Network effects, Customer Satisfaction and Recommendation on the Mobile Phone Market
AbstractOn mobile phone markets that have reached the maturity stage, customer recommendation becomes a critical focus for operators to attract subscribers from rival operators. Referral propensity is also an indicator of subscriber satisfaction and loyalty. The aim of this paper is to examine the factors that influence customer recommendation. Precisely, we want to know whether referral propensity is more driven by supply-side effects (i.e. characteristics of mobile services) or demand-side effects (i.e. network effects). We use data from French subscriber surveys. The main findings are that referrals depend primarily on supply-side effects: operators’ brand image, the price and quality of services, and customer relations. Price, however, is considered to be a less significant factor than the quality of service when it comes to recommending an operator. Also, information on services and the variety of offerings available, as well as network effects, do not seem to influence referral propensity.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS in its series Economics Working Paper Archive (University of Rennes 1 & University of Caen) with number 201242.
Date of creation: Dec 2012
Date of revision:
Contact details of provider:
Postal: CREM (UMR CNRS 6211) – Faculty of Economics, 7 place Hoche, 35065 RENNES Cedex
Phone: 02 23 23 35 47
Fax: (33) 2 23 23 35 99
Web page: http://crem.univ-rennes1.fr/
More information through EDIRC
Postal: CREM (UMR CNRS 6211) - Faculty of Economics, 7 place Hoche, 35065 Rennes Cedex - France
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-22 (All new papers)
- NEP-COM-2012-12-22 (Industrial Competition)
- NEP-ICT-2012-12-22 (Information & Communication Technologies)
- NEP-MKT-2012-12-22 (Marketing)
- NEP-NET-2012-12-22 (Network Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992.
"A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades,"
Journal of Political Economy,
University of Chicago Press, vol. 100(5), pages 992-1026, October.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 2010. "A theory of Fads, Fashion, Custom and cultural change as informational Cascades," Levine's Working Paper Archive 1193, David K. Levine.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
- Banerjee, Abhijit V, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 797-817, August.
- Eshghi, Abdolreza & Haughton, Dominique & Topi, Heikki, 2007. "Determinants of customer loyalty in the wireless telecommunications industry," Telecommunications Policy, Elsevier, vol. 31(2), pages 93-106, March.
- Richard Williams, 2006. "Generalized ordered logit/partial proportional odds models for ordinal dependent variables," Stata Journal, StataCorp LP, vol. 6(1), pages 58-82, March.
- Daniel Birke & G. Swann, 2006. "Network effects and the choice of mobile phone operator," Journal of Evolutionary Economics, Springer, vol. 16(1), pages 65-84, April.
- Charles C. Moul, 2007. "Measuring Word of Mouth's Impact on Theatrical Movie Admissions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(4), pages 859-892, December.
- Gerpott, Torsten J. & Rams, Wolfgang & Schindler, Andreas, 2001. "Customer retention, loyalty, and satisfaction in the German mobile cellular telecommunications market," Telecommunications Policy, Elsevier, vol. 25(4), pages 249-269, May.
- Kim, Hee-Su & Kwon, Namhoon, 2003. "The advantage of network size in acquiring new subscribers: a conditional logit analysis of the Korean mobile telephony market," Information Economics and Policy, Elsevier, vol. 15(1), pages 17-33, March.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Hoernig, Steffen & Inderst, Roman & Valletti, Tommaso, 2010.
"Calling Circles: Network Competition with Non-Uniform Calling Patterns,"
CEPR Discussion Papers
8114, C.E.P.R. Discussion Papers.
- Steffen Hoernig & Roman Inderst & Tommaso Valletti, 2011. "Calling Circles: Network Competition with Non-Uniform Calling Patterns," CEIS Research Paper 206, Tor Vergata University, CEIS, revised 04 Jul 2011.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CODA-POIREY Hélène).
If references are entirely missing, you can add them using this form.