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CONSUMER PREFERENCE AND SATISFACTION TOWARDS VARIOUS CELLPHONE SERVICE PROVIDES CHAPTER-I INTRODUCTION CONSUMER A consumer is an individual who purchase or has the capacity to purchase goods and services offered for sale by marketing institutions in order to satisfy  personal or household needs,wants or desires. According to a statement made by Mahatma Gandhi, ‘consumer refers to the following, â€Å"A consumer is  the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an outsider to our  Ã‚  business.He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so†. So  consumer  is  like  the  blood  of  our  business  and  also  a satisfedcustomer is a word of mouth advertisement of a product / services. The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of effective consumer demand, producers would lack one of the key motivations to produce to sell to consumers.Typically, when  business  people and economists talk of  consumers, they are talking about  the person as consumer, an aggregated  commodity item with little  individuality  other than that expressed in the decision to buy or not to buy. However, there is a trend in  marketing  to individualize the concept. Instead of generating broad  demographic profiles  and  psycho-graphic profiles  of  market segments, marketers have started to engage in personalized marketing,  permission marketing, and  mass customization.There is increasing backlash from the public over use of the label â€Å"consumer† rather than â€Å"customer†, with many finding it offensive and derogatory. Consumer choice  is a theory of  microeconomics  that relates preferences  for consumption goods  and services to con sumption expenditures and ultimately to   consumer demand curves. The link between personal preferences, consumption, and the demand curve  is one of the most closely studied relations in economics. Consumer choice theory is a way of analyzing how consumers may achieve  Ã‚  equilibrium between preferences and expenditures by maximizing  utility  as subject to consumer   budget constraints.Preferences are the desires by each individual for the consumption of goods and services that translate into choices based on income or wealth  for purchases of goods and services to be combined with the consumer's time to define consumption activities. Consumption is separated from production, logically, because two different consumers are involved. In the first case consumption is by the primary individual; in the second case, a producer might make something that he would not consume himself. Therefore, different motivations and abilities are involved.The  Ã‚  models that make up consumer theory are used to  represent  prospectively observable demand patterns for an individual buyer on the  hypothesis  of constrained optimization. Prominent variables used to explain the rate at which the good is purchased (demanded) are the price per unit of that good, prices of related goods, and wealth of the consumer. The fundamental theorem of demand states that the rate of consumption falls as the price of the good rises. This is called the  substitution effect.Clearly if one does not have enough money to pay the price then they cannot buy any of that item. As prices rise, consumers will substitute away from higher priced goods and services, choosing less costly alternatives. Subsequently, as the wealth of the individual rises, demand increases, shifting the demand curve higher at all rates of consumption. This is called the  income effect. As wealth rises, consumers will substitute away from less costly inferior goods and services, choosing higher priced al ternatives. CONSUMER SATISFACTIONEvery human being is a consumer of different produces. If there is no consumer,  there  is  no  business. Therefore,  consumer  satisfaction  is   very important to every business person. According to Philip Kotler consumer satisfaction is defined on, â€Å"personal feeling of pleasure resulting from comparing a product’s pursued performance in relation to his /her expectations†. Consumer attitude measurements are taken on either potential buries or  existing client’s buries in order  to identify their characteristics. Why should the competent market engineer conduct consumer research?Consumer’s surverys  can provide the researcher with a wealth of information, valuable of the marketing funchion. Detailed information regarding the customer in a market will provide the  basic platform for all marketing decisions. Marketing decision maker needs descriptive information about the total potential unit an d dollar sales in each segment. Perhaps the most important one is that a seller need to be  aware of the relevant objective and need  of consumer and  how their objectives  might best reserved by the products.Customer satisfaction, a term frequently used in  marketing, is a measure of how products and services supplied by a company meet or surpass customer expectation. Customer satisfaction is defined as â€Å"the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals. †Ã‚  In a survey of nearly 200 senior marketing managers, 71 percent responded that they found a customer satisfaction metric very useful in managing and monitoring their businesses.It is seen as a key performance indicator within business and is often part of a balanced scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. â€Å"Within organizations, customer satisfaction ratings can have powerful effects. They focus employees on the importance of fulfilling customers’ expectations. Furthermore, when these ratings dip, they warn of problems that can affect sales and profitability. . . These metrics quantify an important dynamic. When a brand has loyal customers, it gains positive word-of-mouth marketing, which is both free and highly effective. † Therefore, it is essential for businesses to effectively manage customer satisfaction. To be able do this, firms need reliable and representative measures of satisfaction. â€Å"In researching satisfaction, firms generally ask customers whether their product or service has met or exceeded expectations. Thus, expectations are a key factor behind satisfaction.When customers have high expectations and the reality falls short, they will be disappointed and will likely r ate their experience as less than satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction rating than a budget motel even though its facilities and service would be deemed superior in ‘absolute' terms. † The importance of customer satisfaction diminishes when a firm has increased  bargaining power. For example,   cell phone  plan providers, such as AT;T  and  Verizon, participate in an industry that is an  oligopoly , where only a few suppliers of a certain product or service exist.As such, many cell phone plan contracts have a lot of  fine print with provisions that they would never get away if there were, say, a hundred cell phone plan providers, because customer satisfaction would be way too low, and customers would easily have the option of leaving for a better contract offer. There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms. PURPOSE â€Å"Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty.   Ã¢â‚¬Å"Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is two fold. † 1. â€Å"Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the company’s goods and services. † 2. â€Å"Although sales or market share can indicate how well a firm is performing currently, satisfaction is perhaps the best indicator of how likely it is that the firm’s customers will make further purchases in the future.Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes. † On a five-point scale, â€Å"individuals who rate their satisfaction l evel as ‘5' are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as â€Å"The percentage of surveyed customers who indicate that they would recommend a brand to friends. When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage. ) â€Å"Individuals who rate their satisfaction level as ‘1,' by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction. † MARKET The term market is derived from Latin Word ‘Mercatus’, which means ‘totrade’ that is purchasing and selling of goods.It also means merchandise truthic   place of business. According to Pyle, â€Å"Market includes bo th place and region in which  buyers and sellers or in free competition with one another†. A  market  is one of many varieties of  systems,  institutions,  procedures,  social relations  and  infrastructures whereby parties engage in exchange. While parties may exchange goods and services by  barter, most markets rely on sellers offering their goods or services (including labor) in exchange for  money  from buyers. It can be said that a market is the process by which the prices of goods and services are established.For a market to be competitive, there must be more than a single buyer or seller. It has been suggested that two people may trade, but it takes at least three persons to have a market, so that there is competition on at least one of its two sides. However,competitive  markets, as understood in formal economic theory, rely on much larger numbers of both buyers and sellers. A market with single seller and multiple buyers is amonopoly. A marke t with a single buyer and multiple sellers is a  monopsony. These are the extremes of imperfect competition.MARKETING Marketing includes all the impacts involved in the exchange process of   transferring  the  possession  and  ownership  of  goods  or  services  from   the  producer to the ultimate consumer’s. Marketing  is the process of  communicating  the value of a product or service to  customers. Marketing might sometimes be interpreted as the art of selling products, but selling is only a small fraction of marketing. As the term â€Å"Marketing† may replace â€Å"Advertising† it is the overall strategy and function of promoting a product or service to the customer.The American Marketing Association defines marketing as â€Å"the activity ,set of institutions,and processes for creating, communication, delivering,and exchanging offerings that have value for customers,clients,partners,and society at large. † From a so cietal point of view, marketing is the link between a society’s material requirements and its economic  patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. The process of communicating the value of a product or service through positioning to customers.Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that benefit the organization and its  shareholders. Marketing is the science of choosing  target markets  through market analysis and  market segmentation, as well as understanding consumer buying behavior and providing superior customer value. MARKETING FORMULA A)The foremost step is business aims at profit. B)For profit making he can sell the products. C)For selling the product he should create customers.D)For  creating the  customer’s,  custom er’s needs  of  preferences  to  beidentified and satisfied. E). To satisfy the customer’s new product to be produced. Marketing is trying to learn, * Who buy the products or services? * How do they buy? * When do they buy? * Where do they buy? * Why do they buy? * How often they buy? It  is  otherwise  called  understand  and  predict  human  actions  in  their  Ã‚   buying role. A marketer is act as consumers while them purchasing any goods/services, and try to market that product to an ultimate consumer. So, marketingis starts with consumer and ends with consumer. So, today’s market is called on consumer market.It can be defined on,â€Å"All the individuals and households who buy goods and services for personal consumption. SKILLS OF MARKETERS Marketers have 4 main skill sets that they bring to an enterprise: 1)Opportunity Identification: Marketing begins before there is a product to sell. Many people think marketing is just sel ling whatever comes out of the manufacturing  plant. It's the job of marketing to decide WHAT comes out of the manufacturing  plant in the first place. Before a business can make money there must be opportunities for money to be made and it's marketing's job to define what those opportunities are.Marketers analyze markets, market gaps, trends, products,competition, and distribution channels to come  up with opportunities to make money. 2)  Competitive strategy/positioning: Markets consist of groups of competitors  competing for a customer's business. The job of  marketing is to decide how to create a defensible sustainable competitive advantage against competitors. Marketers conceive strategies, tactics, and business models to make it hard if not impossible for competition to take away customers from their business. 3)  Demand generation/management It's the job of marketing to create and sustain demand for a company's products.Marketers manage demand for a company's pr oducts by influencing the probability and frequency of their customer's purchase behavior. 4)Sales: The ultimate goal of marketing is to make money for a business. In most company’s sales is a different discipline and department from marketing. But in order for  sales people to have any long term success in a company they must be led by marketing. The better job a company does of identifying opportunities, creating a differential sustainable competitive advantage, and generating demand for their products the easier it will be for sales people to make sales.MARKET SHARE OF PUBLIC AND PRIVATE INDUSTRY The fixed line and mobile segments serve the basic needs of local calls, long distance callsand the international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messa ging, Internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. TheGSM,CDMA,WLLservice  providers  are  all  upgrading  them  to  provide  3G  mobile  services.Along  with improvement in telecom services, there is also an improvement in manufacturing. In the  beginning, there were only the Siemens handsets in India but now a whole series of newhandsets, such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones,etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators,Camera's, etc.The value added services provided by the mobile service operators contribute more than 10% of the total revenue. THE GLOBAL CELLULAR MOBILE INDUSTRY Global telecom s ector Earnings visibility Earnings  growth  is  being  driven  by  improving  pricing  conditions, stabilizing  operating trends, aggressive cost cutting initiatives, a positive regulatory environment, strong wireless growth, and  new market  opportunities. This has  translated into  greater visibility  of  forward earnings as evidenced by recent increased analyst upgrades within the sector. Merger synergiesGiven the substantial amount of excess capital available in the sector and in private equity we expect to see additional merger and acquisition activity, albeit at a slower pace than recently witnessed. Global  telecom  M;A deals  over  the  past  two years  have  reflected  market expansion but have also had a positive effect on the buyers’ balance sheets. Partnering companies have  begun  realizing their  synergies through cost reductions and  economies of  scale. In the US, the largest three companies now account for over 70% of the sector market cap; this compares to 34% in 1990.Trends in bundled services are also paving the way for  additional M;A  activity. Sector  consolidation will  further  increase  the importance  of stock  selection. METHODS TO CUSTOMER SATISFACTION Companies use the following methods to measure  customer satisfaction. 1 ) Complaints and suggestion system: Companies obtaining complaints through their  customer service centres, and further suggestions were given by customers to satisfy their  desires. 2) Customer satisfaction surveys: Responsive  companies  obtain  a  direct  measure  of  customer  satisfaction  by  periodic surveys.They send questionnaires to random sample of their customers to find out how they feel  about  various  aspects of  the company’s performance and also  solicit views  on their competitor’s performance. It is useful to measure the customer’s willingness to recommen d the company and brand to other persons. 3 )Lost Customer Analysis: Companies should contact customers who have stopped buying or who have switched to another supplier to learn why this happened. 4 )Consumer Behavior Vs  Consumption Behavior:Consumer behavior refers to the manner in which an individual reaches decision related to the selection, purchases and use of goods and services. Walters and Paul says that,consumer behavior is the process where by the individuals decides what, when, how and from whom to purchase goods ; services. Consumer  behavior  relates  to  an  individual  person  (Micro  behavior)  where  asconsumption behavior relates to and to the mass or aggregate of individuals. (Macro  behaviour) consumers   behavior   as  a  study  focuses  on  the  decision  process  of  the individual consumer or consuming unit such as the  family.In contrast the consumption behavior as a study is to do with the explanation of the  behavior of the aggregate of consumers or the consuming unit. Consumer is a pivot,around which the entire system of marketing revolves. The study of buyer behavior is one of the most important keys to successful mark. 1. 2. IMPORTANCE OF CONSUMER SATISFACTION The needs to satisfy customer for success in any commercial enterprise is very obvious. The income of all commercial enterprise is derived from the  payments received for the products and services supplied to its customers.If  there is no customer there is no income and there is no business. Then the coreactivity of any company is to attract and retain customers. It is therefore no surprise that Peter Drucker the renowned management Guru, has said â€Å"to satisfy the customers is the mission and purpose of every business†. Satisfaction of customer is essential for retention of customer’s and for  continuous sales of the products and services of the company to customers. This  establishes  the needa fo r and the importance of customer satisfaction. The  satisfaction  of  consumers  is  different  from  onto another.Became,  each consumer has the different behaviour in their life. So, the marketer satisfy the consumer, he must very well know the behaviour of consumer. 1. 4. CONSUMER BEHAVIOUR The  term  consumer  behaviour  may  be  defined  as  the  behaviour   that consumer displays in searching for purchasing, using, evaluating, producing,services and ideas which they expect will satisfy their needs. In other words, â€Å"It is a study of physiological, social, physical, behaviours of all potential customer  as they become aware of evaluation, purchase and consumption and ell other  about products and services† 1. 5. OBJECTIVES OF THE STUDY: * To study the evaluation of cell phones with particular reference to India. * To ascertain the attributer which influenced the customer’s in selecting a  particular cell phone services provider. * To study  the consumer’s satisfaction towards different cell  phone service  providers. * To assess the problems faced by the cell phone users in services. * To offer valuable suggestions to improve the services of cell phones in each companies. INRODUCTION TO TELECOM INDUSTRY The Indian Telecommunications network with 110. 1 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world and represents unique opportunities for U. S. companies in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005,is expected to reach 250 million in 2007. According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by2007. The wireless subscriber base has jumped from 33. 69 million in 2004 to 62. 57 million in FY2004- 2005.In the last 3 years, two out of every three new telephone subscribers were wireless  subscribers. Consequently, wireless  now accounts for  54. 6% of  the total  telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to  bypass 2. 5 million new subscribers per month by 2007. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000 towns across the country. . 6. NEED OF THE STUDY Exchange of information becomes the necessity of life to a common man. In the modern world an individual tends to communicate anything to everything right from the place where he/she stands. Even while riding vehicle he / she wants communicate within a  fraction of second at quick speed with clear  voice,without any disturbance. Like line crossing, out of order, etc. most of which lack in the connection given by the department of tele-communictions. Cell  phones emerges as a boon quench such a thirst, the by providing facilities,which a common man cannot imagine.Though cell phone industry has its originin the recent past and the growth has been excellent Day by day many new competitors enter the market with new attractive schemes,  provide additional facilities, add new  features to existing ones, reduce the charges her incoming and outgoing calls, introduce varieties of handsets,models  a  healthy  competition  that  benefits  the  subscribers. Hence  in  this context, it is important to study the functioning of cellular phone services and the utilization of their services by the telephonesation. 1. 8. STATEMENT OF PROBLEMIn our country the growth of service marketing especially mobile phone industry is still in its infancy stage, as compared to the industrially advanced countries. It is for the fact that the economy of our country has been i n the developing stage. There are various mobile phones services provider’s in our  country and they are playing an essential role in fulfilling the needs of the customers. Now-a-days, the customers are more dynamic. Their taste, needs and  preference can the changing as per current scenario. Hence the development of  cellular industry mainly depends on the customer satisfaction.However the following questions may arise regarding customer satisfaction. CHAPTER II REVIEW OF LITERATURE India is the world’s fastest growing industry in the world in terms of number of wireless connections after China, with 811. 59 million mobile phone subscribers. According to the world telecommunications industry, India will have 1. 200 billion mobile subscribers by 2013. Furthermore, projections by several leading global consultancies indicate that the total number of subscribers in India will exceed the total subscriber count in the China by 2013.In 1850 experimental electric teleg raph started for first time in India between  Calcutta (Kolkata) and Diamond Harbor (southern suburbs of Kolkata, on the banks of the Hooghly River). In 1851, it was opened for the use of the British East India Company. Subsequently construction of telegraph started through out India. A separate department was opened to the public in 1854. Dr. William O’Shaughnessy, who pioneered the telegraph and telephone in India, belonged to the Public Works Department, and worked towards the development of telecom.Calcutta or the-then Kolkata was chosen as it was the capital of British India. In early1881, Oriental Telephone Company Limited of England opened telephone exchanges at Calcutta (Kolkata), Bombay (Mumbai), Madras (Chennai) and Ahmedabad. On the 28th January 1882 the first formal telephone service was established with a total of 93 subscribers. From the year 1902 India drastically changes from cable telegraph to wireless telegraph, radio telegraph, radio telephone, trunk dial ing. Trunk dialing used in India for more than a decade, were system allowed subscribers to dial calls with operator assistance.Later moved to digital microwave, optical fiber, satellite earth station. During British period all major cities and towns in India were linked with telephones. In the year 1975 Department of Telecom (DoT) was responsible for telecom services in entire country after separation from Indian Post ; Telecommunication. Decade later Mahanagar Telephone Nigam Limited (MTNL) was chipped out of DoT to run the telecom services of Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for private investment.In1995 TRAI (Telecom Regulatory Authority of India) was setup. This reduced the interference of Government in deciding tariffs and policy making. The Government of India corporatized the operations wing of DoT in 2000 and renamed Department of Telecom as Bharat Sanchar Nigam Limited (BSNL). In last 10 years many private operator’s espe cially foreign investors successfully entered the high potential Indian telecom market. Globally acclaimed operators like Telenor, NTT Docomo, Vodafone, Sistema, SingTel, Maxis, Etisalat invested in India mobile operators. Wireless CommunicationPager Services Pager communication successful launched in India in the year 1995. Pagers were looked upon as devices that offered the much needed mobility in communication, especially for businesses. Motorola was a major player with nearly 80 per cent of the market share. The other companies included Mobilink, Pagelink, BPL, Usha Martin telecom and Easy call. Pagers were generally worn on the belt or carried in the pocket. The business peaked in 1998 with the subscriber base reaching nearly 2 million. However, the number dropped to less than 500,000 in 2002.The pager companies in India were soon struggling to maintain their business. While 2-way pagers could have buffered the fall, the pager companies were not in a position to upgrade their i nfrastructure to improve the ailing market. The Indian Paging Services Association was unable to support the industry. Pager companies in India also offered their services in regional languages also. However, the end had begun already. By 2002, Motorola stops making or servicing pagers. When mobile phones were commercially launched in India, the pager had many advantages to boast.Pagers were smaller, had a longer battery life and were considerably cheaper. However, the mobile phones got better with time and continuously upgraded themselves. Mobile Communication First mobile telephone service on non-commercial basis started in India on 48th Independence Day at country’s capital Delhi. The first cellular call was made in India on July 31st, 1995 over  Modi Telstra’s MobileNet GSM network of Kolkata. Later mobile telephone services are divided into multiple zones known as circles. Competition has caused prices to drop and calls across India are one of the cheapest in th e world.Most of operator follows GSM mobile system operate under 900MHz bandwidth few recent players started operating under 1800MHz bandwidth. CDMA operators operate under 800Mhz band, they are first to introduce EVDO based high speed wireless data services via USB dongle. In spite of this huge growth Indian telecom sector is hit by severe spectrum crunch, corruption by India Govt. officials and financial troubles. In 2008, India entered the 3G arena with the launch of 3G enabled Mobile and Data services by Government owned MTNL and BSNL. Later from November 2010 private operator’s started to launch their services.Broadband communication After US, Japan, India stands in third largest Internet users of which 40% of Internet used via mobile phones. India ranks one of the lowest provider of broadband speed as compared countries such as Japan, India and Norway. Minimum broadband speed of 256kbit/s but speed above 2Mbits is still in a nascent stage. Year 2007 had been declared as â€Å"Year of Broadband† in India. Telco’s based on ADSL/VDSL in India generally have speeds up to 24Mbit max while those based on newer Optical Fiber technology offer up to 100Mbits in some plans Fiber-optic communication (FTTx).Broadband growth has been plagued by many problems. Complicated tariff structure, metered billing, High charges for right of way, Lack of domestic content, non implementation of Local-loop unbundling have all resulted in hindrance to the growth of broadband. Many experts think future of broadband is on the hands of   wireless factor. BWA auction winners are expected to roll out LTE and WiMAX in India in 2012. Next Generation Network (NGN) Next Generation Networks, multiple access networks can connect customers to a core network based on IP technology. These access