the part of the provider.

Services, Recovery, Switching, and Continuity

1.5.2 Service Recovery on Customer Loyalty When complaints are satisfactorily resolved, there is a much higher chance that the customers involved will remain loyal. TARP research found that intentions to repurchase for different types of products ranged from 9 percent to 37 percent when customers were dissatisfied but did not complain. For a major complaint, the retention rate increased from 9 percent when dissatisfied customers did not complain to 19 percent if the customer complained and the company offered a sympathetic ear but was unable to resolve the complaint to the satisfaction of the customer. If the complaint could be resolved to the satisfaction of the customer, the retention rate jumped to 54 percent. The highest retention rate, 82 percent, was achieved when problems were fixed quicklytypically on the spot.

We can conclude that complaint handling should be seen as a profit center, not a cost center. When a dissatisfied customer defects, the firm loses more than just the value of the next transaction. It may also lose a long-term stream of profits from that customer and from anyone else who switches suppliers or is deterred from doing business with that firm, because of negative comments from an unhappy friend. However, many organizations have yet to buy into the concept that it pays to invest in service recovery designed to protect those long-term profits. 1.5.3 The Service Recovery Paradox The service recovery paradox refers to the effect that customer who experience a service failure and then have it resolved are sometimes more satisfied than customers who have had no problem in the first place. 20 Research has shown that the service recovery paradox is far from universal.21 For example, a study of repeated service failures in a retail banking context showed that the service recovery paradox held for the first service failure that was recovered to customers full satisfaction.22 However, if a second service failure occurred, the paradox disappeared. It seems that customers may forgive a firm once, but become disillusioned if failures recur. Furthermore, the study also showed that customers expectations were raised after they experienced a very good recovery; thus, excellent recovery becomes the standard they expect for dealing with future failures.
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Whether a customer comes out delighted from a service recovery probably may also depend on the severity and recoverability of the failureno one can replace spoiled wedding photos, a ruined holiday, or eliminate the consequences of a debilitating injury caused by service equipment. In such situations, its hard to imagine anyone being truly delighted even when a most professional service recovery is conducted. When poor service is recovered by delivery of a superior product, youre usually delighted and probably hope for another lost reservation in the future. The best strategy, of course, is to do it right the first time. As Michael Hargrove puts it, Service recovery is turning a service failure into an opportunity you wish you never had.23 Unfortunately, empirical evidence shows that some 40 percent to 60 percent of customers reported dissatisfaction with the service recovery processes they experienced. 1.5.4 Common Service Recovery Mistakes Here are some typical service recovery mistakes made by many organizations:
Managers disregard evidence that shows how service recovery provides a significant financial return. In recent years, many organizations have focused on cost cutting, paying only lip service to retaining their most profitable customers. On top of that, they have also lost sight of the need to respect all their customers. Companies do not invest enough in actions that would prevent service issues. Ideally, service planners address potential problems before they become customer problems. Although preventive measures dont eliminate the need for good service recovery systems, they greatly reduce the burden on frontline staff and the service recovery system in its entirety. Customer service employees fail to display good attitudes. The three most important things in service recovery are attitude, attitude, and attitude. No matter how well designed and well planned the service recovery system is, it wont work well without the friendly and proverbial smile-in-the-voice attitude from frontline staff. Organizations fail to make it easy for customers to complain or give feedback. Although some improvement can be seen, such as hotels and restaurants offering comment cards little is done to communicate their simplicity and value to customers. Research shows that a large proportion of customers are unaware of the existence of a proper feedback system that could help them get their problems solved.

Services, Recovery, Switching, and Continuity

1.6 Switching in Marketing Switching in marketing includes many term definitions such as brand switching, customer switching and related customer behavior, and switching cost. 1.6.1 Brand switching Sometimes known as brand jumping, brand switching is the process of choosing to switch from routine use of one product or brand to steady usage of a different but similar product. Much of the advertising process is aimed at encouraging brand switching among consumers, thus helping to grow market share for a given brand or set of brands.

Convincing consumers to switch brands is sometimes a difficult task. It is not unusual for customers to build up a great deal of brand loyalty due to such factors as quality, price, and availability. To encourage switching brands, advertisers will often target these three areas as part of the strategy of encouraging brand switching. Price is often an important factor to consumers who are tight budgets. For this reason, advertisers will often use a price comparison model to entice long time users of one brand to try a new one. The idea is to convince the end user that it is possible to purchase the same amount of product while spending less money. Ideally, this means that the consumer can use the savings for other purchases, possibly even a luxury item of some sort. The idea of more discretionary resources in the monthly budget can be an effective in the encouragement of jumping brands. 1.6.2 Customer Switching Defined as the action through which a customer changes supplier", A switch is essentially seen as the free movement of a customer from one supplier to another. Switching activity is defined as the number of switches in a given period of time. A switch additionally includes: - A re-switch: when a customer switches for the second or subsequent time, even within the same measured period of time. - A switch-back: when a customer switches back to his/her former or previous supplier. - Switching and moving: when a customer moves, a switch should only be recorded if a supplier other than the supplier which is incumbent in the area where he/she is moving to.
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1.6.3 Switching Costs The definition of switching costs is quite broad. Thompson and Cats-Baril (2002) defines switching costs as "the costs associated with switching supplier", while Farrell and Klemperer (2007) write that "a consumer faces a switching cost between sellers when an investment specific to his current seller must be duplicated for a new seller". As these definitions indicate, switching costs can arise for several reasons. Examples of switching costs include the effort needed to inform friends and relatives about a new telephone number after an operator switch; costs related to learning how to use the interface of a new mobile phone from a different brand; and costs in terms of time lost due to the paperwork necessary when switching to a new electricity provider. Types of switching costs include exit fees, search costs, learning costs, cognitive effort, emotional costs, equipment costs, installation and start-up costs, financial risk, psychological risk, and social risk. Some of these costs are easy to estimate. Exit fees include contractual obligations that must be paid to the current supplier and compensatory damages that may be awarded for breach of contract. Often, vendors combine sign-up incentives with penalties for early cancellation. Careful buyers who read the fine print should not be surprised by exit fees. Search costs and learning costs, the effort and expense required to find an alternative supplier and learn how to use the new product, are also usually expected. On the other hand, the psychological, emotional, and social costs of switching are often overlooked or underestimated by both buyers and sellers. Gourville (2003) lists several rules of thumb to help understand why many consumers do not immediately switch from a product they currently use to the latest innovative improved product, even if the cost difference is minimal. a) People are sensitive to the relative advantages and disadvantages of any change from the status quo. Therefore, a new, improved product, no matter how great it is on its own merit, must be significantly better than what the consumer is currently using before he will switch.
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b) Different people have different reference points. For example, a high-tech travelling salesman would evaluate the advantages of a mobile phone over a landline telephone from a much different perspective than a homebound, fixed-income retiree. c) People exhibit loss aversion. The pain of giving up a benefit is much more significant than the pleasure of gaining that benefit. For example, DIVX technology may have failed, in part, because it offered the typical consumer no clear benefit to offset the perceived sacrifice of unlimited viewing time and the cost of having to hook into a phone line. Switching costs are a major reason for pursuing order-of-magnitude improvements in costs, efficiencies, and benefits to the consumer. This business strategy has been called Andy Grove's 10x rule. Where switching costs for a buyer are prohibitively high, the situation can be modelled as a monopoly, for a seller, a monopsony, and for both, a bilateral monopoly. However, Shalev and Asbjornsen found that Switching Costs is not a relevant consideration for the public sector procurement. In the public sector, buyers are almost always obliged to engage in an auction process as contracts expire. Given that periodic auctions cannot be avoided in the public sector, switching costs are always incurred, and so switching costs would not be a relevant consideration. 1.7 Services Continuity The continuity of an organizations service delivery is a paramount concern in the organizations operational resilience activities. The organization can invest considerable time and resources in attempting to prevent a range of potential disruptive events, but no organization can mitigate all risk. As a result, the organization must be prepared to deal with the consequences of a disruption to its operations at any time. Significant disruption can result in dire circumstances for the organization, even bankruptcy or termination. Service Continuity describes the organizational processes responsible for developing, deploying, exercising, implementing, and managing plans for responding to and recovering from events and restoring operations to business as usual. This requires that the organization have a plan and program for service continuity, assign adequate and sufficient resources to the plan and program, and have the requisite infrastructure to carry out the plan and program. Based on risk appetite and tolerance, the organization must determine which service continuity plans it needs to establish, develop the plans, and exercise them on a regular and sufficient basis to ensure they remain viable as long as the service is vital to the organization.
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2. PART 2: CURRENT RESEARCH STREAMS 2.1 Services Marketing and The 7 Ps of Services Marketing Stated simply, Services Marketing refers to the marketing of services as against tangible products. As already discussed, services are inherently intangible, are consumed simultaneously at the time of their production, cannot be stored, saved or resold once they have been used and service offerings are unique and cannot be exactly repeated even by the same service provider. Marketing of services is a relatively new phenomenon in the domain of marketing, having gained in importance as a discipline only towards the end of the 20th century. Services marketing first came to the fore in the 1980s when the debate started on whether marketing of services was significantly different from that of products so as to be classified as a separate discipline. Prior to this, services were considered just an aid to the production and marketing of goods and hence were not deemed as having separate relevance of their own. The 1980s however saw a shift in this thinking. As the service sector started to grow in importance and emerged as a significant employer and contributor to the GDP, academics and marketing practitioners began to look at the marketing of services in a new light. Empirical research was conducted which brought to light the specific distinguishing characteristics of services. By the mid1990s, Services Marketing was firmly entrenched as a significant sub discipline of marketing with its own empirical research and data and growing significance in the increasingly service sector dominated economies of the new millennium. New areas of study opened up in the field and were the subject of extensive empirical research giving rise to concepts such as the product-service spectrum, relationship marketing, franchising of services, customer retention etc. Difference b/w goods and services goods can be resold but the services can't be resold The first four elements in the services marketing mix are the same as those in the traditional marketing mix. However, given the unique nature of services, the implications of these are slightly different in case of services. Product: In case of services, the product is intangible, heterogeneous and perishable. Moreover, its production and consumption are inseparable. Hence, there is scope for
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customizing the offering as per customer requirements and the actual customer encounter therefore assumes particular significance. However, too much customization would compromise the standard delivery of the service and adversely affect its quality. Hence particular care has to be taken in designing the service offering. Pricing: Pricing of services is tougher than pricing of goods. While the latter can be priced easily by taking into account the raw material costs, in case of services attendant costs such as labor and overhead costs - also need to be factored in. Thus a restaurant not only has to charge for the cost of the food served but also has to calculate a price for the ambience provided. The final price for the service is then arrived at by including a mark up for an adequate profit margin. Place: Since service delivery is concurrent with its production and cannot be stored or transported, the location of the service product assumes importance. Service providers have to give special thought to where the service would be provided. Thus, a fine dine restaurant is better located in a busy, upscale market as against on the outskirts of a city. Similarly, a holiday resort is better situated in the countryside away from the rush and noise of a city. Promotion: Since a service offering can be easily replicated promotion becomes crucial in differentiating a service offering in the mind of the consumer. Thus, service providers offering identical services such as airlines or banks and insurance companies invest heavily in advertising their services. This is crucial in attracting customers in a segment where the services providers have nearly identical offerings. We now look at the 3 new elements of the services marketing mix - people, process and physical evidence - which are unique to the marketing of services. People: People are a defining factor in a service delivery process, since a service is inseparable from the person providing it. Thus, a restaurant is known as much for its food as for the service provided by its staff. The same is true of banks and department stores. Consequently, customer service training for staff has become a top priority for many organizations today. Process: The process of service delivery is crucial since it ensures that the same standard of service is repeatedly delivered to the customers. Therefore, most companies have a service blue print which provides the details of the service delivery process, often going down to even defining the service script and the greeting phrases to be used by the service staff. Physical Evidence: Since services are intangible in nature most service providers strive to
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incorporate certain tangible elements into their offering to enhance customer experience. Thus, there are hair salons that have well designed waiting areas often with magazines and plush sofas for patrons to read and relax while they await their turn. Similarly, restaurants invest heavily in their interior design and decorations to offer a tangible and unique experience to their guests. Structure of the Service Sector The services sector is remarkably diverse. It comprises a wide array of industries that sell to individual consumers and business customers, as well as to government agencies and nonprofit organizations. Services make up the bulk of todays economy and also account for most of the growth in new jobs. Unless you are already predestined for a career in family manufacturing or agricultural business, the probability is high that you will spend your working life in service organizations. The size of service sector is increasing in almost all economies around the world .As national economy develops, the relative share of employment among agricultural industry, and services change dramatically. Even in emerging economies, service output is growing rapidly and often represents at least half of the GDP. a) Ordering Ease: Ordering ease refers to how easy it is for the customer to place an order with the company. b) Delivery Ease: Delivery refers to how well the product or service is brought to the customer. It includes speed, accuracy, and care throughout the process. c) Installation: It refers to the work done to make a product or service operational in its planned location. Ease of installation becomes a true selling point, especially when the target market is technology novice. d) Customer Training: It refers to training the customer's employees to use the vendor's equipment properly and efficiently. e) Customer Consulting: It refers to data, information systems, and advice services that the seller offers to buyers. f) Maintenance and Repair: It describes the service program for helping customers keep purchased products in good working order. 2.2 The effects of service recovery on consumer satisfaction: The findings of the research conducted by Ah-Keng Kau and Elizabeth Wan-Yiun Loh (nd) showed that the complainants level of satisfaction with service recovery was significantly affected by perceived justice. The behavioral outcomes of the complainants in terms of trust,
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word-of-mouth (WOM) and loyalty were also found to be affected by their satisfaction with the service recovery. T-tests confirmed that the levels of trust, WOM and loyalty were significantly higher for those respondents who were satisfied with the service recovery compared with those who were dissatisfied. Further t-tests also indicated that respondents who were initially satisfied with the service expressed greater trust and positive WOM compared with the satisfied complainants. Finally, the study showed that dissatisfied complainants would exhibit a lower level of trust and were more likely to engage in negative word-of-mouth behavior compared with those who were dissatisfied initially but chose not to complain. 2.3 Customer Switching Patterns Roos et.al (2004) argued that Changes in customer switching behavior are compared in five different service industries. Switching barriers and the competitive industrial situations in the comparison between industries also revealed changes in behavior in an industrial monopoly in which switching to alternative external service providers was not an option. This kind of switching was articulated as internal switching. The behavioral change was therefore assessed in terms not only of frequency but also of type of change. The switching ability to cause change, called configuration energy, even caused a change in behavior at the highest level in a noncompetitive industry in which there was a lack of switching alternatives. Total change was considered to be a result of the higher energy level driving the switching configuration than when the change was partial. 2.4 Consumer Switching Behavior Thapa (2011) studied the consumer switching behavior of shampoo brands and concluded that usage rate of shampoo among the select individuals has been high and their buying behavior is also very frequent. It has been seen that most of the people are aware of cosmetic shampoos rather than herbal and medicated ones. Price, availability and Packaging of the product also plays an important role in buying the shampoo products. It has been found that most of the consumers preferred gifts, extra quantity, discount, price off while making decision for buying the shampoos. Also, it has been seen that various factors influence the switching behavior of the consumers like impact of packaging, price rise of current brand, scheme of brands, impact of advertisement, non-availability of brand, to try new option and influence by others etc.

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2.5 Brand Switching Matrices Richard Colombo and Darius Sabavala (nd) stated that brand switching matrices are square tables that display customer purchases on two different, usually contiguous, occasions. Marketers have used such tables in at least three ways. First, by examining substitution patterns those brands to which and from which consumers tend to switch marketers can identify the major competitors of a brand. Second, consumer loyalty and customer retention can be assessed from the degree of repeat buying as measured by the diagonal elements of the table. Third, the tables can be used for forecasting since they show losses and gains of each brand from every other. These matrices capture switching behavior in various ways. The most direct way is to observe switching from one purchase occasion to the next. But switching behavior can also be observed from one time period to another. And, if observation is difficult, as it might be for durable goods with long inter-purchase times, brand switching matrices can be constructed by tabulating answers to questions such as what was the last brand you bought? and what brand do you intend to buy next time? The flexibility and usefulness of switching matrices have made them familiar to marketers. But to go beyond the data how do, or should, brand-switching matrices be analyzed (or correspondingly how should switching behavior be modeled)? To answer this question, they asked a group of well-known marketing scientists to analyze a set of similar switching matrices using their own preferred technique. But switching matrices have seen uses in many other fields so that statisticians are also familiar with methods for their analysis. they therefore contacted some statisticians as well as marketers. In all, they received responses from twenty-one out of the thirty-five or so people they approached.

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3. PART 3: APPLICATIONS 3.1 Services marketing in banking and financial sector Recently, banks are in a period that they earn money in servicing beyond selling money. The prestige is get as they offer their services to the masses. Like other services, banking services are also intangible. Banking services are about the money in different types and attributes like lending, depositing and transferring procedures. These intangible services are shaped in contracts. The structure of banking services affects the success of institution in long term. Besides the basic attributes like speed, security and ease in banking services, the rights like consultancy for services to be compounded are also preferred. 3.2 Customer-switching behavior in mobile phone industry According to research by TNS Telecom Trak, consumers tend to use their handsets for about twenty months before upgrading to a new one. Telecommunications regulator OFTEL found that this is also the average amount of time that a majority of mobile phone users will stay with the same mobile provider for. Oftel's research ascertained that 90% of consumers thought about changing their network when changing handsets. OFTEL published a report in April 2003, which provided an overview of the key findings of trends in consumer behaviour in the mobile market based on a residential consumer survey conducted in February 2003. Research was carried out by Recom (Research in Communications) amongst a representative sample of 2,289 UK adults, 75% of who claimed to have a mobile. Findings revealed that 26% of mobile customers have switched network/ supplier. There was a strong indication that the rise in switching in the last quarter was a reflection of confusion over re-branding and rise in mobile penetration. One in ten (9%) of mobile customers were found to have switched network at least twice since owning a mobile, including customers switching back to a previous operator. Men (37%) and younger mobile users, 15-34 (38%) were found to be most likely to switch multiple times, which included returning to a previously used network. Although the
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switching differed according to type of package, 36% of contract customers had switched multiple times compared to those on prepay (33%). 24% of customers had switched once in the last 6 months, compared to three in ten (28%) of those that had switched twice and 43% that had switched more than 3 times.

The same survey also revealed that in November 2002, 34% of consumers stated that they had switched mobile network, which was believed to have a result of customer confusion caused by the re-branding of O2 (formally BTCellent) and T-mobile (One2One). Yet this rise was temporary and soon returned to the previous level of 27%. In February 2003, 7% of T-mobile customers said that they had switched network having previously being with One2One, this was the same for O2 customers who had switched from BTCellnet. This accounted for 3% of all switchers who were confused by the rebranding during February. The current percentage of mobile consumers that have switched mobile network remains at 26%.

When looking at multiple switching, two in ten (18%) of mobile customers had changed their network once, and seven out of ten claimed to have never switched network.

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4. REFERENCES Simon J. Bell and James A. Luddington, Coping with Customer Complaints, Journal of Service Research, 8, No. 3,February 2006, 221233. Leonard L. Berry, On Great Service: A Framework for Action. New York: The Free Press, 1995, 94. Susan M. Keveaney, Customer Switching Behavior in Service Industries: An Exploratory Study, Journal of Marketing, 59, April 1995, 7182. Steven S. Tax and Steven W. Brown, Recovering and Learning from Service Failure Sloan Management Review,49, No. 1, Fall 1998, 7588. Stephen S. Tax, Stephen W. Brown, and Murali Chandrashekaran, Customer Evaluation of Service Complaint Experiences: Implications for Relationship Marketing, Journal of Marketing, 62, No. 2, Spring 1998, 6076; for a study in the online environment see Betsy B. Holloway and Sharon E. Beatty,Service Failure in Online Retailing: A Recovery Opportunity, Journal of Service Research, 6, No. 1, 2003,92105. Rod Stiefbold, Dissatisfied Customers Require Service Recovery Plans, Marketing News, 37, No. 22, October 27, 2003, 4445. Carl Shapiro and Hal R. Varian (1999). Information Rules, Boston: Harvard Business School Press. John T. Gourville (2003). "Why Consumers Don't Buy: The Psychology of New Product Adoption," Harvard Business School Case No. 504-056. (Revised April 5, 2004). Andy Grove, (July 21, 2003). "Churning Things Up," Fortune. Retrieved 13 December 2012. Christopher Lovelock and Jochen Wirtz (2011), Services Marketing People, Technology, Strategy. 7th ed., Upper Saddle River, New Jersey: Prentice Hall Lovelock, C., Gummesson, E. 2004. Whither Services Marketing?: In Search of a New Paradigm and Fresh Perspectives. Journal of Service Research 7 (1) 20-41. Lovelock, C., Gummesson, E. 2004. Whither Services Marketing?: In Search of a New Paradigm and Fresh Perspectives. Journal of Service Research 7 (1) 20-41. Christopher Lovelock and Jochen Wirtz (2011), Services Marketing People, Technology, Strategy. pg 14, 7th ed., Upper Saddle River, New Jersey: Prentice Hall. Marketing Management: A South Asian Perspective, 13th Edition, Philip Kotler, Kelvin Lane Keller, Abraham Koshy, Mithileshwar Jha, Pearson Publications. Roos, Edvardsson and Gustafsson (2004), Customer Switching Patterns in Competitive and Noncompetitive Service Industries Journal of Service Research, Volume X, No. X, Month 2004 1. Ah-Keng Kau and Elizabeth Wan-Yiun Loh,The effects of service recovery on consumer satisfaction: a comparison between complainants and non-complainants Emerald. http://www.bnet.fordham.edu/public/mrktg/rcolombo/Car_Challenge_Road_Map.htm http://www.ukdissertations.com/dissertations/marketing/customer-switchingbehaviour.php#ixzz2OfYOIZkc
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