RELATIONSHIP OF SWITCHING COST TOWARDS SWITCH BARRIER IN TELECOMMUNICATION INDUSTRY IN JAKARTA

Authors

  • Dedi Mulyadi Universitas Buana Perjuangan Author
  • Uus MD Fadli Universitas Buana Perjuangan Author
  • Obsatar Sinaga Universitas Padjadjaran3 Author
  • Muhammad Asyraf Hasim Universiti Kuala Lumpur Author

DOI:

https://doi.org/10.61841/fefx9131

Keywords:

Switching costs, Switching barriers, Telecommunication industry

Abstract

The purpose of this research is to measure the role of switching cost and the switching barriers in the telecommunication industry. The competition in telecommunication industry is very tough that lead service provider to compete against the limited market. One of the way to increase market share is through getting customer from competitor through attractive offering. This is a quantitative research that using questionnaire to collect data. 250 questionnaires but response rate is only 80%. The data analysis indicates that search cost and move in cost is significant towards the switching barrier. Telecommunication industry should consider the result in developing their marketing strategy and promoting their package for postpaid and prepaid services. Service provider in the industry should think of something in order to attract new customer and lock them for a certain numbers of period.

 

 

Downloads

Download data is not yet available.

References

[1] Abd-elrahman, A. H., Hassan, S. A., El-borsaly, A. A., & Hafez, E. A. (2019). A critical review of alternative measures of telecommunications service quality. https://doi.org/10.1108/IJQSS-08-2018-0066

[2] Al-mutawkkil, A., Heshmati, A., & Hwang, J. (2009). Development of telecommunication and broadcasting infrastructure indices at the global level. Telecommunications Policy, 33(3–4), 176–199. https://doi.org/10.1016/j.telpol.2008.12.008

[3] Anindito, D. B., & Sutriadi, R. (2016). Towards a Just City in Information Era: Understanding the Inclusiveness of Community Network Induced by Telecommunication Technology at the Local Level (Case Study: Cihapit and Cipaganti Neighborhoods, Bandung City, Indonesia). Procedia - Social and Behavioral Sciences, 227(November 2015), 255–264. https://doi.org/10.1016/j.sbspro.2016.06.069

[4] Anouze, A. L. M., & Alamro, A. S. (2019). Factors affecting intention to use e-banking in Jordan. International Journal of Bank Marketing, 38(1), 86–112. https://doi.org/10.1108/IJBM-10-2018-0271

[5] Balabanis, G., Reynolds, N., & Simintiras, A. (2006). Bases of e-store loyalty: Perceived switching barriers and satisfaction. Journal of Business Research, 59(2), 214–224. https://doi.org/10.1016/j.jbusres.2005.06.001

[6] Basaure, A., Vesselkov, A., & Töyli, J. (2019). Internet of things (IoT) platform competition: Consumer switching versus provider multihoming. Technovation, (July 2018), 102101.

https://doi.org/10.1016/j.technovation.2019.102101

[7] Berry, L. L., Parasuraman, A., & Zeithaml, V. A. (1985). The Service-Quality Puzzle.

[8] Broetzmann, S. M., Kemp, J., Rossano, M., & Marwaha, J. (1995). Customer satisfaction-lip service or management tool? Managing Service Quality: An International Journal, 5(2), 13–18. https://doi.org/10.1108/09604529510083530

[9] Calvo-Porral, C., Faíña-Medín, A., & Nieto-Mengotti, M. (2017). Satisfaction and switching intention in mobile services: Comparing lock-in and free contracts in the Spanish market. Telematics and Informatics, 34(5), 717–729. https://doi.org/10.1016/j.tele.2016.08.022

[10] Cen, Y., & Li, L. (2019). Effects of network externalities on user loyalty to online B2B platforms: an empirical study. Journal of Enterprise Information Management. https://doi.org/10.1108/JEIM-02-2019-0050

[11] Chang, Y. H., & Chen, F. Y. (2007). Relational benefits, switching barriers and loyalty: A study of airline customers in Taiwan. Journal of Air Transport Management, 13(2), 104–109. https://doi.org/10.1016/j.jairtraman.2006.10.001

[12] Chang, Y. W., Hsu, P. Y., Huang, S. H., & Chen, J. (2019). Determinants of switching intention to cloud computing in large enterprises. Data Technologies and Applications. https://doi.org/10.1108/DTA-12-2018-0104

[13] Chuah, S. H. W., Rauschnabel, P. A., Tseng, M. L., & Ramayah, T. (2018). Reducing temptation to switch mobile data service providers over time: The role of dedication vs constraint. Industrial Management and Data Systems, 118(8), 1597–1628. https://doi.org/10.1108/IMDS-07-2017-0326

[14] Chumaidiyah, E. (2012). The Technology, Technical Skill, and R&D Capability in Increasing Profitability on Indonesia Telecommunication Services Companies. Procedia Economics and Finance, 4(Icsmed), 110–119. https://doi.org/10.1016/s2212-5671(12)00326-7

[15] Dong Hee Shin. (2007). A study of mobile number portability effects in the United States. Telematics and Informatics. https://doi.org/10.1016/j.tele.2005.11.002

[16] Gerpott, T. J., Rams, W., & Schindler, A. (2001). Customer retention, loyalty, and satisfaction in the German mobile cellular telecommunications market. Telecommunications Policy. https://doi.org/10.1016/S0308-5961(00)00097-5

[17] Giovanis, A. N., Zondiros, D., & Tomaras, P. (2014). The Antecedents of Customer Loyalty for Broadband Services: The Role of Service Quality, Emotional Satisfaction and Corporate Image. Procedia - Social and Behavioral Sciences, 148, 236–244. https://doi.org/10.1016/j.sbspro.2014.07.039

[18] GSMA Association. (2014). Understanding the Internet of Things (IoT). Gsma Connected Living.

[19] Han, H., Back, K.-J., & Barrett, B. (2009). Influencing factors on restaurant customers’ revisit intention: The roles of emotions and switching barriers. International Journal of Hospitality Management, 28(4), 563–572. https://doi.org/10.1016/j.ijhm.2009.03.005

[20] Hapsari, R., Clemes, M., & Dean, D. (2016). The Mediating Role of Perceived Value on the Relationship between Service Quality and Customer Satisfaction: Evidence from Indonesian Airline Passengers. Procedia Economics and Finance, 35(October 2015), 388–395. https://doi.org/10.1016/s2212-5671(16)00048-4

[21] Hassan, S., & Shamsudin, M. F. (2019). Measuring the effect of service quality and corporate image on student satisfaction and loyalty in higher learning institutes of technical and vocational education and training. International Journal of Engineering and Advanced Technology, 8(5), 533–538. https://doi.org/10.35940/ijeat.E1077.0585C19

[22] Hauff, J. C. (2019). Reasons to switch: empowered vs less powerful bank customers. International Journal of Bank Marketing, 37(6), 1441–1461. https://doi.org/10.1108/IJBM-08-2018-0231

[23] Hino, H. (2017). Does switching-intention result in a change in behaviour? Exploring the actual behavioural shopping patterns of switching-intended customers. British Food Journal, 119(12), 2903–2917. https://doi.org/10.1108/BFJ-12-2016-0622

[24] Izogo, E. E. (2016). Antecedents of attitudinal loyalty in a telecom service sector: the Nigerian case. International Journal of Quality and Reliability Management, 33(6), 747–768. https://doi.org/10.1108/IJQRM-06-2014-0070

[25] Jung, J. Y., Qiu, J. L., & Kim, Y. C. (2001). Internet connectedness and inequality: Beyond the “divide.”

Communication Research. https://doi.org/10.1177/009365001028004006

[26] Kenski, K., & Stroud, N. J. (2006). Connections between Internet use and political efficacy, knowledge, and participation. Journal of Broadcasting and Electronic Media. https://doi.org/10.1207/s15506878jobem5002_1

[27] Kilgour, M. (2006). Marketing Management: An Asian Perspective. Australasian Marketing Journal (AMJ). https://doi.org/10.1016/s1441-3582(06)70062-3

[28] Kim, Moon K., Park, M. C., & Jeong, D. H. (2004). The effects of customer satisfaction and switching barrier on customer loyalty in Korean mobile telecommunication services. Telecommunications Policy, 28, 145–159. https://doi.org/10.1016/j.telpol.2003.12.003

[29] Kim, Moon Koo, Park, M. C., Park, J. H., Kim, J., & Kim, E. (2018). The role of multidimensional switching barriers on the cognitive and affective satisfaction-loyalty link in mobile communication services: Coupling in moderating effects. Computers in Human Behavior, 87(May), 212–223. https://doi.org/10.1016/j.chb.2018.05.024

[30] Koo, B., Yu, J., & Han, H. (2020). The role of loyalty programs in boosting hotel guest loyalty: Impact of switching barriers. International Journal of Hospitality Management, 84(October 2018), 102328. https://doi.org/10.1016/j.ijhm.2019.102328

[31] Kotler, P. (2012). Marketing management/Philip Kotler, Kevin Lane Keller. In Marketing management.

[32] Lee, H., Choi, H., & Koo, Y. (2018). Lowering customer’s switching cost using B2B services for telecommunication companies. Telematics and Informatics, 35(7), 2054–2066. https://doi.org/10.1016/j.tele.2018.07.008

[33] Lee, J., Kim, Y., Lee, J.-D., & Park, Y. (2006). Estimating the extent of potential competition in the Korean mobile telecommunications market: Switching costs and number portability. International Journal of Industrial Organization, 24(1), 107–124. https://doi.org/10.1016/j.ijindorg.2005.07.003

[34] Li, C. Y. (2018). Consumer behavior in switching between membership cards and mobile applications: The case of Starbucks. Computers in Human Behavior, 84, 171–184. https://doi.org/10.1016/j.chb.2017.12.042

[35] Liang, D., Ma, Z., & Qi, L. (2013). Service quality and customer switching behavior in China’s mobile phone service sector. Journal of Business Research, 66(8), 1161–1167. https://doi.org/10.1016/j.jbusres.2012.03.012

[36] Liu, C. T., Guo, Y. M., & Lee, C. H. (2011). The effects of relationship quality and switching barriers on customer loyalty. International Journal of Information Management, 31(1), 71–79. https://doi.org/10.1016/j.ijinfomgt.2010.05.008

[37] Lunn, P. D., & Lyons, S. (2018). Consumer switching intentions for telecoms services: evidence from Ireland.

Heliyon, 4(5), e00618. https://doi.org/10.1016/j.heliyon.2018.e00618

[38] Maharjan, S., & Khadka.Kabu. (2017). Customer Satisfaction and Customer Loyalty. Customer Satisfaction and Customer Loyalty.

[39] Mahendrawathi, E. R., Astuti, H. M., & Nastiti, A. (2015). Analysis of Customer Fulfilment with Process Mining: A Case Study in a Telecommunication Company. Procedia Computer Science, 72, 588–596. https://doi.org/10.1016/j.procs.2015.12.167

[40] Maicas, J. P., Polo, Y., & Javier Sese, F. (2009). Reducing the level of switching costs in mobile communications: The case of Mobile Number Portability. Telecommunications Policy, 33(9), 544–554. https://doi.org/10.1016/j.telpol.2009.04.003

[41] Mannan, M., Mohiuddin, M. F., Chowdhury, N., & Sarker, P. (2017). Customer satisfaction, switching intentions, perceived switching costs, and perceived alternative attractiveness in Bangladesh mobile telecommunications market. South Asian Journal of Business Studies, 6(2), 142–160. https://doi.org/10.1108/SAJBS-06-2016-0049

[42] McCloughan, P., & Lyons, S. (2006). Accounting for ARPU: New evidence from international panel data.

Telecommunications Policy. https://doi.org/10.1016/j.telpol.2006.09.001

[43] Mihardjo, L. W. W., Sasmoko, S., Alamsjah, F., & Elidjen, E. (2019). Digital leadership role in developing business model innovation and customer experience orientation in industry 4.0. Management Science Letters. https://doi.org/10.5267/j.msl.2019.6.015

[44] Minarti, S. N., & Segoro, W. (2014). The Influence of Customer Satisfaction, Switching Cost and Trusts in a Brand on Customer Loyalty – The Survey on Student as im3 Users in Depok, Indonesia. Procedia - Social and Behavioral Sciences, 143, 1015–1019. https://doi.org/10.1016/j.sbspro.2014.07.546

[45] Mutum, D., Mohd Ghazali, E., Nguyen, B., & Arnott, D. (2014). Online loyalty and its interaction with switching barriers. Journal of Retailing and Consumer Services, 21(6), 942–949. https://doi.org/10.1016/j.jretconser.2014.08.012

[46] Nakamura, L., & Chow-White, P. A. (2013). Race after the internet. In Race After the Internet. https://doi.org/10.4324/9780203875063

[47] Ndebele, T., Marsh, D., & Scarpa, R. (2019). Consumer switching in retail electricity markets: Is price all that matters? Energy Economics, 83, 88–103. https://doi.org/10.1016/j.eneco.2019.06.012

[48] Octabriyantiningtyas, D., Suryani, E., Jatmiko, A. R., Octabriyantiningtyas, D., Suryani, E., & Jatmiko, A. R. (2019). ScienceDirect ScienceDirect Modeling Customer Satisfaction with the Service Quality of E- Modeling Customer Satisfaction with the Service Quality of E- Money in Increasing Profit of PT . Telekomunikasi Indonesia Money in Increasing Profit of PT . Telekomu. Procedia Computer Science, 161, 943–950. https://doi.org/10.1016/j.procs.2019.11.203

[49] Özer, A., Argan, M. T., & Argan, M. (2013). The Effect of Mobile Service Quality Dimensions on Customer Satisfaction. Procedia - Social and Behavioral Sciences, 99, 428–438. https://doi.org/10.1016/j.sbspro.2013.10.511

[50] Parry, M. E., & Sarma, S. (2019). The impact of pioneer adopter characteristics and perceptions on the perceived costs of switching to a follower product. Asia Pacific Journal of Marketing and Logistics, 31(4), 875–897. https://doi.org/10.1108/APJML-03-2018-0113

[51] Patterson, P. G., & Smith, T. (2003). A cross-cultural study of switching barriers and prospensity to stay with service providers. Journal of Retailing, 79(2), 107–120. https://doi.org/10.1016/S0022-4359(03)00009-5

[52] Phong, N. D., Khoi, N. H., & Nhat-Hanh Le, A. (2018). Factors affecting mobile shopping: a Vietnamese perspective. Journal of Asian Business and Economic Studies, 25(2), 186–205. https://doi.org/10.1108/jabes-05- 2018-0012

[53] Puspitasari, L., & Ishii, K. (2016). Digital divides and mobile Internet in Indonesia: Impact of smartphones.

Telematics and Informatics, 33(2), 472–483. https://doi.org/10.1016/j.tele.2015.11.001

[54] Qiu, H., Ye, B. H., Bai, B., & Wang, W. H. (2015). Do the roles of switching barriers on customer loyalty vary for different types of hotels? International Journal of Hospitality Management, 46, 89–98. https://doi.org/10.1016/j.ijhm.2015.01.015

[55] Ramsaran-Fowdar, R. R. (2013). Assessing the influence of switching barriers on patients’ expectations and tolerance zone. International Journal of Health Care Quality Assurance, 26(3), 236–249. https://doi.org/10.1108/09526861311311427

[56] Razak, A. A., & Shamsudin, M. F. (2019). The influence of atmospheric experience on Theme Park Tourist’s satisfaction and loyalty in Malaysia. International Journal of Innovation, Creativity and Change, 6(9), 10–20.

[57] Rohman, I. K., & Bohlin, E. (2014a). Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on? Telecommunications Policy. https://doi.org/10.1016/j.telpol.2013.10.006

[58] Rohman, I. K., & Bohlin, E. (2014b). Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on? Telecommunications Policy, 38(3), 248–263. https://doi.org/10.1016/j.telpol.2013.10.006

[59] Santouridis, I., & Trivellas, P. (2010). Investigating the impact of service quality and customer satisfaction on customer loyalty in mobile telephony in Greece. TQM Journal, 22(3), 330–343.

https://doi.org/10.1108/17542731011035550

[60] Shafei, I., & Tabaa, H. (2016). Factors affecting customer loyalty for mobile telecommunication industry. EuroMed Journal of Business, 11(3), 347–361. https://doi.org/10.1108/EMJB-07-2015-0034

[61] Shamsudin, M. F., Nurana, N., Aesya, A., & Nabi, M. A. (2018). Role of university reputation towards student choice to private universities. Opcion, 34(Special Issue 16), 285–294.

[62] Shamsudin, M. F., Shabi, K. S., & Salem, M. A. (2018). Role of perceived credibility towards intention to use of m- commerce. Opcion, 34(Special Issue 16), 276–284.

[63] Shamsudin, M., Mohd Noor, N., Abu Hassim, A., Hussain, H., Salem, M., & Hasim, M. (2015). Factors lead to customer loyalty in prepaid mobile services. Caspian Journal of Applied Sciences Research, 4(10).

[64] Shamsudin, Mohd Farid, Esa, S. A., & Ali, A. M. (2019). Determinants of customer loyalty towards the hotel industry in Malaysia. International Journal of Innovation, Creativity and Change, 6(9), 21–29.

[65] Sharma, S. K., & Sharma, M. (2019). Examining the role of trust and quality dimensions in the actual usage of mobile banking services: An empirical investigation. International Journal of Information Management, 44(October 2018), 65–75. https://doi.org/10.1016/j.ijinfomgt.2018.09.013

[66] Shin, Dong H., & Kim, W. Y. (2007). Mobile number portability on customer switching behavior: In the case of the Korean mobile market. Info, 9(4), 38–54. https://doi.org/10.1108/14636690710762129

[67] Shin, Dong Hee, & Kim, W. Y. (2008). Forecasting customer switching intention in mobile service: An exploratory study of predictive factors in mobile number portability. Technological Forecasting and Social Change, 75(6), 854– 874. https://doi.org/10.1016/j.techfore.2007.05.001

[68] Stenbacka, R., & Takalo, T. (2019). Switching costs and financial stability. Journal of Financial Stability, 41, 14–

24. https://doi.org/10.1016/j.jfs.2018.12.001

[69] Sultan, A. (2019). Identifying brand touchpoints to increase switching costs in the banking industry. International Journal of Bank Marketing. https://doi.org/10.1108/IJBM-07-2019-0255

[70] Sutherland, E. (2007). Mobile number portability. Info. https://doi.org/10.1108/14636690710762101

[71] Temerak, M. S., & El-Manstrly, D. (2019). The influence of goal attainment and switching costs on customers’ staying intentions. Journal of Retailing and Consumer Services, 51(October 2018), 51–61. https://doi.org/10.1016/j.jretconser.2019.05.020

[72] Tesfom, G., Birch, N. J., & Culver, J. N. (2016). Switching behavior of U.S. mobile phone service customers after providers shift from contract to no contract mobile phone service plans. Journal of Retailing and Consumer Services, 33, 154–163. https://doi.org/10.1016/j.jretconser.2016.08.015

[73] Thompson, F. M., & Tuzovic, S. (2019). Why organizational loyalty programs cannot prevent switching. (October). https://doi.org/10.1108/JSM-10-2019-0387

[74] Valenzuela, F. (2010). Switching barriers used to retain retail banking customers: Some empirical evidence from a South American country. Management Research Review, 33(7), 749–766. https://doi.org/10.1108/01409171011055825

[75] Vasudevan, H., Gaur, S. S., & Shinde, R. K. (2006). Relational switching costs, satisfaction and commitment: A study in the Indian manufacturing context. Asia Pacific Journal of Marketing and Logistics, 18(4), 342–353. https://doi.org/10.1108/13555850610703281

[76] Wang, W. T., Ou, W. M., & Chen, W. Y. (2019). The impact of inertia and user satisfaction on the continuance intentions to use mobile communication applications: A mobile service quality perspective. International Journal of Information Management, 44(November 2018), 178–193. https://doi.org/10.1016/j.ijinfomgt.2018.10.011

[77] Wu, K., Vassileva, J., & Zhao, Y. (2017). Understanding users’ intention to switch personal cloud storage services: Evidence from the Chinese market. Computers in Human Behavior, 68, 300–314. https://doi.org/10.1016/j.chb.2016.11.039

[78] Yang, Y. (2014). Understanding household switching behavior in the retail electricity market. Energy Policy, 69, 406–414. https://doi.org/10.1016/j.enpol.2014.03.009

Downloads

Published

30.09.2020

How to Cite

Mulyadi, D., Fadli, U. M., Sinaga, O., & Hasim, M. A. (2020). RELATIONSHIP OF SWITCHING COST TOWARDS SWITCH BARRIER IN TELECOMMUNICATION INDUSTRY IN JAKARTA. International Journal of Psychosocial Rehabilitation, 24(7), 2466-2475. https://doi.org/10.61841/fefx9131