The driving forces of customer loyalty : a study of user perception of Internet service providers in Hong Kong

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The driving forces of customer loyalty : a study of user perception of Internet service providers in Hong Kong

 

Author: Lai, Chi-fung Lawrence
Title: The driving forces of customer loyalty : a study of user perception of Internet service providers in Hong Kong
Degree: D.B.A.
Year: 2005
Subject: Hong Kong Polytechnic University -- Dissertations
Internet service providers -- China -- Hong Kong
Customer loyalty -- China -- Hong Kong
Department: Graduate School of Business
Pages: 105 leaves : ill. ; 30 cm.
InnoPac Record: http://library.polyu.edu.hk/record=b1968200
URI: http://theses.lib.polyu.edu.hk/handle/200/5496
Abstract: The population of Internet users has been growing at an unprecedented pace due to the many benefits that the Internet provides. With the connectivity services and related applications provided by Internet Service Providers (ISPs), users are able to perform online shopping, e-trading, information searching, email and other applications through the Internet. By virtue of the important role of ISPs in Hong Kong, their number increased drastically from 3 in 1994 to 258 in 2001. Due to the significant surge in the number of ISPs, the broadband market has become very crowded, resulting in fierce price competition, which then reversed the trend and culminated in the elimination of many ISPs from the market. From 2001 to 2004, the number of ISPs dropped from 258 to 188. It is widely recognized that as the broadband market matures, the focus of ISPs has shifted from customer acquisition to customer retention. The objective of this study is to examine the driving forces of customer loyalty in the broadband market in Hong Kong. The study developed and empirically tested a model examining the antecedents of customer loyalty towards the ISPs in Hong Kong. The Structural Equation Modeling (SEM) techniques were used to evaluate the proposed model.
A total of 737 questionnaires were completed through an Internet-based survey. The results showed that customer satisfaction together with switching cost and price perception are antecedents leading directly to customer loyalty, with customer satisfaction exerting the greatest influence. Though service quality is an antecedent of customer satisfaction and customer satisfaction is an antecedent of customer loyalty, a linear relationship between service quality and customer loyalty was not found. Furthermore, there was evidence to indicate that corporate image is not linked directly with customer loyalty and that reliance by Internet service providers on spending huge resources on corporate image could indeed be a risky strategy. Hong Kong is widely recognized as one of the most liberalized telecommunications markets in the region. The extent of liberalization in this market far surpasses the other public utilities sectors such as electricity, water and gas. The lessons learned from the highly competitive telecommunications sector may be of relevance to, and provide useful implications for, other pubic utilities sectors. This study provides a number of directions for future research, possibly focusing on identifying and developing a unique measure of customer loyalty for an ISP context. We can also look at developing a richer model that incorporates other constructs beyond those used in this study and to consider their interactive effects.

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