MARKOV CHAIN ANALYSIS OF BUSINESS STRATEGY AND CUSTOMER LOYALTY IN THE NIGERIAN TELECOMMUNICATION INDUSTRY

The purpose of this study is to analyze the Competitive Strategies of Telecommunication Companies in Nigeria and how it affects Customer Loyalty using Markov Chain. The Markov Chain was used to predict Consumer Switching Behaviour. Mobile telecommunication providers face a great ordeal in their quest for market share, growth and profit. In the Nigerian market space with its low switching cost and barriers, it a continuous struggle telecom firms to not only attract new customers but to retain old ones. In, there are four mobile telecom providers operating in the market and form the basis for this research, they are; MTN, Airtel, Glo, & 9mobile. Primary data was obtained through a questionnaire and residents in the vicinity if Lagos State University were targeted for the study. 200 questionnaires were self-administered by the researchers to the subscribers of all the mobile telecom providers and 180 questionnaires were returned. The questionnaires were analyzed using Markov Chain Analysis of Data, which was used to predict the switching behaviour of customers using variables such as; Price, Service Quality and Corporate Brand Image. The results identified Service Quality and Corporate Brand Image as having much effect on consumers’ switching behaviour as opposed to Price which had a less impact on switching behaviour of customers. The research concluded that it is cheaper for firms to seek to retain existing customers than to acquire new ones. Though the customer acquisition cost varies and it is subjective by a number of factors, it is still a cost all the same. The study recommends that telecom firms should first seek to retain customers than to acquire, by aligning their marketing strategies to this goal, some of the saved acquisition cost can be used to improve service quality and build better corporate brand image, two concepts which the study proved made customers more loyal