Why Consumers (Do Not) Change Their Mobile Service Providers – a Hungarian Study

The present study introduces the connexions of consumer satisfaction, consumer trust, consumer loyalty and switching costs in one framework. The empirical study took place in the Hungarian mobile telecommunication market, because of the high penetration and the oligopolistic competition in the industry. The results suggest that the major indicator of consumer loyalty is the consumer trust in the companies, and consumer satisfaction is more likely to be an indicator of trust. Switching costs have little effect on loyalty compared with consumer trust or even satisfaction.


Introduction
Although many other publications have already involved the consumer satisfaction, consumer trust and consumer loyalty, much less studies involved all of these three topics in the same research, especially such a study, which suggested casual relationship between consumer satisfaction and consumer trust. Previous studies usually considered the consumer satisfaction as a direct antecedent of consumer loyalty (Turel et al, 2006), or studied the consumer trust next to the satisfaction without considering any casual relationship between satisfaction and trust. The connection between the switching costs and consumer loyalty also have been researched previously (Aydin et al, 2005), but the present study examine the effects of switching costs in a more complex framework together with the satisfaction and trust. Switching costs can be elaborated a more rational reason to behave loyal.
The reason to examine the telecommunication sector is also supported by the fact, that at the beginning of the 2000s, and before this time, the number of mobile devices with the demand on mobile services has been grown exponentially worldwide (Goode et al, 2005;Souki et al, 2008). Nowadays, the mobile service providers need to focus more on the consumer retention, than to acquire new clients and increase their market shares (Turel et al, 2006), because the growth of telecommunication market is decreasing, and the competition is increasing. In such circumstance, to maintain the market share also become more important (Aydin et al, 2005). So the aim of the present study is to provide additional understanding about the topic of consumer satisfaction, consumer trust, and consumer loyalty, but also to involve the effect of perceived switching costs of the consumers. The study was done in the field of Hungarian mobile telecommunication services market, because this market is glutted and emphasises the importance of consumer loyalty. According to the report of the National Media and Infocommunications Authority of Hungary, the penetration of mobile services reached 115,5% with the amount of 11.492.000 mobile subscriptions in Hungary in October 2012 at the time the empirical research was done. Three companies compete in the market, with the following market shares: T-mobile with 46,14%, Telenor with 31,26%, and Vodafone with 22,74% (NMHH, 2012). The glut in the market means that the companies can acquire new customers from their competitors. Therefore, to maintain or increase the number of subscribers and market share, the consumer loyalty can play major role.

Literature review 2.1 Consumer Satisfaction
The consumer satisfaction can be interpreted as satisfaction with a concrete transaction, like a purchasing action, or as whole satisfaction with the whole brand or company, which involves every calculations, evaluations and experiences from the beginning to now. The whole satisfaction is an overall fundamental marker of the performance of the company in the past, in the present and even in the future. The whole satisfaction aids to lower price sensibility and facilitates preference attitudes (Aydin et al, 2005;Kuo et al, 2009). However, for a newcomer company, this satisfaction does not influence its selection, because of the lack of direct experience (Rust et al, 1993).
Consumer satisfaction appears, when the consumer's previous expectations meet with the perceived performance, or the performance even gets higher than the previous expectations. If the performance is lower than the previous expectations, or these expectations do not meet with the performance, it can lead to consumer dissatisfaction. The different levels of satisfaction can be explained by different previous expectations and/or different perceived performances of the services. The less satisfied consumers, the more they tend to switch and look for other service provider (Carpenter, 2008;Hoffman et al, 2006;Hofmeister et al 2003;Kotler et al, 2006;Ruyter et al, 1998). So, satisfaction is rather retrospective, while the commitment of consumers can be prospective (Gustafsson et al, 2005).
According to the literature, the satisfaction has two different levels. One is the satisfaction with the services, which is the consumer satisfaction within the transactions -an emotional response based on comparison between the perceived quality of the service and the previous expectations of the consumer. Another level is the consumer satisfaction with the whole relationship between the consumer and the company, which contains every previous experience and their evaluations, as well as every previous transactional satisfaction. Therefore, the satisfaction with the services influences the satisfaction with the costumer-company relationship. But a shift can be recognised in marketing from the importance of acquiring new customers to the retention of the present ones. The satisfaction of the consumer does not guarantee the retention of the consumers. The satisfaction is necessary, but sometimes it is insufficient to create, maintain or enhance consumer loyalty. So the examination of consumer loyalty should involve the role of other factors, such as consumer trust, which has a critical role to enhance consumer loyalty.

Consumer Trust
In order to get profound knowledge and deeper understanding of consumer trust, it is necessary to mention three dimension of consumer trust. These three dimensions are the trusts in the competency, benevolence and the problem-solving orientation of the company. The operational competency involves the seller professional knowledge as an indicator of trust. The consumer expects consistent and competent performance of the service provider. The operational benevolence is en expectation of trustworthy responsibility -an intention of the company's ethical behaviour. This motivation emphases the service provider not to behave opportunistic, not to take its own interest ahead of the interest of the consumers. The problem-solving orientation helps the companies, because every problem offer the chance to prove their commitment about service provision and thus create higher level of consumer trust. The consumer distrust with a service provider is directly and strongly correlated with the consumer dissatisfaction of first problem solving episode (Alhabeeb, 2007;Aydin et al, 2005;Santos et al, 2008;Sirdeshmukh et al, 2002). Therefore, the organisational culture should support the creation of consumer trust, the employees should treat the consumers as they themselves would expect to be treated as a consumer (Mitchell, 2005).
If the perceived performance of a service provider is low or below the expectations, than this will reduce the consumer trust in the competency of service provider. If a consumer perceives that the price and received service was fair, then this will enhance the consumer trust in benevolence of service provider (Singh et al, 2000). The major importance of trust was found by Santos and Fernandes (2008), who stated that the trust in the company has strong effect on repurchasing behaviour and aim to maintain the relationship between the consumer and the company. The trust was the major most significant indicator of consumer recommendation behaviour, stronger than satisfaction or perceived value. All in all, trust seemed to be stronger direct indicator of loyalty than satisfaction.

H1 (a): There is a positive relationship between consumer satisfaction with the services and consumer trust in the company. H1 (b): There is a positive relationship between consumer satisfaction with the consumer-company relationship and consumer trust in the company.
So, in this study, the satisfaction was considered as an antecedent of the consumer trust. This means that the more satisfied the consumer with the services, the more it is likely they have higher degree of trust in the company, because the consumer experience that the company is able to and willing to provide appropriate services, prove its competencies and benevolence towards the consumer, which contribute to enhance consumer trust. The more it is likely to believe in problem solving orientation, that the company is able to and willing to solve problems and handle complaints. On contrary if a consumer is dissatisfied with the services, it can lead to doubt in the competencies, benevolence and problem solving orientation of the company, that it is able to and willing to provide appropriate services and it is less likely to trust in the company itself. Moreover, the more satisfied the consumer with the consumer-company relationship, the more it is likely to willing to trust in the company. If the consumercompany relationship is considered to be appropriate, the consumer is more likely evaluate the operation of the company competent, regards the company benevolent than opportunistic, and think the problem solving orientation satisfactory, that the company is able to and willing to handle problems and complaints. On contrary, if the consumer consider to the consumer-company relationship inappropriate, and he does not satisfy with it, then, it is less likely the consumer will trust in the company.
The behaviour and management of front-line employees is likely to have key role in consumer trust. The trust in the service provider has two aspects, one of them is the trust in the front-line employees, another one is the trust in management practise, practically the trust in the company itself. This is suggested by the fact that satisfaction also can be related by a contact person, the service itself and the organisation (Alhabeeb, 2007;Sirdeshmukh et al, 2002). Briefly, both the trust in the front-line employee and the trust in the company have positive relations with the loyal purchasing and cooperation, both level of trust have positive influence on repurchasing intentions, which foster the future relationship (Kennedy et al, 2001). So consumer trust was measured as a trust in the front-line employees as well. The more consumers trust in the service provider, the more likely he is to be loyal to the company.

Consumer Loyalty
Loyalty is considered to be a favourable attitude or behavioural response of the consumer toward one or more brand within a time period. In the two dimensional loyalty approach: the loyalty can be examined as the frequency and volume of purchase, and the share of a brand within total purchase of the category. Loyalty means constant repurchase of a brand, and a lot of researchers consider it enough to describe loyalty. However, loyalty also contains attitudinal influences. The attitudinal approach means a favourable attitude toward a brand, so it is a deep commitment, intention to repurchase the preferred service or product constantly in the future (Alhabeeb, 2007;Dick et al, 1994;Lichtlé et al, 2008;Oliver, 1999). Multidimensional approach also contains the situational elements, and the resistance to the competitive offers in order to maintain the relationship (Bandyopadhyay et al, 2007;Oliver, 1999), and reduce the probable switching intentions ). The loyalty is not equal with retention, and it cannot be defined by only behavioural patterns (Bodó, 2006). The repurchasing behaviour without favourable attitudes cannot be treated as false loyalty (Dick et al, 1994). The attitudinal loyalty involves an psychological attachment, while simply the repurchasing behaviour does not necessary involve any psychological attachment (Carpenter, 2008). The measurement of loyalty is possible in more dimensions, as the consumer commitment, intention to repurchase. Willingness is to recommend the preferred product or service to friends and to the social environment (word of mouth) in the future. Motivation to maintain a long time relationship with the firm, resist switching for competitors offers. Repurchase again and again despite negative effects in some cases, and the switching incentives created by marketing. Transfer larger share of income to a specific service provider (Alhabeeb, 2007;Aydin et al, 2005;Santos et al, 2008;Sirdesmukh et al, 2002;Turel et al, 2006). Corresponding with the literature findings in the present study, the consumer loyalty is measured as maintain the relationship with company as a consumer commitment, which involves the repurchasing behaviour, resist to competitive offers and higher price tolerance. Another behavioural aspect of loyalty is the consumer recommendations -a positive word of mouth. An attitudinal dimension is also added into the model, as the loyalty involves favourable attitudes towards specific service provider. Thus, the second hypothesis can be divided into three subhypotheses: H2(a): Consumer trust has positive relationships with the maintenance of consumer-company relationship, and this relationships are stronger, than the direct effects of consumer satisfaction on maintain this relationship. H2(b): Consumer trust has positive relationships with consumer recommendations, and this relationships are stronger, than the direct effects of consumer satisfaction on consumer recommendations. H2(c): Consumer trust has positive relationships with consumer preference, favourable attitudes, and this relationships are stronger, than the direct effects of consumer satisfaction on consumer preference, favourable attitudes.

Switching costs
Beside the behavioural intentions, the loyalty is also influenced by other factors, which obstruct the consumers to terminate the relationship with company, make more difficult and costly to switch (Fornell, 1992;Jones et al, 2000). Those obstacles are the interpersonal relationships, the perceived and real switching costs, market barriers, the lack of prospective competitors or the perceived risk to switch (Lichtlé et al, 2008;Sirdeshmukh et al, 2002). Switching costs includes every beneficial lost caused by switching a product or service (Maicas et al, 2009). The perceived switching costs are the highest for those consumers, who have never switched service provider previously, because they have no previous knowledge about. Therefore, they become the most loyal consumers to their service providers (Ganesh et al, 2000).
H3: Perceived switching costs have positive relationship with maintenance of consumer-company relationship, and perceived switching costs can reduce the role of trust to support the maintenance of consumer-company relationship.
The higher the switching costs altogether, the consumers are more likely to maintain the relationship with the service provider company, because the switching costs make more difficult to switch among service providers. Therefore, the switching costs are able to influence the behavioural loyalty of the consumers as the maintenance of the relationship, but it is not supposed that these costs influence consumer recommendations or favourable attitudes and create preference. Powerful feature of PLS path modelling is that it is suitable for prediction-oriented research. Thereby, the methodology assists researchers who focus on the explanation of endogenous constructs. PLS delivers latent variable scores, i.e. proxies of the constructs, which are measured by one or several indicators (manifest variables). PLS path modelling avoids small sample size problems and therefore, can be applied in some situations when other methods cannot. PLS path modelling can estimate very complex models with many latent and manifest variables. PLS path modelling has less stringent assumptions about the distribution of variables and error terms. PLS can handle both reflective and formative measurement models. However, the PLS should be used carefully, because the requirements of representative sample is the same (Henseler et al, 2009).
PLS is similar to regression, but simultaneously models the structural paths (theoretical relationships among latent variables) and measurement paths (relationships between a latent variable and its indicators) (Chin et al, 1996). The PLS model is usually analyzed and interpreted sequentially in two stages. The first stage is the assessment of the reliability and validity of the measurement model, followed by the assessment of the structural model. This sequence ensures that the researcher has reliable and valid measures of constructs before attempting to draw conclusions about the nature of the construct relationships. In PLS, individual item reliability is assessed by examining the loadings (or simple correlations) of the measures with their respective construct. In practice, it is common to find that at least several measurement items in an estimated model have loadings below the 0.7 threshold, particularly when new items or newly developed scales are employed. In general, items with loadings of less than 0.4 or 0.5 should be dropped. PLS has as its primary objective the minimization of error (or, equivalently, the maximization of variance explained) in all endogenous constructs. (Hulland, 1999

Empirical Research and Sample Information
The quantitative research was done by online survey, which aimed to do fast data collection and reach more numerous sample size within short time. This survey was done by NRC Market Research Company, they managed to collect answers from 300 people among the Hungarian Internet users, which sample is representative to sex, age, education background and living place. The data collection was done from 24th to 28 th of October 2012, the short period of data collection aimed to avoid distortions caused by time. The results were measured by the Smart PLS 2.0 (Ringle et al, 2005). The previous model was tested with 300 iterations to measure the correlations between the latent variables. The significance test was done based on bootstrapping to test the connections between the model components. 200 subsamples were generated, which tend to provide reasonable standard error estimates (Chin, 2001). PLS was used to analyze the theoretical framework, which was constructed based on literature review.

Model Testing and Empirical Results
The results suggest that consumer satisfaction with the services has no direct effect on consumer trust in the company, which implies that it was previously supposed incorrect. As the theoretical framework suggested, the switching costs have no significant effect on consumer recommendations as a dimension of loyalty. The satisfaction with the services shows strong relationship (0,797) with the satisfaction, so if a consumer is satisfied with the services, it is very likely that he is satisfied with the whole relationship with the company. However, the satisfaction with the services has no significant effect on consumer trust in the front-line employees or consumer trust in the company. The analyses suggest that consumer satisfaction in transaction level does not influence significantly consumer trust.
The satisfaction with the consumer-company relationship has a bit weaker than intermediate (0,406) influence to consumer trust in company, which suggest accepting the previous hypothesis. However, the satisfaction with the consumer-company relationship has strong influence (0,758) to the consumer trust in front-line employees, which indicates an additional indirect effect on consumer trust in service provider. Consumer trust in front-line employees has a bit stronger than intermediate (0,568) effect on consumer trust in the company. Therefore, the satisfaction with the consumer-company relationship is direct and through consumer, trust in front-line employees has an indirect effect on consumer trust in the company, which corresponds with the expectations.
The model testing shows that consumer trust in the company is a very important indicator of consumer loyalty, because it has stronger than intermediate effect on each and every dimension of consumer loyalty. The effect on consumer retention in the relationship is stronger than intermediate (0,672), but the effect on consumer recommendations and preference are strong (with 0,804 and 0,839). These results correspond with the hypothesis that the consumer trusts contributes to consumer loyalty. The effect of front-line employees of service providers on consumer loyalty was also tested, but the result shows this effects on the different dimension of loyalty are weak and insignificant, even make the direct effect of trust in the company lower. So the effect of front-line employees on loyalty are indirect, through the consumer trust in the company can influence the consumer loyalty.
The importance of trust is significant, because on the other hand, the switching costs directly effect on consumer retention; the relationship with the company is weak (0,135). However, unexpectedly the switching costs also shows a weak (0,119), but significant relationship with favorable attitudes, preference as a dimension of consumer loyalty. The switching costs also influence the strength of trust-loyalty link in this dimension from 0,839 to 0,800. The hypothesis about switching cost and loyalty relationship is also considered to be true, because the switching costs and consumer retention has significant connexion, however the switching costs effect on other loyalty dimension is weaker or even does not exist. As it was supposed, if the model does not contain the switching costs, the consumer trust in the company has stronger effect on to maintain the relationship with the company as a dimension of loyalty, the strength increase from 0,672 correlation value to 0,716. This result corresponds with the previous expectations that switching costs have not only effect on to maintain the relationship with the company, but they reduce the effect of trust into this loyalty dimension too.
When the satisfaction was considered the direct indicator of loyalty dimensions, the satisfaction with the consumer-company relationship has weaker effect on every loyalty dimensions, than consumer trust in the service provider has as a direct indicator. Maintaining the relationship with the company is stronger than intermediate (0,638), the effect on consumer recommendations and the effect on preference remain strong (respectively 0,770 and 0,729). The effect of switching costs on consumer loyalty also increased, but remained weak (0,181).

Figure 2:
The test of satisfaction-trust-loyalty connexion (Own measurements)

Conclusions
The structural analysis in the Hungarian mobile telecommunication service market was done by PLS path modeling, and it suggests that the consumer trust is a better indicator variable of consumer loyalty than consumer satisfaction. If the consumer trust has direct link with loyalty, the relationships are stronger in every dimension of loyalty, than the direct relationships between satisfaction and loyalty. Another important fact is that the trust also a better indicator of loyalty, because it reduce the effect of switching costs on the dimensions of loyalty. Only focusing on significant correlations the order of consumer satisfaction with consumer-company relationship and consumer trust in company cannot be judged, because these two items mutually influence each other. The interpretation of the results rather based on the strength of connexion with consumer loyalty, and the strength of effect of switching costs on loyalty dimensions. Those results suggest that the consumer satisfaction rather through consumer trust contribute to consumer loyalty, than directly. Therefore, consumer trust in the company is the direct antecedent of loyalty. The trust in front-line employees neither has direct contribution to consumer loyalty, it also through the trust in company enhance loyalty.
The effects of switching costs on consumer loyalty are much weaker than the effect of consumer trust, but the effect is significant on two of three loyalty dimensions examined in the research. The switching costs also reduce the strength of trustloyalty link. Therefore the perceived barriers also contribute to maintain consumer relationships with the service provider, and facilitate favourable attitudes, preference towards the company.
However, financially can be reasonable create financial punishment to make switching behavior more expensive to subscribers, and create other perceived barriers in order to enhance consumer retention and influence consumer preference and favorable attitudes towards the company.
An important message of this study to the mobile service providers, that the consumer trust plays key role to maintain consumer loyalty, enhance loyalty to the company. Good service quality should be provided in order to receive consumer satisfaction with the company, which has major effect on to enhance consumer trust. In addition, take care about the front-line employees and their performance, because the consumer trust in the front-line employees directly contributes to the trust in the company. The consumers, who trust in the service providers, is more likely to maintain the relationship with the company, which aim to maintain the market share. The maintenance of the relationship also contains the price tolerance, so retention can be caused by not only financial reasons. If a new company enters the market, the present companies can keep their positions thanks to consumer's trust in them.
Beside to keep market share, to enhance consumer trust is also give an opportunity for mobile service providers to acquire market share, because the subscribers, who trust in them, are more likely to recommend the operator to others. Consumer recommendations can pave the way to acquire new subscribers, which also means financial benefit to the service providers. The subscribers, who trust in the company, are more likely to prefer it and have favorable attitudes towards it too. Therefore, the marketing activities of the service providers should have special care about getting and keeping consumer trust of their subscribers in order to consumer retention. Important to emphasize that in the marketing communication, messages should be capable to enhance and maintain consumer trust. The company should show a trustworthy image of the company to the consumers. During the consumer-company interactions, we have to let the subscribers feel trust in the company, include the front-line employees, with competent, helpful image, who are able to and willing to deal with the problems and questions of the consumers. Giving the consumers a competent and helpful image of the whole company is needed to achieve consumer trust.
The appropriate quality of services is needed, and we have to let the consumers acknowledge it, so the communication messages the technology proficiency and perfect quality of services also should be emphasized. The company should handle with consumer complaints, make the possible critical incidents as a positive episode, rather than a negative one. The consumers who are satisfied with the whole relationship with the company are more likely to feel trust in the company and remain the subscriber of the same company.
Finally, regarding the interpretations of the results, some limitations should be noted. The results of this research come from the Hungarian mobile telecommunication services industry, which indicates that the extension of the results needs further studies. The sample of the research was the Hungarian Internet user society, the results are representative to this sample, but further research would be necessary to other national and international comparisons. The interpretation of the results also restricted by the cross sectional research methodology, which means that the links and correlations between the variables can change by time. Understanding the dynamic of this links needs longitudinal research methodology.