Exploring Service Quality, Customer Satisfaction and Customer Loyalty in the Taiwan Mobile Telecommunication

Abstract

The launch of nationwide Mobile Number Portability (MNP) in October 2005 has taken the Taiwan
mobile telecommunication industry one step forward . The implementation of MNP has given another
challenge for the mobile service providers to maintain their loyalty of existing customer as customers are
allowed to retain their existing telephone number when switching from one mobile service provider to
another. Under such circumstances, the pursuit of customer loyalty appears to be an essential goal of the
companies' sustainable competitive advantage and growth. In response to the challenges, mobile service
providers are aggressively launching various innovative and attractive marketing campaigns and promotions
with the aim to retain customer loyalty. The objectives to carry out this research are to investigate the
relationship between service quality and customer satisfaction and to investigate the relationship
between customer satisfaction and customer loyalty in the Taiwan mobile telecommunication market.
This study adopts five dimensions of SERVQUAL instrument to measure service quality in the mobile
telecommunication industry, such as tangibles, reliability, responsiveness, assurance and empathy. A series
of Questionnaire provide and distribute to explore the mobile service providers’ customer. The five-point
Likert scale that ranged from 1=strongly disagree to 5= strongly agree. Hypotheses testing are needed to
obtain the objective of this research by using Regression analysis. Result shows that the dimensions of
service quality such as tangibles, responsiveness, assurance and empathy have significant effect to
customer satisfaction. Furthermore, customer satisfaction was found to have significant positive effect
on customer loyalty in the Taiwan mobile telecommunication industry.