UNIVERSITY OF GHANA 
 
 
RELATIONSHIP MARKETING PRACTICES AND CUSTOMER 
RETENTION IN THE MOBILE TELECOMMUNICATIONS 
INDUSTRY OF GHANA 
 
 
BY  
MAXWELL KOFI ADIKA 
(10272787) 
 
 
 
 
THIS THES IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN 
PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF MPHIL 
MARKETING DEGREE 
 
 
 
JULY, 2015
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DECLARATION 
I do hereby declare that this long essay is the result of my own research and to the best of my 
knowledge, it contains no material previously published by another person, nor material 
which has been accepted for the award of any other degree of this or any other University, 
except where due acknowledgement has been made in the text. 
 
 
 
 
 
 
…………………………..                                                                ………………………… 
 MAXWELL KOFI ADIKA                                                                          DATE 
         (10272787) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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CERTIFICATION 
I hereby certify that this thesis was supervised in accordance with procedures laid down by 
University of Ghana, Legon. 
 
 
 
 
 
 
 
…………………………………                                                  ……………………………..  
DR.  MAHMOUD A. MAHMOUD                                                               DATE 
   (PRINCIPAL SUPERVISOR) 
 
 
 
 
 
…………………………………..                                              ……………………………….. 
PROF. ROBERT EBO HINSON                                                                   DATE 
 (CO-SUPERVISOR) 
 
 
 
 
 
 
 
 
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DEDICATION 
To my family and friends, for their prayers and support towards the completion of this thesis.    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ACKNOWLEDGMENT 
First of all, my appreciation goes to the almighty Jehovah for His unending grace that has 
brought me this far. I would also want to extend my profound appreciation to my supervisor, 
Dr. Mahmoud A. Mahmoud for his immense guidance, comments and encouragement 
throughout this project. Also, my sincerest gratitude goes to Prof. Robert Hinson for his 
tutelage and supervision.  
I am also much indebted to my M.Phil. colleagues at the Marketing and Entreprenuership of 
the University of Ghana Business School for their support while completing my thesis. 
Further gratitude goes to my family and friends especially Prince Baah, David Yobo, and 
Kwodwo Sekyere  for their unwavering concern and prayers all these years.  
Finally, my heartfelt appreciation goes to all who have contributed in diverse ways toward 
making this project a success. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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TABLE OF CONTENTS 
 
DECLARATION ........................................................................................................................ i 
CERTIFICATION ..................................................................................................................... ii 
DEDICATION ......................................................................................................................... iii 
ACKNOWLEDGMENT........................................................................................................... iv 
TABLE OF CONTENTS ........................................................................................................... v 
LIST OF FIGURES ................................................................................................................... x 
ABSTRACT ............................................................................................................................. xii 
CHAPTER ONE: INTRODUCTION ........................................................................................ 1 
1.1 Background of the Study ................................................................................................. 1 
1.2 Statement of  Research Problem ...................................................................................... 4 
1.3  Research Objectives ........................................................................................................ 7 
1.4  Research Questions ......................................................................................................... 8 
1.5  Significance of the Study ................................................................................................ 8 
1.6   Scope of the Study ....................................................................................................... 10 
1.7  Chapter Disposition ...................................................................................................... 10 
CHAPTER TWO: LITERATURE REVIEW .......................................................................... 12 
2.0 Chapter Overview .......................................................................................................... 12 
2.1 Overview of Relationship Marketing ............................................................................. 12 
2.1.1 Developments in Marketing .................................................................................... 12 
2.1.2 Emergence of Relationship Marketing ................................................................... 16 
2.1.3 Defining Relationship Marketing ........................................................................... 20 
2.2 Relationship Marketing Practices .................................................................................. 23 
2.2.1 Trust ........................................................................................................................ 24 
2.2.2 Commitment ........................................................................................................... 25 
2.2.3 Conflict handling .................................................................................................... 26 
2.3 Implementing a Relationship Marketing Approach ....................................................... 28 
2.3.1 Identifying and Understand Customer Expectations .............................................. 28 
2.3.2 Selecting customers ................................................................................................ 29 
2.3.3 Adapting the Offering ............................................................................................. 29 
2.4 Importance of Relationship Marketing .......................................................................... 30 
2.5 Relationship Marketing Outcomes ................................................................................ 31 
2.5.1 Customer Satisfaction ............................................................................................. 31 
2.5.2 Customer Retention ................................................................................................ 32 
2.6 Measuring Customer Retention ..................................................................................... 34 
2.7 Importance of Customer Retention ................................................................................ 35 
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2.8 Relationship Marketing Practices and Customer Satisfaction ....................................... 37 
2.8.1 Trust and Customer Satisfaction ............................................................................. 37 
2.8.2 Commitment and Customer satisfaction ................................................................. 38 
2.8.3 Conflict handling and Customer Satisfaction ......................................................... 38 
2.9 Relationship Marketing Practices and Customer Retention .......................................... 39 
2.9.1 Trust and Customer Retention ................................................................................ 40 
2.9.2 Commitment and customer retention ...................................................................... 40 
2.9. 3 Conflict Handling and Customer Retention ........................................................... 41 
2.10 Customer Satisfaction and Customer Retention .......................................................... 41 
2.11 Relationship Marketing, Customer Satisfaction and Customer Retention .................. 42 
2.12 Conceptual Framework ................................................................................................ 43 
2.12.1 Components of the Conceptual Framework ......................................................... 44 
CHAPTER THREE: CONTEXT OF THE STUDY ............................................................... 47 
3.0 Introduction .................................................................................................................... 47 
3.1 The Global Telecommunication Industry ...................................................................... 47 
3.2 Overview of Telecommunication in Ghana ................................................................... 49 
3.3 Mobile Telephony in Ghana .......................................................................................... 49 
3.3.1 Mobile Service Providers in Ghana ........................................................................ 51 
3.3.2 Types of Mobile Services Provision ....................................................................... 54 
3.3.3 Technological Standards in the Telecommunications Industry .............................. 55 
3.4 Regulatory Framework of Telecommunication Industry of Ghana ............................... 56 
3.4.1 National Communication Authority (NCA) ........................................................... 56 
3.4.2 Ministry of Communication .................................................................................... 57 
3.5 Current Trends in the Telecommunication Industry of Ghana ...................................... 57 
3.5.1 Customer Retention in the Telecommunication Sector .............................................. 58 
3.6 Market Structure of the Telecommunication Industry of Ghana ................................... 59 
CHAPTER FOUR: METHODOLOGY .................................................................................. 64 
4.0 Introduction .................................................................................................................... 64 
4.1 Research Methodology .................................................................................................. 64 
4.1 Research Design............................................................................................................. 64 
4.1.2 Research Process ..................................................................................................... 65 
4.1.3 Research Purpose .................................................................................................... 66 
4.1.4 Research Logic........................................................................................................ 67 
4.2 Research Paradigm......................................................................................................... 67 
4.3 Research Strategy........................................................................................................... 68 
4.4 Population and Sample Selection................................................................................... 69 
4.4.1 Sample Size ............................................................................................................. 70 
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4.4.2 Sampling Method .................................................................................................... 71 
4.5 Types and Sources of Data ............................................................................................ 72 
4.6 Research Instrument....................................................................................................... 73 
4.6.1 Questionnaire Design .............................................................................................. 74 
4.6.2 Pre-testing Questionnaire ........................................................................................ 76 
4.6.3 Data Collection Procedure ...................................................................................... 76 
4.7 Data Analysis Technique ............................................................................................... 77 
4.8 Reliability of the Study .................................................................................................. 79 
4.9 Validity of the Study ...................................................................................................... 79 
4.10 Ethical Consideration in Research ............................................................................... 80 
CHAPTER FIVE: DATA ANALYSIS AND PRESENTATION OF FINDINGS ................. 82 
5.0 Introduction .................................................................................................................... 82 
5.1 Response Rate ................................................................................................................ 82 
5.1.1 Respondents'  Details .................................................................................................. 82 
5.2 Descriptive Statistics of Latent Constructs .................................................................... 85 
5.2.1 Independent Variables ............................................................................................ 85 
5.2.2 Descriptive Statistics of Dependent Variables ........................................................ 87 
5.3 Model Assessments ........................................................................................................ 88 
5.3. 1 Convergent validity ................................................................................................ 89 
5.3.2 Construct Reliability ............................................................................................... 89 
5.3.3 Discriminant Validity Measures ............................................................................. 90 
   5.4 Structural Model..............................................................................................................92 
   5.5 Results of Hypothesis Test..............................................................................................95 
   5.6 Discussion of Findings....................................................................................................96 
CHAPTER SIX: SUMMARY, CONCLUSION AND RECOMMENDATIONS ................ 101 
6.0 Introduction .................................................................................................................. 101 
6.1 Summary ...................................................................................................................... 101 
6.1.1 Summary of Findings ............................................................................................ 102 
6.2 Conclusion ................................................................................................................... 104 
6.2.1 Objective One: .......................................................................................................... 104 
6.2.2 Objective Two:...................................................................................................... 104 
6.2.3 Objectives Three: .................................................................................................. 105 
6.3 Implications for Management ...................................................................................... 106 
6.3.1 Building Trust ....................................................................................................... 106 
6.3.2 Enhancing Commitment ....................................................................................... 106 
6.3.3 Effective Conflict Handling .................................................................................. 107 
6.4 Limitations and Recommendations for Future Studies ................................................ 107 
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APPENDIX-QUESTIONNAIRE...........................................................................................109 
REFERENCE ......................................................................................................................... 111 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
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LIST OF TABLES 
Table 2.2: Relationship Marketing Schools of  Thought ......................................................... 20 
Table 2.3: Relationship Marketing Practices ........................................................................... 23 
Table 3.1: Technological Standards Adopted by Mobile service Providers in Ghana ............ 55 
Table 3.2: Mobile Subscription Trends ................................................................................... 60 
Table 3. 3:  Market Share of Mobile Operators (July-Dec, 2014) ........................................... 61 
Table 4.1: Basis of  Research Design ...................................................................................... 65 
Table 4.2: Summary Composition of Questionnaire ............................................................... 75 
Table 5.1 Socio- Demographic of Respondents ...................................................................... 84 
Table 5.2: Period with Service Provider .................................. Error! Bookmark not defined. 
Table 5:3: Descriptive statistics for trust as an independent variable ...................................... 85 
Table 5.4: Descriptive statistics for commitment as an independent variable ......................... 86 
Table 5.5: Descriptive statistics for Conflict handling as an independent variable ................. 87 
Table 5.6: Descriptive Statistics for Customer Satisfaction .................................................... 87 
Table 5.7: Descriptive Statistics for Customer Retention ........................................................ 88 
Table 5.8:  Construct Validity and Reliability of Constructs................................................... 90 
Table 5.9: Discriminant Validity of Variables ......................................................................... 91 
Table 5.10: Customer satisfaction as the dependent variable .................................................. 94 
Table 5.11: Customer retention as the Dependent Variable .................................................... 95 
Table 5.12: Path Coefficients and of Hypothesis Testing........................................................ 96 
 
 
 
 
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LIST OF FIGURES 
Figure 2.1: Conceptual Framework of the study ..................................................................... 44 
Figure 3.1: Market share of the telecommunication Sector of Ghana ..................................... 62 
Figure 5.3: Structural Equation with Coefficients of Paths ..................................................... 93 
Figure 5.4: Structural Equation with t-values of Paths ............................................................ 93 
5.3.2 Relationship between Relationship Marketing Practices and Customer 
Retention.........................................................................................................................94 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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LIST OF ABBREVIATIONS 
AVE        Average Variance Extracted  
CB           Covariance Base 
CR           Customer Retention  
EPA         Environmental Protection Agency  
GDP         Gross Domestic Product  
GSM        Global System for Mobile Communication 
KPI          Key Performance Indicators  
MNP       Mobile Number Portability 
NCA        National Communications Authority  
PLS          Partial Least Square Equation Modelling  
RM           Relationship Marketing 
SEM         Structural Equation Modelling  
SET          Social Exchange Theory 
SIM          Subscriber Identity Module  
WoM        Word of Mouth 
 
 
 
 
 
 
 
 
 
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ABSTRACT 
This main objective of this study is to determine the relationship between relationship 
marketing practices  and cusotmer retention in the mobile telecommunications industry of 
Ghana. Specifically, the study sought to analyse the direct and indirect relationship among 
relationship marketing (RM) practices of trust, commitment, conflict handling on customer 
retention . To achieve the objectives of the study, hypothesis were formulated based on 
literature reviewed and a descriptive quantitative study was used to investigate the problem.  
Methodologically, the study was a  cross sectional quantitative survey that involved the use 
of self administered structured questionnaire to garner data from respondents of four  (4) 
mobile telecommunication operators in Ghana. Using  a sample size of 320, convenience 
sampling  technique  was used to sample the respondnets. The Statistical Package for Social 
Sciences (SPSS) version 20.0 software and Partial Least Square's (PLS) Structural Equation 
Modelling (SEM) were used to analyse the responses. The findings revealed that the RM 
construct of  trust and commitment do not have a direct relationship with customer retention 
except conflict handling. However, the RM practices were seen to have an indirect impact on 
customer retention through customer satisfaction. While the methodological limitation of the 
study are  noted, the study offers useful  theoretical and managerial contributions. The study 
recommended that to increase customer retention, mobile telecommunications firms were 
advised to implement effective conflict handling mechanisms to in order to increase customer 
retention. Again, the firms were recommended to increase relationship marketing efforts to 
enhance customer satisfaction in order to achieve a higher customer retention.
 
 
 
 
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CHAPTER ONE 
INTRODUCTION 
 
 
1.0 Chapter Overview  
The opening chapter of this study briefly introduces the major constructs of relationship 
marketing and customer retention and the context of the study. It further details the rresearch 
problem  and gaps  based on prior studies. The research objectives, research questions and 
research hypothesis are also presented in this chapter. Furthermore, the research significance, 
scope and limitations of the study are discussed. The chapter concludes detailing the chapter 
disposition for the study. 
 
1.1 Background of the Study    
The mobile communication industry is considered as one of the most rapidly growing and 
competitive service sector (GSMA, 2015). Rahman and Masoom (2012) contend that, in the 
world of globalization, the telecommunication industry is one of the fastest growing ventures. 
The International Telecommunications Union (2013), recognise that globally, the penetration 
rate of mobile phone is 96.2 per cent with the spread of mobile technology varying 
significantly between countries with more mobile phone users in developing world than the 
developed world. A report by Vodafone (2011) indicated that the global mobile 
telecommunication industry generates approximately US$ 900 billion of annual revenue and 
accounts for around 1.5 per cent of world Gross Domestic Product (GDP) by providing a 
variety of businesses such as mobile service, handsets, content delivery, and infrastructure 
installation. 
Rahman and Masoom (2012) argue that the telecommunication industry is very competitive 
with customers having a large choice of mobile operators to select services. They estimated 
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that averagely, there are typically between three to five mobile network operators per market, 
although some markets have considerably more. Consequently, Verbekea, Dejaegera, 
Martensb, Hurc, and Baesensa  (2012) recognise that mobile telecommunication markets are 
getting saturated, particularly in the developing countries. In addition to the unprecedented 
competition, the high cost of attracting new customers poses challenge to the survival and 
growth of mobile service providers (Gerpott, Ram, & Schindler, 2001; Geppert, 2002 ; Kim 
& Yoon, 2004). Neslin, Gupta, Kamakura and Mason (2006) submit that in service sectors, 
such as telecommunication, a firm can hardly differentiate itself on the basis of its products 
alone thereby making achieving competitive advantage extremely difficult.  
Hunga, Yen and Wang (2006) reveal that with a saturated market, firms in the industry are 
shifting from its customer acquisition strategy for retaining customers because the cost of 
acquisition is typically five times higher than retention. Supporting this view, Honts and 
Hanson (2011) opine that saturated markets and high levels of competition within industries 
have necessitated the practice of customer retention strategies among firms. Hollensen (2010) 
submit that in the context of saturated market, customer retention is becoming more 
important. Therefore, contemporary marketing efforts should be geared towards strategizing 
on how to retain customers (Seo, Ranganathan, & Babad, 2008).   
While the precise definition and meaning of customer retention vary between industries and 
firms, Mostert, De Meyer, and Van Rensburg (2009) view customer retention as the way in 
which organizations focus their efforts on existing customers in an effort to continue doing 
business with them. In a mathematical perspective, customer retention can also mean the 
number of customers who stay with the provider in the course of an established period, such 
as a year (Dawes, 2009). Buttle (2004) believes customer retention is concerned with 
repeated patronage which is closely related to repeat purchasing behaviour. Accordingly, 
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customer retention implies that organisations should try to form and maintain good 
relationship with customers in an effort to continue doing business with them in the future 
(Hollensen, 2010). Similarly, Harris, O’Malley, and Patterson (2003) explained the process of 
retaining customers as connecting and developing customer relationships and described 
customer retention as the intent to develop stronger bonds with customers. Thus, developing 
relationship with customers has been identified as a marketing practice in retaining customers 
(Berndt & Tait, 2012). 
The concept of relationship marketing emerges from the areas of service marketing and 
industrial marketing (Lindgreen, Palmer, & Vanhamme, 2004) where customers are seen as 
the main fortitude of firms (Gupta & Zeithmal, 2006). Kotler and Keller (2012) intimate that 
one of the ways by which firms can survive is through implementing effective relationship 
marketing strategies. Kotler and Keller (2012) postulate that RM is not only a strategy for 
achieving survival but also necessary for firms survival.  
According to Gronroos (2004), relationship marketing aims to establish, maintain and 
enhance relationships with customers and other partners, at a profit, so that the objectives of 
the parties involved are met. From the firm’s perspective, the essence of relationship 
marketing can therefore be seen as building long-term relationships with customers rather 
than to continually attempt to attract new customers (Hollensen, 2010). Berndt and Tait 
(2012) identified that one of the main outcomes of a strong relationship between buyer and 
seller is customer retention.  
Literature theorise  RM as a composite of trust, commitment, and conflict handling (Ndubisi 
& Wah, 2005; Roberts-Lombard, 2011; Narteh et al., 2013). Ndubisi (2007) explains trust as 
the willingness of customers to rely on a supplier in whom confidence is entrusted. This 
willingness is reflected in the willingness of the customer customers desire to maintain the 
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indefinitely (Sauers, 2008). Conflict handling on the other hand, encompasses all activities 
employed by firms to avoid potential conflict (Ndubisi & Wah, 2005). Ndubisi and Wah 
(2005), suggest that when organisations successfully handle customer complaints, it has a 
positive impact on customer repurchase decisions and ultimately retention. According to 
Baran, Galka, and Strunk (2008), the overriding purpose of these RM practices is to increase 
satisfaction, improve customer perception of service quality and increase customer retention. 
To retain customers in an increasing competitive mobile telecommunications market,  it is 
imperative that mobile telecommunications firms in Ghana understand the impact of trust, 
commitment, and conflict handling on customer retention. Accordingly, the current study 
therefore seeks to establish the direct and indirect interplay between the independent RM 
variables of trust, commitment and conflict handling on customer retention through customer 
satisfaction.  
 
1.2 Statement of  Research Problem  
Hollensen (2010) argued that in the new marketplace, customers are seen as the reason for the 
existence of businesses; therefore the need to develop strategies in attempted to retain 
customers. However, Kotler and Keller (2011) observed that customers are now harder to 
please, smarter, price conscious, demanding, less forgiving and they are approached by many 
more with equal or better offers. This has led to the majority of mobile firms losing 
customers at an alarming rate (Springer, Kim, Azzarello, &  Melton, 2014 ). 
Vranakis, Chatzoglou, and Mpaloukaset (2012) argue that the competition in this sector has 
become very intense and the quest for survival has warranted the need for mobile telecom 
firms to develop strategies to attract and retain customers. According to Fluss (2010), annual 
customer churn rate stands at almost 40 percent in the mobile telecommunication industry. 
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This phenomenon implies higher customer attrition in the telecommunication industry. 
Again, given the fact that the mobile telecom industry experiences an average of 25-40 per 
cent annual churn rate and that it costs 5-10 times more to recruit a new customer than to 
retain an existing one (Xevelonakis, 2004), customer retention has now become even more 
important than customer acquisition (Ang & Buttle, 2006 ).  
The mobile telecommunications market in Ghana has become very competitive which is 
evidenced by the falling prices of mobile telephony services (GSM, 2015). Mahmoud and 
Hinson (2012) identified that companies operating in the sector now have to serve customers 
under competitive forces due the deregulation and the reduction of entry barriers into 
industry. As a result of the competition in the telecom sector, firms find it difficult in 
retaining their customers  (Junaid & Saqib, 2011). To remain competitive in this industry, it is 
imperative that telecoms firms understand the impact of relationship marketing on their 
efforts to retaining their customers. 
The concept of customer retention in the telecoms sector has been investigated from different 
approaches. For example, most studies on customer retention, consider the relationship 
between service quality and customer retention (Zeithaml et al., 1996; Ranaweera & Neely, 
2003;Gummesson, 2004). Others investigated the relationship between service recovery and 
customer retention (eg Hart, Heskett, & Sasser, 1990; Rust & Zahorik, 1993; Jones & Sasser, 
1995; Zeithaml;Berry, & Parasuraman,1996). Also, existing studies on the customer retention 
in the service sector are mainly focused on the customer satisfaction and the switching barrier 
(Gerpott, et al., 2001; Lee & Cunningham, 2010). A recent study Ali, Ali, Rehman, Yilmaz, 
Safwan, and Afzal (2010) focused on establishing the link between perceived tariff and 
customer retention. 
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Increasingly, studies are being undertaken in establishing the link between  RM marketing 
and customer retention (Rizan et al., 2014). These studies on relationship marketing and 
customer retention often identify a single relationship between RM and customer retention 
even though RM has been conceptualised as a composite of several practices (Ndubusi and 
Wah, 2005; Narteh et al., 2013). Explaining further, few studies undertake to identify the 
interplay between each RM practices and customer retention (Kjaernes, 2006; Liu & 
Louvieris, 2006). Hence, there exist paucity of research in determining the exclusive link 
amongst RM practices and customer retention. 
Also, several studies fail to establish a relationship among each RM practices as 
conceptualised by Ndubisi and Wah (2009), customer satisfaction and customer retention 
even though customer satisfaction has been identified as an intervening factor between 
relationship marketing and customer retention (Hennig-Thurau & Klee, 1997; Rizan, 
Warokka, & Listyawati, 2014). Explaining further, most studies do not investigate the 
intervening role of customer satisfaction between RM practices and customer retention (see 
Ndubisi & Wah, 2005; Narteh, Agbemabiese, Kodua, & Braimah, 2013). In this regard, 
limited studies have concentrated on determining the impact of the individual RM practices 
on customer satisfaction.  
A further review of literature revealed that most studies on customer retention are done in the 
financial sector (Dawkins & Reichheld, 1990; Reichheld & Kenny, 1990; Marple & 
Zimmerman, 1999) with emphasis in the banking sector (Roig, Garcia, Tena, & Monzonis, 
2006; Ganguli & Roy, 2011).  There exist limited research  on customer retention strategies 
with specific focus on RM. With regard to respondent's focus, Buttle (2004) submit that 
previous studies on customer retention mainly emphasis on firms opinions on how to 
maintain relationship with customers. This opinion is shared by Hovmøller, Mads, and 
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Freytag (2008) who revealed that most studies on retention are done from the suppliers' 
perspective with few researches conducted to study the link between RM and customer 
retention from the customers' side. Hence there is the need understand customers perspectives 
on the link between RM practices and customer retention  
In the Ghanaian context, more of the studies identify relationship between customer 
satisfaction and loyalty (Adjei & Denanyoh, 2014). Others studies conducted on customer 
retention concentrated on service quality as an antecedent to customer retention (Arko, 2006; 
Hinson, Owusu-Frimpong, & Dasah, 2011). Due to the paucity of study on relationship 
marketing and customer retention in the Ghanaian telecoms sector,  industry practitioners and 
policy makers resort to using literatures on customer relationship and retention from other 
industries. More so, literatures pertaining to foreign countries are often used in the local 
context.  
Based on the identified gaps, the current study sought to determine the interplay between 
relationship marketing  and customer retention in the  mobile telecommunication industry of 
Ghana from the perspective of mobile telecommunication service subscribers. 
 
 
1.3  Research Objectives  
The main aim of the study is to determine the relationship between relationship marketing 
practices and customer retention in the  mobile telecom industry of  Ghana. 
The specific  objectives of the study is to: 
i. Establish the relationship between relationship marketing practices (trust, 
commitment, and conflict handling) and customer satisfaction in the mobile 
telecommunications industry of Ghana. 
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ii. Identify the relationship between relationship marketing practices (trust, commitment, 
and conflict handling) and customer retention in the mobile telecommunications 
industry of Ghana. 
iii. Determine whether there is an indirect relationship between relationship marketing 
practices (trust, commitment, and conflict handling) and customer retention through 
customer satisfaction in the mobile telecommunications industry of Ghana. 
 
1.4  Research Questions  
i. What is the relationship between relationship marketing practices (trust, commitment, 
and conflict handling customer satisfaction in the mobile telecommunication industry 
of Ghana? 
ii. Is there a significant relationship between relationship marketing practices (trust, 
commitment, and conflict handling) and customer retention in the mobile 
telecommunication industry of Ghana? 
iii. Is there an indirect relationship between marketing practices (trust, commitment, 
communication and conflict handling) and customer retention through customer 
satisfaction in the mobile telecommunication industry of Ghana? 
 
1.5  Significance of the Study 
According to Ang and Buttle (2006) customer retention has gained significant attention in 
contemporary marketing literature and practice. The significance of retaining customers is 
emphasized by Kotler (2000) who noted that marketing is as much concerned with retaining 
as well as acquiring customers. Reichheld (2001) argues that most companies spend a 
majority of their resources on attracting new customers whiles research clearly demonstrates 
the value of investing in customer relationship building and retention.  
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The growth of  interest in customer retention can be attributed to the high customer churn due 
to increased competition (Kim & Yoon, 2004).  Relationship marketing has been identified as 
a marketing tool in creating value in an exchange relationship with the customer in order to 
develop and maintain long lasting relationship with customers. It is in this regard that 
Grönroos (2004) submitted that customer retention has been the main goal for firm’s that 
practice relationship marketing. However, to achieve this, there is the need for firms to gain 
an understanding of the relationship between the various RM practices and customer 
retention. 
This study contributes to academia in the aspect of literature and methodology. The current 
study adds to existing literature on relationship marketing, customer satisfaction and 
customer retention. Specifically, the findings add to the literature on the direct and indirect 
impact of relationship marketing practices on customer retention  by establishing the link 
between each relationship marketing practices and customer retention. In terms of 
methodology, the study adds to the increasing usage of partial least squares structural 
equation modelling in data analysis in marketing research (Hair, Hult, Ringle, & Sarstedt, 
2014)  
The findings of the study are crucial for mobile phone service providers as provided an 
understanding of the impact of relationship marketing practices on customer satisfaction and 
customer retention. This will enable the telecommunications firms effectively manipulate 
relationship marketing practices to achieve customer satisfaction and customer retention. The 
study is also crucial in underpinning the essence of relationship marketing in fostering 
customer retention in a highly competitive mobile telecommunications industry.  
 
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1.6   Scope of the Study  
This study is conducted in one of today’s most rapidly growing and competitive sectors, the 
mobile telecommunications industry (Gruber, 2005). Even though the telecommunication 
sector is broad and includes broadband and internet service providers, fixed line providers, 
the study was limited to only cellular services. According to Alshurideh (2010), studies on 
customer retention in the mobile telecommunications industry can be undertaken from two 
perspectives- the customer and the service provider. However, this study was undertaken 
from the perspective of customers without factoring the perspectives of the service providers. 
This is informed by the views of (Thorsten & Alexander, 1997; Wirtz & Lihotzky, 2003) who 
argue that suppliers’ perspective on relationship marketing and customer retention has been 
widely discussed in literature as a well-researched area. Therefore, the study was conducted 
on pre-paid customers of four (MTN, Tigo, Vodafone & Airtel) out of the six service 
providers in Ghana. The four mobile telecommunication service providers were selected 
since they account for about 95% of the entire subscriber base in the industry (NCA, 2014). 
 
1.7  Chapter Disposition 
This thesis is divided into six chapters which include the introduction of the study, literature 
review and conceptual framework, methodology for the study, the context of the study, Data 
analysis and discussions and finally, summary, conclusions and recommendations. The 
chapter are briefly explained below. 
Chapter One: Thesis Introduction- The first chapter covers the background of the study, 
problem statement research gaps, research objectives, research questions, justification for the 
study.  
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Chapter Two: Literature Review-This chapter presents a review on extensive related 
literature on the subject matter. Topics to be covered include relationship marketing, 
customer retention, customer loyalty and customer satisfaction.  
Chapter Three: Research Context -This chapter is dedicated to giving an overview of the 
mobile phone industry of Ghana.  Specifically, the growth of the industry and the players of 
the industry (both statutory and network service providers) was analysed. 
Chapter Four: Methodology- The third chapter outlines the methodology adopted for the 
study. The research design, research population, sampling technique and sample size was 
considered in this chapter. Additionally, sources of data, data collection instrument(s), and 
methods of data collection as issues on research ethical considerations were addressed. 
Thereafter, the data analysis tools and technique used for the study were discussed. The 
chapter concludes by presenting the method for testing the validity and reliability of the 
research instrument. 
 
Chapter Five: Data Analysis and Discussions-The fifth chapter presents an analysis of the 
data collected. The descriptive and inferential analyses of the data were presented. Using 
structural equation modelling (SEM), the relationships between the various relationships 
between the latent constructs were established at this stage. Also, a discussion of the findings 
in relation to literature reviewed was presented. 
Chapter Six: Summary, Conclusion and Recommendation .The last chapter was dedicated 
to the presentation of the summary of the study and conclusions based on the findings. 
Thereafter, implications of the study and limitations and recommendations for future study 
were mentioned in this chapter. 
 
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CHAPTER TWO 
LITERATURE REVIEW 
 
2.0 Chapter Overview 
This chapter is dedicated to the review of literature on relationship marketing and customer 
retention. This section draws on existing academic literature on relationship marketing and 
customer retention. The chapter starts with an overview of relationship marketing dwelling 
on the development in marketing, evolution of relationship marketing, the concept of 
relationship marketing. Furthermore, emphasis is placed on relationship marketing practices 
and relationship marketing outcomes. The concept of customer satisfaction, and customer 
retention are then discussed. Consequently, the hypotheses for the study are proposed by 
establishing the relationships between the constructs for the study based on literature. The 
chapter concludes by presenting the conceptual framework for the study. 
 
2.1 Overview of Relationship Marketing  
2.1.1 Developments in Marketing  
The concept of  marketing has experienced tremendous change over the years. Marketing as a 
concept is in the process of evaluation and as such defies on singular definition. However, an 
earlier  definition of marketing is given by the American Marketing Association (AMA), an 
international organisation of practioners and academics as " the process of planning and 
executing the conception , pricing , promotion, and distribution of ideas, goods, services to 
create exchanges that satisfy individual and organisational objectives ( AMA,1985). This 
definition of marketing describes what became known as the traditional (transactional) 
marketing  concept. This concept proved successful in the 1950s and 1960s industrial era 
where because of mass production and mass marketing of consumer goods, marketing was 
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more about attracting rather than retaining customers (Hollensen, 2010). This concept of 
marketing has, however evolved over the years to a more relational approach. In order to 
appreciate the development and emergence of RM, it is necessary to consider the traditional 
marketing approach. 
2.1.1.1 Transactional Marketing    
According to Berndt and Tait (2012), the transactional (traditional) marketing concept, 
focuses on marketing programmes aimed at making customers buy, regardless whether they 
are existing customers or new customers. In transactional marketing, firms concentrate on 
maximizing the profit for the company by recruiting more and more customers to purchase 
the firm's product and not building much of relationship with them (Kotler & Armstrong ,  
2012). Thus, in transactional marketing, in the promotion and selling of the product, there is 
little or no concentration on customer value and satisfaction, rather attempts are made to  
make new customer every time (Hollensen ,2010).  
In addition, orientation is on product and its features, rather than planning for the long-term 
view of the product in the market. Also, it is based on the short time scale, with little or no 
emphasis on customer services. The transactional concept employs pull technique of 
marketing, producing the product with quality as a primary concern, and satisfying the 
customers' needs and wants without building any relationship with them (Kotler & 
Armstrong , 2012).    
Traditional marketing has greatly been underpinned by the four traditional element of 
marketing ,sometimes referred to as the four P's. According  to Hollensen ( 2010), the so-
called 4Ps are the epitome of what should be done and are also known as the marketing mix.  
The marketing mix management paradigm has dominated marketing thought, research and 
practice since it was introduced almost 40 years ago ( Palmatier, Jarvis, Bechkoff, & Kardes, 
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2009).  The marketing mix comprises of the product or service, price, distribution or place, 
and promotion. According to Hollensen (2010), the model of transactional marketing (the 
4Ps) rest on the three assumptions: 
1. there is a large number of potential customers; 
2. the customers  and their  needs are fairly homogeneous  
3. it is rather easy to replace lost customers with new customers. 
 
In terms of the marketing mix, the marketer is confronted with the challenge of finding an 
optimal mix that gets superior response in the market and, at the same time create profit 
(Berndt & Tait, 2012). 
During the growth of the service industry, researches began to show that the marketing mix 
model of marketing was too restrictive for service marketing. Gronroos (2006) admitted that 
the marketing mix paradigm which has dominated practice, research and though since its 
introduction in the 70’s is beginning to lose its position. In this line, several researchers have 
critique the marketing mix concept. They (Sheth & Parvatiyar, 2000; Gronroos, 2006) 
identified that the nature of traditional marketing ignored the factor of relationship marketing 
in a marketing process and its strategic implications in human interactions in an exchange 
process.  
In the opinion of  Kotler (2000), long term success of a company does not come solely from 
the manipulation of marketing mix elements but by building a long term relationship between 
buyer and seller. According to Gummesson (2008), the marketing mix approach is considered 
too limited and thus inadequate in meeting the requirements of the marketing concept. 
Zineldin (2000) further argue that, the marketing mix concept is not transferable to the 
service sector and the industrial marketing (Rafiq & Ahmed, 2000). 
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Again, Hollensen (2010) observes that contemporary marketing approaches clearly portray 
marketing process in a social context where relationship building and management are vital 
underpinnings. Their argument is that the marketing mix does not take sufficient account of 
building long term relationship between a buyer and a seller. Furthermore, it became 
increasingly apparent that the traditional marketing mix perspective (of the 4Ps) was too 
restrictive and failed to capture the broader complexities inherent within many markets 
(Hollensen, 2010). As a result other marketing perspectives such as relationship marketing 
were suggested (Harwood & Garry, 2006). 
2.1.1.2 The Relationship Marketing (RM) Concept  
Relationship marketing concerns the facilitation and management of the relationships 
between the business and its customers. The concept was developed as a response to the 
realisation that businesses were spending vast resources in time and money to attract 
customers but very little on retaining existing ones (Berndt & Taits, 2012). Relationship 
marketing helps to show the customer that the business cares for its existing customers just as 
much as its new ones and that long term customer satisfaction is the business main purpose. 
Berndt and Taint (2012) emphasised that relationship marketing aims to retain customers 
through various means (such as customer care and after-sales services) to ensure future 
transactions with these customers by delivering what they want. In the opinion of Morgan 
and Hunt (1999), relationship marketing is particularly relevant when a customer has 
alternative service providers to choose from, when the customer makes the selection decision 
and when there is an on-going desire or need for the service, such as the mobile 
telecommunications industry. 
Bowen and Shoemaker (2003) provided some difference between transactional and 
relationship marketing based on several categories. The categories are tabulated below. 
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Table 2.1: Comparison of Relationship Marketing and Traditional Marketing 
Traditional marketing     Relationship marketing  
Tendency to only sell  Tendency to retain customers  
Random meeting of customers   Constant relationship with customers  
Focus on the properties of the product  Focusing on the value of customers  
Short term perspective   Long term perspective 
Poor emphasis on providing services to 
customers  
Place  emphasis on providing services for 
customers  
Poor commitment to meet the customers 
need  
Commitment to meet the customers’ needs  
Less attention to customer expectations  Considering customers’ expectations  
Qualitative attention from only the 
productive staff 
Qualitative attention from all staff 
  
Source: Bowen and Shoemaker (2003). 
 
 
2.1.2 Emergence of Relationship Marketing 
According to Brito (2011) relationship marketing emerged as a contestant to traditional 
marketing theories due to the critique of the transactional nature of the traditional marketing 
concept. The concept of relationship marketing has emerged within the field of services 
marketing and industrial marketing (Berry, 1983; Jackson, 1985; Christopher, Payne, & 
Ballantyne, 1991) and has gain considerable interest among academics and practitioners 
(Egan 2004). The emergence of relationship marketing in 1980s according to (Sheth & 
Parvatiyar, 2000) was not a discovery but a rediscovery of an approach that has long been 
recognised as a sine qua none for business success. Earlier, Wilson (1995) argues that 
relationship between buyers and sellers existed since human bean trading goods and services. 
However, according to Harker and Egan (2006), the term “relationship marketing" alluded to 
Thomas (1976) was first explicitly used by Berry (1983) as a new rubric for service 
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marketing. Berry (1983) first used the term ‘relationship marketing’ in his book on marketing 
in the context of professional services. Within the same year, Levitt (1983),even though did 
not uses the exact expression “ relationship marketing” in his opinion, business should not 
limit themselves to only sales but endeavour to ensure the highest customer satisfaction 
which according to him depend on how well the relationship is managed by the seller. 
Jackson (1985) then used the same term “relationship marketing” in the context of industrial 
marketing. Amongst many other things, it has also been called “customer-focused 
management” (Gummesson, 1994), or “relationship management”. 
In the late 20th century, the relationship marketing theory become a globally accepted and 
gained a widespread attention among authors (Crosby et al 1990; Morgan & Hunt, 1994; 
Berry, 1995; Sheth & Parvatiyar, 1995; Narteh, 2009). Previous studies on relationship 
marketing covers different context including business-to-business marketing (Morgan & 
Hunt,1994; Wilson, 1995), business alliances (Sheth & Parvatiyar,1994), service marketing 
(Berry, 1983; Crosby et al., 1990), database marketing (Treacy & Wiersema, 1993), internal 
marketing (Berry & Parasuraman, 1991), and business-to-customer marketing ( Sheth & 
Parvatiyar, 1995; Christy, Oliver, & Penn, 1996).  
The development of the relationship marketing theory and practice can be understood from a 
number of different orientations, which is highlighted by the existence of four schools of 
thought: the Nordic, the Industrial Marketing and Purchasing Group (IMP Group), the North 
American and the Anglo-Australian Approach (Cranfield School). 
2.1.2.1 Nordic Approach 
According to Brito (2011), the Nordic School emerged from research conducted primarily in 
the services field and has its roots in Nordic countries such as Sweden and Finland. The 
Nordic school of thought emerged as a response to the perceived limitations in transactional 
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approach to marketing. According to Palmer, Lindgreen, and Vanhamme (2005), researchers 
and practitioners in this school of thought developed the concept of service as a means of 
improving the quality of the relationship, stimulating customer loyalty and extending 
customer life cycle.  
According to the Nordic School approach, managing services was at the core of relationship 
building and maintenance although also supported by other factors such as the building of 
networks, the establishment of strategic alliances, the development of customer database and 
the management of relationship-oriented marketing communications. Again, Brito (2011), 
emphasizes that with the Nordic School, making marketing decisions cannot be separated 
from the overall function of the company. This implies that in making decisions, whether 
general or functional, managers must take into account market considerations and customers.  
2.1.2.2 IMP Group  
 
Brito (2011) identifies the IMP Group – Industrial Marketing and Purchasing as having its 
roots in Scandinavia, UK and France. This school of thought identifies relationships within 
the business to business marketing. In such markets transactions are not isolated, but occur as 
part of a continuing stream of interaction between organizations. The interaction between 
companies and many individuals constitute the relationships and the multiple relationships 
between buyers, suppliers and other firms aggregate into network (Brito, 2011). Competitive 
advantage can be gained from an adequate selection process and management of network 
partners. 
2.1.2.3 Anglo American  
The Anglo-Australian approach is based on the work of Christopher et al. (1991). This school 
of thought integrated the contemporary theories of quality management, services marketing 
and customer relationship economics to explain the emergence of relationship marketing. 
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Under this school of thought, Christopher et al. (1991) underscores that relationship 
marketing embodies the following elements: emphasises on relationship rather than 
transactional approach to marketing, understands the economics of customer retention 
thereby allocating the right amount of money and resources between the two tasks of 
retaining and attracting customers.   
In his explanation, Christopher et al. (1991) further illustrated how the traditional marketing 
mix concept (the 4Ps) does not adequately portray all the key elements necessary in building 
and sustaining relationships with all markets. He conceptualises different types of markets 
where relationship marketing can be manifested in (ie customer markets, internal markets, 
supplier/alliance market, recruitment markets, influence market and referral markets). 
Essentially, the Anglo American school of thought highlights the critical role of internal 
marketing in achieving external marketing success and ensures that marketing is considered a 
cross-functional process. 
2.1.2.3 North America Approach 
The focus of this school of thought was on the relationship between buyer and seller 
interacting within the context of organizational environment, enhancing their relationship 
(Palmer et al., 2005). The North American Approach upholds that organization's environment 
decides the relationship between buyer and seller. 
 
 
 
 
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Table 2.2: Relationship Marketing Schools of thought 
Schools of Thought                              Key Issues  
Nordic  Integrate the network approach with issues related to service 
relationships and relationship economics 
Industrial Marketing 
and Purchasing  
Buyer-seller relationships are built from a series of 
interactions, and a close link between the concept of 
adoption and the process of evolving relationships 
North America  Focus on buyer and seller in context of organizational 
Environment 
Anglo-Australian  Make integration between quality management, and the use 
of a service marketing concept and customer relationship 
economics 
Source: Shammout, 2007. 
 
2.1.3 Defining Relationship Marketing  
The concept of customer relationship marketing is widely understood, both academically and 
professionally (Harwood & Garry, 2006). Narteh et al. (2013) observe that relationship 
marketing has generated high interest among academics and practitioners over the last two 
decades. In the opinion of Story and Hess (2006), relationship emerged as an exciting area of 
marketing and now a dominant paradigm in marketing. Hollensen (2010), believes the 
conception of relationship marketing has transverse beyond the earlier ideas of attempting to 
attract to maintaining and enhancing customer relationships. 
A further review of literature revealed that relationship marketing is handled in different 
ways by different authors. Hollensen (2010) intimate s that relationship marketing is founded 
on the core proposition that the purpose of marketing is the creation long term profitable 
relationship with customers. Some authors (eg. Morgan and Hunt, 1994) believe that 
relationship marketing encompasses a network of relationships which include those between 
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a firm and its buyers, suppliers, employees and customers. Whereas others (e.g. Buttle, 2004) 
contend that relationship marketing is an external customer relationship.  
Hunt, Arnett, and Madhavaram (2006) opine that the relationship marketing theory explains 
that successful relationship marketing is created from number of certain features of 
cooperative relationships. Baran, Galka and Strunk (2008) on the other hand see RM as a 
philosophy of strategically managing relationships with stakeholders with a strong focus on 
customer retention. In summing up the diverse views on the concept, Du Plessis, Jooste and 
Strydom (2005) conclude that relationship marketing focuses on developing and maintaining 
relationships with individual customers. 
According to Eiriz and Wilson (2006), RM involves attracting, maintaining and – in multi-
service organisations –enhancing customer relationships. This definition reflects the earlier 
view of Ravald and Gronroos (1996), who view RM as a way for firms to develop mutually 
beneficial and valuable long-term relationships with customers.  
Gummesson (1994) sees RM as a continuing mutual relationship between the business holder 
and the customer that leads to enduring profitability. In line with such view, Grönroos (2000) 
argue form service marketing view that “a relationship has developed when a customer 
perceives that a mutual way of thinking exists between customer and supplier or service 
provider” (p. 33).  
In an attempt to define relationship marketing, Gummesson (1997) identifies relationships, 
networks and interactions as the drivers of relationship marketing. Gronroos (1994) offers a 
more general definition of relationship marketing by describing it as a process of establishing 
a mutually beneficial exchanges and fulfilment of promises by parties involve in a series of 
interactions over the duration of the relationship.  
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Another view of RM is presented by Bruhn and Georgi (2006) who explain RM as 
concerning analysing, planning and control of measures that initiate, stabilize, intensify and 
reactivate business relationships with customers. Gummesson (1994) offered the following 
key characteristics of relationship marketing: management of interactions, relationships and 
networking. Rao and Perry (2002) mentioned that RM assumes a macro and micro 
dimensions. At a macro level, the term describes the relationship within which the 
organization engages with all stakeholders, thus the strategic issue is to establish the mix or 
portfolio of the relationship that is essential for the firm (Rao & Perry, 2002). Gummesson 
(1999) submit that relationship marketing at the macro level of business to business exchange 
involves a different approach as compared with relationship marketing between a firm and its 
numerous low value customers.  
Relationship marketing has developed even more at a micro level, the concept at this level is 
concerned with the nature of the relationship between the firm and customers that emphasize 
a long-term relationship that takes into account the customer’s needs and value (Rao & Perry, 
2002). In the opinion of Eiriz and Wilson (2006), RM embraces intra and inter organisational 
relationships as well as relationships between organisations and individuals. Berry and 
Parasuraman (1991) submit that RM goal is to foster strong relationships and convert latent 
customers into loyal ones. Gummerson (1994) identified the main benefit of RM as customer 
retention. Also, Zeng, Wemg, and Yen (2003) identify the main characteristics of RM 
practices as ensuring customer satisfaction.  
For the purposes of this study, the researcher adopts the definition by Eiriz and Wilson (2006) 
which explains RM as the set of marketing activities oriented to establishing, developing, and 
maintaining relational exchanges with customers. This definition summarises the various 
definitions of RM, identifying the core essence of implementing RM strategies. 
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2.2 Relationship Marketing Practices 
Since the introduction of the concept of relationship marketing theory, several researchers 
empirically identify the underlying principles of the theory (eg Gronroos, 1994; Palmatier, et 
al., 2009; Narteh et al., 2013). There has been diverse literature on relationship marketing 
practices. 
Established literature on relationship marketing theorise relationship marketing practices as 
follows: trust (Moorman, Deshpande, & Zaltman, 1993; Morgan & Hunt, 1994; Ndubisi, 
2004), commitment (Morgan & Hunt, 1994; Ndubisi, 2004), independence (Crosby et al 
1990) ,fulfilment of promise (Gummesson,1990) competence (Chan, 2004), benevolence 
(Buttle, 1996), empathy (Ndubisi, 2004), conflict handling (Dwyer & Schur,1987 ; Chan, 
2004), and communication or sharing of secrets (Crosby et al., 1990; Morgan and Hunt, 
1994).  
However, scholars have emphasized four key practices that have been theorized in the 
relationship marketing literature, namely trust (Morgan & Hunt, 1994), Commitment 
(Ndubisi, 2004; Morgan & Hunt, 1994) and conflict handling (Chan, 2004). It is these 
practices which contribute to the effectiveness of relationship marketing and distinguishes 
from other marketing concepts.  
Table 2.3: Relationship Marketing Practices 
Relationship Marketing   Practices                        Authors 
Trust  Moorman et al., 1993; Morgan and Hunt, 1994; 
Ndubisi, 2004, Ndubisi & Wah (2005),  
Commitment  Morgan and Hunt, 1994; Ndubisi, 2004, Narteh et al 
2013. 
Conflict Handling  Chan, 2004; Dwyer et al., 1987, Narteh et al., 2013. 
Communication Crosby et al.,1990 
Source: Researcher, 2015. 
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2.2.1 Trust  
Trust has been identified in a number of studies as an imperative in developing relationships 
with customers (Roberts-Lombards, 2011; Ndubisi & Wah, 2005; Narteh et al., 2013). 
Roberts-Lombard and du Plessis (2012) submit that if a relationship can exist, both parties 
must mutually perceive that the relationship exists. Wilson (1995) identified that most 
conceptualisation of trust involves the belief that one relationship partner will act in the best 
interest of the other partner. In the opinion of Liang and Wang (2006) trust is “the perceived 
level of confidence in transaction partners’ reliability and honesty”. Similarly, Ndubisi (2007) 
explains trust as the willingness to rely on a partner in whom confidence is entrusted. 
Likewise, Benamati, Fuller, Serva, and Baroudi (2009) see trust as the willingness of a party 
to be vulnerable or dependent on the actions of another party in situation or risk. 
Buttle (2004) associates trust with partner’s consistency, honesty, fairness, responsibility, 
helpfulness sand benevolence. Based on this definition, Sauers (2008) intimated that trust is 
based on repeated, reliable interactions and following through expected behaviour. Buttle 
(2004) however, defines trust as one party believing that the other party will act in his best 
interest, that the other party is credible and that the other party has the necessary experience. 
Wong and Sohal (2002) further explain the role of trust in relationship by arguing that trust 
indicates the extent to which each party in a relationship can consider the other persons 
promise.  
From a customer’s perspective, trust can be seen as a desired product, at a fair price and an 
ongoing mutually beneficial relationship between the customer and the company (Sauers, 
2008). Reichheld and Sasser (1990) highlight promise fulfilment as core aspect of building 
customer trust. They demonstrated that fulfilling promises is as an important conduit for 
achieving customer satisfaction, retaining of customers and securing long term profitability. 
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Sauers (2008) added that customers will trust organisations that they perceive to be honest. A 
betrayal of this trust, Ndubisi and Wah (2005) argue that lead to customer dissatisfaction and 
defection. 
 
2.2.2 Commitment  
Egan (2004) argues that commitment is central to relationship marketing and an important 
variable in understanding the strength of a marketing relationship. Similarly, Nguyen and 
Mutum (2012) stated that commitment is the most important variable used in a buyer seller 
relationship and an imperative element for ensuring successful, long term relationships. Like 
trust, commitment appears to be one of the most important variables in understanding 
relationships, and it is a useful construct for measuring the likelihood of customer loyalty as 
well as for predicting future purchase frequency (Wong & Sohal, 2002). Rauyyruen and  
Miller (2007) identify commitment as a psychological sentiment of the mind which attitude 
concerning continuation of relationship with a business partner is formed.  
Commitment refers to the belief by both parties that the relationship is worth working on to 
ensure it endures indefinitely (Roberts- Lombard, 2011).Commitment results when customers 
perceive the cost of terminating the relationship to be high, or when the benefits received 
from the relationship are high (Du Plessis et al., 2005). From a service provider's perspective, 
commitment can be seen as a higher obligation to make a relationship succeed and to make it 
mutually satisfying and beneficial (Morgan & Hunt, 1994).  
Roberts–Lombard and Du Plessis (2012) argue that commitment originates from trust, shared 
values and the belief that partners will be difficult to replace. Read (2009) adds that 
commitment involves vulnerability and leaves customers open to opportunism. Accordingly, 
customers will only make commitments only to trust worthy partners (Read, 2009). 
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According to Gummesson (2006), if the relationship is important and parties rely on it, 
commitment is crucial for it to work. Gummesson (2006) further argues that if the parties 
continue to pool resources, then they are committed to making the relationship work. Sauers 
(2008) submits that during the commitment stage of relationship marketing, the parties reach 
a mature, stable period where the parties share the benefits of the relationship. Again at this 
stage, customers create positive impression of the relationship, and exhibit tendencies to stay 
longer in the relationship (Du Plessis, 2010). 
Contemporary works on commitment suggest that commitment has two distinctive elements; 
first, commitment is a persistent force and second, it directs independent behaviour of other 
drives and attitude (Rego, Carvalho, Friere, & Vieira, 2004). Roberts and Du Plessis (2012) 
believe that commitment motivates partners to co-operate in order to preserve the relationship 
investments. Literature identifies that commitment is higher among individuals who believe 
that they receive more value from relationships (Read, 2009). Tu, Liu, and Chang (2015) 
postulate that committed customers have a more positive impression of their relationship with 
the company and denote intentions to remain in the relationships. 
 
2.2.3 Conflict handling 
Kuada and Hinson (2014) argue that customer complaint cannot be entirely avoided in the 
services industry. Conflict handling encompasses all activities by a supplier’s to avoid 
potential conflict, solve manifested conflicts before they create problems and the ability to 
openly discuss solutions when problems arise (Ndubisi & Wah, 2005). Hinson, Mohammed, 
and Mensah (2006) succinctly intimated that the sources of complaints involve mostly of 
inefficiencies on the part of the service providers to provide solutions to customer complaints 
on time. Hinson et al. (2006) further explained the inefficiencies include unexplained delays, 
rudeness, inflexibility on the part of the service provider, ineptitude and incompetent service.  
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Robert-Lombard (2011) underscores that the ability of firms to resolve customer complaints 
in a satisfactory manner is crucial since they become more loyal than customers who were 
not dissatisfied (Kotler & Keller, 2011). This opinion is shared by Kuada and Hinson (2014) 
who argue that firm’s service provider's ability to respond to customer complaints may result 
in customer satisfaction. Kuada and Hinson (2014) further added that even though complaints 
are sometimes undesirable; they serve as an important source of feedback to firms.   
2.2.4 Communications 
Sin, Tse, Yau, Lee, and Chow (2002) define communication as informal exchanging and 
sharing of meaningful and timely information between buyers and sellers. Communication in 
relationship marketing entails providing information that can be trusted and providing 
information when problems occur (Ndubisi & Wah, 2005). Communication as an interactive 
process takes place during the process of consumer purchase which involves pre-selling, 
selling consuming and post consuming stages. Communication as a two way process, also 
demands creating the necessary conditions for the relay of information from customers to 
service firms. 
Another view on communication is that it focuses on information exchange and helps buyers 
and sellers to understand the other party’s intentions and abilities ( Kucukkancabas, Akyol, & 
Ataman, 2009). Narteh et al. (2013) see communication as a major factor in building a 
trusting relationship leading to stability in relationship. 
To achieve successful communication, Gronroos (2004) proposed an integration of all 
marketing communication message to support the establishment, maintenance and 
enhancement of relationships with customers. According to Khojastehpour and Johns (2014) 
a more effective communication helps to provide useful information. They added that 
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communication can be enhanced by exchanging sufficient and useful information on a regular 
basis.  
For the purposes of this study, RM was conceptualised as being composed of trust, 
commitment, and conflict handling. Trust and commitment have been identified as the basic 
building block of relationship marketing (Morgan & Hunt, 1994). In addition, a study 
conducted by Roberts-Lombard (2011) identified that conflict handling, explains RM more 
than other practices such as communication. Again, a recent study by Kanyan, Andrew, Ali, 
and Beti, (2015) in the pharmaceutical industry reveals conflict handling as the most 
important dimension of RM that influences customer retention. 
2.3 Implementing a Relationship Marketing Approach  
Kotler (2000) argues that a well thought relationship process must be well implemented. In 
implementing a one on one marketing strategy, Peppers, Rogers, and Dorf (1999) identified 
four key steps: Identification, differentiation, interaction and customisation. Similarly, Brito 
(2011) argues that the development of a relationship marketing policy hinges on three basic 
elements: identifying and understanding customers, selecting them and lastly, adapting the 
offering to each of them.  
2.3.1 Identifying and Understand Customer Expectations  
O’Malley and Mitussis (2002) submit that the implementation of relationship marketing 
strategies necessitate the identification and knowledge of present and potential customers. 
Rust and Kannan (2003) identified that database of customers are important in undertaking 
marketing strategies designed at the average profile of the target market segment. 
Furthermore, identification of customer enables the firm to develop one on one interaction 
with customers in terms of communication. Ahmad and Buttle (2003) submit that relationship 
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oriented companies need a constant flow of information and dialogue with their customers to 
define current and future expectations in order to create customer satisfaction.  
 
2.3.2 Selecting customers  
Customers are considered the most valuable asset of any company (Kotler & Keller, 2012). 
However, Reichheld (1996) iterated that not all customers are appropriate targets for 
relationship marketing. In essence, not all customers are worth retaining. Brito (2011) argues 
that it is preferable to do little but good business with fewer customers than a lot of bad 
business with many customers. Storbacka (2000) suggested that the selection of customers 
must be based on the lifetime value of each customer and the strategic value.  
The lifetime value of each customer is explained as the estimation of the expected income of 
the customer throughout the life span of the relationship. Thus it denotes the present value of 
all future expected earnings derived from dealing with a specific customer. In explaining 
strategic intent, Storbacka (2000) argues that customers transfer value to the company 
through the prestige they bring, the expertise they transfer and the access to market they 
provide. It is essential in designing and implementing different marketing programmes for 
customers. Storbacka (2000) however, admitted that, it is difficult to quantify such value. 
 
2.3.3 Adapting the Offering  
After selection of customers there is the need to adapt offering to suit each customer. 
Adapting of services involves customising services to meet customers’ needs. Brito (2011) 
argues that in most cases it is impossible to assume a relationship approach without a certain 
degree of customization; in the same way, it is impossible to carry out an individualized 
approach without interacting and relating with customers.  
 
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2.4 Importance of Relationship Marketing  
The importance of relationship marketing has been seen in terms of the benefits received by 
parties, the service provider and the customer (Shammout, 2007). Hollenson (2010) submits 
that companies must transcend from short-term transaction-oriented goals to long-term 
relationship-building goals in order to satisfy its customer base. 
Relationship has been identified to contribute to organisational performance and profitability. 
Increasingly, organisations are being cognisant that is considerably more profitable to reduce 
its churn rate than to attract more customers. Relationship marketing is aimed at improving 
long run profitability by shifting from transaction based marketing, with its emphasis on 
winning new customers, to customer retention through effective management of customer 
relationships (Berndt & Tait, 2012). Kotler and Armstrong (2012) clearly point out that  
relationship marketing strategy does not only results in increased customer retention and 
company profitability, but it also provides a sustainable competitive advantage to a service 
firm as the intangible aspects of a relationship are not easily duplicated by competitors. 
According to Reinartz and Kumar (2003), to make relationship marketing work, marketers 
have adopted a customer management orientation, which emphasises the importance of 
customer lifetime value, retention and the dynamic nature of a person's customer-organisation 
relationship over time. Based on an earlier definition of RM, Gronroos (2000), the role of 
relationship marketing can be seen as to identify, establish, maintain and enhance 
relationships with customers and other stakeholders, at a profit, so that the objectives of all 
other parties involved are met and that this is done by a mutual exchange and fulfilment of 
promises. 
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2.5 Relationship Marketing Outcomes  
Baron, Conway, and Warnaby (2010) stress that RM practices result in a number of impacts 
on customer behaviour which in turn determines the profitability of firms. They explained 
those impacts as outcomes of relationship marketing which are broadly customer satisfaction 
and customer retention. Leverin and Liljander (2006) explain these outcomes as desirable 
outcomes of RM. The outcomes are discussed below: 
2.5.1 Customer Satisfaction 
Customer satisfaction has been an intensively discussed subject in the area of consumer and 
marketing research (Hennig-Thurau & Klee, 1997). Zhang, Ye, Law, and Li (2010) observed 
that customer satisfaction is a complex phenomenon. Several researchers (Oliver 1997; 
Reichheld & Detrick, 2003; Eakuru & Mat, 2008) explain the construct in different ways. 
Satisfaction has been identified as the fundamental goal of marketing as the core purpose of 
marketing is to satisfy customers.  
Edvardsson, Johnson, Gustafsson, and Strandvik (2000) define satisfaction as customers 
overall evaluation of their purchase and consumption experience. Bloemer and Odekerken 
(2002) see customer satisfaction as a product of successful marketing strategies to create 
value for customers. Reflecting on the time perspective of satisfaction, Homburg and Giering 
(2001) submit that early research on customer satisfaction defined satisfaction as a post 
choice evaluative judgement. In the context of relationship marketing, Buttle (2004) 
conceptualises customer satisfaction as understanding customer requirements, meeting 
customer expectations and delivering customer value.  
Spreng, Harrel, and Mackoy (1995) suggest that satisfaction occurs with the enhancement of 
a customer’s feeling when he or she compares his/her perception of the performance of 
products and services in relation to his/her desires and expectations. Adjei and Clark (2010) 
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identified that customer satisfaction has a positive relationship of behavioural loyalty. Egan 
(2004) intimates that satisfaction heightens customer loyalty and prevents customer churn, 
lowers customers’ price sensitivity, reduces the costs of failed marketing and of new 
customer creation, reduces operating costs due to customer number increases, improves the 
effectiveness of advertising, and enhances business reputation. Du Plessis, Jooste, and, 
Strydom (2005) argue customer satisfaction also provides an opportunity for firms to 
communicate with customers. Essentially, customer satisfaction is crucial for organisations in 
creating a long term relationship with the customer (Arnett, German, & Hunt, 2003). 
For the purposes of this current study, customer satisfaction is defined as the accumulated 
experiences of a customer purchases and consumption experience (Andreassen & Lindstad, 
1998). This definition provides a basic and essential standpoint of customer experiences 
being critical to evaluating customer satisfaction. 
 
2.5.2 Customer Retention  
Retaining customers in highly competitive business environments is critical to any 
company’s survival (Alshurideh, 2010). It is therefore crucial that firms maintain customers 
in order to prevent them switching to competitors. In fact, customer retention is seen as a 
mirror image of customer churn or defection. With increased competition, firms are realizing 
the importance of loyal customers and adopting strategies to create and sustain a loyal 
customer base  Getz, Blattberg, and Thomas (2001). Similarly, Ryals (2005) argues that in 
order to maintain a competitive position inf the market, firms should retain its customers.  
The concept of customer retention defies a singular definition (Ang & Buttle, 2006). 
Gronroos (2006) submit that customer retention is an important field of relationship 
marketing that is mainly concerned with keeping customers in the long run. Likewise, Menon 
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and O’Connor (2007) see customer retention as the longevity of a client’s relationship with a 
product and/or service provider. This perspective of customer retention is confirmed by 
Keiningham, Cooil, Aksoy, Andreassen, and Weiner (2007) who view customer retention as 
customers stated continuation of a business relationship with a firm. 
In a different usage of the term, Ferrell, Hartline, and Lucas (2002) use, retention rate to 
explain the percentage of customers who repeat purchases which is similar to Buchman and 
Gillies’s (1990) definition as the percentage of customers at the beginning of the year that 
will still remain at the end of the year. Some authors view customer retention as that part of 
relationship marketing knowledge concerned mainly with developing and maintaining 
existing customers by manipulating the relationship in a way that enables the parties, the firm 
and the customer, to benefit through long-term, repeat business (Chang & Chen, 2007). Thus, 
customer retention embraces a long term view, a desire to prevent clients from defecting as 
well as a means of increasing income by retaining or maintaining existing clients ( Rootman , 
2011). 
In a quantitative perspective, Buttle (2004) views customer retention as the number of 
customers doing business with a firm at the end of a financial year expressed as a percentage 
of those who are active customers at the beginning of the year. In essence, the number of 
customers should grow consistently (Ferrell et al., 2002). Bruhn and Georgi (2006) explained 
that firms with effective customer retention are able to persuade the customers to stay and 
patronise their offerings. 
From the preceding discussions, it can be deduced that customer retention encapsulate a long 
term view of firms undertaking to maintain their relationship with existing customers in an 
attempt to  reduce customer churn behaviour or customer switching. In line with this and for 
the purposes of this study, the researcher adopts the definition of customer retention by 
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Ranawera, and Prabhu (2003) view the concept  as the future propensity of customers to stay 
with their service provider.  
 
2.6 Measuring Customer Retention  
Ang and Buttle (2006) submitted that while the precise meaning and measurement of 
customer retention can differ by industries and firms, there is a general agreement 
recognising customer retention as a tool for achieving economic rewards. Dawkins and 
Reichheld’s (1990) definition of customer retention suggests that customer retention can be 
measured by calculating the percentage number of customers at the end of a period as against 
the customers at the beginning of a specific period, for example one year. This method has 
been referred to as the crude rate of measuring customer retention (DeSouza, 1992).  
DeSouza (1992) suggested a measure of a weighted retention rate rather than a crude 
retention rate. A weighted retention rate refers to the rate that recognizes the relative 
importance of the buyers in terms of the volume of sales.  
In measuring customer retention, Ahmad and Buttle (2003) submit that firms can use Key 
Performance Indicators (KPI) -related metrics. Ahmad and Buttle (2003) submit that firms 
that use this method should focus on the retention of every customer, irrespective of their 
value. Contrarily, a firm can use the sales or adjusted retention metrics that focuses on efforts 
on customers that contribute a higher level of sales or profit rather than every customer. Other 
authors (Ahmad & Buttle, 2003; Hennig-Thurau, 2004; Kumar, Andrew, & Robert, 2007) 
agree that customer retention rates can be measured by evaluating their characteristics in 
terms of repeat purchases, willingness in spreading positive word of mouth (WOM) about 
products and services as well as insensitiveness to price changes and non-complaining 
behaviour. 
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In this study, the researcher measures customer retention as customer's behavioural intention 
to patronise the services of a network provider, attitudinal predisposition towards the product, 
as well as their inclination to recommend the network provider to others. 
 
2.7 Importance of Customer Retention 
According to Parvatiyar and Sheth (2001), over the last two decades, due to the high churn 
rate in some service businesses, customer retention has attracted significant interest from both 
scholars and practioners in the field of relationship marketing. Getz et al.(2001) added that 
with increased competition, firms are realizing the importance of loyal customers and 
adopting strategies to create and sustain a loyal customer base.  Marketing literature identifies 
that the importance of customer retention has increased since a majority of firms started to 
suffer a noticeable loss of customers, along with the complexity and high costs of acquiring 
new customers (Bird, 2005). 
Review of literature reveals that the essence of customer retention is often seen from the 
economic aspect. According to Lai and Zeng (2014) the economic value of customer 
retention has been widely recognized. A study by Dawkins and Reichheld (1990) first 
reported on the economic implication of customer retention programmes of companies. The 
study reported that 5% increase in customer retention result in a customer net present value of 
between 25% and 95% across business sectors. Corroborating this study, Hanks (2007) 
further suggested a firm can increase its profitability by 75% just by improving its customer 
retention rate by 5%. Essentially, a small improvement in customer retention can therefore 
lead to a significant increase in profit (Van den Poel & Lariviere, 2004). 
In the arena of cost, customer retention decreases cost of doing business for both the 
company and the customer since it takes less time of the company to service the customer. 
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Dawes and Swailes (1999) opine that successful customer retention lowers the need for 
seeking new and potentially risky customers. Moreover, marketing literature state that it is 
more costly to engage a new customer than to retain an existing loyal customer (Sharma & 
Panigrahi, 2011) because acquiring new customers costs five to six times more than retaining 
existing customers( Hollensen, 2010). 
The long term relationship component of customer retention has led to the growing 
awareness of the customer lifetime value. Other authors concluded that long-term customers 
generate higher profits, tend to be less sensitive to competitive marketing activities, become 
less costly to serve, and may provide new referrals through positive word-of-mouth (see 
Reichheld, 1996; Zeithaml et al., 1996 &  Ganesh, Arnold, & Reynolds, 2000). In explaining 
the effect of not retaining customers, Berndt and Tait (2012), submit that losing customers 
lead to opportunity costs because of reduced sales.  
Van Den Poel and Lariviere (2004) summarise the importance of customer retention as 
follows:  
 Lowering the need to seek new and potentially risky customers, which allows 
focusing on the demands of existing customers; 
 Long-term customers tend to buy more;  
 Positive word of mouth from satisfied customers is a good way for new customers' 
acquisition; 
 Long-term customers are less costly to serve, because of a larger database of their 
demands; 
 Long-term customers are less sensitive to competitors ‘marketing activities; 
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 Losing customers results in less sales and an increased need to attract new customers, 
which is five to six times more expensive than the money spent for retention of 
existing customers; 
 People tend to share more often negative than positive service experience with 
friends, resulting in a negative image of the company among possible future 
customers. 
 
2.8 Relationship Marketing Practices and Customer Satisfaction 
Buttle (2004) contend that customer satisfaction has been developed extensively as a basic 
construct for monitoring and controlling activities in the relationship marketing concept. 
Kotler and Armstrong (2000) succinctly opines that relationship marketing becomes 
superfluous if customers defect. They argued further that in order to retain customers, service 
firms must keep them satisfied. Buttle (2004) argues that relationship marketing leads to 
customer satisfaction which reflects in the customer being loyal. Many researchers have also 
recognised the improved customer satisfaction as a result of successful relationship marketing 
practices (Buttle, 2004). Berndt and Tait (2012) claims the objective of relationship 
marketing is to enhance customer satisfaction and retention. 
2.8.1 Trust and Customer Satisfaction  
Hutchinson, Singh, Svensson, and Hysen (2011) postulated that, if an exchange partner 
anticipates that they can rely on the other partner to act fairly, the partner will be more 
satisfied with the relationship. A study by Teichert and Rose (2003) established a strong 
relationship between trust and customer satisfaction. They identified trust as a major element 
of the supplier client – relationship.  Hutchinson et al. (2011) argue that a high level of trust 
in an exchange partner has a positive impact on satisfaction in a relationship. Several studies 
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(Duarte & Davies, 2004; Svensson , Mysen, & Payan, 2010) position trust as an antecedent to 
satisfaction.  Based on these arguments, the researcher proposes that following hypothesis: 
H1a: There is a positive relationship between trust and customer satisfaction in the mobile 
telecommunications industry of Ghana. 
2.8.2 Commitment and Customer satisfaction 
Ndubisi (2007) contend that the degree of customer satisfaction with the organisation will 
depend on the commitment of the firm towards the relationship. According to Skarmeas, 
Katsikaes, Spyropoulou and Sahehi-Sangari (2008) satisfaction represent the focal outcome 
of the buyer, seller exchange relationship, which is unlikely to lead to future purchase 
intention and long term relationship without commitment. In support, Hutchinson et al (2011) 
indicate that customer satisfaction will in part be influenced by the customer investment in 
maintaining the relationship. Also, Farrelly, and Quester (2005) argue that commitment leads 
to customer satisfaction in an exchange relationship. Based on these arguments, the 
researcher proposes that following hypothesis: 
H1b: There is a positive relationship between commitment and customer satisfaction in the 
mobile telecommunications industry of Ghana. 
 
2.8.3 Conflict handling and Customer Satisfaction    
Conflict handling according to Gronroos (2004) is a non-billable service used to service 
organisations to create customer value. Gronroos (2004) further explained that the proper 
handling of customer complaints reflects the desire to make the customer interest a priority 
which improves customer satisfaction. Gummesson (2006) argued that when customers are 
dissatisfied, they resort stop patronising services, temporary or permanent as well as speak 
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out negatively and demand action. In support of this, Gronroos (2004) indicated that conflict 
handling significantly influences customer perception of the services and their satisfaction.  
A study by Narteh (2009) concluded that conflict handling has a significant outcome on 
customer satisfaction in relationship. In summary, conflict handling in the form of service 
recovery has been identified as a means satisfying customer needs, improve long term 
relationship and retain customers not withstanding service failures that may occur (Gronroos, 
2004).  Based on these arguments, the researcher proposes that following hypothesis. 
H1c: There is a positive relationship between conflict handling and customer satisfaction in 
the mobile telecommunications industry of Ghana.  
 
2.9 Relationship Marketing Practices and Customer Retention  
Several studies over a number of years have identified a link between relationship marketing 
and customer retention (Wilmshurst & Mackay, 2002; Ackermann & Van Ravensteyn 2005; 
Bergeron, Roy & Fallu, 2008 ) specifically in service industries (Swartz & Lacobucci, 2000).  
Alshurideh (2010) submit that customer retention is the main goal of those who practise 
relationship marketing. Buttle (2004) argues the establishment of relationship marketing as a 
key factor in retaining of existing customers. Thus, a service provider that is able to 
successfully manage its relationship with customers might prevent the customer from 
switching to other providers, hence a higher retention rate for the firm.  
According to Pride and Ferrell (2002), relationship marketing is necessary because it focuses 
on establishing long term, mutually satisfying customer supplier relationship. This view is 
illustrated by Burnett (1998) who claimed that RM it’s a specific type of marketing aimed at 
developing long-standing, positive relationships with customers and other stakeholders. 
 
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2.9.1 Trust and Customer Retention  
Ndubisi (2007) argues that trust is an underpinning of relationship marketing and has a 
positive influence on customer loyalty leading to customer retention. Customer retention is 
exhibited by set behaviours that indicate a desire to maintain the relationship with the 
organisation which include repeat patronage, engaging in positive word of mouth and 
recommending service providers to others (Ndubisi, 2007). Liang and Wang (2006) pointed 
out that, trust has a significant positive impact on customer loyalty.  
Wong and Sohal (2002) associate higher levels of trust and with higher levels of customer 
retention. Bowen and Shoemaker (2003) pointed out that building customers’ trust has an 
important role in ensuring customers retention. Based on these arguments, the researcher 
proposes that following hypothesis: 
H2a: There is a positive relationship between trust and customer retention in the mobile 
telecommunications industry  of Ghana. 
 
2.9.2 Commitment and customer retention  
Moorman et al. (1993) consider commitment as essential to customer retention. According to 
Wong and Sohal (2002), a higher level of  service provider’s commitment in the relationship 
will translate to overall relationship quality which impact  positively on customer retention. A 
study by Evanschitzky, Iyer, Plassmann, Niessing, and Meffert (2006) suggested that 
commitment is seen as essential antecedent to customer retention. Similarly, a study by White 
and Yanamandram (2007) concluded that commitment has a role in determining customer 
retention. Commitment was found to mediate five major factors reduces customer switching 
behaviour which was switching cost, service recovery interpersonal relationship, 
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attractiveness of alternatives and inertia.  Based on these arguments, the researcher proposes 
that following hypothesis: 
H2b: there is a direct relationship between commitment and customer retention in the mobile 
telecommunications industry of Ghana. 
2.9. 3 Conflict Handling and Customer Retention  
Ndubisi (2007) suggested that customer retention can be created, reinforced by handling 
customer conflict efficiently. Egan (2004) explains that conflict handling is explicitly a 
means restoring and strengthening long term relationship with customers. Homburg and Furst 
(2005) argue that successful conflict handling has a strong effect on customer satisfaction and 
retention. Ndubisi and Wah (2005) submit that  the manner in which conflict is handled will 
either ensure customer retention, or the customers leaving for a competitor.   
H2c: There is a direct relationship between conflict handling and customer retention in the 
mobile telecommunications industry of Ghana. 
2.10 Customer Satisfaction and Customer Retention  
According to Almossawi (2014), the relationship between customer satisfaction and retention 
has been widely researched. Customer satisfaction has been considered as antecedent to 
customer retention. According to Reichheld (1996), customer satisfaction prevents churn and 
consolidates retention. Although a review of extant literature suggests that customers can be 
retained by offering increased levels of satisfaction (Ranaweera & Prabhu, 2003; Zeithaml, 
Bitner, & Gremler, 2009), Soderlund (1998) identified that the connection between customer 
satisfaction and customer retention is not always a linear relation, although it constitutes a 
positive relationship. Similarly, (Anderson, Fornell, & Lehman, 1994; Jones, Mothersbaugh 
& Beauty, 2002) argue that even though customer satisfaction is an important factor 
influencing customer retention, it is not always significant to explain customer retention.  
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2.11 Relationship Marketing, Customer Satisfaction and Customer Retention  
The relationship amongst RM, customer satisfaction and customer retention has received 
growing attention in the relationship marketing literature (Wong & Sohal, 2002). Karakostas, 
Kardaras, and Papathanassiou (2005) stated that about 71% of service firms implement 
relationship marketing strategies with the purpose of ensuring customer satisfaction which 
will in effect prevent customers from switching other service provider hence retaining 
customers. Crosby et al. (1990) submit that businesses in the service sector tend to view any 
future sales opportunities as depending primarily on relationship marketing and satisfaction 
since these are the key tools for increasing customer retention (Sweeney & Swait, 2008). 
A study conducted by Gerpott et al. (2001) identified that overall relationship marketing has 
an impact on customer satisfaction which in turn influences customers’ intentions to 
terminate or continue the contractual relationship with service providers. On a relationship 
dimension, Juttner and Wehrli (1994) submit that customer satisfaction is complemented by 
the comprehensive integration of the customer into an interactive value-generating process, 
based on interdependence and reciprocity. Arnett et al. (2003) consider customer satisfaction  
crucial for organizations that strive for long-term relationships with customers  
Gomez, McLaughlin, and Wittink (2004) are of the view that customer satisfaction as an 
antecedent of customer retention are based on upon serving customers better than the 
competition and being perceived as offering superior service and value. Hennig-Thurau and 
Klee (1997) argue that customer satisfaction is often viewed as a central determinant of 
customer retention. Similarly, Liao, Palvia, and Chen (2009) assert that customer satisfaction 
is often considered as an important determinant of repurchase intention.  
Almossawi (2014) submit that an important consequence of customer satisfaction is customer 
retention since firms will not be able to retain their customers without satisfying them. 
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Gerpott et al.(2001) contend that customer retention, and satisfaction in the 
telecommunications sector is casually interrelated. A study by Gerpott et al. (2001) in the 
German mobile telecommunication industry revealed that overall customer satisfaction has a 
significant a positive impact on customer loyalty which influences customers’ intentions to 
terminate or extend their relationship with their service provider.   
A recent study by Moyo and Makore (2013) on customer retention strategies in the 
telecommunication industry identified customer satisfaction is a critical to customer 
retention. They suggested that delighted customers always return to patronise the services of 
their network provider. Based on previous studies and literature, the researcher proposes the 
following hypothesis.  
H3: Relationship Marketing indirectly impact on customer retention through customer 
satisfaction in the mobile telecommunications industry of Ghana. 
 
2.12 Conceptual Framework 
Shapira (2011) explains conceptual framework as a device that organizes empirical 
observations in a meaningful structure. The conceptual framework is an analytical tool with 
multiple variations used to conceptual distinctions and organise ideas in a research study to 
achieve research purposes. Robson (2011) argues that the conceptual framework of a study is 
a key part of the research design. 
Based on reviewing the literature study, the researcher adapted a conceptual framework 
developed by (Ndubisi & Wah, 2005; Narteh et al., 2013). The adapted framework depicts 
three different relationships based on the research hypothesis developed for the study. The 
framework suggests a direct relationship between relationship marketing practices (trust, 
commitment and trust) and customer retention. The framework also suggests a relationship 
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between relationship marketing practices (trust, commitment and conflict handling) and 
customer satisfaction in the telecommunication industry of Ghana. Finally, the framework 
also predicts an interplay between relationship marketing practices (trust, commitment, and 
conflict handling) and customer retention through customer satisfaction in the communication 
industry of Ghana. 
 
2.12.1 Components of the Conceptual Framework 
The conceptual framework is made up of three main constructs. The constructs are 
relationship marketing, customer satisfaction and customer retention. The constructs of the 
conceptual framework are explained below. Relationship marketing represents the 
independent construct of the study whiles customer retention is the dependent variable. 
Customer satisfaction however is the mediating variable for the framework. 
Figure 2.1: Conceptual Framework of the study 
 Independent   Variables                                                                      Dependent Variable 
 
 
 
 
 
 
 
Adapted from Narteh et al.(2013). 
Customer 
Satisfaction 
Customer 
Retention 
 
Trust  
 
Commitm-
ent          
ment 
 
 
Conflict 
Handling  
H2c 
H1a 
H1b 
H3 
H2a 
H1a 
H1b 
H2c 
H1c 
H3 
H2b 
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2.12.1.1 Relationship Marketing Practices 
According to Hollensen (2010), relationship marketing is aimed at attracting and maintaining 
existing customer base through the development of strong relationships with both new and 
old customers. Berndt and Tait (2012). revealed that relationship marketing practices are 
geared towards customer retention with focus on customer service, quality and higher 
customer commitment. Narteh (2009) identified the role of relationship marketing in building 
customer satisfaction which leads to customer repurchase intentions.  
In essence, relationship marketing enables organisations build stronger relationships with 
customers (Claycomb & Martin, 2001) which may increase the customer propensity to 
patronise the services of a service provider. The framework identifies that relationship 
marketing practices of trust, commitment and conflict handling lead directly to customer 
retention and again indirectly to customer retention through customer satisfaction. These 
relationships are evidenced by previous studies discussed in the literature review and the 
respective hypothesis proposed for each relationship marketing practices relationship with 
customer satisfaction and customer retention. 
2.12.1.2 Customer Satisfaction 
Kotler and Keller (2012) intimated that customer satisfaction is both a goal and a marketing 
tool for customer centred firms. Anderson, Fornell, and Roland (1997) view customer 
satisfaction as an evaluation of a company’s services or products to adequately meet 
customer needs. Lin and Wang (2006) explain customer satisfaction in the telecom industry 
as a customer’s post purchase appraisal and emotional response or reaction to the overall 
product or service and familiarity with the industry. A recent study by Junaid and Saqib 
(2011) concluded that customer satisfaction leads to customer loyalty and ultimately 
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customer retention. Fornell, Johnson, Anderson, Jaesung, and Bryant (1996) argued that there 
exist a strong interplay between customer satisfaction and customer retention. 
Based on the literature review, customer satisfaction is an of the implementation of  
relationship marketing practices. Subsequently, a direct positive relationship was proposed 
between each relationship marketing practices of trust, commitment and conflict handling on 
customer satisfaction. Again customer satisfaction as the intervening variables was identified 
as an antecedent to customer retention. 
2.12.1. 3 Customer retention 
Customer retention has received considerable interest in the service marketing literature 
during the last few years. Getz et al. (2001) explain that a customer retention occurs when 
patronise services again and again. In order to retain customers in the telecommunications 
sector, Kumar (2013) suggested that service providers should focus on satisfying customer to 
prevent them from switching services or being attracted by other service providers. 
Customer retention in this study is seen as a direct result of implementing relationship 
marketing practices of trust, commitment, and conflict handling. Again, customer retention is 
presented as an outcome of customer satisfaction as a result the relationship marketing 
practices of trust, commitment, and conflict handling which is clearly displayed in the 
conceptual framework 
 
 
 
 
 
 
 
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CHAPTER THREE 
 
 CONTEXT OF THE STUDY 
 
3.0 Introduction  
This section provides an overview of the telecommunication industry. The chapter starts by 
given an overview of the global telecommunication industry, the history and overview of the 
telecommunication industry of Ghana. It further provides a profile of the mobile 
telecommunications firms in Ghana and the regulatory framework of the telecommunications 
industry. The chapter concludes by presenting the market share of the mobile 
telecommunications industry of Ghana.  
3.1 The Global Telecommunication Industry 
The mobile communication industry is considered as one of the most rapidly growing and 
competitive sectors. Rahman and Masoom (2012) contended that in the world of 
globalization, the telecommunication industry is one of the fastest growing ventures. ITU 
(2013), recognised that the spread of mobile technology has varied significantly between 
countries with the majority of mobile subscribers in the developing countries. Statistics 
indicate that globally the penetration rate of mobile phone subscribers is 96.2%. Essentially, 
there are now more mobile phone users in the developing world than the developed world.  
According to a report by Vodafone (2011), the mobile communication industry is driven by 
increasing demand for data services and rising mobile penetration in emerging economies. 
The report emphases that the industry had approximately 5.6 billion customers, which is 
equivalent to 80% of the world’s population as at  2011. According to the same report, 
Mobile services account for around 60% of telecommunications revenue with the remainder 
coming from fixed. The number of mobile customers far exceeds other forms of electronic 
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communication. Only 1.3 billion people have fixed line telephones, 2.1 billion have access to 
the internet and 1.2 billion have televisions.  
The mobile proportion of voice calls has increased over the last five years and now accounts 
for 82% of all calls made, with the remainder over fixed lines, reflecting the benefits of 
mobility, lower cost handsets and cheaper calling plans (Vodafone, 2011). 
Rahman and Massom (2012) intimated that the telecommunications industry is very 
competitive with consumers having large choice of mobile and fixed line operators from 
which to select service. It has been estimated that averagely, there are four to five service 
operators per market, although in some cases may be more (Rahman  &  Massom, 2012). 
Consequently, companies in the telecommunications industry are being challenged to adopt 
innovative measures as well as more competitive advantage by introducing technological 
dynamism to enable the provision of value added services to their subscribers (Rahman and 
Masoom, 2012) 
Xevelonakis (2004) identified that the global the telecommunications sector is changing 
radically. The changes are driven by a combination of market, business and technological 
forces. He identified factors that influence the market as: 
 The globalisation of the economy is forcing many multinationals to expand into new 
markets. These companies look for a single provider to meet all their telecom’s needs. 
 Telecom operators looking for new revenue streams are entering the international 
marketplace.  
 New technologies — like wireless, digital subscriber line (DSL) and voice over 
internet protocol (VoIP) are enabling new service opportunities. The demand for 
bandwidth and high-speed access is growing, driving the development of new services 
such as wireless broadband and DSL. 
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 Customer awareness and knowledge is increasing. Customers want services that 
satisfy their unique needs and demand reliable service delivery at competitive prices. 
 
3.2 Overview of Telecommunication in Ghana 
Allotey and Akorli (1999) trace the history of telecommunication in Ghana back to the 
colonial era where the system was established by the administration for the purposes of 
facilitating control and exploitation of the colony. According to Allotey and Felix (2000) 
Ghana’s telecommunication history started during the pre- colonial era when the first 
telegraph line in the then Gold Coast was installed in 1881 between the administration seat of 
the colony’s governor in Cape coast and Elmina.  
After independence, the communication industry remained a state run system focused mainly 
in areas of economic activity. Reform of the telecommunication sector of Ghana was 
heralded by the introduction of the Accelerated Development Programme 1994-2000 (ADP 
2000) which basically sought to promote competition in the telecommunication industry. The 
liberalization process was motivated by a combination of pressure from international finance 
agencies, WTO commitments, inefficiency in the existing system, the government’s need for 
revenue, and a desire to promote universal service (Frempong & Henten, 2004). 
 
3.3 Mobile Telephony in Ghana  
Mobile phone services were first introduced into the Ghanaian market in March 1992 by 
Millicom International Cellular with its Mobitel Brand. The company however won the 
license to operate in the country two years earlier.  Ghana is the first African country the 
company launched its operations in. Mobitel started its operation using the ETACS 
(Extended Total Access Communication System) an analogue standard as opposed to GSM 
which is digital. The ETACS technology had limited function which supported mostly voice 
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services. A year after Mobitel was launched; a new telecom company Celltel (now Expresso) 
won a license to operate. Similarly, the company operated on an analogue network known as 
AMPS (Advanced Mobile System) on a frequency 850MHz. However, in 2005 it converted 
to CDMA (Code Division Multiple Access) 20001X on the same frequency making the 
company the sole CDMA operator. This feature was determined by the company’s 
association with its USA shareholders and the spectrum the company was allotted ( 
Frempong & Henten, 2004).  
The year 1995 witnessed the increased activities and involvement of several firms in the 
sector. Capital Telecom was licensed to provide rural telephony in southern Ghana via 
wireless local loop. This was part of a Rural Telecommunication Project initiated by the 
Ministry of Telecommunications and Transport. Capital Telecom faced numerous technical, 
managerial and political problems, which eventually led to its collapse. Its equipment had a 
capacity of 10,000 lines, but Capital Telecom never installed more than 600 lines. Outside of 
this attempt at rural telephony, mobile phone ownership was limited to government officials 
and wealthy business people ( Frempong & Henten, 2004). 
Meanwhile, another firm, Scancom limited was given license to operate the first GSM 
standard/network in 1995. They however, started operations in 1996 under the brand name 
Spacefon. In 2000, the then sole fixed line carrier in the country, Ghana Telecom launched a 
GSM network under the brand name OneTouch. In that same year, Mobitel migrated to the 
digital platform under the new brand name Buzz which was later changed to Tigo to conform 
to the international branding strategy (Frempong & Henten, 2004). In 2012, the sixth cellular 
network provider started operations after it was given the license to operate four years earlier. 
It became the fifth GSM service provider in the country.  
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Ghana’s mobile telecommunications industry has been described as oligopolistic. The 
industry is highly competitive with six major telecommunications companies in operations. 
Mobile service providers continue to invest in its expansion and the bid to provide high value 
services to their customer base. The growth in the industry has been championed by the 
liberation and the increased accessibility to low cost mobile phones. This has accorded a 
majority of the population to own and subscribe to mobile telecommunications services.  
According to the NCA (2015), the mobile phone environment in Ghana shares many 
characteristics with other markets on the continent, such as predominant prepaid customers, 
the availability of multiple competing mobile networks, and the proportion of customers that 
have accounts and SIM at more than one of the network. 
 
3.3.1 Mobile Service Providers in Ghana 
The mobile telecommunication industry in Ghana is recognised as one of the most 
competitive sectors of the country. Within the last decade, the telecommunication industry of 
Ghana has experienced a massive growth service providers and subscriber base. The growth 
of the sector can basically be attributed to the positive economic outlook of the country, fast 
growing customer base and availability of array of service providers. 
The mobile service industry in Ghana has a long history of acquisition. Currently there are six 
mobile telecommunication service providers in the country. Almost all the current mobile 
service providers in the country except Tigo and Glo entered into the industry through the 
acquisition of other existing brands. The firms in the telecommunication industry in order of 
their time of operation are Tigo, MTN, Vodafone, Expresso, Airtel and Globacom. The 
following are profile of the mobile telecommunication service providers in Ghana. 
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3.3.1.1 Millicom Ghana (Tigo) 
Tigo is operated by Millicom Ghana Limited, a subsidiary of Millicom international cellular 
with its corporate head office in UK and Luxembourg. The company is the first cellular 
network provider in the country operating under the brand name Mobitel in 1991. In the year 
2000, Mobitel migrated to digital standard under the brand name Buzz. In March 2006 the 
company changed its brand name to the current name, Tigo to conform to global branding 
strategy. The company has pioneered certain innovations in the telecommunication industry 
of Ghana. It was the first company that ssssxintroduced GSM technology in 2002 
(www.tigo.com.gh/about-tigo) 
3.3.1 .2 Mobile Telecommunication Network (MTN) 
The history of MTN can be traced to Scancom Gh limited. Scancom operators of Spacefon 
started its operation in October 2006 on the GSM (Global Systems for Mobile 
Communication) 900 technology platform.. The company in 2005 changed its brand name to 
Areeba after being acquired by Investcom LLC. Shortly afterwards, it was acquired by 
Mobile Telecommunication Network, a South African company. MTN is a giant in the global 
mobile communication industry with an estimated combined subscriber base of 219 million 
in 21 countries in Africa and Middle East. MTN is currently the largest network provider in 
terms of subscriptions with a market share of 46% as at December, 2014 (NCA, 2014). MTN 
stands stood out with their wide network coverage and numerous value-added services (NCA, 
2014) 
3.3.1.3 Vodafone Ghana 
Vodafone in Ghana is an operating company of Vodafone Group Plc., the world's leading 
mobile telecommunications company, with a significant presence in Europe, the Middle East, 
Africa, Asia Pacific and the United States. Vodafone is a widely recognised mobile 
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telecommunication brand globally and adjudge as the second most valuable brand in the 
world.. Vodafone entry into the Ghanaian telecommunication industry commenced through 
an acquisition of the erstwhile OneTouch managed by Ghana Telecom (GT). In 2008, 
Vodafone acquired 70% in GT making it the majority shareholder of GT and started 
operating under the new brand name –Vodafone (www.vodafone.com.gh). 
3.3.1.4 Bharti Airtel (Ex-Zain) 
Airtel is an Indian global leading telecommunication company. It operations cover 19 
countries in Asia and Africa. It operates in 16 countries in Africa and three countries in Asia. 
Airtel African operations are owned by Bharti Airtel Limited, it has over 200 million 
customers across its operations of which 50 million of the customers are from Africa. 
Bharti Airtel started its operation through a 75% acquisition share of Zain, a Kuwait mobile 
telecommunication company. The current brand name, Airtel was launched in 2010 and is 
reputed for being one of the most affordable service providers in the country. Airtel’s 
services can be accessed from all the ten regions in Ghana. Airtel vision is to make mobile 
communication affordable for all to give people the freedom to meet their daily challenges 
and to drive the economic and social development (http://africa.airtel.com/wps) 
3.3.1.5 Expressso 
Expresso is a telecommunications group currently operating in Senegal, Mauritania, Guinea 
and Ghana. Expresso entered the Ghanaian market through the acquisition of Kasapa 
Telecom in 2010. Expresso describes itself as an African telecommunications and 
information services company. The firm’s telecommunications services currently provide 
coverage in five African markets through both our fixed and mobile network infrastructure, 
servicing our individual and business customers. The firm employs more than 1,000 
employees across four commercial operations in Senegal, Mauritania, Guinea and Ghana. 
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Expresso is a leader in adopting a variety of technologies to meet the needs of our customers 
(www.expressotelecom.com.gh)  
The company has one of the fastest software that immediately connects customers to the 
fastest data speed available. The telecommunications company over the years has 
experienced a downturn in its subscription base. The firm currently has 200,000 subscribers 
representing less than 0.4% of the market share (NCA, 2014).  
3.3.1.6 Globacom  
Glo Mobile of Globacom, founded in 2003, has become the market leader in its home country 
Nigeria. It revolutionized the telecoms industry in Nigeria with lower tariffs and even more 
value added services. Glo won a license to operate it services in Ghana, but started operation 
in 2012. The delay entry of Glo into the Ghanaian market was attributed to the bureaucratic 
procedure of the Environmental Protection Agency (EPA) GLO had a highly awaited Internet 
service (www.gloworld.com). 
3.3.2 Types of Mobile Services Provision  
Sey (2008) recognised that mobile service providers offer basically two forms of services –
voice and data services. The voice services are described as call and text services whiles data 
service includes packages that enables the user to access the internet. These two services 
according to Sey (2008), can be categorised basic and value added services. Basic services 
are designed to target the low and middle income earners. Value-added telecommunication 
services are telecommunication for which supplier “add value” to the customer’s information 
by enhancing its form or content.  Value added services are often made to target high income 
earners and corporate institutions in need of high speed connections and high end service. It 
must be stressed that between the two main categories of mobile telecommunication services, 
basic telecommunications, are commonly patronised by Ghanaians (Sey, 2008).  
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Under the payment options, just like the system in many countries, customers have the option 
of pre-paid and post-paid payment plan. The prepaid payment affords a user to buy a phone 
and subscriber identity module (SIM) card at an affordable price and top up with credit to 
enjoy the operator’s services. This payment mode happens to be the most widely opted by 
Ghanaians. However, the continuous usage of the mobile service is conditional on regular 
recharge of credit. The prepaid option involves a sign up contract which allows the user to 
enjoy mobile services before payment (Sey, 2008).  
3.3.3 Technological Standards in the Telecommunications Industry 
Currently, telecommunication service companies in Ghana provide service mainly on two 
main technological platforms. They are namely GSM (Global Systems for Mobile 
Communications) and CDMA (Code Division Multiple Access). All the telecommunications 
companies in Ghana operate on the GSM technological standard except Expresso. The main 
limitation of CDMA technology, as currently offered in Ghana, is the inability to freely 
switch between networks, by changing SIM cards on the same handset (Sey, 2008). Thus, 
GSM has an advantage over CDMA in the context of changing networks at will by changing 
SIM cards without changing the handsets. In addition, CDMA does not offer international 
roaming which is an advantage to GSM users. 
Table 3.1: Technological Standards Adopted by Mobile service Providers in Ghana 
 MTN Airtel  Tigo  Vodafone  Kasapa  GLO 
GSM            
CDMA        
Source: Researcher, 2015. 
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3.4 Regulatory Framework of Telecommunication Industry of Ghana 
Ghana’s communication environment is mostly regulated by government agencies. Iqbal 
(2007) opined that it is imperative that telecom regulatory agencies are independent and 
powerful entity.   
3.4.1 National Communication Authority (NCA) 
The National Communication Authority was established by Act 524 of 1996 as a central 
regulatory body to regulate the telecommunication sector and to ensure a level-playing field 
in the telecommunication industry for efficient service delivery and the attainment of public 
policy goals in telecommunication. The general objective of the Authority is to regulate 
communications by wire, cable, radio, television, satellite and similar means of technology 
for the orderly development and operation of efficient communications services in Ghana.  
Haggarty, Shirty and Wallsten (2002) explained the specific objectives of the NCA as the 
promotion of fair competition among the players, protection of operators and consumers from 
unfair conduct from other operators with respect to quality of service and payment of tariffs, 
and protection of consumers’ interest. 
To achieve these objectives, the NCA performs the following functions: 
1. Set technical standards; 
2. License service providers; 
3. Provide guidelines in tariffs chargeable for services; 
4. Monitor the quality of service of providers and initiate corrective action where necessary; 
5. Set the terms/guidelines for interconnections of different networks; 
6. Considers complaints from telecom users and take corrective action where necessary; 
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7. Resolve disputes among service providers (in respect of interconnections, sharing facilities 
and utility installations) and between service providers and consumers (in respect of rates, 
billing, and provision of services, among others); 
8. Control the numbering plan and the approval of equipment and 
9. Advise the minister of communications on policy formulation and development strategies 
for the industry.  
3.4.2 Ministry of Communication 
The Ministry of Communications (MoC) exists to facilitate the development of a reliable and 
cost effective world-class communications infrastructure and services, driven by appropriate 
technological innovations to enhance the promotion of economic competitiveness in a 
knowledge-based environment (MoC , 2015). The vision of the Ministry of Communications 
is to manage the convergence of information and communications technologies to ensure free 
flow of information and gathering of feedback for the promotion of a viable integrated 
national development process within a global setting (MoC , 2015).. 
3.5 Current Trends in the Telecommunication Industry of Ghana  
Network service providers continue to adopt various strategies to achieve competitive 
advantage in the market. Being cognisant of the fact that their survival and growth is driven 
by customer loyalty and retention, which are highly dependent on customer satisfaction and 
value, delivering service quality has been a central pursuit of mobile network service 
providers in Ghana. 
A recent development in the mobile communication landscape of Ghana is the introduction 
the mobile number portability (MNP). MNP was launched in Ghana the NCA in 2011 amidst 
intense competition in the telecommunication industry. MNP is a system that allows mobile 
telephony customers to move from one service provider to another whilst retaining their 
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mobile number (NCA, 2015). A report by NCA (2015) pegged the number of customers who 
have success fully ported their network service provider since the launch of the system in 
Ghana at 2 million. This indicates an active customer switching behaviour in the mobile 
telecommunications industry of Ghana. 
3.5.1 Customer Retention in the Telecommunication Sector 
Over the last decade, the mobile industry has passed through a wave of critically rapid 
changes in its structure, competition, strategies, techniques, and technological environment 
Xevelonakis (2004).These changes came as a result of globalization, liberalisation, 
deregulation, and technological developments which are the primary factors affecting 
economies in general and the mobile phone sector in particular (Xevelonakis, 2004).  
Kim and Yoon (2004) identified the mobile service as one of the fastest growing sector of the 
telecommunications industry with a high turnover and high customer acquisition cost Bolton, 
(1998). Similarly, Seo et al. (2008) submitted the telecommunications sector is experiencing 
unprecedented increased competition accentuating the need of customer retention. In line 
with this assertion, Seth, Deshmukh, and Vrat (2005) argue that  the main challenges that face 
mobile operators in today’s competitive business are how to acquire new subscribers and 
retain existing ones, especially young subscribers (Seth et al. 2005). 
Ensuring Customer retention in the telecommunication industry has become critical as 
Alshurideh (2010) argues that customers have become very familiar with mobile 
communication and have acquired a relatively good knowledge of mobile services. In the 
telecom industry, customer retention determines the success and survival of mobile service 
providers (Mittal & Kamakura, 2001; Leelakulthanet & Hongcharu, 2011). Alshurideh 
(2010) identifies the issue of customer churn as necessitating the need of customer retention 
in the mobile telecommunication industry. For example, Ranawera and Prabhu (2003) 
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observed that most mobile telecommunications service providers lose up to 30% of their 
subscriber base despite implementing various marketing strategies. Based on the high rate of 
customer defect rate in the telecommunication industry, service providers need to establish 
strategies in retaining their customers. As identified customer retention offers benefits to 
firms. 
3.6 Market Structure of the Telecommunication Industry of Ghana  
Ghana’s mobile telecommunications sector is one the most competitive and saturated 
industries competing in an oligopolistic market structure.  In 1992, Mobitel initiated the first 
cellular phone service provider in Ghana. In that very year, it was estimated that were about 
19,000 owned mobile phones. Half a decade later, the number of mobile phone users 
increased to 43, 0000 representing a 226% increase within that period. In 2000, four 
companies competed for cellular customers and subscribers numbered 132,000. After passing 
the 5 million mark in2005, the sector now has about 26 million subscribers at the beginning 
of 2015 (NCA,2015) 
 
 
 
 
 
 
 
 
 
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Table 3.2: Mobile Subscription Trends 
MOBILE 
OPERATORS 
July  August September October November December 
EXPRESSO 122,356 123,825 120,108 118,171 120,667 119,059 
MILLICOM 
(TIGO) 
4,037,212 4,015,946 4,012,580 4,056,322 4,100,172 4,202,923 
SCANCOM 
(MTN) 
13,431,919 13,541,961 13,546,678 13,478,525 13,852,398 13,852,398 
VODAFONE 
MOBILE 
6,749,504 6,688,783 6, 870,223 7,128,764 7,137,501 7,069,516 
AIRTEL 3,659,531 3,756,547 3,790,636 3,742,970 3,756,656 3,735,656 
GLO 1,368,715 1,404,426 1,474,988 1,465,829 1,347,400 1,450,382 
TOTAL 
MOBILE 
29,369,237 29,531,488 29,815,213 29,990,581 30,219,162 30,360,771 
Month Over 
Month Growth 
0.51% 0.55% 0.96% 0.59% 0.76% 0.47% 
FIXED 
OPERATORS 
            
VODAFONE 256,816 256,984 252,292 253,028 252,841 252,669 
AIRTEL 8,355 8,305 8,197 8,082 8,082 7,738 
TOTAL 
FIXED 
265,171, 265,289 260,489 261,110 260,923 260,407 
Month over 
month growth 
-40% 0.04% -1.81% 0.24% -0.07% -0.20% 
Total Access 
Lines 
29,643,408 29,796,777 30,075,702 30,129,517 30,480,085 30,621,178 
Month over 
month growth 
0.50% 0.55% 0.94% 0.18% 1.16% 0.46% 
POPULATION  26,513,214 26,566,240 26,619,373 26,672,612 26,725,957 26,779,409 
Source: NCA (2014) 
According to the latest figures from the NCA, Ghana has a mobile phone penetration rate of 
114.5 %  with a mobile market share of 99.15%.  This figure makes Ghana one of the few 
African countries having more than 100% mobile voice adoption. In theory, the current 
subscription figure of over 30 million subscribers exceeds the total population which is 
estimated to be 26 million. This phenomenon has been attributed to the practice of “multi 
simming”-when an individual subscribes to more than one service provider.  
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On average the telecommunication sector receives a subscription growth of 0.5%. The 
statistics also shows that there are only fixed line operators in Ghana. Fixed line services are 
provided by Vodafone and Airtel. The combined subscription base of customers in the fixed 
line segment is 260,407 representing a penetration rate of 1%. This implies that only 1% of 
the entire population have access to fixed line services as opposed 114.5% to mobile phone 
services.   
It is evident that which such practice, the possible of a service provider losing customers to 
competitors is very high. Customer retention is thus paramount to retain existing customers to 
prevent high customer churn rates. 
Table 3. 3:  Market Share of Mobile Operators (July-Dec, 2014) 
 July (%) August 
(%) 
Sept (%) Oct (%) Nov (%) Dec 
(%) 
Millicom (Tigo) 13.75 13.60 13.46 13.53 13.57 13.62 
GT/Vodafone  22.98 22.65 23.04 23.77 23.62 23.29 
Scancom/MTN 45.73 45.86 45.44 44.94 45.23 45.63 
Airtel -Mobile 12.46 12.72 12.71 12.48 12.43 12.30 
Expresso 0.42 0.42 0.40 0.39 0.40 0.39 
Glo Mobile 4.66 4.76 4.95 4.89 4.76 4.78 
           Total 100                100 100 100 100 100 
  Source; NCA (2014) 
 
 
 
 
 
 
 
 
 
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Figure 3.1: Market share of the telecommunication Sector of Ghana 
 
 
 
 
 
 
Source: NCA (2015) 
According to NCA, as at December, 2014, MTN had the largest subscription base of       
representing 45.63% of the market. Vodafone mobile follows with a distant figure of 23.29% 
of the market. Tigo is the third position with a little above one third (1/3) the subscription 
base of MTN at 13.62%. Airtel closely follows with a subscription base of 12.30%. The last 
two positions are occupied by Glo and Expresso with a subscription base of 4.78% and 
0.39% of the market respectively. 
 
3.7 Contribution of the Mobile Telecommunication Industry to Ghana’s Economy  
The telecommunication industry has been a major driver of economic growth. A latest report 
by GSMA (2015) on the Digital Inclusion and Mobile Sector, Taxation in Ghana claims that 
the mobile sector contribute significantly to the country’s long run economic and fiscal 
stability. The contribution is mainly through the sectors, direct involvement in the economy 
and government revenue. The report further added that the in 2013, the sector contributes 
9.1% of the country’s total tax revenue. Contribution to the Gross Domestic Product in the 
same year was at 3.2%.  
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The mobile industry is one of the most heavily taxed industries in the country. Mobile service 
operators contribute a total of $ 650million taxes in each year (GSMA, 2015). Mobile 
services provide opportunities for investment and employment in the mobile sector GSMA 
(2015). In terms of employment, Teppeh (2011) revealed that the mobile telecommunications 
sector directly employ more than 6,000 full time workers and 1.5 million people indirectly.  
 
 
3.8 Summary  
This chapter puts into perspective the mobile telecommunications industry of Ghana. The 
mobile telecommunications industry of Ghana is very competitive with four main service 
providers (MTN, Vodafone, Tigo and Airtel) accounting for about 95% of the market share. 
The mobile telecommunications industry of Ghana has a high mobile penetration rate with 
over half of the population of the country having access to mobile telecommunications 
services. The industry contributes substantially to the economic development of the country 
through its revenue contribution and employment opportunities it generates. The industry is 
regulated by government agencies which include the National Communication Authority. 
 
 
 
 
 
 
 
 
 
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CHAPTER FOUR 
METHODOLOGY 
 
 
4.0 Introduction 
This section is dedicated to discussing the research methodology that was used in order to 
achieve the purpose of the study.  The chapter begins by explaining research methodology 
and the research design, whereby the various classifications of research are discussed. 
Thereafter, the research paradigm is articulated paving way to the detailing of the research 
population, sampling technique, sample size.  Furthermore, the types of data, data collection 
techniques are highlighted. The chapter concludes presenting the data analysis procedure for 
the study and issues of ethical considerations regarding the conduct of the study. 
  
4.1 Research Methodology 
Malhotra and Birks (2007) define research methodology as a procedural framework within 
which a research is conducted. In other words, research methodology can be seen as the 
process used to collect data for a research study. Research methodology offers the theoretical 
foundations for the understanding which method or set of methods can be applied to specific 
case rather than providing solutions to research problems. 
 
4.1 Research Design  
Boateng (2014) defines research design as how, when and where data for a research is to be 
collected and analysed. Collis and Hussey (2013) identify different categories of research in 
order to classify research studies. They identified the type of study based on the process, 
purpose and logic. 
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Table 4.1: Basis of  Research Design 
Basis Of Research Classification   Types Of Research  
Process of the research  Quantitative and qualitative  
Purpose of the research  Explorative, explanatory, and  descriptive,  
Research Logic  Deductive and inductive  
    Source: Collis and Hussey (2013). 
 
4.1.2 Research Process 
According to Collis and Hussey (2013), research can be classified under process explains 
whether a research is either quantitative or qualitative. Boateng (2014) makes a distinction 
between two research criteria, namely qualitative and quantitative research. Boateng (2014) 
explain further that the focus of qualitative research is to explore a phenomenon. Similarly, 
Hancock, Ockleford, and Windridge (2009) explain that qualitative research focuses studies 
behaviour in natural settings or uses people's accounts as data; which usually involves no 
manipulation of variables. 
According to Boateng (2014), quantitative research seeks to determine the quantity or extent 
of a problem or the existence of a relationship between aspects of a phenomenon by 
quantifying the variation. Measures in quantitative studies are often systematically created 
before data collection is standardized. The objective of quantitative is to test the hypothesis 
that he researcher generates (Malhotra & Birks, 2007). According to Rootman (2011), 
quantitative research is used when the population is large and objectivity is of the utmost 
importance.   
In this study, quantitative research method was used to obtain responses from the respondents 
A review of literature on RM has revealed an extensive use of quantitative research technique 
in data analysis (Ryals, 2005; Ndubisi &  Wah, 2005, Narteh, 2009; Roberts-Lombard, 2011). 
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Also, due to the nature of the study, quantitative method was adopted to test the hypothesis 
developed for the research (Malhotra & Birks, 2007) 
 
4.1.3 Research Purpose 
According to Saunders, Lewis and Thornhill (2012), researches can be classified in terms of 
their purpose. They identified three types of research based on purpose which are explanatory 
research, exploratory research and descriptive research. 
    4.1.3.1  Exploratory research 
Boateng (2014) submits that exploratory research seeks  to explore an area where little is 
known or little research  has been done either in the context or on the research  topic in that 
particular context. Kotler and Armstrong (2012) identify that the objective of exploratory 
research is to gather preliminary information that will help define problems and suggest 
hypothesis. 
    4.1.3.2 Descriptive Research  
Descriptive research is seen as a step further from exploratory research. With descriptive 
research, there is an attempt by the researcher to systematically describe a phenomenon, 
situation or problem (Boateng, 2014). Descriptive research often asks the questions “what” 
and” how” rather than “why”. As the name implies, the objective of descriptive research is to 
describe things (Kotler & Armstrong, 2012).  To explain further, descriptive research seeks to 
provide accurate descriptions of observations of a specific phenomenon.  
    4.1.3.3  Explanatory Research  
Explanatory research focuses on cause effect relationships (Yin, 2014). Explanatory research 
tends to portray the cause and effect relationship among variables. Similarly, Maxwell and 
Mittapalli (2008) agreed that the term explanatory research implies that the research in 
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question is intended to explain, rather than simply describe, the phenomena studied. They 
further added that traditionally, explanatory research is quantitative in nature and typically 
tests prior hypothesis by measuring the relationship between variables.  
The various research purposes are not mutually exclusive and as such researchers can identify 
more than one purpose in a study. In view of sthis; the present study adopts both descriptive 
and explanatory research purposes. The descriptive research purpose was used to describe the 
relationship between the independent and dependent variables under study. The suitability of 
using the explanatory method is to enable the researcher identify the relationship between 
customer relationship variables, customer satisfaction and customer retention. 
 
4.1.4 Research Logic  
According to Collis and Hussey (2013), research logic can either be deductive or inductive. 
Deductive approaches to research mainly aim at testing theory whilst deductive is concerned 
with generating a new theory emerging from data gathered. To achieve this purpose, 
deductive approach starts with hypothesis development and testing them. Inductive approach, 
on the other hand, generally use research questions to narrow the scope of the study. It also 
focuses on exploring previous researched phenomena from a different perspective. This 
approach is generally associated with qualitative study (Gabriel, 2013).  
Since this seeks to test the relationship between variables, the deductive approach was used 
where there is the need to support or refute the hypothesis developed for the study.  
 
4.2 Research Paradigm 
Collis and Hussey (2013) submit that a research paradigm is the process of scientific practice 
based on a researcher’s philosophies and assumptions about the world and the nature of 
knowledge. Burns and Burns (2008) argued that there are two major research paradigms 
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which are the positivistic (quantitative) and the phenomenological (qualitative, interpretivist, 
constructivist) paradigms. The positivistic paradigm ensures that the methods and principles 
of science are applied to the study of human behaviour and human events. The positivist 
paradigms assume that the researcher is independent of and neither affects nor is affected by 
the subject of the research. Interpretive paradigm aims at understanding the subjective 
meanings of persons in the studied domains (Goldkuhl, 2012). 
The current research adopts a positivist approach since the study uses a quantitative approach 
to identify the relationship between the identified variables through hypothesis testing. Also, 
this method is appropriate for the study since the researcher is independent and does 
influence the subject under study. 
 
4.3 Research Strategy 
Saunders, Lewis, and Thornhill (2012) submit that there are several research strategies that 
can be employed in a research. They identified experiment, survey, case study, grounded 
theory, ethnography and action research. However, Yin (2012) notes three research strategies 
in quantitative study: experiments, surveys and case studies. 
The Survey  
Leedy and Ormrod (2010) view surveys as a study, which is designed to determine the 
incidence, frequency, as well as the distribution of certain characteristics in a population. 
Collis and Hussey (2013) explain survey as a positive methodology whereby a sample of 
subjects is drawn from a population and studied to make inferences about the population. 
Thus, a survey is a means of soliciting information about the characteristics, actions, or 
opinions of a large group of people, referred to as a population (Malhotra & Birks, 2007). 
They further added that survey strategy offers strength in measurement given the standardised 
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questions. The survey method has an advantage of making the researcher examine many 
variables and to use a variety of statistics to analyse the data (Wimmer & Dominick, 2011).  
For the purposes of this study, the survey strategy was used. The survey is the relevant 
strategy for this study because it allows for the garnering of subscribers’ perception on 
customer relationship practices in the mobile telecommunication industry. The purpose of 
this study is to examine the direct and indirect relationship between relationship marketing 
practices and customer retention in the telecommunication industry from the perspectives of 
mobile subscribers. To get a reliable result, it is appropriate that a large amount of data from 
the population sample is collected. This is emphasised by Babbie (2013) who asserted that 
surveys are particularly suited to field of mass public opinion. Also, several studies on 
relationship marketing and customer retention adopted the survey method (eg. Leverin & 
Liljander, 2006; Eiriz & Wilson, 2006). 
With regard to the time dimension, research design is independent from which strategy 
adopted. The researcher can either gather data on cross sectional or longitudinal basis. Cross 
sectional studies are designed to gather data at once. Cross sectional studies looks at 
contemporary issues with no reference to past or trend of work. Inversely, longitudinal 
studies involve the gathering of data over a period of time.   
The current study garnered data on cross sectional basis, thus primary data from respondents 
were collected at one point in time. Most works on RM and customer retention adopt this 
style of time dimension in data collection (eg. Ndubisi & Wah, 2005).  
4.4 Population and Sample Selection 
Malhotra and Dash (2011) explain population as a set of elements that contains the 
information needed by the researcher about which the inferences are to be made. Russell and 
Purcell (2009) explain population as the entire or complete collection, group or set of 
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observations of interest to the researcher of a study. Thus the population is the larger pool 
from which sampling elements are drawn and to which findings can be generalised. 
The population for the study comprised all mobile phone subscribers in Ghana. However, the 
unit of analysis for this study was the customers of the top four mobile telecommunication 
service providers in Ghana. Subscribers of the top four mobile service providers account for 
almost 95% of the entire  market hence using subscribers of  the top four service providers is 
a significant representation of the market. The four mobile providers used in this study are 
MTN, Vodafone, Tigo and Airtel. 
 
4.4.1 Sample Size 
After the sample population has been specified, the next stage, it is to determine the sample 
size for the study. The sample refers to the number of elements to be included in the study 
(Saunders et al., 2012). Therefore, a sample is a subset of the larger population. Many authors 
have proposed different ideas to determine sample size (see Alshurideh, 2010). However, 
literature identified that using the sample size similar to previous researches afford the 
researcher a comparison with other researchers' judgement. In line with this, the researcher 
identified that previous research on relationship marketing in the service sector advocate an 
appropriate sample size ranging from 200 to 1000 ( Narteh, 2009).  
Also, in a similar study on relationship marketing and customer loyalty, in the banking sector 
by Anabila, Narteh and Tweneboah-Kouah (2012) used 247 respondents. A study by Lee, 
Lee, and Feick (2001) in the mobile telecommunication industry of France suggested a 
sample size up to 400 is ideal for drawing conclusions. Again prior studies (Ndubisi & Wah, 
2005; Rootman, 2011) used responses from 264 and 220 respondents respectively in drawing 
viable conclusions. Accordingly, based on the sample size previous studies and 
recommendations, a samples size of 320 respondents was used for the study. 
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4.4.2 Sampling Method  
Saunders and Rojon (2014) explain sampling method as the technique for selecting a sample 
from a defined population. The technique or techniques you used to select your sample. 
The purpose of sampling has been identified to enable researchers to estimate some unknown 
characteristic of the population. Blumberg, Cooper and Schlinder (2011) identify three core 
reasons for sampling: for greater speed, greater accuracy of results, and availability of 
population elements.  
There are basically two sampling methods; they are classified as probability or non-
probability sampling (Buame, 2010). Probability sampling occurs when elements or sampling 
units are selected by chance. All elements do not necessarily have the same chance of being 
selected, but the probability of selection of each element can be specified (Blumberg et al., 
2011).  
Probability sampling methods include; simple random sampling, systematic sampling, 
stratified sampling and cluster sampling (Blumberg et al., 2011). Non-probability sampling 
relies on personal judgement of researchers to select the sample. Chance selection procedures 
are not used to draw the sample. Non-probability sampling methods include; convenience 
sampling, judgement sampling, quota sampling and snowball sampling (Malhotra, 2006). 
In this study the author used convenience sampling for selecting the respondents from the 
four telecommunication firms. This method was deemed appropriate for this study because as 
Blumberg et al. (2011) explained that this method is appropriate for survey research where 
cases within samples can be randomly selected. They emphasised that even though the 
method has limitations, they are less important where there is less variation in the population. 
Again, most studies of customer retention the UK's telecommunications industry by adopted 
the convenience sampling method due to the difficulty in getting a sampling frame for 
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probability sampling (Alshurideh, 2010). Also, Prior studies using the survey method adopted 
the convenience sampling method (Alshurideh, 2010; Arthur, Ahenkrah & Asamoah, 2012; 
Narteh & Odoom, 2015). 
The sample was divided into four specific strata with a specified number of respondents 
expected from each stratum. This was used to get representation of customers of the 
telecommunication companies adopted for the study. Respondents of mobile service 
providers were randomly selected from customer service outlets of the selected service 
providers in Accra.  
 
4.5 Types and Sources of Data  
Researchers need to consider the sources on which to base the findings of their research. In 
order to achieve the objectives of a study, researchers can use either primary or secondary 
sources or use both.   
Primary Data 
Boateng (2014) define primary data as a direct record of observations and findings. Thus, 
primary data refer to data garnered directly from the source by the researcher specifically for 
a research study. According to Blumberg, Schlinder and Cooper (2011), primary data are the 
most authoritative because information has not been diluted or interpreted by second party.  
Secondary Data  
Cooper and Schlinder (2011) explain secondary data as the interpretation of primary data.  
According to Kent (2007), secondary data is used to help researchers in solving their 
problems, and to develop an approach for answering certain research problems. Secondary 
data collection according to Bradley (2007) has many advantages such as low cost collection 
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and time saving. In contrast, it has some disadvantages such as its generality and it may be 
outdated and less accurate).  
The current study used only primary data for the purposes of the study.  Primary data were 
used for the current study since it give a realistic perspective to the researcher about the topic 
under consideration. Primary data for this study consisted of first hand information garnered 
from the selected mobile service subscribers through administering questionnaire (see Kaur, 
Sharma & Mahajan, 2012; Narteh & Odoom, 2014).  
 
4.6 Research Instrument  
There are many data collection techniques that can be used to collect the required primary 
data such as: observation, questionnaires and interviews (Saunders et al., 2012). However, the 
questionnaire was the primary data instrument used for this study. According to Burns and 
Burns (2008), questionnaire involves the use of structured questionnaires usually 
incorporating mainly closed ended questions with set response. According to Lu-Ming, Yue-
Min and Chi-Erh (2014) using a questionnaire with scenarios also helps to standardize the 
questions and measurements that are received by the respondents. Moreover, using 
questionnaire allows for greater control over the variables of interest.  
The questionnaire was adopted for this study as opposed to the other data collection 
technique because the responses gathered are in a standardised, making questionnaire 
response more objective as compared to interviews thereby reducing bias. Again, the 
questionnaire was used because it is less intrusive as compared to other methods and can be 
easily analysed using appropriate software. Furthermore, the questionnaire is most 
appropriate for this study since the study adopts the survey approach and seeks to identify 
relationship between variables which can be made possible through questionnaire design. 
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Also, several survey studies on relationship marketing adopted the questionnaire research 
instrument in collecting primary data (eg Kaur et al.,  2012).  
4.6.1 Questionnaire Design  
According Cooper and Schlinder (2011), the questionnaire is the most common data 
collection instrument in marketing research. Questionnaires provide a relatively cheap, quick 
and efficient way of obtaining large amounts of information from a large sample of people. 
Data can be collected relatively quickly because the researcher would not need to be present 
when the questionnaires were completed. This is useful for large populations when interviews 
would be impractical (McLeod, 2014). 
A self-completion structured questionnaire with closed questions was developed for the 
study. A structured questionnaire consists of well-formulated questions and fixed response 
alternatives that are directly related to the research objectives.  Bryman and Bell (2015) posit 
that closed questions have some advantages as it is easy to process answers; it enhances the 
comparability of answers, and makes them easier to show the relationship between variables.  
The study adopts a five point Likert scale in calibrating the responses of the respondents. 
According to Blumberg, Cooper  and Schlinder (2011), the Likert scale is the most frequently 
used variation of summated scale which consist of statements that express either a favourable 
attitude towards an object of interest (Alshurideh, 2010). The style expects the user to judge a 
specific statement on a numeric scale of 1 to 5, usually corresponding to a measure of 
agreement or disagreement and may be in ascending or descending order of importance. 
Prior research in the mobile telecommunication industry used the Likert scale as a means to 
collect data on subscriber’s perspective, choices and opinions (Cronin, Brady, & Hult, 2000; 
Mittal & Kamakura, 2001; Zikmund, 2003; Munnukka, 2006). The questionnaire was divided 
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into three main Sections A and B. Section A consisted of personal information about the 
respondents in respondents such as gender, age, highest educational level, and occupation.  
Section B is made up of questions relating to relationship marketing, customer satisfaction 
and customer retention. This section is composed of items on relationship marketing 
dimensions of trust, commitment, and conflict handling. The questionnaire consists of items 
adopted from previous studies. In all there were 21 items in this section. The first item, 
“trust” consisting of four (4) questions were adapted from studies of (Ndubisi & Wah, 2005; 
Narteh et al, 2013). The second item, “commitment” which comprised of four (4) questions 
were adapted from (Ndubisi & Wah, 2005; Narteh et al., 2013). “Conflict handling” 
dimensions contained four (4) questions which were adopted from ( Ndubisi & Wah, 2005; 
Narteh et al., 2013).  
Questions on customer satisfaction were adapted from Martin-Consuegra, Molina, and 
Esteban (2007). There were four (4) questions on customer retention, which were adopted 
from (Narteh et al., 2013). 
Table 4.2: Summary Composition of Questionnaire 
Variables                         Number of Items  
Commitment                              4 
Trust                              4 
Conflict Handling                              5 
Customer satisfaction                                                                           3 
Customer Retention                             5 
 Source: Researcher, 2015. 
 
 
 
 
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4.6.2 Pre-testing Questionnaire   
Pre-testing is a very important aspect in survey research. It is necessary to pre-test 
questionnaire before administering to the research sample. Hilton (2015) explains pre-testing 
as a method of checking that a questionnaire work as intended and are understood by those 
individuals who are likely to respond to them. According to Grimm (2011), pre testing help 
detect any problem with the questionnaire design leading to ambiguity of words, 
misinterpretation of questions, inability to answer a question, sensitive questions, and many 
other problems associated with the questionnaire as well as the process of administering the 
survey.  
In the current study, a  pre-testing of the questionnaire was conducted prior to the actual data 
collection process by using the collaborative pre-testing (Rouibah, Ramayah,  & May, 2011). 
This method allowed the researcher to obtain the consent of the respondents before 
administering the questionnaire for pre-testing. The questionnaire was tested on a sample of 
respondents twenty five (25) respondents to assess the level of respondents understanding of 
the questionnaires as suggested by (Cooper & Schlinder, 2011). Subsequently, the questions 
that were not clear were rephrased to ensure the questions are simple and clear to the 
respondents. 
4.6.3 Data Collection Procedure 
As described earlier, primary data from respondents were garnered using convenience 
sampling in selecting customers of the selected mobile service providers. The researcher was 
assisted by research assistants in administering the questionnaire. Respondents were 
randomly approached at selected customer care centres on the four mobile service providers 
within the Accra Metropolis. Before administering the questionnaire, the researcher and the 
research assistants sought the permission from the respondents before administering the 
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questionnaire. Those who agreed to partake in the research were later given a copy of the 
questionnaire to fill (see Saunders et al., 2012). The garnering of primary data covered a total 
period of three  months from February to April, 2015. 
 
 
4.7 Data Analysis Technique 
Data analysis involves applying statistical techniques to summarise, describe and illustrate 
and evaluate data. In the current study, Smart PLS 3 and SPSS 16 statistical tools were used 
for the data analysis. SPSS 16 was used for descriptive purposes of the study. Smart PLS 3 
was used for structural equation modelling (SEM) to examine the structural component of the 
measurement and the structural model (Hair et al., 2014).  
In the opinion of Hair, Ringle and Sarstedt (2011) structural equation modelling (SEM) is the 
dominant multivariate technique in research today. According to Kaplan (2007) Structural 
equation model is a family of statistical methods designed to test a conceptual or theoretical 
model. Furthermore, SEM involves a measuring the model that defines the latent variables 
using one or more observable variables and a structural regression model that links the latent 
variables together (Hair et al., 2014). Kline (2011) explains that the parts of the structural 
equation are linked to one another using a system of simultaneous equations. Researchers like 
Henseler and Chin (2010) submit that PLS modelling represents a sustained method for 
establishing complex cause- effect relationship model. 
PLS-SEM is increasingly being applied in marketing and business disciplines (e.g. Henseler, 
Ringle, & Sinkovics, 2009; Ringle, Sarstedt, & Straub, 2012; Henseler, 2012) due to its 
advantage over other SEM techniques. Sample size can affect several aspects of SEM 
including parameter estimates, model fit, and statistical power (Shah and Goldstein, 2006). 
However, different from CB-SEM, PLS-SEM can be utilized with much smaller sample 
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sizes, even when models are complex (Hair et al., 2014). Also, according to Hair et al., 
(2014), PLS-SEM has become a quasi-standard in marketing and management research when 
analysing cause and effect relations between latent constructs.  Another major advantage of 
PLS-SEM is that it permits the use of formative measures, which differ considerably from the 
reflective measures. Formatively measured constructs are particularly useful for studies that 
aim at explaining and predicting key constructs (Hair et al., 2014).  
In using PLS SEM, a two stage process was to analyse the data. First, the data was checked to 
assess the measurement model fitness for the study. Thereafter, a structural equation 
procedure was undertaken to identify the relationship between the latent constructs of the 
study. 
Generally, the data analysis for this study comprised of three main phases which are 
described below. 
The first phase of the data analysis consists of performing descriptive statistics, which include 
mean, frequencies, and standard deviation on the latent constructs of the study. 
The second stage involves the measurement of the model. This involves testing the validity 
and internal consistency (reliability) of the measurement instrument. In testing the validity, 
the factor loadings, the average variance extracted (AVE) measures were used. Reliability 
was measured using the Cronbach alpha and composite reliability (CR). 
The third phase of the data analysis tested the hypothesised relationship between the latent 
constructs. The model for the study was executed in Partial Least Square Equation Modelling 
(PLS-SEM) to obtain the hypothesis testing. Thus, the hypothesis proposed for the study was 
either rejected or accepted based on the results from the structural analysis or path 
relationship. Essentially, the simultaneous relationship between the independent constructs, 
the mediating construct and the dependent construct was examined. 
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4.8 Reliability of the Study  
Reliability can be explained as the consistency, stability and credibility of the study findings 
that allows the findings to be reproduced (Burns & Burns 2008). For the purposes of the 
study, Cronbach alpha and composite reliability were used to determine the reliability of the 
research instrument (Cooper & Schlinder, 2006). Cronbach Alpha can be described as a 
statistical measure used to test reliability in questionnaires (Ryu & Smith-Jackson, 2006). 
Burns and Burns (2008) added that the Cronbach alpha is used for scale data to determine if 
the items used in the questionnaire are measuring the same variable. Nunnally and Bernstein 
(1994) argue that generally, the acceptable lower limit for Cronbach alpha correlation 
coefficient is 0.70. However, Malhotra (2006) added that the Cronbach Alpha could be 
lowered to 0.60 with regard to explorative research. 
Even though, Cronbach alpha is the most widely used to test for reliability of scales, Peterson 
and Kim (2013) argue that Cronbach alpha is lower bound hence underestimate the true 
reliability. Based on this argument, the study in addition to the Cronbach alpha used 
composite reliability, which mostly used in structural equation modelling (see Hair et  al., 
2014). Composite reliability measures the overall reliability of a collection of heterogeneous 
but similar items. It also assesses the internal consistency of a measure (Hair et al., 2014). 
4.9 Validity of the Study  
According to Burns & Burns (2008), validity refers to the appropriateness of the measure to 
access the variable it claims to measure. Thus, validity explains whether the measuring 
instrument is actually measuring what it is supposed to measure. Construct validity was used 
to detect how well the results obtained using the measuring instrument fit theoretical 
expectations (Hair et al., 2014).  
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To check the validity of the measuring instrument, the study used the factor loadings which 
are explained in the subsequent chapter. Again, the validity of the measuring instrument was 
ascertained via convergent and discriminant validity (Hair et al., 2014). Discriminant validity 
shows the extent of which a construct is different from other constructs (Rezaei & Ghodsai, 
2014). Discriminant validity ensures that the items that measure a construct is unique in 
serving as an indicator to the construct (Hair et al., 2014). Thus, it does not relate more to 
other constructs than to the construct it is meant to measure. It is indicated by the low 
correlation between the measure of interest and the measures of other construct (Cheung & 
Lee, 2010).  
Convergent validity ensures that the constructs identified are truly reflected by their 
indicators. Convergent validity of the latent constructs was tested using the confirmatory 
factor analysis (CFA) and the average variance extracted (AVE) measures. According to Hair 
et al. (2011), the CFA seeks to determine if the number of factors and the loadings of the 
measured variables conform to evidence in literature. Loadings of 0.50 are considered 
significant and a proof of validity (Hair et al., 2011). AVE describes the proportion of the 
variance that is explained by the indicators in relation to a specific construct.  The rule of 
thumb for an acceptable AVE score is 0.5 and above (Hair et al., 2011). 
 
4.10 Ethical Consideration in Research 
Malhotra and Birks (2007) argue that issue of ethics is an imperative consideration in 
academic research. Blaxter, Hughes, and Tight (2010) identify that the common cause of 
ethical issue in research is as a result of conflict interest between the researcher and the 
respondents. Basic principles of ethical practice comprises of consent of respondents, respect 
of autonomy, maintain anonymity and confidentiality.  
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In order to observe these principles, the researcher made sure that respondents gave their 
informed consent before administering the questionnaire. This means the participants should 
agree to take part in the research before they take part. The respondents were made aware of 
what they were required to do in respect to filling the questionnaire. Also, an information 
preamble was provided at the beginning of the questionnaire to provide details about the 
researcher, the research topic and the purpose of the study. 
In order to prevent respondents hurriedly answering the questions, the researcher only 
targeted those who had ample time to fill the questionnaire. This accorded the respondents 
the opportunity to read thoroughly before filling the questionnaire. The demographic 
questions were structured in such a way that respondent’s identity was not revealed. The 
respondents were also made aware that the research was purely for academic purposes, hence 
their anonymity and their responses will be safeguarded. 
 
 
 
 
 
 
 
 
 
 
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CHAPTER FIVE 
DATA ANALYSIS AND PRESENTATION OF FINDINGS 
 
5.0 Introduction 
This chapter presents the empirical aspect of the study, which involves the analysis of the 
data gathered and the interpretation of data gathered based on the literature reviewed. This 
section is broadly divided into three sections-descriptive analysis, inferential analysis and the 
discussions of the findings based on literature. The descriptive analysis illustrates the 
background details of the respondents. Descriptive analysis was used to compute the mean 
and standard deviation of the latent constructs. The final section concentrates on the 
discussion of the results based on the literature reviewed for the study. 
 
5.1 Response Rate  
Overall, 320 questionnaires were distributed out of which, 291 questionnaires were usable 
representing a response rate of 90% a reasonable response rate for a survey of this type (see 
Malhotra, 2006). 
 
5.1.1 Respondents'  Details   
Out of a total of 291 respondents, 168 were males representing 57.7%. The remaining 123 
representing 42.3 % were females. A significant 24% of the respondents were between the 
ages of 21-30 years. Almost a quarter of the respondents (29.2%) were between the ages of 
31-40 years, followed by 15.5% between the ages of 41-50 years.  Furthermore, 12% of the 
respondents were less than 21 years and the remaining 9.3% above 51 years. In terms of 
education, 36.1% of the respondents have tertiary education, 34 % have secondary school 
qualification, 21.3 % had basic education, and 8.6 % had post graduate education. The study 
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revealed that 65% of the respondents are subscribed to more than one network service 
provider whilst the remaining 35% claimed they are subscribed to only one service provider. 
This confirms the report by NCA (2014) on the prevalence of multi-simming in the telecom 
industry of Ghana. The respondents were asked to indicate their primary network.  Out of the 
total 291 respondents, 96 were subscribers of MTN, followed by 70 who were subscribed to 
Tigo, a further  66 were subscribers of Vodafone and lastly, 56 had Airtel as their primary 
mobile network provide. 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Table 5.1 Socio- Demographic of Respondents 
  Frequency  Percentage (%) Cumulative frequency  
Gender     
    Male  168 57.7  57.7 
   Female  123 42.3  100 
Total  291 100  
Age (in years)     
    Less than 21  35 12  12 
    21-30 99 34  46 
    31-40 85 29.2  75.3 
    41-50 45 15.5   90.7 
   Above 51 27 9.3  100 
Total 291 100  
Educational Level    
  Basic  62 21.3 21.3 
  Secondary 99 34.0 55.3 
  Tertiary 105 36.1 91.4 
  Post graduate  25   8.6 100 
Total 291 100  
Occupation    
 Unemployed   48 16.5 16.5 
 Self employed    77 26.5 43.0 
 Salaried worker 125 43.0 86 
Student    41 14 100 
 Total                                 291  100  
 Subscription 
Multiplicity  
   
Only one  101 35 35 
Two or more  190 65 65 
 Total 291 100 100 
Primary Network    
MTN   96 33 33 
Tigo   70 24 57 
Vodafone    66 22.7 79.7 
Airtel    59 20.3 100 
Total 291 100  
 Source: Field Data, 2015. 
 
 
 
 
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5.2 Descriptive Statistics of Latent Constructs  
Pallant (2003) suggest that the data should first be subjected to descriptive analysis before 
validation and further. Descriptive statistics allow data to be present in a simpler way for 
understanding. It, however, does not allow a conclusion beyond the data collected. Mean and 
Standard deviation was used to present a descriptive analysis of the data collected.  
 
5.2.1 Independent Variables 
Trust 
From Table 5.3, most of the respondents agreed that their primary service provider has a high 
integrity which is reflected by the mean score of 2.68. With a mean of 2.9, most of the 
respondents agreed or were neutral that their primary network service provider is consistent 
in delivering quality service. Overall, most of the respondents were in agreement with most 
of the items under trust.  
Table 5:3: Descriptive statistics for trust as an independent variable  
 Items N MEAN S.D 
TR1 High Integrity 291 2.6838 1.04207 
TR2 Fulfils Promise 291 2.8110 1.13046 
TR3 Consistent In Quality 291 2.9966 1.03557 
TR4 Confidence In Service Provider 291 2.7079 1.03085 
Source: Field Data, 2015. 
 
Commitment 
Form table 5.4, most of the respondents either agreed or strongly agreed that they care about 
the long term relationship with their service provider which is reflected in the men score of 
2.66. Also, most of the subscribers either agreed or were neutral that their primary service 
provider is flexible in offering services which is indicated in the average score of 2.8. With an 
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average score of 2.8, a significant number of subscribers either agreed or were neutral that 
they are proud customers of their network service. 
Table 5.4: Descriptive statistics for commitment as an independent variable  
 Items N MEAN S.D 
CM1 Committed to relationship 291 2.8007 1.16329 
CM2 Flexible Service 291 2.9485 1.07676 
CM3 Care Long Term 291 2.6598 1.03277 
CM4 Proud Customer 291 2.8076 .98124 
Source: Field Data, 2015. 
  
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Conflict Handling   
In determining the responses of subscribers to conflict handling practices, majority of the 
despondence which is indicated by a mean score of 2.5 agree that their service provider 
listens to their complaints when it arises. An average of 2.58 also agreed to service providers 
providing clear avenues for registering complaints. The least confirmation was recorded for 
the giving of service failure compensation by the service providers with a score of 3.23.   
Table 5.5: Descriptive statistics for Conflict handling as an independent variable  
 Items N MEAN S.D 
CH1 Clear Avenues For Complaints 291 2.5808 1.08414 
CH2 Problem Solving Promptly 291 3.0653 1.15633 
CH3 Service Delivery Compensation 291 3.2302 1.35897 
CH4 Solve Problem Before Manifestation 291 2.9210 1.21653 
CH5 Listens To Complaints  291 2.5017 1.14884 
Source: Field Data, 2015. 
 
5.2.2 Descriptive Statistics of Dependent Variables 
Customer Satisfaction  
With regard to the responses on customer satisfaction, all responses had mean values less 
than three (3) indicating that most of the respondents either agreed or were neutral to the 
items under customer satisfaction. 
Table 5.6: Descriptive Statistics for Customer Satisfaction  
 Items N MEAN S.D 
CS1 Completely Happy 291 2.9003 1.17166 
CS2 Good Experience  291 2.7560 1.09494 
CS3 Overall Satisfaction 291 2.8076 1.14051 
Source: Field Data, 2015. 
 
 
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Customer Retention 
From Table 5.7, it can be seen most subscribers either agreed or neutral on for future 
patronage of their primary service with a mean score of 2.82. However, most customers 
either were neutral or disagree   that they will pay more for network service usage with a 
mean score of 3.67. 
Table 5.7: Descriptive Statistics for Customer Retention 
 Items N MEAN S.D 
CR1 Recommend 291 2.9897 1.26077 
CR2 Future Patronage 291 2.8213 1.14877 
C43 Emotionally Attached  291 3.1890 1.26574 
CR4 Pay More 291 3.6770 1.15913 
CR5 WOM 291 2.9175 1.12038 
 Source: Field Data, 2015. 
 
 
5.3 Model Assessments 
Duarte and Raposo (2010) submit that the goodness of a theoretical model is assessed by 
identifying the strength of each structural path and the combined productiveness of its 
constructs. Hair et al.(2014) explain that PLS SEM, as compared to Covariance based (CB- 
SEM) techniques does not have a global goodness-of-fit criterion.  
However, based on Hair et al.(2014) criteria for assessing a model in PLS SEM, the outer 
loadings, composite reliability, the average variance extracted (AVE) and discriminant 
validity were examined in order to achieve consistency. 
 
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5.3. 1 Convergent validity  
From the Table 5. 8, it can be seen that the AVE values for all the latent constructs exceed 
0.5, which means the latent variables are able to explain more than half of the variance of its 
indicators on average (e.g. Gotz, Liehr-Gobbers, & Kraft, 2009).Thus demonstrating 
convergent validity of all the constructs. Again the empirical results indicate that the outer 
loadings score for all the items were above 0.50. 
 
5.3.2 Construct Reliability  
From Table 5.8, for composite reliability, the entire construct were above the accepted value 
of 0.7. The results also indicated a Cronbach alpha of 0.7 and above adequate for quantitative 
studies as advised by (Hair et al., 2014). Hence, all the requirements for convergent validity, 
construct reliability, Cronbach Alpha or internal reliability, and composite reliability is 
achieved. The next step is to determine the validity of the constructs. 
 
 
 
 
 
 
 
 
 
 
 
 
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Table 5.8:  Construct Validity and Reliability of Constructs 
Variables  Factor 
Loadings   
AVE CR Cronbach 
Alpha 
Trust   0.5886 0.8489 0.77 
    TR1 0.600    
    TR2 0.787    
    TR3  0.768    
    TR4 0.886    
Commitment   0.7395 0.8947 0.82 
    CM1 0.810    
    CM2 0.909    
    CM3 0.858    
Conflict handling   0.5291 0.8163 0.70 
    CH1 0.624    
    CH2 0.673    
    CH3 0.802    
    CH4 0.794    
Customer Satisfaction   0.8389 0.9398  0.90 
    CS1 0.918    
    CS2 0.937    
    CS3 0.892    
Customer Retention  0.6246 0.8914  0.85 
    CR1 0.856    
    CR2 0.722    
    CR3 0.808    
    CR4 0.645    
    CR5 0.894    
Source: Field Data, 2015. 
 
5.3.3 Discriminant Validity Measures  
Discriminant validity compares the average variance explained by the indicators in each of 
the constructs to the squared correlations between the constructs (Fornell & Larcker, 1981). 
The rule of thumb for discriminant validity tests ensures that the square root of the average 
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variance extracted (AVE) for a construct exceeds the correlations it has with other constructs 
Gotz et al. (2009).  
 
 
Table 5.9: Discriminant Validity of Variables  
                        1       2       3         4        5 
           Commitment (1) 0.74     
Conflict Handling (2) 0.24 0.53    
Customer Retention (3)        0.3 0.37 0.62   
Customer Satisfaction 
(4) 
0.31 0.27 0.58 0.84  
 Trust (5) 0.22 0.15 0.26 0.31 0.59 
Note: The diagonals represent the square root of the average variance extracted while the 
other entries represent the squared correlations. 
Source: Field Data, 2015. 
Table 5.10 gives the results of the discriminant validity tests. The diagonal elements represent 
the square root of the AVE of the various latent constructs. According Hair et al. (2014), the 
squared correlation for each construct should be less than the square root of the AVE of the 
indicators measuring the construct. The results meet this rule indicating that truly the 
indicators are unique in measuring its construct and hence there are no higher correlations 
between the constructs. Thus the various items in measuring the construct are unique 
indicators in measuring that specific construct and do not have problem with collinearity 
(Hair et al., 2014). 
In summary, the recommended guidelines for the measurement model shows adequate 
convergent and discriminant validity. Therefore, it can be concluded that the measuring 
properties and structural relationships indicate acceptable validity and reliability. 
 
 
 
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5.4 Structural Model. 
According to (Hair et al., 2014), once the construct measures have been confirmed as reliable 
and valid, the next step is to assess the structural model results. Sang, Lee, and Lee (2010) 
indicated that the structural model explains the casual relationship among the latent 
constructs in the model. The structural model includes the estimates of the path coefficients, 
t-value, and the R2 value, which determine the prediction power of the model and the 
relationships between the constructs (Hair et al., 2014). Sang et al., (2010) further explained 
that the R2 and the path coefficient explains the degree to which the data support the 
hypothesised model. Table 5.11 and Figure 5.3 and 5.4 show the results of the structural 
model from the PLS output. 
  
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Figure 5.3: Structural Equation with Coefficients of Paths 
 
Source: Field Data, 2015. 
Figure 5.4: Structural Equation with t-values of Paths  
 
Source: Field Data, 2015. 
 
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Relationship between Relationship Marketing Practices and customer satisfaction 
In order the analyse the impact of the relationship marketing practices on customer 
satisfaction(CS), the coefficient and t-values of the respective practices were measured 
against customer retention as the dependent variable.  From Table 5.10 and Figure 5.3, it can 
be seen that RM marketing practices of trust (β=0.33, t=3.49, P=0.005<0.05), commitment 
(β=0.27, t=2.52, P= 0.0119< 0.05), and conflict handling (β=0.26, t=2.72, P= 0.0065<0.05) 
have a significant relationship with customer satisfaction. Accordingly, trust was found to 
have the most impact on customer satisfaction (CS) followed by commitment and conflict 
handling. Again, Figure 5.3; reveal that the various RM practices explain 47.4% of the 
variation in customer satisfaction in the mobile telecommunications industry of Ghana. 
Table 5.10: Customer satisfaction as the dependent variable 
Variable  Coefficient  T-value P-value 
Trust  0.33 3.494 0.0005 
Commitment  0.27 2.516 0.0119 
Conflict Handling  0.26 2.719 0.0065 
 Note: T >1.96, P<0.05 
Source: Researcher, 2015 
 
 Relationship between Relationship Marketing Practices and Customer Retention 
Table 5.11 and Figure 5.4 indicate that the RM practice of trust (β=0.07, t=1.96, P=0.457) 
and Commitment (β= 0.097, t =1.146, P=0.252) do not have a direct relationship with 
customer retention. However, Conflict handling (β=0.26, t=2.74, p=0.0061<0.05) has a direct 
significant relationship with customer retention. Also, RM practices of trust, commitment and 
conflict handling explains 64.9% of customer retention. 
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Table 5.11: Customer retention as the Dependent Variable  
Variable  Coefficient  T-value P-value 
Trust               0.062              0.744 0.4569 
Commitment  0.097 1.146 0.2518 
Conflict Handling  0.260  2.743 0.0061 
Note: T >1.96, P<0.05     
Source: Researcher, 2015. 
 
Relationship marketing practices and customer retention through customer satisfaction  
The structural model (Figure 5.4) depicts an indirect relationship between RM practices of 
trust, commitment and conflict handling and the dependent variable, customer retention 
through customer satisfaction at the value of (β=0.54,t >5.753, P=0.000<0.05). 
 
5.5 Results of Hypothesis Test  
An analysis of path coefficient and the levels of significance of all the hypothesis were 
undertaken. The results showed that five out of the seven hypotheses were supported or 
accepted. Hypothesis 1a predicts a positive relationship between trust and customer 
satisfaction, and it was accepted at a t-value of (3.49). The hypothesis 1b, which predicts a 
positive relationship between commitment and customer satisfaction was accepted at t value 
of (2.516). Similarly, the relationship between conflict handling and customer satisfaction 
was accepted at t value of (2.719).  
Furthermore, the positive relationship between trust and customer retention was rejected at t 
value of (0.744). Similarly, the positive relationship between commitment and customer 
retention was accepted at (1.146). However, the positive relationship between conflict 
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handling and customer retention was accepted at t value of (2.743). Finally, the indirect 
relationship between RM practices and customer retention through customer satisfaction was 
accepted at a t –value of (5.733). 
Table 5.12: Path Coefficients and of Hypothesis Testing 
Hypothesis Hypothesis Path T values Result 
H1a  Trust                          customer satisfaction     3.494 Supported 
H1b  Commitment             customer satisfaction     2.516 Supported 
H1c Conflict handling           customer satisfaction     2.719 Supported 
H2a   Trust                           customer retention     0.744 Unsupported 
H2b   Commitment            customer retention     1.146 Unsupported 
H2c  Conflict handling           customer retention     2.743 Supported 
H3       Relationship marketing        customer satisfaction                                
customer retention 
5.753 Supported 
Notes: t- values for two tailed test: 1.96 (significant level=5%)      
Source: Hair et al., (2014). 
 
5.6 Discussion of Findings  
Relationship marketing has become an important marketing practice in fostering customer 
loyalty and subsequent retention in the service sector. The essence of RM is to build a long 
term relationship with the customer in order to reduce customer switching behaviour as a 
means of ensuring customer retention. The study therefore examined the direct and indirect 
relationship between relationships, marketing practices and customer retention in the 
telecommunication industry of Ghana. Three relationship marketing practices were adopted 
for this study to determine their impact on customer retention. The result confirmed that 
relationship marketing is a multidimensional construct that involve trust, commitment, 
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conflict handling. This is in line with prior studies by (Ndubisi & Wah, 2005; Narteh et al, 
2009, 2013).  
 
Relationship marketing practices (trust, commitment, and conflict handling) and 
customer satisfaction  
The study indicates a strong relationship between relationship marketing practices and 
customer satisfaction. Specifically, 47.4% of the relationship marketing practices were 
explained by the relationship marketing practice of mobile telecommunication firms in 
Ghana. The relationship marketing practices of commitment, conflict handling was found to 
have a significant positive relationship with customer satisfaction at t values 2.62 and 2.71 
respectively. These finding are supported by (Narteh, 2009).  
The study revealed a positive and significant relationship between trust and customer 
satisfaction in the telecom sector. This confirms the study of Chiou (2004) who identified that 
perceived trust has a direct and positive impact on overall satisfaction and loyalty of 
customers. Furthermore, this indicated that trust has the highest impact on customer 
satisfaction with a significant t value of 3.09. This underscores the argument that trust is the 
basic foundation of relationship marketing (Wong & Shoal, 2002). This further implies that 
subscribers of mobile phone services in Ghana believe that fulfilling promises, consistently 
proving quality network services and maintaining integrity has the highest impact on their 
relationship satisfaction level.  
Similarly, a positive interplay was identified between commitment and customer satisfaction 
in the telecommunication sector of Ghana which corroborates the findings of Hutchinson et 
al. (2011). Commitment was identified as the RM practice with the second strongest impact 
on customer satisfaction. This implies that in the opinion of mobile subscribers in Ghana, 
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having an honest investment in and engagement with their service provider (Rizan et al., 
2014)  
Conflict handling indicated a significant relationship with customer satisfaction indicating 
that conflict handling has a positive impact on customer satisfaction in the telecommunication 
industry. This finding confirms the Narteh (2009) that conflict handling has a significant 
impact on the customer satisfaction level in the service industry. Also, this finding 
corroborates with a prior study by Gronroos (2004) who identified conflict handling as a key 
variable influencing customer satisfaction. This implies that the ability of mobile 
telecommunications firms to prevent potential conflicts as well as solve manifested conflicts 
has a significant impact on customers’ satisfaction with the relationship. 
The study revealed of all the relationship marketing practices, trust had the highest impact on 
customer satisfaction followed by conflict handling and commitment. The result 
demonstrated that ensuring trust is the single most important factor in determining the quality 
and in essence the satisfactory level of customers.  
 
Relationship between relationship marketing practices (trust, commitment, and conflict 
handling) and customer retention 
Per the findings of the study, all the relationship marketing practices do not have a direct 
positive relationship with customer retention in the telecommunications industry except 
conflict handling. The RM practice of trust did not have a positive relationship with the 
dependent variable, customer retention. This was inconsistent with previous studies (Bowen 
& Shoemaker, 2003; Ndubisi, 2007).  
Furthermore, the results also indicated that commitment in a relationship does not impact on 
customer retention. This contradicts previous studies by (Wong & Sohal, 2002; White & 
Yanamandram, 2007). However, conflict handling had a positive and significant relationship 
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with customer retention in the telecommunication sector. The direct relationship between 
conflict handling and customer retention resonates with the findings of Narteh (2013) which 
emphasise that when firms are able to handle service failures and successfully handle 
customer’s complaints, leads to customers returning to patronise services of the firm.    
Hence, conflict handling has a direct impact of customer retention. 
 
Relationship marketing practices and customer retention through customer satisfaction  
The findings of the study indicate a relationship marketing tactics significantly affect 
customer retention through customer satisfaction as suggested by (Rizan, 2014). Per the 
result, there appears to be an association between building long term relationship with 
customers, customer satisfaction and customer retention as pointed by Mostert and De Meyer 
(2010). Also, the study resonates the view of Morgan and Hunt (1994) that customer 
satisfaction is an important component in fostering relationship marketing.  
The study revealed that customer satisfaction mediates relationship marketing practices of 
trust, commitment, and customer retention. This study also mirrors the findings of 
satisfaction (Ranaweera & Prabhu, 2003; Zeithaml et al., 2009) customers can be retained by 
offering increased levels of satisfaction.  
The study indicates that customer satisfaction is a key driver of customer retention (Rizan et 
al., 2014), consequently firms should concentrate more on providing desirable services, 
getting their services right. However, it was found out that conflict handling has a direct 
relationship with customer retention. The findings of this study is in contrast to the argument 
of Reichheld (1996) that customer satisfaction does not have a positive direct relationship 
with customer retention since customer satisfaction was found to have a direct significant 
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relationship with customer retention. Hence, mobile telecommunication firms should adopt 
relationship marketing to achieve customer satisfaction and subsequently customer retention. 
 
Summary  
This chapter presented the empirical aspect of the study. The respondent’s details were 
presented, followed by a descriptive analysis of the responses. The results indicated a 
majority of respondents patronise mobile services of more than one services provider. A 
model assessment of the measurement instrument indicated a high validity and reliability. 
The structural model of the study led to the confirmation of five (5) out of the seven (7) 
hypotheses developed for the study. 
 
 
 
 
 
 
  
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CHAPTER SIX 
SUMMARY AND CONCLUSION AND RECOMMENDATIONS 
 
6.0 Introduction  
This chapter is dedicated to presenting the summary, conclusion and recommendation of the 
study. This concluding chapter summarises the study based on the purpose and objectives 
developed for the study. The major findings are then discussed with a conclusion drawn. The 
chapter finally discusses the managerial implications of the study, and makes 
recommendation for further research. 
 
6.1 Summary   
The  mobile telelcomunications industry continues to experience intense competition, hence 
firms are being challenged to implement marketing strategies to ensure growth and survival. 
Boohene and Agyapong (2010) recognise that the growth and survival is depepndnet on firms 
ability to attract and retain customers, as customers are the focus of businesses operations.   
The main aim of this study is to determine the direct and indirect impact of relationship 
marketing practices of trust, commitment, and conflict handling on customer retention in the 
telecommunications sector of Ghana. Specifically, the study sought to determine the 
relationship between the identified relationship practices and customer retention; determine 
the relationship between marketing practices and customer satisfaction, lastly, to examine the 
indirect influence of customer satisfaction on the relationship between relationship marketing 
and customer retention. 
To achieve this purpose, literature was reviewed which led to the identification of trust, 
commitment and conflict handling as the independent variables, while customer satisfaction 
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and customer retention were specified as the intervening and depending variables 
respectively. 
Furthermore, hypothesis were developed for empirical testing using 320 respondents  
surveyedusing self-administered structured questionnaire to the subscribers of 
telecommunications services in Ghana. Out of the sampled respondents, 291 questionnaires 
were usable. The data gathered were analysed using SPSS and PLS. The results from the 
structural equation model confirmed five out of the seven hypothesis developed. 
 
6.1.1 Summary of Findings  
The following are the summary of the major research findings. 
I. There exists a significant relationship between trust and customer satisfaction in the 
mobile telecommunications industry of Ghana at (β=0.33, t=3.494, P=0.012). This 
finding confirms earlier studies by Hutchinson et al. (2011) that trust has positive 
impact on satisfaction in an exchange relationship. Also, the findings suggest trust is 
an antecedent to customer satisfaction as argued by (Duarte & Davies, 2004; 
Svensson et al., 2010). 
II. There exist a significant relationship between commitment and customer satisfaction 
in the telecommunication industry of Ghana at (β=0.270, t=2.516, P=0.0005). This 
result resonates prior researches by Skarmeas et al. (2008). It further resonates with 
the arguments by Ndusisi (2007) and Farrelly and Quester (2005) that commitment 
leads to customer satisfaction in an exchange relationship. 
III. There exist a significant relationship between conflict handling and customer 
satisfaction in the mobile telecommunication industry of Ghana at (β=0.263, t=2.70, 
P=0.0069). The study reveals that effective conflict handling procedures are necessary 
to achieve customer satisfaction. This finding reflects the study by Narteh (2009) and 
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supports the claim by Gronroos (2004) that the extent on customer satisfaction in an 
exchange relationship is dependent on the level of service failures. 
IV. There is no significant relationship between trust and customer retention in the 
telecommunication industry of Ghana at (β= 0.062, t=1.146, P=0.457). This finding 
contradicts prior studies (Teichert & Rose, 2003; Ndubisi & Wah, 2007).  
V. There is no significant relationship between commitment and customer retention in 
the mobile telecommunication industry of Ghana at (β=0.097, t=2.719, P=0.252).This 
result contradicts the some prior studies (Wong & Sohal, 2002; White & 
Yanamandram, 2007). 
VI. There exist a significant relationship between conflict handling and customer 
retention in the mobile telecommunication industry of Ghana at (β=0.260, t=0.744, 
P=0.061). This result confirms prior studies (Egan, 2004; Homburg, 2005; Ndubisi, 
2007).  
VII. There exist an indirect relationship between relationship marketing practices of trust, 
commitment, and conflict handling and customer retention through customer 
satisfaction at (β=0.534, t=5.75, P=0.000). This result is in line with previous studies  
(Liao,Palvia & Chan, 2009; Mostert & De Meyer, 2010).  
 
 
 
 
 
 
 
 
 
 
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6.2 Conclusion  
The conclusion of the study is discussed based on the research objectives developed for the 
study. 
6.2.1 Objective One: Establish the relationship between relationship marketing 
practices (trust, commitment and conflict handling) and customer satisfaction in the 
telecommunication industry of Ghana. 
For the purposes of this study, relationship marketing was conceptualised to involve trust, 
commitment, communication and conflict handling (Narteh et al., 2013; Ndubisi & Wah, 
2005).Literature establishe positive relationship between the concept of relationship 
marketing and customer satisfaction. However, few studies analyse the distinct impact of 
relationship marketing practices as conceptualised by (Narteh et al., 2013; Ndubisi & Wah, 
2005). The findings of the study suggest that there is a positive significant relationship 
between relationship marketing practices (trust, commitment, and conflict handling) and 
customer satisfaction.  
 
6.2.2 Objective Two: Identify the relationship between relationship marketing practices 
(trust, commitment, and conflict handling) and customer retention in the 
telecommunication industry of Ghana. 
The structural equation modelling results indicated that relationship marketing practices trust 
and commitment do not have a direct impact on customer retention. This implies that 
building trust among subscribers, commitment on the part of the service provider towards 
service exchange relationship do not have a significant impact on customer repeat purchases. 
However, conflict handling was found to have a direct impact on customer retention. Thus, 
conflict handling mechanisms such as measures put in place to prevent potential service 
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failures, solving manifested service failures and adequately compensating subscribers for 
service delivery failures result in customer retention. 
 
6.2.3 Objectives Three: Determine whether there is an indirect relationship between 
relationship marketing practices (trust, commitment, and conflict handling) and 
customer retention through customer satisfaction in the telecommunications sector in 
Ghana. 
The study revealed that relationship marketing practices of trust, commitment and conflict 
handling indirectly impact on customer retention. The findings confirmed that customer 
satisfaction is imperative in achieving customer retention when employing relationship 
marketing practices. Customer satisfaction was found to intervene between relationship 
marketing practices of trust, commitment, and Conflict handling and customer retention. This 
implies that even though relationship marketing practices are necessary to ensure customer 
retention, relationship marketing is not a sufficient factor in ensuring future purchase 
intention decision of subscribers. Therefore, customer satisfaction should be the focus of 
mobile communications service providers in order to achieve customer retention. 
In conclusion, in manipulating relationship marketing practices to achieve customer retention, 
firms should largely focus on achieving customer satisfaction first. Relationship marketing 
practices were found to have a significant indirect impact on customer retention rather than a 
direct impact on customer retention. Furthermore, the relationship marketing practices even 
though different should be seen as mutually reinforces each other in achieving customer 
satisfaction and subsequently customer retention 
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6.3 Implications for Management  
The findings and discussions of this study offer several implications for management of 
mobile service providers in Ghana. There following are recommendations for management of 
mobile service providers in Ghana. 
 
6.3.1 Building Trust  
Trust has been identified as an important element of the relationship between mobile service 
providers and customers, which affects customer satisfaction and ultimately customer 
retention. Given the results, management of mobile telecommunications firms should focus 
their efforts on building  trust amongst their subscriber base since trust was found to impact 
customer satisfaction the most. It is therefore imperative that firms within the mobile 
telecommunication industry strive to enhance their trustworthiness. Mobile service providers 
in Ghana can build customer trust by fulfilling their promises in a timely manner.  
Firms in the industry should make realistic and achievable promises which they can fulfil. It 
also important that mobile service providers provide quality services consistently to build the 
confidence of subscribers in the services that they offer. Mobile service companies can build 
trust or maintain a high integrity by continually training its employees, especially their 
customer care representatives on how to be professional in their dealings with customers. 
Mobile service should not undervalue the essence of its physical environment in achieving 
customer confidence and trust in their services. 
 
6.3.2 Enhancing Commitment  
Commitment is fundamental is sustaining the relationship between mobile service providers 
and their customers. Commitment, explains the enduring desire by the partners to sustain the 
relationship. Commitment is an important antecedent in determining customer satisfaction 
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and customer retention; therefore mobile service providers should invest in facilities to 
enhance consistent quality services in order to sustain their relationship with customers. 
Furthermore, mobile service providers should design services to meet the different segments 
of its customer base. Overall, companies within the mobile telecommunications industry of 
Ghana should focus on investing into sustaining their relationship with customers.   
 
6.3.3 Effective Conflict Handling 
Conflict handling was found to have a direct impact on both customer satisfaction and 
customer retention. This explains that the extent of customer satisfaction and customer 
retention can be directly linked to the effectiveness of the conflict handling mechanisms of 
mobile service providers in Ghana. It therefore paramount for mobile service providers to 
develop and implement an effective and comprehensive conflict management system in order 
to address service failure and other forms of conflicts, mobile service providers should make 
it possible and easy for customers through the provision of avenues to make such complaints. 
Again, service providers should undertake to solve complaints promptly, and if cannot be 
rectified immediately, they should inform customers when they can solve it.   
Also, it is important that mobile service providers compensate customers for service failures. 
Compensation may take the form of services subscribed by customers. Also, customer care 
personnel should be trained on how to handle customer complaints without aggravating the 
situation.   
 
6.4 Limitations and Recommendations for Future Studies  
Based on the scope, limitations and findings of the study, future research in relation to issues 
in this study should consider the following recommendations. 
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 First, the use of cross-sectional survey for data collection, which makes it difficult to 
determine equivocally the time sequence of relationship between RM practices and 
customer retention. Using this time frame of data collection subjects the response 
being affected by current event which could influence respondents’ opinion/response. 
Based on the limitation of the cross sectional data collection method, future studies 
should consider undertaking a longitudinal study to offer more insight on the data 
collected.  
 
 Also data were collected only from the perspectives of the subscribers of mobile 
phone subscribers without considering the opinion of the management of each of the 
network service providers used in the study. In order to have a broader understanding 
of achieving customer retention via RM, sfuture research should consider 
incorporating both perspectives of subscribers and management of the network 
service providers. 
 This study is also limited to the issue of geographical reach. The study was conducted 
in the Accra metropolis which might not reflect the entire opinion of subscribers 
elsewhere in the country. Therefore, future studies in area should consider 
undertaking an extensive geographical reach to enable more representative results. 
 Ang and Buttle (2006) intimate that the central characteristic of relationship 
marketing is long term relationship with customers on mutual benefits or on 
profitability basis. Therefore, future studies should delve into developing a model for 
undertaking RM based on the profitability of customers.  
 
 
 
 
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APPENDIX A-QUESTIONNAIRE 
 
 
UNIVERSITY OF GHANA BUSINESS SCHOOL 
DEPARTMENT OF MARKETING AND CUSTOMER MANAGEMENT  
 
 
QUESTIONNAIRE 
Dear Participant,  
This study is being conducted by an M.Phil. Marketing Student of the University of Ghana 
Business School on the topic “Relationship marketing practices and customer retention 
in the telecommunication industry of Ghana”. The study seeks to assess the impact of 
relationship marketing on customer satisfaction and customer retention in the telecom sector 
of Ghana.  
Please attempt to answer all the questions and tick one appropriate box that best suits your 
perspective for each statement. Your responses will be anonymous; data will be combined 
and analysed as a whole. Your participation in the study will be greatly appreciated. Thank 
you very much for your time and effort.  
 
Section A: Respondents Information 
1. Gender                  i.  Male [      ]                               ii.  Female [          ] 
2. Age                 i. <20    [      ]         ii. 20-30 [       ]        iii. 31-40 [       ]         iv.  41-50 [      ]        
                           v. 51-60 [      ]         vi. >60   [       ] 
 
3. What is your highest level of education?  
 i. Non formal Education   [       ]                    ii. Basic Education       [        ]         
 Iii.Secondary Education    [       ]                  iv. Graduate Education [        ]  
 v. Post Graduate Education [       ] 
 
4. What is your employment status? 
i. unemployed [      ]        ii. Self –employed [       ]            iii. Salaried employee [      ]                                
iv. Student [      ]  
 
 
5.  Kindly state the telecommunication service provider (s) you subscribe to 
i. Tigo [       ]    ii.MTN [      ]      iii.Vodafone [        ]     iv.Airtel     [         ]      
 Others ………………….. 
6. Kindly state your primary network service provider if you use more than one service 
provider. 
…………………………………………………………………………………….. 
7. How long have you been using your current (main) mobile service provider? 
i. Less than a year [      ]                 ii. 1-3 years [       ]                 iii.  More than 3 years [      ] 
 
 
 
 
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Section B: Relationship Marketing and Customer Retention 
For each of the following statements, please indicate the extent to which you either agree or 
disagree with the statement relating customer relationship practices of your network service 
provider.  Where 1= strongly agree, 2= agree, 3=Neutral, 4=disagree, 5=strongly 
disagree.  Please mark only ONE response per statement. 
No. Items 1 2 3 4 5 
  Trust       
1 My service provider  has high integrity      
2 My service provider fulfils its promises      
3 My service provider is consistent in providing quality 
services  
     
4  I have confidence in my network service provider      
 Conflict Handling      
1 There are clear avenues for registering complaints      
2 Service provider solves problems promptly       
3 Service provider gives compensation for service delivery 
mistakes. 
     
4 Service provider tries to solve manifest conflicts before the 
create problems 
     
5 My service provider listens well and understands my 
complaints. 
     
 Commitment       
1 My service provider is interested its relationship with me      
2 My service provider is flexible in serving my needs      
3 I care about the long term success of my service provider      
4 Proud customer of my service provider      
 Customer Satisfaction      
1 I am completely happy with my service provider       
2 My experience with my service provider has been good.      
3 Overall I am satisfied with my network service provider      
 Customer Retention      
1 I usually recommend my service provider to friends      
2 I will continue to remain a customer of my service provider 
no matter what 
     
3 I feel emotionally attached to my network service provider      
4 I am prepared to pay more for service delivery.      
5 I say positive thing about my service provider to friends      
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