An assessment of factors affecting quality customer care in the Telkom Industry - A survey of Telkom Kenya

Contents

Declaration

Abstract

Abbreviations

DefinitionofTerms

CHAPTER ONE
1.0 Introduction
1.2 Statements of the Problem
1.3 Objectives of the study
1.3.1 General Objectives
1.3.2 Specific Objectives
1.4 Research Questions
1.5 Justification of the Study
1.6 Significance of the Study
1.7 Limitation of the study
1.8 Scope of the Study

CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
2.1.2 Conceptual framework
2.2 Theoretical Review Framework
2.2.1 Customer care strategy Development
2.2.2 Service Quality Model
2.2.3 Customer care strategy Development
2.2.4 Pillars of the 5P's Service Quality Model
2.4 Critique review
2.5 Empirical review framework
2.5.1 Related Theories and Previous Studies
2.5.2 Develop people to deliver service quality
2.5.3 Total Quality Service
2.5.4 Agility and timeless access to company product and services
2.5.5 Accessible Customer care centres
2.5.5 Customer care policy guidelines framework
2.6 Knowledge Gaps

CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research design
3.3 Research Design Justification
3.4 Target population
3.5 Sample procedures and Sample size
3.6 Data collection and Survey instrument
3.7 Data Analysis and presentation
3.8 Pilot study

CHAPTER FOUR
4.0 DATA ANALYSIS, PRESENTATION AND INTERPRETATION
4.1. Response rate analysis
4.2. Quantitative analysis
4.2.1 Customer care training
4.2.2. Strategic Location
4.2.3. Customer care policy
4.2.4. Agility Access to Products
4.3. Qualitative analysis

CHAPTER FIVE: FINDINGS, CONCLUSIONS AND COMMENDATIONS
5.1 Summary of Findings
5.2 Answers to research questions
5.3 Conclusion
5.4 Recommendations
5.4 Suggestions for further research

REFERENCES

APPENDIX

APPENDIX

QUESTIONNAIRES

ABSTRACT

The purpose of the study was to examine factors affecting quality customer care service in Telkom Kenya: a case study of Telkom Kenya, specific objectives are to determine how staff training, to establish how accessible centres, to find out how policies and guideline, to examine how agility supply chain of goods and service affect quality customer care services in the Telkom Kenya. It comes with indepentant variables such as customer care training, accessible centres, development of proper customer care policies and guideline, agility supply chain management of products and services.

The problem statement Telkom Kenya lost most of their customers to their competitors mainly due to poor customer service provision by the organisation, staff not having match needed customer care skills and trained customer care knowledge, lack of proper organisation customer care policies and guidance, poor agility supply chain management of its core products and services hence poor supply chain and timeless supply operation, also lack of strategic business customer care location on a decentralized business system for easy accessibility by its clients. Out of these Telkom Kenya has lose its market share to its competitors like Safaricom , Zain and reduce its organisational performance and poor end customer satisfaction in the market hence narrow its margins and lose of customers.

The scope of the study focused on Telkom Kenya, Head Office, Park side Towers along Mombasa Road in Nairobi. The target population will include the management, employees and the customers. The focus was on a selected sample of customers and employees seeking their opinion and views on the issues that influence quality service. The research design used in this study was quantitative. The sample size chosen was 9.5% of the population. The design was appropriate because the problem was specific and well defined with homogenous strata. Data collection was done using a structured questionnaire and analyses with the help the computer program called statistical package for social scientists (SPSS ver.17).

The limitation of the study were sampled population were unwilling to provide most relevant information to the researcher, the study utilized some of the qualitative data whose quality and originality cannot be ascertained .lastly the shortage of literature in the field of quality customer care was mitigated upon through increased study time and visits to public libraries including parastatals and state universities.

The finding on the study were that staff training, customer care policies and guidelines, strategic customer care location,agile supply chain supply of products and services are equally significant in improving service quality delivery hence customer satisfaction and organizational performance. Service industry plays like Telkom Kenya was to benefit from the finding as they can use the result of the study to improve organisational performance. The telecommunication service industry stakeholders will benefit in that it will formulate policies that guidelines the service industry and set standard to benefit industry customers. Researcher and scholars will benefit from the study, as they will use the findings of the study as a source reference.

ABBREVIATIONS

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DEFINITION OF TERMS

Customer Services- is a systematic process of effectively dynamic caring client needs and wants (letro,2009).

Customer satisfaction- is a measure of how product and services supplied by organization to meet customer expectation (Joan, 2004).

Value- as a comparison between what consumers get and what they give (Zeithaml et al,2008).

Marketing -Process of identifying, anticipating and satisfying consumer requirement profitably(Aquilano,2001).

Training - is the process of giving out skills and knowledge in the market to gain competitive edge (Roland,2007).

Service - is a customer value that has no tangible substance but has tangible value that a customer derives from it (Kotler, 2004).

Data Source -The individual or institution from which the evaluation raw data are collected (Prahalnd, 2000)

Quantitative data – numeric information that is subject to statistical analysis (Howe, 2010)

Qualitative data – text-based information that provides descriptive details, often collected from interviews, focus groups, or observations (Jacob, 2007)

Quality - is whatever customers expect to be and what they say it is (Sorrensen ,2009)

CHAPTER ONE

1.0 Introduction

1.1 Background of the Study.

A service is a customer value that has no tangible substance but has tangible value that a customer derives from it (Kotler,2004).Unlike goods, services are those separately identifiable but intangible activities that provide want-satisfaction, and that are not, of necessity, tied to, or inextricable from, the sale of a product or another service. It can as well be defined as an activity of benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything (William, 2007).

Services marketing face a number of distinct problems, and as a consequence, the approach adopted must be varied, and particular marketing practices developed. Services have the following characteristics which make them distinctive from the marketing of goods; intangible, inseparable, heterogeneous, perishable and transferable making it difficult to determine the quality standard of the service provided. A customer must therefore, be convinced beyond doubt that the service is of standard quality (Sureshchander, 2002).

Customer service quality is a task that involves the interaction with customers in person by telecommunications, customers or by mail (Adrian, 2005). It is designed, performed and communicated with two goals in mind: Operational efficiency and Customer satisfaction. Quality customer service is seen as how the clients are treated within an organization and the impact when a customer receives a service hence determines the future of the business (Parasuraman, 2004). Customer service can be defined as giving a customer what he needs, when he wants it (Silvestro, 2000). Excellent customer service is the process by which an organization delivers its services or products in a way that allows the customer to access them in the most efficient, fair, cost effective and humanly satisfying and pleasurable manner possible(Hazlett,2006).

Customer services are processes, not a set of actions that might include greeting the customer, smiling, asking if you can help (Letro, 2008). It enables the company to increase customers receive high quality service through all channels before and after sale. A company creates its own image to the public according to the way it receives handles and discharges its customer. In developing customer care, proper customer complaint should be established. This is an important tool and challenging task which requires participation and commitment of all staff.

Telkom Wireless Kenya entered services industry in the year 2007 and was officially launched in the month of January. It codes starts with 020 giving Kenya an opportunity to fully appreciate the time potential of mobile telephone, creating an environment that stimulates innovation for the employees’ values which include simplicity, assurance, understanding and clarity. However, Telkom Wireless has faced competition from Celtel and Safaricom which have become more focused (CCK, 2005).

This has consequently made Telkom to loose many of its customers. As a result, the number of customer complaints has increased with many records per month (CCK, 2009). There are currently three operators who offer telephone services in Kenya, two of them being mobile phone operators i.e. Safaricom Kenya, Zain Ltd and Yu Mobile.

Telkom Kenya, being Kenya’s leading telephone provider was created in 1997 as a fully owned subsidiary of Telkom Kenya. In May 2007, Vodafone Group acquired a 40 % stake and management responsibility for the company leaving Telkom Kenya with 60% shareholding. Its success is attributed to its customer service through a customer care department which started in 1997 (CCK, 2005). It has over 500 employees with several retail shops countrywide. Five of which are located in Nairobi and the rest in Mombasa and Kisumu , in June 2011 Telkom lunch a 3G network access on mobile application hence being as per with reveal Safaricom ltd in mobile internet service. It also has a countrywide dealer network to handle distribution and selling of Telkom Wireless services and products (CCK, 2002).

The company as a whole is divided into several departments. The customer care department provides services to the subscribers. Providing right answers to the customers and giving good impression. Generally, it answers and fulfils the customers’ expectation. Marketing department anticipates, identifies and satisfies customers’ needs. It also defines and implements the firm’s communications strategy. Sales department develops sales through all distribution channels. Technical department builds, operates and maintains the firm’s network.

1.2 Statements of the Problem

Specialized Telecommunication institution like Telkom Kenya are facing increasing challenges brought on by the effect of globalization, communication market liberalization and the vast opportunities being created by information technology. This challenge requires Telkom Kenya to keep pace with the rapidly changing technological and business environment, one that is heavily influenced by events outside the control of these institutions. But Telkom Kenya most continuously adapted product taste and preference improvement, marketing-oriented of its products, product differential and not having well structured customer care policies and guidelines, human resource department employment of untrained staffs hence unskilled, invest more in production and not looking at the end customer satisfaction and needs such that these became challenges confronting Telkom Kenya ltd. Increasable competitive telecommunication market squeeze operating margins, thereby requiring vigilant customer care service operating efficiently, growing of market share and customer retention. Like many other Telecommunication companies Telkom Kenya was set to spur telecommunication and communication growth through investment in Telecommunication sector that creates jobs and reduce poverty hence social-economic progress (CCK, 2010).

Despite such opportunity for long stay in the market ,early starting on operation Telkom Kenya service performance remained poor with a decline in their market share dropping of 49% and customer volume also dropping by 45% since its inception hence decline in margins and being the fourth ranked Telecommunication company by market share and customer volume (CCK,2011) The has been caused by poor customer service provision by the organisation due to staff not having match needed customer care skills and trained customer care knowledge, lack of proper organisation customer care policies and guidance, poor supply chain management of its core products and services hence poor agility of supply and timeless operation, also lack of strategic business location on a decentralized business system for easy accessibility by its clients. Out of these Telkom Kenya has lose its market share to its competitors like Safaricom, Zain and reduce its performance in the market hence narrow its margins(CCK,2010).

1.3 Objectives of the study

1.3.1 General Objectives

The general objective was to assess the factors that affecting quality customer care services in Telkom Kenya.

1.3.2 Specific Objectives

i. To determine how staff training affects quality customer care services
ii. To establish how accessible centres affect quality customer care services
iii. To find out how policies and guidelines affects quality customer care services
iv. To examine how agility supply chain affect quality customer care services.

1.4 Research Questions

i. How does staff training affect quality customer care services?
ii. How does an accessible centre affect quality customer care services?
iii. How does policies and guidelines affect quality customer care services?
iv. How does agility supply chain affect service quality delivery?

1.5 Justification of the Study

Despite the fact that Telkom Kenya was the first telecommunication company to be established before Safaricom, Zain and Yu Mobile in the industry, it has remained the most less competitive, poor organisation performance with its poor provision of its services, poor customer relation, poor customer service (CCK, 2010).The market shares of Telkom Kenya has reduced by 47% compared to its competitors Safaricom and Zain whose market shares have gained by 60% and 34% respectively (CCK, 2009).This provoked the researcher to do a study on Telkom Kenya customer care in order to look into, establish and study the on the an investigation of factors affecting quality customer care services in the Telkom Kenya Ltd .Also other studies done by scholar’s lefts some gaps by not bring out clearly the main causes, and relation between of quality service and customer satisfaction hence the study gap, customer perception and organizational performance ,employees altitude ,association and customer care skills towards customer and organizational performance ,product-oriented end approach to the market and customer-oriented end approach to the market. The above mentioned scholars have also concentrated their studies in the developed countries like India, Singapore and this leaves a gap for the author to carry out the same in a developing country like Kenya. In particular, Grönroos (2008), (Gale, 2007), Munyiri (2002), Okeri (2006) and Ummer (2008) have carried out studies customer care on parastatals but did not focus on quality customer service provision in the service industry like Telkom Kenya. With such gaps identified, this study assess the factors that have affected service quality delivery to customer service at Telkom Kenya leading the parastatal not to be fully successful or barely less competitive and its profit margin shrinking (CCK,2010). It is against this background and study that has inspired researcher aims to find out the factors affecting service quality delivery to customer in the service industry, also the gaps left by scholars who have not brought out clearly the main causes of quality customer service failures or slow-downs. With such gaps identified, this study examined the factors that affects service quality to customer in the service industry case being Telkom Kenya that was leading the parastatal not to be fully perform and make loss in their margins.

1.6 Significance of the Study

To the Telkom Kenya the study will help top management to come up with customer care policies, procedure and guidelines to understand factors affecting service quality delivery in the service industry. Especially to the junior staff customer care training, knowledge will be added to their experience hence understand the customer care operation well. The study can also be of significance to the policy makers of the country in understanding how quality services should be provided to the customer as well as keeping in pace with the competition. Finally, the study can be expected to add to the body of knowledge and scholarly fields of both quality and marketing in terms of findings and theoretical review.

1.7 Limitation of the study

The major limitation identify is that employees and customers were unwilling to provide the most relevant information and also reluctant to give out information for the fear that the information might be linked to their competitors. This limitation was taken care of through provision of an introductory letter and carefully talking to employees and customers to assure them of the report confidentiality. Secondly, the study utilized some qualitative data whose quality which was complex to analyse. To overcome this problem, the field staff used official documents that are recognised by both Telkom staff and their customers. Lastly the shortage of literature in the field of quality customer care was mitigated upon through increased study time and visits to public libraries including parastatals and state universities.

1.8 Scope of the Study.

The study focused on Telkom Kenya, Head Office, Park side Towers along Mombasa Road in Nairobi. The target population included the management, the customers and the employees who are both permanent and casual .The focus was on a selected sample of customers and employees to get their opinion and views on the factors affecting service quality delivery on customer in the service industry case of Telkom Kenya Ltd.

CHAPTER TWO LITERATURE REVIEW

2.1 Introduction

This chapter presents a review of literature pertinent to the study as presented by various researchers, scholars, analysts and authors. First the theoretical review of the study will provided. Then, empirical review on how factors affecting service quality delivery to consumers in the service industry. Lastly, the link between employee customer care training, customer centres accessibility, agility of product access, employee performance and organisation performance will be reviewed.

2.1.1 Conceptual framework.

The conceptual framework of this study was based on the examining factors as Customer care training, accessible customer care centers, customer care policies, agility access to product and services which are the independent variable. Customer care training the company needs to train its employees on effective management of customer service quality to enable all staff to be at a position to offer effective and efficient services to customers (Beardwell et al, 2004). “The company JIT delivery of product and service create reliability hence enhance effective management of Customer service quality” (Kevin, 2005). Therefore, customers should be made aware if the goods will not be available and create good communication systems which provide them with forums for expressing dissatisfaction.Business strategically located away provide some competitive advantage although have some disadvantages. Poor choice of location results in excessive transport costs, shortage of qualified personnel and inadequate supplies of raw materials. These enable accessibility of goods and services as quickly as possible.

Defines a policy is a deliberate plan of action to guide decisions and achieve rational outcome(s) . The company should come up with company policy guidelines that would enhance effective management of Customer service quality (Paquette,2008).

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Fig 1.2 Conceptual Frameworks

Source: Researcher Conceptualisation, (2012)

2.2 Theoretical Review Framework

2.2.1 Customer care strategy Development.

According to this perspective, customers buy products and or services for basically the same reason receive a service that creates value for them. The consequence of such logic is that companies should rethink their business logics to make them more service-oriented. The adoption of a service-logic implies focusing on how to provide benefits to customers (with both goods and services), rather than focusing on adding services to

the current market offerings. However, being a strategic decision, the adoption of a service-logic should be based on a careful assessment of the customers’ purchase logic (Grönroos ,2008).

Customers may not necessarily make an assessment of the benefits that products and services can generate for them (value in use) but, rather, consider value as embedded (value in exchange) in the resources (goods and services) they buy. If that is the case and if the customers’ mindset cannot be changed, than approaching customers with service logic won’t probably be rewarding Grönroos (2008).

Observed that customer guiding principle will be concerned with such specific matters as; developing customer care policies, practices and guidelines that support the achievement of business goals: of providing customer expected needs, training staffs on customer care services hence high staff customer service performance; maintain competitive edge in quality service provision Drucker (2007).

Similarly, Payne (2005) concluded that services are increasingly important area of the world economy and now account for more employment than the manufacturing sector. There are a number of reasons why services marketing is more important today than in the past; firstly, rapid growth of world population of about 12% of the total population, particularly in the less developed countries China being the leading with 2.5 billion people all requiring variety services, secondly, the growth of services sector in advanced industrial societies.

2.2.3 Customer Service quality

Service quality is a significant basis which customers use for differentiating between competing services, second only to market share in the PIMS research (Gale, 2007). Relative quality is a key contributor to bottom line profit performance. Quality can only be defined by customers. It occurs where a firm supplies of products to a specification that satisfies their needs (Payne, 2008). Customer expectations serve as standards against which subsequent service experiences are compared; when service performance falls short of customer expectations, dissatisfaction occurs. There are three ways firms can gain from improving their quality of service, higher sales revenue and improved marketing effectiveness brought about by improved customer retention, positive word of mouth recommendations and the ability to increase prices, wide profit margin due to increased market share and as a result sales volume increases and the organisation enjoys the economies of scale, Improved productivity and the reduced costs because there is less rework, higher employee morale and lower employee turnover, Gronroos (2009).

Figure 2.2 A model of quality customer service training on technical and functional.

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The model suggests that the quality of a given service is the outcome of an evaluation process where consumers compare what they expected to receive with what they perceive that they actually received. Consumer expectations are influenced by marketing mix activities, external traditions, ideology and word of mouth communications. Gronroos (2004) also suggests previous experience with the service will influence expectations.

Gronroos (2002) suggested there are two principal components of quality, technical and functional, with a third, image, acting as a mediating influence. One is the technical quality training is what the customer is left with, when the production process is finished. For example in higher education this would be perceived as the level of attainment and understanding achieved at the end of the course. This can be much more easily measured by the consumer second is functional quality training is on the other hand, is more difficult to measure objectively because it involves an evaluation of how the consumer receives the technical quality in the interactions between customer and service provider and other customers.

Gronroos (2004) suggestion that service quality is dependent in both what you receive and how you receive it emphasizes the importance of service interactions, contact employees and managing in the service experience.

Gronroos (2008) suggests that both expectations and perceptions are affected by the consumer’s view of the company and by its image. If a consumer has a positive image of a university or a lecturer but has a negative experience, for example a rather confused lecturer, the consumer may still perceive the service to be satisfactory because he or she will find excuses for the negative experience.

Figure 2.3 Internal service quality models (Frost and Kumar, 2000)

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The authors have developed an internal service quality model based on the concept of GAP model (Parasuraman, 2005). The model (Figure 2.2) evaluated the dimensions, and their relationships, that determine service quality among internal customers (front-line staff) and internal suppliers (support staff) within a large service organization. The internal gap 1 shows the difference in support staff’s perception (internal supplier) of front-line staff’s expectation (internal customers). Internal gap 2 is the significant difference between service quality specifications and the service actually; customer value and customer satisfaction delivered resulting in an internal service performance gap.

2.2.4 Pillars of the 5P's Service Quality Model

As with all organisational operations, policies, the Service Quality Model will only deliver its full potential and value if they are embedded into the organisational infrastructure and maintained through a continuous cycle of measurement and communication, supported by the key pillars of education and training. The Model distinguishes the 5 main factors of customer service excellence, which directly impact and determine customer satisfaction, Policies - the guide of action. It is the overall enabler and conditioner of the other 4 P's and parameter for the allocation of resources (time, money and effort etc.) to the achievement of the organization’s service excellence goals, Processes one of the most crucial elements in the delivery of service excellence and customer satisfaction. Customers expect a satisfactory outcome after completing a transaction with the organisation and it is the efficiency and effectiveness of the processes that contribute greatly to the expected outcome. People the main resource of an organisation. Their knowledge, competence and skills can positively influence the service quality performance and the success of the organisation, Products/Services - the key reason why customers are engaging with the organisation, build loyalty or leave to the competitors, Premises major contributory factors to the customers overall impression of the business and can act as major attractors to new customers.

Figure 2.3 A model of quality customer service policies.

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Source: Philip Forrest (2010)

Continuous performance measurement is a crucial factor of customer service excellence by, making sure the organisation is on the right direction achieving service excellence, identifying strengths and areas of improvement, identifying customer needs and expectations, developing an action plan to implement improvements and fulfill customer needs and/or even succeed the expectation ensure sustainability in customer service improvement (Forrest,2010)

Haywood-Farmer (2008) states that a service organization has “high quality” if it meets customer preferences and expectations consistently. According to this, the separation of attributes into various groups is the first step towards the development of a service quality model. In general, services have three basic attributes: physical facilities and processes; people’s behaviour; and professional judgment. Each attribute consists of several factors. In this model, each set of attributes forms an apex of the triangle as shown in Figure 2.3. Too much concentration on any one of these elements to the exclusion of other may be appropriate it may lead to disaster for e.g. too much emphasis on procedures may give an impression to the customer that he will be processed as per his sequence. The author tried to map different type of service settings as per degree of contact and interaction, degree of labour intensity and degree of service customization in to this model.

For example services, which are low in terms of customers’ contact customization and labor intensity (utilities, transportation of goods etc.), are closer to physical facility and process attribute of the model. Thus, the model suggests that special care at this instant must be taken to make sure that equipment is reliable and easy for customer to use.