Consumerism Essay Example | Topics and Well Written Essays - 250 words

Consumerism - Essay Example Because of increased intensive production of numerous, this heightened living standards of the English as well as other people belong from the same caste. People enjoyed the experience of acquiring material possessions, which where once prized for their durability over fashionability. This also led to the emergency of more sophisticated designers majoring in trendy products (Mackendrick, Brewer & Plumb 2). Based on my opinion, I think current US designers’ ideas are highly valued in production of new items in the market aimed at satisfying the consumer. For instance, the newly graduates from universities and colleges who have studied fashion designs courses (Mackendrick, Brewer & Plumb 5). Inventing more advanced manufacturing industries, to cater for increased customer’s demands world wide such as textile industries. In addition, a manufacturer notifies customers online, in the newspapers, magazines or social media about new products in the market through internet, local and international newspapers. Issuing of trade cards to individual clients, so buying and selling be more advanced by giving out special printed cards to customers like business cards (Mackendrick, Brewer & Plumb

PESTEL Analysis Indonesia Essay Example | Topics and Well Written Essays - 1250 words

PESTEL Analysis Indonesia - Essay Example 40% of these forests lies within protected areas (FAO 2010). Forest clearing within areas zoned for timber, logging, oil palm, and mining accounted for nearly 45 percent of deforestation in Indonesia between 2000 and 2010, (finds a new study that examined forest loss within industrial concessions). Analyzing the greenhouse gas emissions in the Indonesia, currently, paper plantations are the largest source of carbon emissions during the period, accounting for more than a third of total industrial emissions. Oil palm follows up with 28 %, logging with 22%. Nevertheless, the percentages vary from island to island. In Sumatra, fiber plantations amounted to nearly 60 percent of emissions, while the palm oil industry in Kalimantan accounted for about 40 percent. Logging concessions were the biggest source of industrial land use emissions in Papua, Sulawesi, and the Moluccas. In the future according to the study: Relative contributions of the logging, fiber, oil palm and mining industries t o forest loss in Indonesia, it is expected that forest concessions continue to grow, due to political treaties and economic investment in logging. In response to the general idea that the process of logging is illegal, corrupt in Indonesia, the new Minister of Environment and Forestry Siti Nurbaya Bakar imposed a moratorium (suspension) on the issuance of all new logging, by allowing issuances to be fair, accurate, clear and accountable. The moratorium is likely to last between four and six months.

Piagets Theory: Observation and Reflection

Piagets Theory: Observation and Reflection Piagetian Task For this task, I used blue play-dough and shaped it into 2 balls of the same size. I conducted this task with a boy who is 7 years old and in first grade. I asked him if he would help me with something and he said, Sure, but seemed nervous. I presented him with the two balls of play-dough and he got excited, as if we were about to do something fun. I began by asking him if the two balls of play dough were the same size. He looked at them closely and then picked up each ball before stating that they were not the same size. I asked him to make them the same size and let him know he could use the extra play-dough I had set aside if needed. He added the extra play-dough to one of the balls, melding it into the ball, and then looked at both balls again. He took some of the dough from the now larger ball and added it to the other, looked at the balls again, then added a little more, making sure both balls were smooth and round again. This entire time, he was very focused on what he was doing. Once he finished, one of the balls was clearly a still a little larger than the other, but he was satisfied that they were now the same. To be fair, the difference was very small. I then smashed the larger ball down so that it was flat and round. I asked him if one of them had more play-dough than the other or if they had the same amount. He replied with, Of course theyre the same!, with what seemed to be a bit of an exasperated tone. I asked him to tell me how he knew they had the same amount. He said that he knew this because he himself had made sure each ball had the same amount before. He kind of rolled his eyes and let me know that just because one was squished down doesnt change the amount of play-dough it had. I was quite impressed with his abilities in response to my questions during this task. I dont know what to make of the fact that he felt the balls were not equal to begin with. However, during the process of adding and removing play-dough from the balls to make them even, he exhibited great focus and concentration. Holding the balls, eyeing one and then the other, he made changes until he felt satisfied that they were the same. I had expected just a quick answer either way, so this was surprising to me. I believe that this did confirm Piagets observations, at least in regard to the characteristics of the Concrete Operations stage, which this 7 year old boy clearly fell into. After he finished modifying the balls until he saw them as being equal, he recognized that nothing had changed when I smashed one of them down. Seeing one large round ball, and one seemingly smaller flat disc did not cause him to hesitate when asked if they contained the same amount of play-dough. If anything, he seemed to think it was absurd to even ask that question. I happen to know that this particular boy loves to build things. His favorite thing is taking boxes of different sizes and cutting them into various shapes to make whatever hes imagining at the time.houses, furniture, rockets, etc. His parents have always made sure that he has plenty of random material he can use for his building activities, including a mud pit in the back yard, similar to a small sandbox. I believe that his prior background in utilizing a variety of materials helped to enable him in this task as well. He has learned, on his own, how things fit together and how to form materials like mud into various shapes for different uses. While I dont believe he spent time thinking about the way his brain and eyes processed the information in front of him, he did spend time thinking about the task at hand through the lens of the information processes he had gained through prior experience. He was able to evaluate the balls, and then spend time modifying them to complete the task of making them be the same size. He then had no doubts about the different shapes containing the same amount of play-dough and reasoned that since he had made them the same, they continued to be the same no matter what shape they took on. I believe that all of these factors contributed to his reasoning and performance in carrying out this task. OSHA 1994: Problems in Implimentation OSHA 1994: Problems in Implimentation Problem Statement Malaysia construction industry is the higher fatalities compared with among all the industry in Malaysia table 1 Occupational accident by sector for the category of death from 2009 April to 2011 April shown at below. (Department of Occupational Safety and Health (DOSH), 2009-2011). Implementing safety and health requirement should be part of Contractors responsible. (Dongping.F, et al., 2006, p: 434) Contractors comply with Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 to implementing safety and health requirement for the construction site to make the act effectively minimize the accident rate and fatalities. (Omran, et al., 2008) Aim A study into the effectiveness Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 in reducing fatalities and injury rates in Malaysia construction site. Objectives To study of Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 the effectiveness by contractors to implement at construction site. To identify the barrier facing by contractor of implementing Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 on construction site. To identify the implement of Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 on actual construction site. Background The OSHA Malaysia is effective on 24 February 1994(Act 514). An act is to ensure safety, health and welfare of persons who are at work and to protect other person against safety risk or health in connection with the activities of persons at work. (Occupational Safety and Health Act 1994 (OSHA), s.1) OSHA 1994 actually is quoted Occupational Safety and Health Act. The objects of OSHA 1994 have written and are under section 4. An object of OSHA1994 is to secure the safety, health and welfare of persons who are at work and to protect persons at a place of work other than persons at work against hazards. Not only for that had the act also had to promote an occupational environment for persons at work which is fit to worker physiological and psychological needs. The last object of the act is to provide way or method according related to the occupational safety and health legislations can be gradually replaced by an institution of regulations and permitted the industry codes of practice operating in combination with the provisions of the statute, designed to maintain or improve the safety and health standards. (OSHA, s.4 (a-d)) FMA 1967 (Act 139) is to provide for the control of factories with respect to matters relating to safety , health and welfare of person therein, the registration and inspection of machinery and for matters connected therewith. Those machinery which is high risk for operate such as mobile cranes, tower cranes and etc must be certified and inspected by DOSH. (Factories and Machinery Act 1967 (FMA), s.1) According to DOSH government website mentioned that, all factories and general machinery must be registered with DOSH before they can be installed and operated. Factories or any companies require to use machinery their must require to obtain a permission to install machinery by submitting relevant documents to their nearest DOSH offices. The permission to install machinery is for each time certificated machinery or new auxiliaries installed. Methodologies Data collections methodologies categorized as two main ways there are secondary source and primary sources. Secondary source is get information from documents such as personal records, service record, books, journals, newspaper and etc. Primary source are few methods such as questionnaire, interview, case study and etc. (Kumar, 2005, p: 118) For this research title is relative with safety and health requirement therefore the secondary data source will obtain a lot of information which is collected from book, relevant title of articles and relevant record publish from the departments of occupational safety and health. The objective one and two of this research paper which is to study of Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 the effectiveness by contractors to implement at construction site and to identify the barrier facing by contractor of implementing those two acts at construction site. The first objective can be achieved by reading those two acts to understand which should implement by the contractors. The second objective can be achieved by reading more books to find out the effectiveness and barrier that contractors may be facing when they implement the two acts at construction site. In addition, questionnaire is appropriate primary data source to get information for this research paper. Because of the research is time-limited and questionnaire is the easiest and quick methodology. Open question is the respondent could be answer in their own words. This open question can be generated mainly qualitative data. The advantages for open question are providing depth and valuable information provided by respondent able to expressing their own opinions. Respondents have the opportunity to express themselves freely, resulting in a wider variety of information. (Kumar, 2005, p: 132) According to Kumar (2005) stated that questionnaires restricted two basic types of question there are closed-ended which called as closed question and open-ended or called as open question. Closed question is researcher set out the answer such as yes or no and let the respondent to answers. Although there is a disadvantages of closed question which is not enough of depth and variety of the information obtained, sometime the answer provided are not truly reflect respondent their own view or opinion. Through the closed question for questionnaire is to ensure that literature view the view and ideas that is appropriate for respond from the respondents. For this research paper will be total 100 sets of questionnaires given to respondents regarding objective two and three will be set for the question. The respondents could be contractors, site staff, site agent, project manager and other parties which experience and knowledge for safety and health at construction site. Guides to Research Chapter In this research paper will be content total five chapters. Chapter 1 is the introduction and problem statement of the research title. Then is the aim and objective of the research paper. The aim is achieved by through implemented the objective that have be set out. Chapter 2 is the literature review is through reading more articles and books or other resources which are concern to the research title and obtain the similar idea for those sources and write out the literature review base on the objective stated. Chapter 3 is research methodology for this research paper will carry out the questionnaire. The target of the respondents will be contractor and persons who are related to construction site. Those questionnaires will be set out 100 sets and data will be collected base on this stage which mean in this chapter. Chapters 4 are analysis the data and carry out the result of the analysis in chapter. After the result had been analysis the issues can be identified from the findings. Those data will be presented by using bar chart and etc. Chapter 5 will be the last part of the research paper. This chapter will be conclusions and recommendations after those progresses had been gone through. This chapter also is to ensure that the research aim has achieved through implementing those three objective and the recommendations will be suggested in this chapter. CHAPTER 2: LITERATURE REVIEWS Introduction Occupational Safety and Health Act 1994(OSHA) and Factories and Machinery Act 1967(FMA) is a legislative framework in Malaysia construction industry to give promote to the construction industry, advance and assist to have better or high standards of safe and healthy working culture. The legislations are enforcement by Department of Occupational Safety and Health (DOSH). The DOSH are under Ministry of Human Resources Malaysia. The department is agency of government to enforce those legislations to promote and enhancing Malaysia construction site quality of working life. (Mudrikah, 2010) In this research paper, the method to reducing the accident rate in construction industry is Contractors have to implementing with the strict safety and health regulatory frameworks for preventing, monitoring and reporting adverse events for the construction site. Contractors should comply with those effective safeties and health requirement to effectively minimize the accident happen on construction worksite. (Dorji et al, 2009) Problems and barrier to implement of OSHA 1994 Table 1 showing that construction industry is among the highest accident rate and fatalities industry in Malaysia occupational rankings. The highest accident rate and fatalities happen in construction site one of the reason may because the act is not effective and there have a legal loophole. Before amend the OSHA 1994 section 29 safety and health officer there is no penalty. But after amended become the OSH (Safety and Health Officer) Regulations 1997 and OSH (Safety and Health Officer) Orders 1997 have a penalty if the contractors do not comply to employ competent person as safety and health officer and other duties in ensuring such personnel could perform his duties effectively and define class of industry to appoint competent safety and health officer both are penalty same condition which is maximum RM5000.00 or maximum six months imprisonment or both. Section 29 has been amended by the Minister to OSH (Safety and Health Office) Regulation 1997 after amended stated that any building operation and any work of engineering construction when the total contract price of the construction project which is exceeding twenty million of ringgit Malaysia the contractors should employ a safety and health officer or other duties in ensuring such personnel could perform his duties effectively. (Safety and Health Officer) Order1997. (Occupational Safety and Health Regulation 1997, s.29) Some of the construction project the total contract sum may not exceeding twenty million according to OSHA section 29 mentioned that means contractors is not necessary to comply and appoint the safety and health officer on their workplace. If unfortunate accident happened cause site workers injury or death at construction site is that whether should be the negligence of the contractors because his has full comply with the OSHA 1994 or the legal is indeed imperfect because only the project exceeding twenty million of ringgit Malaysia contractors should to appoint a safety and health officer. According to OSHA 1994 section 18 duties of safety and health officer his had a important duties at the construction site one of it is to advise contractors measure of the site workers their interests of the safety and health and their responsibilities also included to inspect the workplace determine whether any machinery or equipments or process of work may have the chances liable site worker injuries or harmful their body. If accident is happen safety and health officer have to submit report informs on the number and types of accidents which had occurred in the workplace to the DOSH according to OSHA 1994 section 19 stated. Since section 29 of OSHA had mentioned that only total contract sum exceeding twenty million construction projects is required to appoint a safety and health officer. Moreover, the workplace is happen any accident, dangerous occurrence, occupational poisoning or occupational disease which has occurred or may have chance occur on the worksite according OSHA section 32 to inform the nearest DOSH office. If accident had occurred which is construction project not exceeding twenty million total contract sum who are going to take safety and health officer his duties to report to DOSH is that means small project is not an accident happen. The purpose of reporting of accident incidences to DOSH is to ascertain the root causes and enable to take remedial actions for prevention future occurrences similar condition. The report incidence is important database for DOSH the database is to analyze strategic planning, management and law enforcement. The data recorded by the safety and health officer is required in order to analyze the results of unification and to ensure statistical validity. (DOSH, 2004, p: 4) Safety and health organization shall be implementing by the Contractors those person are profession and get training for safety and health programme. Those safety and health officer with qualified their role are provide appropriate advice to the site workers their responsibility for the safety in the site and to promote and encourage the planning and implementation of the necessary and effective measures in minimizing the risk and to reduce the accidents rate. (Construction Confederation, 2008) The problem may be arise if contractors they do not appoint safe and health officer or site safety supervisor there is no professional person at worksite to train for new site workers or instrumental promote a safe and healthy working environment on workplace. Furthermore, most of the site workers are foreigners like Indonesia, Pakistan, Myanmar, Bangladesh or etc. Those foreigner workers they may be lack of knowledge to protect themselves. They might never been exposure with the construction not to mention that they have experience to cope with the huge construction projects. Therefore, the bad attitude and behavior is belonging to the construction it will then rapid increasing the accidents rates. (Wee Lee, 2010, p: 22) According to Wee Lee (2010) there may have another legal loophole in Malaysia. Malaysia safety and health officer they do not have autonomy power therefore they cannot strictly implement the regulation. Moreover, the safety and health officer is employed by the contractor. The contractors may tend to hiding the accident occurrence on site and do not comply with reporting accident happen on their site or even threatened their safety management staff do not report to DOSH that is because the accident of worker may make lost productive time for DOSH officer come over to inspection the accident areas. The construction site accident rate has been increasing simply because of these unhealthy practices in Malaysia. (Wee Lee, 2010, p: 15) Although appoint a safety and health officer of construction site have effective reduce the risk of accident rate. But according to Rabani (2010) mentioned that many contractors they are not aware the important role for appoint a safety and health officer at construction site. Therefore, many contractors they neglect to appoint a safety and health officer. (Rabani, 2010, p: 3) According to Kit Keng (2004) mentioned that when the accident happen at site it may cause contractors suffer losses in term of the productivity and affected their profit. Accident happen may lower down the productivity this may simply because of site worker may because their co-worker happen accident cause injury or death which may affect their physical and psychological fear they were worry to become the next victims. Therefore, may occur a shortage of workers on site because they may do not want to work in an accident workplace. Because of that cause the construction work delay and cannot be completed on time. Contractor suffers losses affect his profit paid site worker to work over-time to speed up the works and completed at schedule time. In fact, poor safety background actually will cause high insurance premium according to Kit Keng mentioned contractors there are always think that as long as he had buy a insurance to protect themselves from the direct losses caused by the accident happen at construction site, but actually some of the contractors they do not know how much had his to pay the insurance premium. Lastly, some of the contractors think that safety and health officer is not necessary for employ at his workplace. But as a matter of fact the contactors should employ a qualified persons act as safety and health officer. (OSHA, s.6 (1)) In addition, according to OSHA 1994 Section 16 have been revised to OSH (Employers Safety and Health General Policy Statements) (Exception) Regulation 1995 by the Minister. The section 16 been amend that, if the organization has more than five employees than the employer and self-employed person has their duty to formulate the safety and health policy. (Occupational Safety and Health Regulation 1995, s.16) However, the OSHA 1994 section 16 had been modified become better and detail for the need of safety and health policy. But after amend the act from pervious penalty maximum RM5000.00 or maximum two years imprisonment or both become not penalty required for the Regulation 1995 which mean the safety and health policy is not an important for the construction site and site workers. In case, the contractors did not provide the safety and health policy to their workers is without any penalty. (CIDB, 2010, pp: 20-21) According to Kit Keng (2004) mentioned that, the barrier to the implement safety and health requirement at construction site is because the contractors seen the safety and health requirements required a big visible cost to implement. Therefore, they often do not comply with the legislation requirement in their workplace as provide the safety and health organizations. Conclusion given the above problem is the OSHA 1994 it still contains a little bit of problems and the contractors have the excuse to bypass some of the responsibilities that he should comply with and implementing at his workplace to reduce the accident occurred at the site. Effective to implementing OSHA 1994 Construction industry is highest hazard among all industry therefore to effective minimize the accident rate and fatalities the construction project should through a good planning and co-ordination before the construction project start. Therefore, the contractor plays an important role to implement safety and health responsibility from the concept to the construction completion. One of the effective ways to bring in safety and health in early stages is incorporate safety and health into tendering stage. Therefore, contractors are required to demonstrate that they have an appropriate safety and health management system and to verify its implementation in practice and his required to comply with contract specific occupational safety and health requirement. (CIDB, 2010, pp: 4-5) Select those potential contractors which are appropriate evaluate the safety and health for the project. Implement safety and health included in contract like PAM Contract 2006. According to PAM 2006 contractors his received letter award his is entitles to starts construction works at site his is required to procure and submit contractors all risks insurance, workman compensation and performance bond to the architect or quantity surveyor before the contractors only allowed commencing the construction works. Although OSHA 1994 and FMA 1967 is able to take legal action but bound the safety and health include in contract will be more effective. Because of contract is binding that able enhance strict to implementing safety and health through taking legal action. Profit is the goal of most business is actually the construction industry is also had the same goal. The way to effective reducing the accident for the construction site may through using approach prevention of injuries and death with implementing occupational safety and health management system. (CIDB, 2010, p: 42) According to Kit Keng (2004) mentioned that contractors seen the visible larger amount for implementing the occupational safety and health management system in his construction project but implementing the safety and health management systems is effectively reducing of injury and death at construction site and benefits to contractors his are achieved through avoidance of delay to his construction project in order to increase his profit as early as completion of the construction project. According to CIDB (2010) stated that, the principles of an occupational safety and health management system contain plan, do, check and act (PDCA). Inside the plan there are mentioned the safety and health policy had to provide at the construction site to introduction the safety and health program. The safety and health policy should be always up-to-date and get aware to the site workers which mean the safety and health policy is very important. Therefore, if the contractors are not complying with OSHA regulation 1995 at his workplace his is be get penalty. Besides, implementing and establish a safety and health committee if the situation is build a condominiums it may have forty or more than forty workers including those staffs hired by employer or workers supply by the sub contractors in this cases the management chain will lead to more than forty worker being hiring or work on the construction project. (Wee Lee, 2010, p: 13) Contractors should implement to form a safety and health committee because there are a lot of workers at the construction site. Otherwise, the Contractors get instructed by the Director General of DOSH that the workplace is required that to form the safety and health committee. Both employee and management are represented for the safety and health committee this is to keep on reviews the construction site conditions. Because of lack of reviews conditions on worksite there may affect worker on site or public surrounding their safety and health. (OSHA, s.30) According to OSHA section 29 and 30 actually contractors should employ a full time competent person act as safety and health officer and then establish a safety and health committee at construction. Safety and health committee must be keeping on reviews the construction site condition. Therefore, at least once every three months the safety and health committee shall conduct periodical inspection and audit on site and provide essential advice on safety issues besides drafting and improving the companys OSH guidelines and procedure. (Rabani, 2010, p: 47) (OSHA, s.29, s.30) Introduction of FMA 1967 Contractors not only had the responsibilities to comply with the OSHA 1994 but Contractors had the obligation need to comply with the FMA 1967 too. FMA 1967 mainly is applying by factories and construction site. The Contractors should understand more about the Factories and Machinery Act 1967, which will help the contractors able to implementing the act on the construction site. This is responsibility of the contractors to maintain all their machinery which is appropriate and safe to operating condition and provide with implement safety measures in construction site operations.(Rabani, 2010, p: 52) Besides, the FMA 1967 section 36 and regulation 7 of FMA (Notification, certificate of fitness and inspection) Regulation 1970 stated that any of the machinery should get permission to install the machinery on construction site is required certificate of fitness. According to FMA 1967 section 35 stated that, any construction project should involve using machinery or plant to carry out the construction work. Only in the case that the construction project is able completed in a period less than six week and does not need or involve using any machinery for their construction project then the contractor is does not require to notify to DOSH. FMA 1967 Section 56 have been revised to FMA (Building Operations and Works of Engineering Construction) (Safety) Regulation 1986 by the Minister. (FMA, s.56) Part I regulation 3 Application stated that these regulations are applied by the building operations and to works of engineering construction. Section 56 Regulations have total 17 parts divided showed in arrangement of regulation. (Factories and Machinery Regulation 1986, r.3) In this research paper was discussing about the construction project which contractors should implementing to minimize the machinery hazard cause site workers injury and death at construction. Therefore, in this research papers will be focus on Part II General Provisions. Statutory of FMA 1967 Since table 1 showing that construction industry is the highest accident of fatalities rates. Therefore, machinery at construction shall also to consider and comply with FMA 1967. According FMA regulation 1986 regulation 25 appoint a site safety supervisors to inspecting and rectifying any unsafe place of work and correcting any unsafe practice on construction site this is to ensure the safety , health and welfare of site workers. Appoint a site safety supervisor will be same requirement with safety and health officer which is person who is qualification. Site safety supervisor there must have at least minimum of two years site foremen experience. Their also have the duty to check the sub-contractor work which is to ensure sub-contractor have comply with the Malaysia legislation. If the contractor appoint a part time site safety supervisor and the particular part time site safety supervisor shall spend at least fifteen hours per week and promoting safe conduct of work at construction site. (Factories and Machinery Regulation 1986, r.25) Otherwise appoint a part time site safety supervisor if the construction site employed more than twenty site workers on a workplace contractor shall appoint a contractors safety supervisor. The contractors safety supervisor shall spend at least five hours per week and promoting a safe conduct to his site workers. Contractors safety supervisor requirement will be same with site safety supervisor with at least two years site foreman experience and qualification. (Factories and Machinery Regulation 1986, r.26) The construction work site which is employed fifty persons or more than it shall establish a safety committee. The safety committee members will be both employee which mean including sub-contractors and contractors and also management members to be represented. Purpose for safety committee is to keep and review safety and health condition in workplace. (Factories and Machinery Regulation 1986, r.27) The safety committee shall appoint senior member of contractors staff at construction site and the safety committee shall consist the site safety supervisor, the entire contractors safety supervisors and others site worker. The safety committee should meeting at least once a month. (Factories and Machinery Regulation 1986, r.27) Furthermore, contractors should implement strict on machinery installed rules on FMA Regulation 1986 regulation 6 just like machinery installed on any floor above the ground floor there have a regulation to control over like any floors above the ground of any building or structures are not allowed to use machinery. Only if the floor or structure has been designed or constructed there are able to support the loading of the machinery or additional strengthen purpose then contractors is allow to use or operate the machinery on the particular building or structures. Contractor should maintain their machinery which is always in good and safe condition his is require to ensure around the machinery surrounding meaning that the passenger walk way is free from any loose material or non-slippery condition. This is to prevent those site workers would not fall down towards to the machines and caused injury or death. According to this regulation 6 if the contractors are not comply with it his will be fines not exceeding RM2000.00. Besides, slipping is easy to happen on construction site. Therefore, Contractors should make sure the surfaces of the passageway sanded or covered or removed. If any passageway such as platform, scaffold or otherwise of elevated working surface is slippery and causing the workers fall down found out is the negligence of the contractor they do not provide slip-safe footing to minimize the slipping hazards on the construction safe according to the FMA Regulation 1986 regulation 8 the contractors would be penalty not exceeding RM2000.00. Contractors have the obligation to keep or remain the worksite passageways with do not have any dirt and debris or other obstruction object may cause site workers tripping. Contractor should minimize those accumulations of dirt and debris on worksite by instructed his site agent to maintain for it and site agent is Contractors representative on construction site. In addition, the debris shall be handled and disposed-off by a method which will not harmful to person and the debris is not allow to accumulate is may constitute a hazard to the worker on site.( Factories and Machinery Regulation 1986, r.22) Moreover, contractors should also have to ensure at worksite there is do not have any projection may or could cut site workers if any, contractor or his representative should removed it or made safe to prevent site workers injury or death. (Factories and Machinery Regulation 1986, r.9) Construction site the most important is provide workers a safe access to workplace. Firstly, Contractors must ensure the construction site provided proper stairways; ramps or runways. (Factories and Machinery Regulation 1986, r.10) According to FMA Regulation 1986 regulation 15 stated that, some of the worker who are work in wet concrete may wet their foot contractors shall provide suitable waterproof boots to protect site workers foots get injuries. Malaysia weather is always raining and it cannot be predicted therefore sometime site worker inevitably work on raining day. Contractor shall provided worker waterproof coat and hat when site workers work on raining day at construction site. The penalty to those contractors they are do not provide is fines not exceeding RM2000.00. Besides, site workers should get protective apparel just like if worker their do not wear a safety helmet access to construction site when the construction project is construct more than two storey high building the workers may get higher risk to get serious head injury or may cause death and all people who are performing any work or services in worksite they should wear safety helmets. (Factories and Machinery Regulation 1986, r.24) Barrier that contractors tend to do not comply to provide all safety helmets and safety boots is because the cost of buying standard helmet and safety boots are very costly generally the construction site are employ many site workers. Moreover, contractors provide safety helmets and safety boots to his site worker simultaneously the contractors shall employ a site safety supervisor or a contractors safety supervisor to ensure the site worker wear proper equipments. According to Kit Keng (2004) mentioned that, good safety records may attract lower insurance premium. Provides safety helmet and safety boots can be effectively reducing the injury and death rates. Therefore, way to implementation is to ensure all the site workers wear the safety equipments properly the employer or architect they representative which mean project manager and site staff should have the responsibility to control by using fines the site workers they own salary to punish them to ensure they comply with the safety and health regulation to protect themselves safer. The electrical hazards is serious if the contractors did not check any part of an electric power circuit which is exposed or hidden by using instruments to find out the electric power circuit location and performance. The purpose to do so is because of the site worker they may use the jackhammers or other hand tools working as drill through the ground. Hence, the Contractors shall post and maintain proper the warning signs which is using national language where is such circuit exists. Contractors have the responsibilities advice his site worker

Customer Switching Behaviour for Mobile Networks

Customer Switching Behaviour for Mobile Networks EXECUTIVE SUMMARY Consumers use services everyday, these ranges from taking the train or opening a bank account to talking on a mobile phone. Businesses also rely on a wide range of services on a daily basis, but on a much larger scale compared to consumers. However, customers are not always satisfied with a particular service that they maybe using and often resort to switching their service provider in order to resolve the issue or pursue better value from a less expensive service. The objective of this study is to investigate customer-switching behaviour in the mobile industry, why it takes place and what factors influence it. This topic area has been chosen, as customer switching and the mobile phone industry are contemporary and relevant to the present day and will continue to evolve overtime. Research has been undertaken using secondary and primary data collection methods. Secondary data provided a background to the mobile phone industry and an overview of customer switching behaviour in services. Primary data consisted of self administered questionnaires to a convenient sample of university students, this enabled data to be collected which would provide an idea of mobile phone users contemplation of switching and their understanding of why they believe they would switch from one service to another. Findings revealed that a majority of customer switching is due to high call and monthly charges and consumers trying to obtain more free minutes and texts. This contrasts with the literature and precious studies, which have found other reasons to cause customer switching, which illustrates how causes of switching differ in every industry according to the nature of the service. CHAPTER 1: INTRODUCTION 1.1 Project Aims The aim of this project is to determine the reasons as to why consumers switch from one mobile phone network to another? The research objectives that arise from the aim will therefore be: 1 To evaluate whether competitors offerings are causing consumers to switch from one network to another 2 To evaluate whether retail offerings are causing consumers to switch to gain a better deal 3 What actions of the service firms or their employees cause customers to switch from one service provider to another The research will be UK based geographically using a convenient sample of university students and will be done using both primary and secondary research methods. The research may help managers and researchers understand service switching from a customers perspective in the mobile phone industry and the switching drivers may provides answers as to what has influenced customer behaviour. The results of the research will be analysed to provide recommendations. The reason for choosing this topic area is that there appears to be a lack of research on customer switching behaviour in the mobile phone industry. This study aims to explore this topic are further. 1.2 Background on Mobile Phones Service Mobile phones service refers to a service whose customer base includes firms using mobile phones for business and customers using it for their personal use. Mobile phones have become substitutes for fixed telephone lines and have led to the decline in calls made from fixed telephone lines. The take up rate of mobile phones is constantly increasing and over the years the growth in the use of mobile phones has been dramatic. According to EMC mobile user numbers reached the 1.5 billion mark in June 2004 and is set to reach 2 billion by July 2006 and 2.45 billion by the end of 2009. (http://www.cellular.co.za, 2005) Mobile phones today are not solely used to make calls, additional value added services such as Short Messaging Service (SMS), Multimedia Messaging Service (MMS), radio, internet access and so on. This means that the benefits and use of mobile phones is also expanding, which is also contributing to industry growth. This has become a focus point for the various operators as intense competition has led to increasingly lower voice call prices. SMS was first used in 1992 and is currently the fastest growing communications technology in history. Worldwide, 135 billion text messages were sent person to person in the first quarter in 2004 (http://www.cellular.co.za, 2005). Retail revenues from voice and data services (including MMS, SMS) account for 79% of the total revenue of the four main UK mobile operators (Vodafone, O2, Orange and T-Mobile), which accounted for  £13.6 billion in revenues in 2003, (see appendix 1). CEPG Research Company conducted a study of the mobile telecommunications industry in 2002, in which findings showed that turnover had reached  £32 billion a year, with the sector contribution to GDP being  £19.4 billion (2.2%), (ofcom.org.uk/research/telecoms, 2005). The demand for mobile phones has never been so great as it has become a must have for people of all ages; consumers are constantly exchanging their outdated phones for the latest colour handsets. The popularity of mobile phones is immense and it is perceived that this interest in mobile phones will continue to grow over the next decade or so, as demand increases and new models and technology is introduced to mobile phones. 1.3 Mobile Phone Service Industry The mobile phone industry is one of the fastest growing sectors of the British economy, with the UK making up the second largest mobile market in Europe, with a share of 18% (Datamonitor, Nov 2004). This growth is due to factors such as changes in government policies towards communication (deregulation), economic growth and developments in information technology. The more recent growth has come from existing mobile phone users upgrading their handsets, which have led to mobile phone companies and network operators targeting first time buyers (Datamonitor, Nov 2004). Mobile phones are not only seen as a vital element for success in business but also as a much wanted item for social use. This is evident in the increasing number of individuals both young and old who now have at least one mobile phone. As indicated by an Oftel report, in Britain over one million people own a mobile phone instead of a fixed telephone line. 2.3 million UK residents live without a fixed line telephone at home. The popularity of the fixed line phone drastically declined after the mass introduction of mobile phones to the UK. It is worth noting however, that fixed phone line companies have not taken this lightly and have retaliated by introducing mobile phones linked to fixed home lines and companies such as BT setting up their own mobile networks i.e. BT until recently owned O2 and also offering special discounted rates to encourage customers to use their fixed lines. There are four main network providers in the UK; they are T-mobile, O2, Vodafone and Orange. In 2004 there were 342.43 million mobile subscribers, which is an increase of 8.54 percent from the previous year and a penetration rate of 87.63 percent. T-mobile UK accounted for 15.06 million subscribers, Orange UK had 13.75 million, O2 UK had 13.06 million and Vodafone UK had 12.98 million (mobile communications). Recently there have been changes in terms of ownership of the major mobile phone networks. T-mobile is now one of the three strategic growth areas of Deutsche Telekom, a German network provider and O2 is now owned by Spanish firm Telefonica. Orange was sold to German mobile phone network Mannesman, which was then taken over by Vodafone, who sold Orange to France Telecom. Orange has a strong network in the UK and overseas but recent management decisions by France Telecom have reversed their user growth and subscriber numbers, which has been partly due to customers switching to other networks. Customers can become concerned that, if their chosen network provider is owned by a firm overseas, their needs will not be met as well as they could by a UK owned provider. Additionally events such as these can contribute to switching behaviour through customer confusion, as found by Oftel (2003), where many consumers switched due to confusion over re-branding of the network. 1.4 Customer Switching Behaviour in the Mobile Phone Industry According to research by TNS Telecom Trak, consumers tend to use their handsets for about twenty months before upgrading to a new one. Telecommunications regulator OFTEL found that this is also the average amount of time that a majority of mobile phone users will stay with the same mobile provider for. Oftels research ascertained that 90% of consumers thought about changing their network when changing handsets. Oftel published a report in April 2003, which provided an overview of the key findings of trends in consumer behaviour in the mobile market based on a residential consumer survey conducted in February 2003. Research was carried out by Recom (Research in Communications) amongst a representative sample of 2,289 UK adults, 75% of who claimed to have a mobile. Findings revealed that 26% of mobile customers have switched network/ supplier. There was a strong indication that the rise in switching in the last quarter was a reflection of confusion over re-branding and rise in mobile penetration. One in ten (9%) of mobile customers were found to have switched network at least twice since owning a mobile, including customers switching back to a previous operator. Men (37%) and younger mobile users, 15-34 (38%) were found to be most likely to switch multiple times, which included returning to a previously used network. Although the switching differed according to type of package, 36% of contract customers had switched multiple times compared to those on prepay (33%). 24% of customers had switched once in the last 6 months, compared to three in ten (28%) of those that had switched twice and 43% that had switched more than 3 times. The same survey also revealed that in November 2002, 34% of consumers stated that they had switched mobile network, which was believed to have a result of customer confusion caused by the re-branding of O2 (formally BTCellent) and T-mobile (One2One). Yet this rise was temporary and soon returned to the previous level of 27%. In February 2003, 7% of T-mobile customers said that they had switched network having previously being with One2One, this was the same for O2 customers who had switched from BTCellnet. This accounted for 3% of all switchers who were confused by the re-branding during February. The current percentage of mobile consumers that have switched mobile network remains at 26%. When looking at multiple switching, two in ten (18%) of mobile customers had changed their network once, and seven out of ten claimed to have never switched network. CHAPTER 2: LITERATURE REVIEW This chapter will review all existing literature related to the mobile phone industry with a focus on customer switching habits and their surrounding elements such as consumer lifestyles, services themselves, competitor offerings and loyalty to help understand the research problem. This chapter will also review the contributions other researchers have made to the concepts of switching behaviour, yet it should be noted that literature on mobile phone choice is sparse and issues relating to why customers actually switch services remains unexplored in marketing literature which will be explored through this study. 2.1 Classification of Services There is no one single definition of services that is universally accepted, although many authors have attempted to define it. Yet very few products are 100% service or 100% tangible, they usually consist of a combination of both. Gronroos (1990) defines services as: â€Å"A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, takes place in interactions between the customers and the service employee and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems†. This illustrates the fact that services can take place through physical form, for example this project is concerned with customers switching network provider service (which is intangible) but to have that service to begin with, customers need to purchase a mobile phone, which is a tangible product. Therefore switching behaviour in such a situation may differ from switching a service, which is not integrated with hardware; this may be due to the fact that when physical products are also involved, the costs and risk of switching is different to when there is just a service alone. Brassington (2003) acknowledged that most products tend to have a combination of both physical goods and service e.g. purchasing a gas appliance; this would require the professional fitting service as well as purchasing of the appliance itself. Kotler (1997) also recognised that some services are a combination of both a service and a product and has incorporated this in his definition of services: â€Å"Any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.† This emphasises two key elements: 1. Intangibility A Service cannot be experience before it is purchased, 2. Lack of ownership there is no ownership in a pure service as there is no physical product involved. This is further illustrated in the Figure 1 below which illustrates Kotlers (1997) four categories of products, which are: 1. A pure service 2. A major service with accompanying minor goods/services 3. A tangible good with accompanying service 4. A pure tangible product New services are being introduced on a daily basis to satisfy and meet all customer needs from individual consumers to business consumers. The service industry comprises the majority of todays economy. In 2001, it represented 80 percent of the GDP of the USA (U.S Bureau of Economic Analysis). Keiningham et al (2003) said â€Å"there is a growing recognition among managers of the importance of measuring the share of business a customer conducts with a particular service provider (share-of-wallet) as opposed to simply repurchasing a product or service at some point in the future or continuing to keep a business relationship with a service provider†. This indicates the importance of retaining and maintaining customers and the importance of the relationship with them. Research carried out by Bitner (1990); Boulding at al, (1993) looked at service quality in service organisations, Crosby Evans and Cowles (1990); Crosby and Stephens (1987) researched relationship quality and Cronin and Taylor (1992) looked at overall satisfaction with regards to the issue of customer retention in service organisations. These researchers all agreed that service organisations could improve the likelihood of customers intention to remain with a particular service organisation, as it is these features that contribute to customer satisfaction and the growth of the organisation. The above studies all illustrated strategies relating to customer retention in services. Yet issues relating to why customers actually switch services remain unexplored in marketing literature. 2.2 Characteristics of Services When describing the main characteristics of a service, it can be depicted as being intangible, as a service has no physical dimension but can take place through a tangible product as is the case with mobile phones and network providers, as discussed earlier. A service can also be described using a tangible noun as Shostack (1987) exemplified that an ‘airline means transportation and a ‘hotel means lodging rental. Berry (1980) described a good as ‘an object, a device, a thing in comparison to a service which is ‘a deed, a performance, an effort. This further illustrates the fact that consumers cannot see, touch, hear, taste or smell a service; all they can do is experience the performance of the service as said by Carman and Uhl, (1973) and Sasser et. al, (1978) but, the experience may not be possible in all cases without some form of hardware in addition. Because services are delivered by individuals, each service experience will differ from another; as a result each purchaser will receive a different service experience. Additionally, when a consumer purchases a good, they own it, yet with a service the consumer only has temporary access or use of it, as the service is not owned, only the benefit of it is. Wyckham et al (1975) and Kotler (1986) defined this concept as ownership. 2.3 The Services Marketing Mix As previously discussed above, many features separate services from tangible products, yet the marketing principles remain the same for both. One particular difference is that there is close contact between individual employees from the supplier organisation and the customer themselves. Because of this, the traditional marketing mix needs to be re-evaluated in terms of the 7ps. Product: This refers to the features of the product or surrounding it, which in this case would be a good service or supplementary services surrounding it. These features should be benefits, which the customer would desire, and the surrounding features would be competing products performance. (Lovelock and Wirtz, 2004). Place and Time: Delivering a service to customers involves place, time of delivery and distribution channels used. Delivery can be done both physically and through electronic distribution channels according to the nature of the service being provided. Services can be delivered directly to customers or through intermediary firms, e.g. rental outlets. (Lovelock and Wirtz, 2004). Promotion and Education: these are three fold, firstly information and advice needs to be provided to customers, target customers need to be persuaded towards a product, and they need to be encouraged to take action. Service promotional communication are usually educational, informing potential customers of the benefits of the service, where and when to obtain it and how. These communications are delivered through individuals (sales people) or media (TV, radio, newspapers etc.). (Lovelock and Wirtz, 2004). Price and Other User Outlays: In services monetary values refer to rates, fees, admissions, charges, tuition, contributions, interest etc. (Gabbott and Hogg, 1997). Physical Environment: A firms service quality can be perceived through the appearance of buildings, landscaping, vehicles, interior furnishing, equipment, staff members, signs, printed materials and other visible cues. These are physical evidence and impact customer impressions. (Lovelock and Wirtz, 2004). Process: A service is delivered to a customer through a process, which is the method and actions in the service performance. Poor processes can result in slow and ineffective service and unsatisfied customers. Front line staff may also find it difficult to do their jobs well as a result of poor process, which can again lead to service failure. (Lovelock and Wirtz, 2004). People: Services tend to involve direct interaction between customers and firms employees. The experience of the interaction, for example talking to call centre staff, can influence the customers perceptions of service quality. The implication is that firms need to train and motivate their employees to ensure good service quality. (Lovelock and Wirtz, 2004). 2.4 Marketing in Services Image is often a key factor in differentiating a service from its competitors. Marketing is therefore important in service because it enables the customer to link an image with a brand. Examples of these can be seen on delivery vehicles, which are painted, hotel soap and shampoos etc. When consumers have no experience with a product, they tend to ‘trust a favoured or well-known brand name; therefore service marketers need to build a favourable brand image. Some consumer theorists have linked service quality with consumer behaviour intentions, in that the quality of the service will determine whether the consumer remains with that particular provider or defects to a competitor. When consumers perceive high service quality, the behavioural intentions will be positive, as they will remain with the service provider. In contrast, poor service quality will lead to the relationship with the customer weakening resulting in defection to a competitor. Financially the firm will benefit more by retaining customers through increasing service quality; this is demonstrated in the figure 2 below. The figure above shows that the more favourable a firms service quality is, the more likely the customer is to remain with the firm, benefiting the firm. But when the service quality is poor, the customer will show unfavourable behavioural intentions, which will result in defecting/ switching. This highlights that in order to prevent customers from switching and to enable the firm to continue making profits, the firm needs to retain customers through good service quality. Service firms and service marketers need to recognise the significance of these reasons as they can lead to negative effects on share and profitability as noted by Rust and Zahorik (1993). This can arise from negative word of mouth, which will in turn deter potential customers. These reasons can also help markets to plan their promotional campaigns according to the aspects that are causing customers to switch. As maintained by Reichheld and Sasser (1990) companies can boost profits by almost 100% by retaining just 5% more of their customers. 2.5 Marketing in the Mobile Phone Industry As the market becomes more competitive, firms will endeavour to maintain their market share by focusing on retaining their current customers. It can be said that recent competition amongst mobile phone networks has become aggressive, especially with all the competitive price plans and handsets on offer, which are being promoted by the networks. More recently a ‘camera wars are taking place between mobile brands as consumers are considering this an important feature when purchasing mobile phones, Marketing magazine (2004). When network 3 entered the market, they were able to encourage many consumers to switch mobile networks from their existing providers to 3. this was done using challenging and direct advertising comparing brand and product features with those of competing networks. Marketing magazine (2004). As a result of this, 3 were able to reach the one million-customer mark faster than any other network since launching. It is evident that mobile phone networks are being innovative in their marketing tactics in the aim of securing higher customer bases. Much of the marketing the mobile networks today to do this are directed towards consumer confusion tactics. Consumer confusion tactics are where consumers are provided with large amounts of decision-relevant information, in regards to mobiles, this is seen in the form of deals, discounts, leaflets, newspaper adds and television advertising line rentals from as little as 99p per month. Confusion marketing and overload aims to confuse consumers into a state of stress and frustration, resulting in information overload and sub-optimal decisions. Price confusion is the most common confusion marketing tactic used in the mobile telephone market today in order to assist companies to gain a competitive advantage. It has been found that this tactic of confusion marketing appears to work and confuses customers to such an extent that they end up being persuaded b y this marketing literature and the information overload that they are provided with that they purchase the plan that is sold to them without investigating it further as they feel that they have all the information that they need and have made an informed choice. Confusion usually arises from 3 main sources: i) Over choice of products and stores there are independent mobile phone shops opening up regularly, and new mobile phones are being introduced to the market every month. ii) Similarity of products all the price plans available are very similar in terms of price as well as network call charges. iii) Ambiguous, misleading or inadequate information conveyed through marketing communications For example, many retailers are offering line rental for 99p per month, what consumers are not aware of is that they have to pay the full line rental for the first six months and then they claim their cash back. But using confusion marketing can have adverse effects on consumers. The ‘information overload can cause consumers to shop around, which can reduce brand loyalty towards the firm. 2.6 Decision Making Process for Mobile Phones When customers purchase a product or service they go through a complex process of three stages: the pre purchase stage (decision to buy), the service encounter stage and the post purchase stage. This can be applied to the purchasing of mobile phones. The post purchase stage will determine the customers future intentions on whether or not to remain loyal to that service provider or to switch service. During the post purchase stage, customers evaluate service quality and their satisfaction/dissatisfaction with the service experience. This is done by comparing what was initially expected with what they perceived they received from a particular provider. If expectations are met, customers are likely to be satisfied and therefore more likely to make repeat purchases and remain loyal. If customer expectations are not met, customers may complain about poor service quality, suffer in silence or resort to switching service provider. It has become evident in recent years that customers no longer â€Å"suffer in silence† with bad service to the extent that they previously and if they experience service that they are not satisfied with then are more likely to switch in order to receive a better service/better value for their money. When considering the purchase process of mobile phones, again there are complex factors, which influence the decision the decision process which include both macro and microeconomic conditions, but it generally tends to follow the traditional buying process. When faced with the problem of whether or not to purchase a mobile phone, consumers will initially take part in an information search before choosing which one to buy. The consumers decision-making process is directed by preferences that the consumer has already formed regarding a particular brand. Beatty and Smith (1987) and Moorthy et al (1997) argue that this means the consumer is most likely to make a choice based on a limited information search and without evaluating fully all the alternative brands available. As indicated by Dhar and Wertenbroach (2000), limited information search and evaluation of alternatives can result in a situation where the consumers choice is driven by hedonic considerations. Utilitarian goods are co nsidered to be instrumental and functional whereas hedonic good are seen as being fun and exciting, but some goods can have both features, as stated by Barta and Ahtola (1990). With relation to mobile phones the choice has both utilitarian (e.g. communication, SMS, planning) and hedonic (e.g. games, music, camera) features. Wilska (2003) believes the younger the consumer gets, the more they value the hedonistic features in their mobile phones. The mobile phone market is a technology driven market, therefore products are created based on consumers possible future needs which tend to be hedonistic features. Riquelme (2001) explored the level of knowledge consumers have when choosing between different mobile phone brands. The study focused on main factors, which were: telephone features, connection fee, access cost, mobile-to-mobile phone rates, call rates and free calls), which respondents had to rate according to importance. Findings revealed that respondents with previous experience about products predicted their choices well, although they over-estimate the importance of features, cal rates and free calls and under-estimated the importance of the monthly access fee, mobile-to-mobile phone rates and the connection fee. 2.7 Customer Switching Behaviour There is no one clear definition of customer switching, due to the lack of research into this area, although very few authors have attempted to define it. According to Brassington (2003) customer switching refers to â€Å"consumers who are not loyal to any one brand of a particular product and switch between two or more brands within the category†. Switching behaviour has also been referred to as defection or customer exit (Hirschman, 1970; Stewart, 1994) and refers to a customers decision to stop purchasing a particular service or patronising the service firm completely as agued by Bolton and Bronkhurst (1995) and Boote, (1998). Yet it can be argued that this is not a valid definition of customer switching as this definition refers to the consumers behaviour as abandonment of the use of a product/service although, whereas switching is concerned with consumers using one product/service provider and then deciding to switch to another. Many models have attempted to portray customer switching behaviour in services yet they all imply that switching derives from a gradual dissolution of relationships as a result of multiple problems encountered over time as found by Bejou and Palmer (1998) and Hocutt (1998). 2.8 Causes for Dissatisfied Service and Switching Bitner et al (1994) has looked at the events that lead to satisfying and dissatisfying service encounters for customers from an employees point of view. Bitner et als (1994) study found that employees were inclined to describe the customers problems with external causes such as delivery system failures as the most prominent followed by problem customers. A small percentage of dissatisfactory incidents were classified as spontaneous negative employee behaviours such as rudeness or lack of attention. It was evident that the employees were biased in terms of not blaming themselves for failures. Past research associating customer and employee views on critical factors compelling customers to switch offers assorted assumptions. Schneider and Bowen (1985) and Schneider, Parkington, and Buxton (1980) found a strong relationship between employee and customer attitudes regarding service quality on the whole in the banking service. The results from their study contradicted those of a study carried out by Brown and Swartz (1989). Data was collected from patients based on experiences with their physicians and were compared to what physicians perceived of the experiences of their patients. Results showed large differences inversely associated to patient satisfaction in general. Thus researchers have different views regarding customer and employee attitudes on service quality. When considering switching in the financial service, Mintel International Group believes the critical factor causing consumers to switch providers is price. Price is a sensitive issue and one that is close to th e heart of customers so it is perceived that they may consider switching on the basis of this if they are not satisfied with the service they are receiving. But it can be concluded that the customers view holds greater value, as it is their opinion that brings in business for a firm. Bolton Brankhurst (1995) and McDougal (1996) have looked at customer switching behaviour in relation to complaints, which they believe leads up to the defection. They suggested, that this field should be further explored, as there is a lack of research that tries to investigate the correlations between the factors that influence service switching and those that influence complaints before switching. Complains are again another major area of concern. The first Customer Switching Behaviour for Mobile Networks Customer Switching Behaviour for Mobile Networks EXECUTIVE SUMMARY Consumers use services everyday, these ranges from taking the train or opening a bank account to talking on a mobile phone. Businesses also rely on a wide range of services on a daily basis, but on a much larger scale compared to consumers. However, customers are not always satisfied with a particular service that they maybe using and often resort to switching their service provider in order to resolve the issue or pursue better value from a less expensive service. The objective of this study is to investigate customer-switching behaviour in the mobile industry, why it takes place and what factors influence it. This topic area has been chosen, as customer switching and the mobile phone industry are contemporary and relevant to the present day and will continue to evolve overtime. Research has been undertaken using secondary and primary data collection methods. Secondary data provided a background to the mobile phone industry and an overview of customer switching behaviour in services. Primary data consisted of self administered questionnaires to a convenient sample of university students, this enabled data to be collected which would provide an idea of mobile phone users contemplation of switching and their understanding of why they believe they would switch from one service to another. Findings revealed that a majority of customer switching is due to high call and monthly charges and consumers trying to obtain more free minutes and texts. This contrasts with the literature and precious studies, which have found other reasons to cause customer switching, which illustrates how causes of switching differ in every industry according to the nature of the service. CHAPTER 1: INTRODUCTION 1.1 Project Aims The aim of this project is to determine the reasons as to why consumers switch from one mobile phone network to another? The research objectives that arise from the aim will therefore be: 1 To evaluate whether competitors offerings are causing consumers to switch from one network to another 2 To evaluate whether retail offerings are causing consumers to switch to gain a better deal 3 What actions of the service firms or their employees cause customers to switch from one service provider to another The research will be UK based geographically using a convenient sample of university students and will be done using both primary and secondary research methods. The research may help managers and researchers understand service switching from a customers perspective in the mobile phone industry and the switching drivers may provides answers as to what has influenced customer behaviour. The results of the research will be analysed to provide recommendations. The reason for choosing this topic area is that there appears to be a lack of research on customer switching behaviour in the mobile phone industry. This study aims to explore this topic are further. 1.2 Background on Mobile Phones Service Mobile phones service refers to a service whose customer base includes firms using mobile phones for business and customers using it for their personal use. Mobile phones have become substitutes for fixed telephone lines and have led to the decline in calls made from fixed telephone lines. The take up rate of mobile phones is constantly increasing and over the years the growth in the use of mobile phones has been dramatic. According to EMC mobile user numbers reached the 1.5 billion mark in June 2004 and is set to reach 2 billion by July 2006 and 2.45 billion by the end of 2009. (http://www.cellular.co.za, 2005) Mobile phones today are not solely used to make calls, additional value added services such as Short Messaging Service (SMS), Multimedia Messaging Service (MMS), radio, internet access and so on. This means that the benefits and use of mobile phones is also expanding, which is also contributing to industry growth. This has become a focus point for the various operators as intense competition has led to increasingly lower voice call prices. SMS was first used in 1992 and is currently the fastest growing communications technology in history. Worldwide, 135 billion text messages were sent person to person in the first quarter in 2004 (http://www.cellular.co.za, 2005). Retail revenues from voice and data services (including MMS, SMS) account for 79% of the total revenue of the four main UK mobile operators (Vodafone, O2, Orange and T-Mobile), which accounted for  £13.6 billion in revenues in 2003, (see appendix 1). CEPG Research Company conducted a study of the mobile telecommunications industry in 2002, in which findings showed that turnover had reached  £32 billion a year, with the sector contribution to GDP being  £19.4 billion (2.2%), (ofcom.org.uk/research/telecoms, 2005). The demand for mobile phones has never been so great as it has become a must have for people of all ages; consumers are constantly exchanging their outdated phones for the latest colour handsets. The popularity of mobile phones is immense and it is perceived that this interest in mobile phones will continue to grow over the next decade or so, as demand increases and new models and technology is introduced to mobile phones. 1.3 Mobile Phone Service Industry The mobile phone industry is one of the fastest growing sectors of the British economy, with the UK making up the second largest mobile market in Europe, with a share of 18% (Datamonitor, Nov 2004). This growth is due to factors such as changes in government policies towards communication (deregulation), economic growth and developments in information technology. The more recent growth has come from existing mobile phone users upgrading their handsets, which have led to mobile phone companies and network operators targeting first time buyers (Datamonitor, Nov 2004). Mobile phones are not only seen as a vital element for success in business but also as a much wanted item for social use. This is evident in the increasing number of individuals both young and old who now have at least one mobile phone. As indicated by an Oftel report, in Britain over one million people own a mobile phone instead of a fixed telephone line. 2.3 million UK residents live without a fixed line telephone at home. The popularity of the fixed line phone drastically declined after the mass introduction of mobile phones to the UK. It is worth noting however, that fixed phone line companies have not taken this lightly and have retaliated by introducing mobile phones linked to fixed home lines and companies such as BT setting up their own mobile networks i.e. BT until recently owned O2 and also offering special discounted rates to encourage customers to use their fixed lines. There are four main network providers in the UK; they are T-mobile, O2, Vodafone and Orange. In 2004 there were 342.43 million mobile subscribers, which is an increase of 8.54 percent from the previous year and a penetration rate of 87.63 percent. T-mobile UK accounted for 15.06 million subscribers, Orange UK had 13.75 million, O2 UK had 13.06 million and Vodafone UK had 12.98 million (mobile communications). Recently there have been changes in terms of ownership of the major mobile phone networks. T-mobile is now one of the three strategic growth areas of Deutsche Telekom, a German network provider and O2 is now owned by Spanish firm Telefonica. Orange was sold to German mobile phone network Mannesman, which was then taken over by Vodafone, who sold Orange to France Telecom. Orange has a strong network in the UK and overseas but recent management decisions by France Telecom have reversed their user growth and subscriber numbers, which has been partly due to customers switching to other networks. Customers can become concerned that, if their chosen network provider is owned by a firm overseas, their needs will not be met as well as they could by a UK owned provider. Additionally events such as these can contribute to switching behaviour through customer confusion, as found by Oftel (2003), where many consumers switched due to confusion over re-branding of the network. 1.4 Customer Switching Behaviour in the Mobile Phone Industry According to research by TNS Telecom Trak, consumers tend to use their handsets for about twenty months before upgrading to a new one. Telecommunications regulator OFTEL found that this is also the average amount of time that a majority of mobile phone users will stay with the same mobile provider for. Oftels research ascertained that 90% of consumers thought about changing their network when changing handsets. Oftel published a report in April 2003, which provided an overview of the key findings of trends in consumer behaviour in the mobile market based on a residential consumer survey conducted in February 2003. Research was carried out by Recom (Research in Communications) amongst a representative sample of 2,289 UK adults, 75% of who claimed to have a mobile. Findings revealed that 26% of mobile customers have switched network/ supplier. There was a strong indication that the rise in switching in the last quarter was a reflection of confusion over re-branding and rise in mobile penetration. One in ten (9%) of mobile customers were found to have switched network at least twice since owning a mobile, including customers switching back to a previous operator. Men (37%) and younger mobile users, 15-34 (38%) were found to be most likely to switch multiple times, which included returning to a previously used network. Although the switching differed according to type of package, 36% of contract customers had switched multiple times compared to those on prepay (33%). 24% of customers had switched once in the last 6 months, compared to three in ten (28%) of those that had switched twice and 43% that had switched more than 3 times. The same survey also revealed that in November 2002, 34% of consumers stated that they had switched mobile network, which was believed to have a result of customer confusion caused by the re-branding of O2 (formally BTCellent) and T-mobile (One2One). Yet this rise was temporary and soon returned to the previous level of 27%. In February 2003, 7% of T-mobile customers said that they had switched network having previously being with One2One, this was the same for O2 customers who had switched from BTCellnet. This accounted for 3% of all switchers who were confused by the re-branding during February. The current percentage of mobile consumers that have switched mobile network remains at 26%. When looking at multiple switching, two in ten (18%) of mobile customers had changed their network once, and seven out of ten claimed to have never switched network. CHAPTER 2: LITERATURE REVIEW This chapter will review all existing literature related to the mobile phone industry with a focus on customer switching habits and their surrounding elements such as consumer lifestyles, services themselves, competitor offerings and loyalty to help understand the research problem. This chapter will also review the contributions other researchers have made to the concepts of switching behaviour, yet it should be noted that literature on mobile phone choice is sparse and issues relating to why customers actually switch services remains unexplored in marketing literature which will be explored through this study. 2.1 Classification of Services There is no one single definition of services that is universally accepted, although many authors have attempted to define it. Yet very few products are 100% service or 100% tangible, they usually consist of a combination of both. Gronroos (1990) defines services as: â€Å"A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily, takes place in interactions between the customers and the service employee and/or physical resources or goods and/or systems of the service provider, which are provided as solutions to customer problems†. This illustrates the fact that services can take place through physical form, for example this project is concerned with customers switching network provider service (which is intangible) but to have that service to begin with, customers need to purchase a mobile phone, which is a tangible product. Therefore switching behaviour in such a situation may differ from switching a service, which is not integrated with hardware; this may be due to the fact that when physical products are also involved, the costs and risk of switching is different to when there is just a service alone. Brassington (2003) acknowledged that most products tend to have a combination of both physical goods and service e.g. purchasing a gas appliance; this would require the professional fitting service as well as purchasing of the appliance itself. Kotler (1997) also recognised that some services are a combination of both a service and a product and has incorporated this in his definition of services: â€Å"Any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.† This emphasises two key elements: 1. Intangibility A Service cannot be experience before it is purchased, 2. Lack of ownership there is no ownership in a pure service as there is no physical product involved. This is further illustrated in the Figure 1 below which illustrates Kotlers (1997) four categories of products, which are: 1. A pure service 2. A major service with accompanying minor goods/services 3. A tangible good with accompanying service 4. A pure tangible product New services are being introduced on a daily basis to satisfy and meet all customer needs from individual consumers to business consumers. The service industry comprises the majority of todays economy. In 2001, it represented 80 percent of the GDP of the USA (U.S Bureau of Economic Analysis). Keiningham et al (2003) said â€Å"there is a growing recognition among managers of the importance of measuring the share of business a customer conducts with a particular service provider (share-of-wallet) as opposed to simply repurchasing a product or service at some point in the future or continuing to keep a business relationship with a service provider†. This indicates the importance of retaining and maintaining customers and the importance of the relationship with them. Research carried out by Bitner (1990); Boulding at al, (1993) looked at service quality in service organisations, Crosby Evans and Cowles (1990); Crosby and Stephens (1987) researched relationship quality and Cronin and Taylor (1992) looked at overall satisfaction with regards to the issue of customer retention in service organisations. These researchers all agreed that service organisations could improve the likelihood of customers intention to remain with a particular service organisation, as it is these features that contribute to customer satisfaction and the growth of the organisation. The above studies all illustrated strategies relating to customer retention in services. Yet issues relating to why customers actually switch services remain unexplored in marketing literature. 2.2 Characteristics of Services When describing the main characteristics of a service, it can be depicted as being intangible, as a service has no physical dimension but can take place through a tangible product as is the case with mobile phones and network providers, as discussed earlier. A service can also be described using a tangible noun as Shostack (1987) exemplified that an ‘airline means transportation and a ‘hotel means lodging rental. Berry (1980) described a good as ‘an object, a device, a thing in comparison to a service which is ‘a deed, a performance, an effort. This further illustrates the fact that consumers cannot see, touch, hear, taste or smell a service; all they can do is experience the performance of the service as said by Carman and Uhl, (1973) and Sasser et. al, (1978) but, the experience may not be possible in all cases without some form of hardware in addition. Because services are delivered by individuals, each service experience will differ from another; as a result each purchaser will receive a different service experience. Additionally, when a consumer purchases a good, they own it, yet with a service the consumer only has temporary access or use of it, as the service is not owned, only the benefit of it is. Wyckham et al (1975) and Kotler (1986) defined this concept as ownership. 2.3 The Services Marketing Mix As previously discussed above, many features separate services from tangible products, yet the marketing principles remain the same for both. One particular difference is that there is close contact between individual employees from the supplier organisation and the customer themselves. Because of this, the traditional marketing mix needs to be re-evaluated in terms of the 7ps. Product: This refers to the features of the product or surrounding it, which in this case would be a good service or supplementary services surrounding it. These features should be benefits, which the customer would desire, and the surrounding features would be competing products performance. (Lovelock and Wirtz, 2004). Place and Time: Delivering a service to customers involves place, time of delivery and distribution channels used. Delivery can be done both physically and through electronic distribution channels according to the nature of the service being provided. Services can be delivered directly to customers or through intermediary firms, e.g. rental outlets. (Lovelock and Wirtz, 2004). Promotion and Education: these are three fold, firstly information and advice needs to be provided to customers, target customers need to be persuaded towards a product, and they need to be encouraged to take action. Service promotional communication are usually educational, informing potential customers of the benefits of the service, where and when to obtain it and how. These communications are delivered through individuals (sales people) or media (TV, radio, newspapers etc.). (Lovelock and Wirtz, 2004). Price and Other User Outlays: In services monetary values refer to rates, fees, admissions, charges, tuition, contributions, interest etc. (Gabbott and Hogg, 1997). Physical Environment: A firms service quality can be perceived through the appearance of buildings, landscaping, vehicles, interior furnishing, equipment, staff members, signs, printed materials and other visible cues. These are physical evidence and impact customer impressions. (Lovelock and Wirtz, 2004). Process: A service is delivered to a customer through a process, which is the method and actions in the service performance. Poor processes can result in slow and ineffective service and unsatisfied customers. Front line staff may also find it difficult to do their jobs well as a result of poor process, which can again lead to service failure. (Lovelock and Wirtz, 2004). People: Services tend to involve direct interaction between customers and firms employees. The experience of the interaction, for example talking to call centre staff, can influence the customers perceptions of service quality. The implication is that firms need to train and motivate their employees to ensure good service quality. (Lovelock and Wirtz, 2004). 2.4 Marketing in Services Image is often a key factor in differentiating a service from its competitors. Marketing is therefore important in service because it enables the customer to link an image with a brand. Examples of these can be seen on delivery vehicles, which are painted, hotel soap and shampoos etc. When consumers have no experience with a product, they tend to ‘trust a favoured or well-known brand name; therefore service marketers need to build a favourable brand image. Some consumer theorists have linked service quality with consumer behaviour intentions, in that the quality of the service will determine whether the consumer remains with that particular provider or defects to a competitor. When consumers perceive high service quality, the behavioural intentions will be positive, as they will remain with the service provider. In contrast, poor service quality will lead to the relationship with the customer weakening resulting in defection to a competitor. Financially the firm will benefit more by retaining customers through increasing service quality; this is demonstrated in the figure 2 below. The figure above shows that the more favourable a firms service quality is, the more likely the customer is to remain with the firm, benefiting the firm. But when the service quality is poor, the customer will show unfavourable behavioural intentions, which will result in defecting/ switching. This highlights that in order to prevent customers from switching and to enable the firm to continue making profits, the firm needs to retain customers through good service quality. Service firms and service marketers need to recognise the significance of these reasons as they can lead to negative effects on share and profitability as noted by Rust and Zahorik (1993). This can arise from negative word of mouth, which will in turn deter potential customers. These reasons can also help markets to plan their promotional campaigns according to the aspects that are causing customers to switch. As maintained by Reichheld and Sasser (1990) companies can boost profits by almost 100% by retaining just 5% more of their customers. 2.5 Marketing in the Mobile Phone Industry As the market becomes more competitive, firms will endeavour to maintain their market share by focusing on retaining their current customers. It can be said that recent competition amongst mobile phone networks has become aggressive, especially with all the competitive price plans and handsets on offer, which are being promoted by the networks. More recently a ‘camera wars are taking place between mobile brands as consumers are considering this an important feature when purchasing mobile phones, Marketing magazine (2004). When network 3 entered the market, they were able to encourage many consumers to switch mobile networks from their existing providers to 3. this was done using challenging and direct advertising comparing brand and product features with those of competing networks. Marketing magazine (2004). As a result of this, 3 were able to reach the one million-customer mark faster than any other network since launching. It is evident that mobile phone networks are being innovative in their marketing tactics in the aim of securing higher customer bases. Much of the marketing the mobile networks today to do this are directed towards consumer confusion tactics. Consumer confusion tactics are where consumers are provided with large amounts of decision-relevant information, in regards to mobiles, this is seen in the form of deals, discounts, leaflets, newspaper adds and television advertising line rentals from as little as 99p per month. Confusion marketing and overload aims to confuse consumers into a state of stress and frustration, resulting in information overload and sub-optimal decisions. Price confusion is the most common confusion marketing tactic used in the mobile telephone market today in order to assist companies to gain a competitive advantage. It has been found that this tactic of confusion marketing appears to work and confuses customers to such an extent that they end up being persuaded b y this marketing literature and the information overload that they are provided with that they purchase the plan that is sold to them without investigating it further as they feel that they have all the information that they need and have made an informed choice. Confusion usually arises from 3 main sources: i) Over choice of products and stores there are independent mobile phone shops opening up regularly, and new mobile phones are being introduced to the market every month. ii) Similarity of products all the price plans available are very similar in terms of price as well as network call charges. iii) Ambiguous, misleading or inadequate information conveyed through marketing communications For example, many retailers are offering line rental for 99p per month, what consumers are not aware of is that they have to pay the full line rental for the first six months and then they claim their cash back. But using confusion marketing can have adverse effects on consumers. The ‘information overload can cause consumers to shop around, which can reduce brand loyalty towards the firm. 2.6 Decision Making Process for Mobile Phones When customers purchase a product or service they go through a complex process of three stages: the pre purchase stage (decision to buy), the service encounter stage and the post purchase stage. This can be applied to the purchasing of mobile phones. The post purchase stage will determine the customers future intentions on whether or not to remain loyal to that service provider or to switch service. During the post purchase stage, customers evaluate service quality and their satisfaction/dissatisfaction with the service experience. This is done by comparing what was initially expected with what they perceived they received from a particular provider. If expectations are met, customers are likely to be satisfied and therefore more likely to make repeat purchases and remain loyal. If customer expectations are not met, customers may complain about poor service quality, suffer in silence or resort to switching service provider. It has become evident in recent years that customers no longer â€Å"suffer in silence† with bad service to the extent that they previously and if they experience service that they are not satisfied with then are more likely to switch in order to receive a better service/better value for their money. When considering the purchase process of mobile phones, again there are complex factors, which influence the decision the decision process which include both macro and microeconomic conditions, but it generally tends to follow the traditional buying process. When faced with the problem of whether or not to purchase a mobile phone, consumers will initially take part in an information search before choosing which one to buy. The consumers decision-making process is directed by preferences that the consumer has already formed regarding a particular brand. Beatty and Smith (1987) and Moorthy et al (1997) argue that this means the consumer is most likely to make a choice based on a limited information search and without evaluating fully all the alternative brands available. As indicated by Dhar and Wertenbroach (2000), limited information search and evaluation of alternatives can result in a situation where the consumers choice is driven by hedonic considerations. Utilitarian goods are co nsidered to be instrumental and functional whereas hedonic good are seen as being fun and exciting, but some goods can have both features, as stated by Barta and Ahtola (1990). With relation to mobile phones the choice has both utilitarian (e.g. communication, SMS, planning) and hedonic (e.g. games, music, camera) features. Wilska (2003) believes the younger the consumer gets, the more they value the hedonistic features in their mobile phones. The mobile phone market is a technology driven market, therefore products are created based on consumers possible future needs which tend to be hedonistic features. Riquelme (2001) explored the level of knowledge consumers have when choosing between different mobile phone brands. The study focused on main factors, which were: telephone features, connection fee, access cost, mobile-to-mobile phone rates, call rates and free calls), which respondents had to rate according to importance. Findings revealed that respondents with previous experience about products predicted their choices well, although they over-estimate the importance of features, cal rates and free calls and under-estimated the importance of the monthly access fee, mobile-to-mobile phone rates and the connection fee. 2.7 Customer Switching Behaviour There is no one clear definition of customer switching, due to the lack of research into this area, although very few authors have attempted to define it. According to Brassington (2003) customer switching refers to â€Å"consumers who are not loyal to any one brand of a particular product and switch between two or more brands within the category†. Switching behaviour has also been referred to as defection or customer exit (Hirschman, 1970; Stewart, 1994) and refers to a customers decision to stop purchasing a particular service or patronising the service firm completely as agued by Bolton and Bronkhurst (1995) and Boote, (1998). Yet it can be argued that this is not a valid definition of customer switching as this definition refers to the consumers behaviour as abandonment of the use of a product/service although, whereas switching is concerned with consumers using one product/service provider and then deciding to switch to another. Many models have attempted to portray customer switching behaviour in services yet they all imply that switching derives from a gradual dissolution of relationships as a result of multiple problems encountered over time as found by Bejou and Palmer (1998) and Hocutt (1998). 2.8 Causes for Dissatisfied Service and Switching Bitner et al (1994) has looked at the events that lead to satisfying and dissatisfying service encounters for customers from an employees point of view. Bitner et als (1994) study found that employees were inclined to describe the customers problems with external causes such as delivery system failures as the most prominent followed by problem customers. A small percentage of dissatisfactory incidents were classified as spontaneous negative employee behaviours such as rudeness or lack of attention. It was evident that the employees were biased in terms of not blaming themselves for failures. Past research associating customer and employee views on critical factors compelling customers to switch offers assorted assumptions. Schneider and Bowen (1985) and Schneider, Parkington, and Buxton (1980) found a strong relationship between employee and customer attitudes regarding service quality on the whole in the banking service. The results from their study contradicted those of a study carried out by Brown and Swartz (1989). Data was collected from patients based on experiences with their physicians and were compared to what physicians perceived of the experiences of their patients. Results showed large differences inversely associated to patient satisfaction in general. Thus researchers have different views regarding customer and employee attitudes on service quality. When considering switching in the financial service, Mintel International Group believes the critical factor causing consumers to switch providers is price. Price is a sensitive issue and one that is close to th e heart of customers so it is perceived that they may consider switching on the basis of this if they are not satisfied with the service they are receiving. But it can be concluded that the customers view holds greater value, as it is their opinion that brings in business for a firm. Bolton Brankhurst (1995) and McDougal (1996) have looked at customer switching behaviour in relation to complaints, which they believe leads up to the defection. They suggested, that this field should be further explored, as there is a lack of research that tries to investigate the correlations between the factors that influence service switching and those that influence complaints before switching. Complains are again another major area of concern. The first