Business of Wireless Services: of Cingular - Case Study Example

Marketing Research Executive summery The study seeks to establish ways in which Cingular hold manage the business of wireless services in this competitive American market. Competition has been very stiff especially due to consolidation, merging and acquisitions; these made a number of service providers to loss their customers to their competitors. The study did establish that 53.0% of female and 47.0% males have wireless services other than Cingular. Factors that did significantly dictate whether customers will seek services of cingular are notably the ability to make calls from anywhere, Cingular having a calling plan that meets needs of the customers and a coverage area that meets customers need. Additionally, there was a significant difference between those with Cingular wireless services and those without. There is need for Cingular to improve on three major issues immediately; these are ensuring that customers can make calls from anywhere, adopt strategies that make coverage res to adequately meet customers’ needs and having calling plans that meet customers need, with these done, the company will be in a position to retain its customers and woo those of its competitors. Background and the situation Currently there is a very stiff competition in the industry of wireless services in the U.S.A. It is noted that the market for individuals is termed as being the most competitive segment; in this segment there are fewer big wireless service providers and four major ones rule the market. Indeed there has been consolidation, despite that; there are still a number of smaller players. The market is markets are stable when it comes to pricing, technological innovation as well as growth. It is worth noting that the rate of technological innovation is a bit hysterical and a adoption of the same by one of the big four can indeed change the wireless service industry. Among the major wireless service providers are AT & T which has 70.1 million subscribers. Cingular wireless in 2004 acquired AT &T giving it a national opportunity to provide the services. Two years later, AT & T acquired Bellsouth giving it full control of Cingular Wireless. Verizon wireless has 65.7 million subscribers; it was formed when Bell Atlantic, Air Touch Cellular, PrimeCo AND GTE merged. Vodafone has a 45% share in this company. Others include U.S Cellular having 6.1 million subscribers, T-Mobile having 28million subscribers, Sprint Nextel with 58.8 million subscribers and AllTel Inc with 12 million subscribers. This company in 2007 merged with TPG Capital and GS Capital Partners, it stopped trading in New York Stock Exchange. Over the years, the growing numbers of subscribers and revenue generated in the industry has been dramatic. Similarly, mergers, acquisition and consolidation and pricing pressure made smaller service providers to quit or forced to be swallowed by the bigger ones. From then, pricing were no longer used as a competition strategy but they used two year renewable contracts to retain customers. As a result larger service providers have realized increased average revenue per user. Despite the fact that there is increased ARPU, the average number of subscribers in demand for the wireless services remained low. As a result of new phone that are web enable, more subscribers are turning to heavily rely on these phones and disconnecting the wire line services on their home phones. This thus was good news to the wireless industry. Significantly, the industry recorded an increase in the number of minutes of use of its service. Additionally, a web of technological innovation, government policies in licensing the wireless companies are seriously and stiffly competing with each other. The competition has resulted to these companies poaching their competitors’ customers by providing them with superior quality of services, appealing calling plans and providing tremendous support to customers. This competition is threatening companies especially AT&T that has experienced a decline in number of subscription. Management decision problem What management strategies should AT&T adopt to ensure that it stays competitive in the wireless service industry and meet the aspirations of the customers? Marketing research problem and management research objectives The main objective of the study is to find out the management strategies that will help AT & T Company in winning back its customers. Specific objectives of the study include; 1. To find out the attitudes and perceptions people have about AT & T wireless services 2. To find out what companies the locals solicit for wireless service provision 3. To establish how people evaluate the existing services provided by AT & T wireless company. Research Questions 1. What are the attitudes and perceptions people hold about AT & T wireless services? 2. What are the companies that provide people with wireless services? 3. How do people evaluate the current services provided by AT & T wireless company?. 4. How is AT & T wireless company rated in the market? Justification of the study The research (study) is of a lot of important as it answer the question ‘what are the management strategies AT&T should adopt to ensure that it stays competitive and relevant in the wireless service provision industry’. The issues that have led to a number of subscribers to disconnect their AT & T wireless cellular service will be brought to light. The findings are of importance to various stakeholders especially in the wireless service industry but more so to AT & T cellular company This will call for the company to take necessary actions to salvage its status in the market thereby providing customers with superior quality of services, appealing calling plans and providing tremendous support to customers thus making them satisfied. If the adopted strategies are carefully and creatively executed, then the future survival and existence of AT & T will be bright (Cringely, 2009). Not carrying out this research will clearly depict that there will be no management options to salvage the status of AT & T Company; hence it will collapse resulting to a number of problems such as loss of jobs, poor service provision among other things. Additionally, the long term reputation built by the company will no longer be felt (Cringely, 2009) Research methodology How should AT&T be managed so that it remain competitive in the IT business world is the main question that the study seeks to address. The research has put forward recommendations that will help organization to effectively manage itself so that it meets the aspiration desires and aspiration of its customers. Both secondary and primary data sources were used to solicit for the required data. Both qualitative research methodology and quantitative methodology were also used as they gave more insight on the whole issue and drawing of more concrete conclusions made. Data analysis has been accomplished using both parametric and non parametric statistics. Research design and procedure Both qualitative research and quantitative research methods were used during the study. This was important because it enabled the research to be broad and cover all the requirements of the research. Additionally, exploratory research, cross-sectional and descriptive designed were employed to provide further insight on issues that AT &T should incorporate in managing the company. Population, sample size and sampling The target population is those Americans who are using wireless services. Sampling strategies that was be used to obtain the sample population included; random sampling, convenient and careful biased sampling. Random sampling ensured that every individual in the population had equal chance to be selected to provide relevant information. Careful biased and convenient samplings were also used; these ensured that those subscribers that discontinued their wireless AT & T wireless cellular services. Data collection Tools Primary sources The primary sources of data collection used: interviews, observation and questionnaires (open and close ended). Interview was used to carry out the research and it proved successful. Its advantage is that when the research was being done one was able to have directs contacts with the interviewee and obtain first hand information. Both the interviewer and the interviewee clarified on issues of the research being done hence, obtaining information which is well elaborated and authentic. Despite the advantage mentioned, it’s a slow method because the process called for interview of one person at a time. Questionnaires were also used; they were distributed to the interviewee and were collected later at an agreed date. It covered a large population at time as they would be distributed to different participants at a time and be collected later or at the same day depending on the willingness of the responded. Observation were also used, this seemed to provide more accurate information. Secondary source Materials from the library, internet and related research reports were read to provide the required data and information. Internal sources included information compiled by AT & T especially relating to customers and its products. External data sources included information from other sources other than those compiled by the company such as business books, research on the same topics, news papers and journals. Scope and limitation of the study The research will have a global scope highlighting the various issues relating to how AT & T should be managed, in order to meet the needs, desires and aspirations of its customers. Considering the fact that the world has turned out to be a competitive business world, the results and findings here in will help organizations particularly in the field of IT to stay competitive. The research was faced with the following limitations; time limitation, financial constrains, unresponsive respondent as well as legal restriction. Data analysis and presentation Demographic characteristics Of the 402 respondent, 47.0% were males while female constituted 53.0%. in terms of education, 1.2% attained some high school, high school graduates constituted 30.6%, 10.7% vocational school, 19.2 some college education, 24.1% graduated from college, 3.7%attained some graduate school,9.5% were graduates or attained professional degrees. Concerning the issue of house hold situation, 24.6% were characterized by a single person being the income provider, 65.4% had two income providers, 4.2 had more than two income providers and 1.5% did not fall in any of the previously mention categories. Age characteristics of the population sample is as follows, 3.5% were born between 1915-1925, 3.7% 1926-1935, 10.5% 1936-1945, 22.6% 1946-1955, 28.1% 1956-1965, 19.9% 1966-1975, 9.7% 1976-1985. In terms of age quartile, 25.1% were I quartile 1, 27.6% in quartile 2, 22.4% in quartile 3 and 24.9% in quartile 4. Households that recorded 1 adult were represented by 15.2%, 2 adults 60.7% while 23.4% recorded more than 3 adults. 75.9% recorded no teenager, 15.2% recorded 1 teenager while 8.0% recorded more than 2 teenagers. Children under 12 years; 70.1% recorded no child, 119% recorded 1 while 16.9 recorded more than 2 children. It is worth noting that 60.9% of the respondents were not with Cingular while 39.1% were with it. Comparative demographic of those with and with no Cingular wireless services His was attained by carrying out cross tabulation. In terms of gender, 53.1% of females compared to 46.9% of males are not with Cingular; similarly a greater percent of female are with Cingular as compared to males 52.9% and 47.1% respectively. Those in age quartile 2 (29.4%) are the highest for not having Cingular wireless services. Those in quartile 4 constitute a larger percentage (31.2%) having wireless services from Cingular. 28.6% of those who graduated from college are not with Cingular; the lowest are those with some high school education (.8%). It is worth noting that a greatest percentage of high school graduate with Cingular, the least are those who attained some high school education. Considering household status, those families with more than 2 incomes provides did have a larger percentage (79.5%) not being with Cingular, similarly those with Cingular are highly characterized by households that have more than 2 income providers. A bar graph showing level of education and wireless services from Cingular A table 1: Age Quartile a having/having not Cingular service Age_Quartiles Total 1 2 3 4 Do you currently have wireless service from a carrier other than Cingular Yes - I am not with Cingular Count 69 72 53 51 245 % within Do you currently have wireless service from a carrier other than Cingular 28.2% 29.4% 21.6% 20.8% 100.0% No - I am with Cingular Count 32 39 37 49 157 % within Do you currently have wireless service from a carrier other than Cingular 20.4% 24.8% 23.6% 31.2% 100.0% Total Count 101 111 90 100 402 % within Do you currently have wireless service from a carrier other than Cingular 25.1% 27.6% 22.4% 24.9% 100.0% Table 2: Do you currently have wireless service from a carrier other than Cingular * Recoded Household Status Crosstabulation Recoded Household Status Total 1.00 2 Plus Do you currently have wireless service from a carrier other than Cingular Yes - I am not with Cingular Count 47 182 229 % within Do you currently have wireless service from a carrier other than Cingular 20.5% 79.5% 100.0% No - I am with Cingular Count 52 98 150 % within Do you currently have wireless service from a carrier other than Cingular 34.7% 65.3% 100.0% Total Count 99 280 379 % within Do you currently have wireless service from a carrier other than Cingular 26.1% 73.9% 100.0% Cingular performance To do this, independent sample t-test was carried out on the specific attributes, ANOVA (Analysis of Variance) on education and household situation with variables coverage, contact and prices were performed additionally paired sample t-test to test for significance differences on Cingular’s performance with various attributes such s selection of phone, high quality customer service conveniently situated stores and lower prices. To test whether there was a significant difference between those who are with Cingular and those who are not with it, all the even attributes were tested. There was a significant difference between those who are not with Cingular and those who are with Cingular when it come to the attribute of Cingular covering there need (t=-4.158, p=0.000), the same case applied to consumer being able to make or receive calls where she or he lives (t=-2.832, p=0.005), Cingular has calling plans that meet consumers needs (t=-4.767, p=0.00). There were no significant differences on all the remaining attributes. This thus suggests that Cingular’s ability to meet customers’ needs, ability of customers to make calls from what their location and the ability of the company to have in place plans that meet customers need are what determine the performance hence retention or losing customers to competitors. To test Cingular’s performance on coverage, contracts and pricing according to level of education and situation in households, it is established that there is no significant differences between any of the academic level groups (F=0.808, p=0.564, F=0.558, p= 0.763 and F=0.860, P=0.525). Similarly, there are no significant differences between household situation and Cingular performance in coverage, contract and prices. However, a Tukey post hoc test indicates that there are no significant differences. To test for significant difference between Cingular coverage and contract performance, t=-2.430, df=401, p=0.016, results shows that there is a significance difference people decide to be or not to be with Cingular particularly because of coverage of their needs other than the issues of contract. In terms of coverage meeting respondents needs and lower prices, there is a significant differences, t=3.152, df=401, p=0.002, thus respondents are more concerned with the services covering their needs other than lower prices. Comparing the significance difference between the company’s favorable contract and lower prices, respondents are more concerned with favorable contract requirements other than lower prices, t=7.517, df=401, p=0.000. Table 3: ANOVA Sum of Squares df Mean Square F Sig. Cingular's coverage are meets your needs Between Groups 49.786 6 8.298 .808 .564 Within Groups 4014.648 391 10.268 Total 4064.435 397 Cingular has favorable contract requirements Between Groups 24.906 6 4.151 .558 .763 Within Groups 2906.592 391 7.434 Total 2931.497 397 Cingular has lower prices Between Groups 36.337 6 6.056 .860 .525 Within Groups 2755.002 391 7.046 Total 2791.339 397 Contribution of attributes to general features To establish the relationship of the various attributes contributing to the general feature of the company, a regression was performed. Coverage was a dependent variable while the ability to make a call from where one was, high voice quality and few chances of calls being dropped were independent variables. The adjusted R Square=0.371, this thus depicts that 37.1% of the relationship between coverage and making and receiving call from anywhere, consumer getting few dropped calls and voice quality of the call being good can be explained by the linear regression model. Since p=0.000 the relationship is significant this can also be found in the population. Partial regression coefficients Coverage is a function of voice quality, few dropped calls and ability of consumers to make calls from anywhere they are; Coverage=1.813+0.555*Ability to make calls from anywhere+0.065*Consumer getting few dropped calls+0.058*Voice quality of the calls being very good. Testing significance of the regression coefficients In this case the variables that contribute to coverage significantly include; Ability of consumers making call from where they are, t=11.178, p=0.000. Additionally, there is no multi-co-linearity between the variables since all values are less than the standard value of 0.70 this thus suggest that the regression analysis is stable. Concerning plans that meet customers need (dependent variable) an association between it and variety of phone selection, high quality customer service, lower prices and high quality voice calls were analyzed. There was a significant relationship between the dependent and independent variables, p=0.000. Adjusted R square is 0.303 suggesting that 30.3% of the variations in the relationship ca be explained by the linear regression model. The plan=1.245+0.036*selection of phones+0.196*quality customer service+0.084*conveniently located stores+0.451*lower prices. The variables that contribute significantly to the relationship are; Cingular provide high quality customer service, t=4.165, p=0.000 and lower pricest-9.191, p=0.000.For the two relationships, the coverage and calling plan, there are 62.9% and 69.7% of the relationship and variation that are not explained by the models, thus there must be other factors that might be playing a part in these relationships hence could be better predictors for these ratings (Cringely, 2009) Table 4: Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.813 .370 4.899 .000 Consumer is able to make or receive calls where he/she lives and travels .555 .050 .552 11.178 .000 Consumer gets few dropped calls .065 .047 .065 1.390 .165 Voice Quality of the calls is very good .058 .061 .049 .953 .341 1. Dependent Variable: Cingular's coverage area meets your needs Key dimension of performance This was established by carrying out factor analysis. From examination of correlations matrix, it is apparent that most correlation exceed 0.3, this thus means that the matrix is suitable for factoring. The value of KMO=.827 is >.50 shows that factor analysis is appropriate. From the Total Variance Explained table, if the two factors are extracted 23.3% of the variance would be explained. Similarly, on the Scree plot, the line begins to flatten at the third factor; this thus shows that it is appropriate to only two factors. From Rotated Component Matrix, Cingular provides high quality customer service, has error-free billing statement and has a selection of phones that meet consumers need, each have a strong loading on coverage area need of customers (Coakes, 2008). Similarly, voice quality of the call being very good, coverage area meeting customers need and customers getting few dropped calls do strongly impact on customers’ ability to make calls from anywhere. Table 5: Rotated Component Matrixa Component 1 2 Cingular has favorable contract requirements .775 Cingular has lower prices .730 Cingular has calling plans that meet consumers' needs .719 Cingular provides high-quality customer service .668 Cingular has error-free billing statement .619 Cingular has selection of phones that meet consumers' needs .479 Cingular has conveniently-located stores .432 Consumer is able to make or receive calls where he/she lives and travels .850 Voice Quality of the calls is very good .768 Cingular's coverage are meets your needs .693 Consumer gets few dropped calls .682 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations. Table 6: Total Variance Explained Component Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative % 1 4.083 37.115 37.115 4.083 37.115 37.115 3.031 27.557 27.557 2 1.508 13.705 50.819 1.508 13.705 50.819 2.559 23.263 50.819 3 .992 9.018 59.837 4 .834 7.585 67.422 5 .734 6.675 74.096 6 .684 6.217 80.313 7 .511 4.648 84.961 8 .494 4.494 89.455 9 .467 4.245 93.700 10 .390 3.548 97.248 11 .303 2.752 100.000 Extraction Method: Principal Component Analysis. Table 7: Correlation Matrix Cingular's coverage are meets your needs Consumer is able to make or receive calls where he/she lives and travels Consumer gets few dropped calls Voice Quality of the calls is very good Cingular has favorable contract requirements Cingular has calling plans that meet consumers' needs Cingular has selection of phones that meet consumers' needs Cingular has error-free billing statement Cingular provides high-quality customer service Cingular has conveniently-located stores Cingular has lower prices Correlation Cingular's coverage are meets your needs 1.000 .607 .321 .399 .209 .326 .267 .246 .279 .204 .254 Consumer is able to make or receive calls where he/she lives and travels .607 1.000 .420 .576 .206 .154 .228 .244 .260 .174 .190 Consumer gets few dropped calls .321 .420 1.000 .494 .207 .136 .203 .307 .269 .244 .213 Voice Quality of the calls is very good .399 .576 .494 1.000 .255 .195 .281 .326 .351 .245 .254 Cingular has favorable contract requirements .209 .206 .207 .255 1.000 .455 .311 .394 .521 .240 .485 Cingular has calling plans that meet consumers' needs .326 .154 .136 .195 .455 1.000 .245 .304 .363 .213 .515 Cingular has selection of phones that meet consumers' needs .267 .228 .203 .281 .311 .245 1.000 .263 .305 .295 .312 Cingular has error-free billing statement .246 .244 .307 .326 .394 .304 .263 1.000 .503 .417 .341 Cingular provides high-quality customer service .279 .260 .269 .351 .521 .363 .305 .503 1.000 .218 .348 Cingular has conveniently-located stores .204 .174 .244 .245 .240 .213 .295 .417 .218 1.000 .223 Cingular has lower prices .254 .190 .213 .254 .485 .515 .312 .341 .348 .223 1.000 Conclusion and Recommendation From the review of the data collected Cingular need to do something so that it retains it customers and to woo those of its competitors. 53.0% of female and 47.0% males have wireless services other than Cingular. Factors that did significantly dictate whether customers will seek services of Cingular are notably the ability to make calls from anywhere, Cingular having a calling plan that meets needs of the customers and a coverage area that meets customers need. Additionally, there was a significant difference between those with Cingular wireless services and those without. I recommend the following; 1. Ensure that customers can make calls from anywhere, 2. Adopt strategies that make coverage res to adequately meet customers’ needs 3. Have calling plans that meet customers need. References Coakes, S. Steed, L & Price, J. 2008. SPSS: Analysis without Anguish: Version 15 for Windows, Milton, QLD: John Wiley & Sons Australia. Cringely, R, 2009. AT&T: Strictly for losers. Viewed on 25 Nov. 2010 from http://www.infoworld.com/blogs/robert-x-cringely Malhotra, N.K. 2010. Marketing Research, An Applied Orientation. Pearson Education, Upper Saddle River, New Jersey. Read More