Empirical Study of Customer Value and its Impact

www.cpmr.org.in Opinion: International Journal of Business Management 1

ISSN: 2277-4637 (Online) | ISSN: 2231-5470 (Print) Opinion Vol. 2, No. 2, December 2012

Empirical Study of Customer Value and its Impact onStrategic Performance in Cellular Mobile Services

C. Somashekar*Dr. K. B. Kiran**

ABSTRACTResource based view theory explains that anorganization which possesses strategic resources andexploits them can create and deliver better value totheir customers leading to superior performance.Superior performance means above averageperformance: performance of a firm is greater thanthe industry average. Customers prefer services fromthat service provider who creates and delivers thembetter value in the market because they are satisfiedwith the services due to the value they get. Whenmore number of customers prefer, that CMO attainssustainable competitive advantage and hencesuperior strategic performance. Superior strategicperformance reflects leading indicators of futurefinancial, operational performance of a firm. Thispaper theoretically and empirically analyses andshows that among six dimensions of customer value;monetary value, and functional values influencesmore on strategic performance.

Keywords: Customer Value, Strategic Performance,and Cellular Mobile Services.

I. INTRODUCTIONCompetitive dynamics in Cellular Mobile Operator(CMO) industry in India is so intense that everyparticipant is striving to gain an advantageous marketposition. To stay, and grow in business and to have anedge over their rivals it is necessary to develop strategiccompetitiveness. Strategic competitiveness of anorganization is defined as its ability to understandchanging customer needs and wants design and developservices that create customer value to them resulting insuperior performance and sustainable growth rate relativeto competitors (Gatigon and Xureb 1997; Hamel andPrahalad 1994; Han, Kim, and Srivastava 1998;Heywood and Kenley 2008). Creation and delivery ofsuperior customer value to customers is a key elementfor success of any firm (Higgins 1998; Woodruff 1997;Porter 1996) that leads to customer satisfaction andloyalty (Reichheld, Markey, and Hopton 2000).Customer value is “not what the producer puts in, butwhat the customer gets out” (Doyle 1989). Customervalue is the sum of benefits received minus cost incurredby the customer in acquiring a product or service (Treacyand Wiersima 1995). (Horovitz 2000) puts thatcustomers receive value when the benefits from aproduct or service exceed the cost. Customers perceive

*Research Scholar, **Associate ProfessorHumanities, Social Sciences and Management Department, National Institute of Technology Karnataka,Sreenivasanagar,Surathkal, Mangalore. Dakshina Kannada District, Karnataka - 575025



different weights for different dimensions of customervalue (Sweeney and Soutar 2001). Sustainablecompetitive advantage (SCA) will produce value tocustomers, with superior performance. Superiorperformance means above average performance:performance of a firm is greater than the industry average(Bharadwaj et al., 1993; Barney and Hesterly, 2008).A CMO which attains superior performance in terms offinancial, operational and strategic over a prolongedperiod will achieve SCA. Above average strategicperformance reflects leading indicators of future financial,operational performance and business prospects of afirm. As (Eccles and Pyburn, 1992) claims that financialmeasures are lagging indicators which are based on pastperformance and do not provide future performance.(Atkinson et al. 1997) cautions that performancemeasurement based on financial measures lack the focusand robustness needed for internal management andcontrol. Strategic performance dimensions like customersatisfaction, customer trust, customer loyalty and brandequity are more closely linked to strategic initiatives.CMOs need to innovate, and develop cellular mobileservices that add value to the user, hence leading tostrong adoption of those services by customers(Alkemade 2003). Hence exploring and understandingcustomer value is important for cellular mobile serviceproviders (Alkemade 2003).

The knowledge of customer value in cellular mobileservices is limited (Yang and Jolly 2006), thus it isimportant to examine customer value associated withcurrent cellular mobile services in India. This studyanalyses empirically the six dimensions of customer valueand how much each dimension influences strategicperformance.

1.1 Cellular Mobile Service Providers inIndiaIndia is among the fastest growing telecommunicationsmarkets across the world. It is also the second-largestwireless market in the world after China (Confederationof Indian Industry Ernst & Young 2008). The overalltelecom penetration in India almost touched 75 percentin August 2011 and the market continues to exhibit

unabated growth (TRAI, Telecom Subscription Data -August 2011). The estimated projection of futuresubscribers in India shows that, still there is lot ofpotential in the market. It is estimated that in 2025consumer spend on communication will be 6 % from2.7 % in 2007 (Confederation of Indian Industry Ernst& Young 2008). Hence eyes of the world are now onIndia, a very luring market that is attracting global players.Today the wireless services market in India, catered toby 15 service providers, is highly competitive. This hasled to pricing pressures, which have, in turn, pusheddown wireless tariffs and hence ARPU levels. The 22telecom circles in India (18 telecom circle service areasand 4 metro service areas) are classified under 4categories – Metros, Category A, Category B andCategory C – on the basis of revenues derived fromeach circle with Metros & A circles expected to havethe highest potential. Today all over India there are 15players, some in pipe line to enter the market, and atleast 6 players in each circle and it is expected shortlyto have approximately 12 operators in each circle. Thedominant players are Airtel, Reliance, Vodafone, BSNL,Idea and Tata tele services.

II. THEORETICAL BACKGROUNDAND HYPOTHESES

2.1 Customer ValueCustomer value is relative to the perceived satisfactionobtained among alternative value offerings, it isconsidered an important factor for determining serviceattractiveness (Walters and Lancaster 1999).“Customer value is a customer’s perceived preferencefor and evaluation of those product attributes, attributeperformances, and consequences arising from use thatfacilitate achieving the customer’s goals and purposesin use situations” (Woodruff 1997). (Lee et al. 2002)explains customer value as a user’s overall assessmentof the utility of the services when using mobile services,(Day 1990; Narver and Slater 1990; Khalifa 2004)recommends for market driven CMOs need to focuson creating and delivering superior customer value toretain existing and grow with new subscribers. (Zeithaml



1988) defines customer value as the “consumer’s overallassessment of the utility of a service based on perceptionof the utility of a product based on perception of whatis received and what is given”. (Gale 1994; Khalifa2004) puts it as market perceived quality adjusted forrelative price of your product. (Treacy and Wiersima1995; Khalifa 2004) defines customer value as the sumof benefits received minus the costs incurred by customerin acquiring product or service.

Creating customer value and providing Value AddedServices (VAS) should be based on a deepunderstanding of the mobile market and insight ofpotential mobile service consumers (Alkemade 2003).Thus, for CMO strategic resources contributesignificantly in exploring and understanding customervalue in VAS in order to successfully commercializemobile services (Alkemade 2003). (Sheth Newman andGross 1991) developed multiple value dimensions forcustomer value; functional value, conditional value, socialvalue, emotional value, and epistemic value relatespecifically to the perceived utility of a choice. (Dodds,Monroe, and Grewal 1991) argue that buyer’sperception of value represent a trade –off between thequality or benefits they received in the product relatingto the sacrifice they perceived by paying the price.Customers receive value when the benefits from aproduct or service exceed what it costs to acquire anduse it (Horovitz 2000; Khalifa 2004). When usingcellular mobile services, subscribers are often perceivedto save time and money, hence monetary value is alsoan important value dimension. Hence for the study weconsider the following customer value dimensions,functional value, social value, emotional value,conditional value, epistemic value, and monetary value(Sheth Newman and Gross 1991; Sigala 2006;Pihlstrom and Brush 2008) which subscribers considerwhile assessing value of services.

The functional aspect of mobile service can leadconsumers to adopt and utilize the mobile data services.Functional value can be defined as the practical ortechnical benefits that users can obtain by using a service.Functional value typically relates to factors such as utility,product appearance, durability and price and underlies

the performance of the object in key areas includingprice, reliability and durability (Sweeney and Soutar2001). Functional value refers to value derived fromeffective task fulfillment, ability to do the task easily andinstantly with efficiency and effectiveness (ShethNewman and Gross 1991).

Emotional value refers to meeting the psychologicalneeds of product or service users (Sweeney and Soutar2001). In cellular mobile services enjoyment and funare strong motivators to use and adopt the services (Pura2005). Emotional value is the most important predictorof behavioral intention to use services in cellular services(Sweeney and Soutar 2001). Emotional value representsthe capacity of a product or service to arouse feelingsor affective states, and is measured using a set of feelingstoward its object. Emotional value stresses feeling oremotional status, mobile services like SMS, MMS andVAS are capable of changing consumer feelings oremotional states that have emotional value (ShethNewman and Gross 1991).

Social value is obtained when consumers feel theyare connected to others by using a product or a servicewith social groups like friends, colleagues, and family.(Sheth Newman and Gross 1991) proposed thatproducts have social value if they can link consumers tosocial groups. Social value relates to social approvaland the enhancement of self-image among otherindividuals (Sigala 2006), hence social value influencesmobile services adoption and use of services. Regardingsocial value, consumers are concerned not only withreal characteristics but also with their capacity ofimproving social status such as acceptance by othersand positive impression.

Epistemic value of a product/service is that whichprovide novelty or knowledge, creates curiosity andstimulate subscribers to purchase and use it (ShethNewman and Gross 1991; Duman and Mattila, 2005).Something ‘new’, ‘unusual’ or ‘fashionable’ is valuedregardless of other factors, including functional or socialvalue. Consumers buy technology not only for a specificgoal or use, but also due to curiosity and novelty seeking.New generation, innovative and distinct cellular mobileVAS are novel, curious, complicated or unique factors



generally driven by the epistemic value (Schiffman andKanuk 1987; Chang 2008) which influences the userassessment.

Conditional value is described as the set ofsituations, occasions or events (anniversaries, birth of achild, accident) faced by customers while using serviceaffects decision. Situational variables influence customerassessments of product/service utility (Sheth Newmanand Gross 1991; Belk 1974). Services of a CMO duringparticular circumstances create impression about theservice, if impression is positive, the conditional value isincreased (Sheth Newman and Gross 1991) andcustomers try to continue to use from that serviceprovider.

Monetary value is defined as how much a service issatisfactory in regard to cost, time or effort spent inusing a product or a service (Sweeney and Soutar 2001;Bolton and Drew 1991; Cravens et al. 1988; Yang andJolly 2006). Higher the monetary value of particularservice provider, customers prefers the services fromthat firm rather than competitors.

2.2 Strategic PerformanceThe attainment of SCA can be expected to lead tosuperior performance measured in conventional termssuch as market share and profitability (Bharadwaj etal., 1993). A successful strategy adapts to the CMO’sexternal and internal situation leading to creation of bettercustomer value hence more number of customers preferthe service provider leading to SCA and superiorperformance. A firm’s superior performance dependson its ability to innovate, defend intangible assets, suchas knowledge, and use those assets (Teece, 2000).Superior performance means above averageperformance i.e. performance of a firm is greater thanthe industry average (Bharadwaj et. al., 1993; Barneyand Hesterly, 2008). The sustainability of firm abnormalprofit is defined as abnormal profitability that persistsover a long period of time.

Strategic performance reflects as leading indicatorsof future financial performance, operationalperformance and business prospects of a firm. Strategicperformance indicates a company’s competitiveness,

and market position are deteriorating, holding steadyor improving. Strategic performance indicators likecustomer trust, customer satisfaction, customer loyaltyand brand equity (Javalgi et al., 2005) shows to theirmanagers that, the positioning of CMOs in the mindof the customers. These indicators are a sign of futureperformance of the service providers based on pastand present services they offer. To attain superiorstrategic performance a firm has to craft its strategyand allocate its resources so that it delivers better value,satisfy and create loyal customers. Strategicperformance signifies strength in marketing standing,competitive vitality and future business prospects of afirm.

2.2.1 Customer satisfactionA firm which wants to continue in market for longerperiod has to have an objective of creating satisfiedcustomers. (Zeithaml and Bitner, 2000) definedcustomer satisfaction as the “customers’ evaluation ofa product or service in terms of whether that productor service has met their needs and expectations”.When a customer subscribes for cellular services, he/she has some needs and expectations. Satisfaction istherefore a consumer’s post-purchase evaluation andaffective response to the over all cellular mobile serviceexperience. Customer satisfaction is an outcome ofoverall evaluation of cellular services by subscriberabout the services, responses during interaction withservice provider. (Oliver, 1980) defined that“customers satisfactions is a summary of psychologicalstates when the emotions surrounding disconfirmedexpectations are coupled with the consumers’ priorfeelings about consumption experience”. (Parasuramanet al., 1994) suggested that the customer satisfactionis influenced by service quality, product quality andcost. Overall satisfaction refers to the customers ratingon a particular event based on all dimensions andexperiences (Johnson and Fornell, 1991). (Rust andOliver, 1994) defined satisfaction as the “customer’sfulfillment response” which is an evaluation as well asan emotion-based response to a service. Oncecustomers are satisfied with the services of theirCMO, it leads to build confidence and obviously they



trust their service provider. In the present study, tomeasure customer satisfaction of subscribers fouremotion-laden items already used and tested by(Westbrook and Oliver, 1991) have been used whichare presented in Appendix A.

2.2.2 Customer trustCustomer trust indicates whether service provider hasdeveloped confidence with their subscribers. (Moormanet al., 1992) defined trust as “a willingness to rely on anexchange partner in whom one has confidence”. Trustis a psychological state that involves the approval ofvulnerability formed from the positive expectations ofthe behaviors or intentions of another (Rousseau et al.,1998). It is result of different interactions, incidencesand situations of subscribers with their service providerover a period of time. (Geyskens et al, 1996; Rousseauet al, 1998; and Singh and Sirdeshmukh, 2000; Urbanet al. 2000) suggested that customer trust is an essentialelement in building and maintaining strong customerrelationships and sustainable market share. Customertrust indicates future actions behavior and long termrelationship of subscribers with their service provider.(Berry and Parasuraman, 1991) found that “customer-firm relationships require trust” and the degree of trustis described as a “fundamental relationship buildingblock”. Trust also can be defined as “the belief in theintegrity, honesty and the reliability of another person”(Dwyer and Tanner, 2002). Trust is a key element forrelationship success and tends to be related to a numberof elements such as competitive advantage andsatisfaction (Ratnasingam and Pavlou, 2003). Customertrust signifies future behavior of subscribers whether toswitch or stay. Once customers trust a CMO, they tendto become loyal to them. (Chiou et al., 2002) foundthat perceived trust had direct and positive impacts onthe overall satisfaction and loyalty of customers. It isnow well-established that trust supports exchange andhelps partners project their exchange relationships intothe future. In the present study, to measure customertrust, scale items used and tested by (Delgado-Ballesteret al., 2003; Tariq and Moussaoui, 2009) has been usedand is presented in Appendix A.

2.2.3 Customer loyaltyA loyal subscriber generally acts better than a satisfiedone and prefers to repurchase services continuously andalso recommends to others to an extent that his patronageis retained for a long period of time. (Oliver, 1999)defined customer loyalty as “a deeply held commitmentto re-buy or re-patronize a preferred product/serviceconsistently in the future, thereby causing repetitivesame-brand or same brand-set purchasing, despitesituational influences and marketing efforts have thepotential to cause switching behavior”. Customer loyaltyrefers to strong favorable attitude towards a particularbrand and also leads to repeat purchase of the samebrand (Day, 1969). Customer loyalty is a relationshipbetween relative attitude towards an entity and repeatpatronage behavior (Dick and Basu, 1994). Theoperational measures in deterministic approach arepreference, buying intention, and recommendation (Kimet al., 2004; Boulding et al., 1993; Gerpott et al., 2001).Customer loyalty is concerned with the likelihood ofcustomer returning, making business referrals, providingstrong word-of-mouth references and publicity (Bowenand Shoemaker, 1998). A loyal customer to a cellularservice provider is thus, one who will stay with the sameservice provider, is likely to use new value addedservices with the service provider and is likely torecommend to others (Fisher, 2001). In the presentstudy, the customer loyalty towards the serviceproviders is measured with the help of the relevant threestatements already used and tested by (Kish, 2000;Bridgewater, 2001) and are presented in Appendix A.

2.2.4 Brand EquityBrand equity is the value added to a product or serviceby its association with a brand name and/or symbol (e.g.,Aaker 2004; Keller, 1993). Brand equity, which refersto the incremental utility or value added to a product byits brand name (Keller, 2003) which nurtures long-termbuying behavior. Brands with high brand equity are thosethat have high levels of consumer awareness and strong,positive, and unique associations in consumers’ memory(Keller, 1993). (Yoo and Donthu, 2001) explains thepositive effect of brand equity on a company’s future



profits and long-term cash flow, a consumer’swillingness to pay premium prices, sustainablecompetitive advantage, and marketing success. Thesources of brand equity are derived from a high level ofbrand awareness and a positive brand image, whichthen provide consumers with strong, favorable, andunique brand associations. “The differential effect thatbrand knowledge has on consumer or customerresponse to the marketing of that brand” (Keller, 2002).(Kotler, 2003) defines brand equity as “the positivedifferential effect that knowing the brand name has oncustomer response to the product or service.” This leadsto customers showing preferences for a brand whenproducts are basically identical, and are prepared topay a price premium. Brand equity thus represents theextent to which the firm influences the customer’ssubjective evaluation of the firm’s offerings. As such,the brand equity construct may be measured throughbrand awareness, attitude toward the brand and attitudetoward the company. For firms, growing brand equityis a key objective achieved through gaining morefavorable associations and feelings among targetconsumers (Falkenberg, 1996). To measure the brandequity of CMOs, three statements as scale items usedand tested by (Holehonnur et al., 2009) have been usedand are presented in Appendix A.

2.2.5 HypothesesThe study was designed to investigate the antecedenteffect of customer value on strategic performance. Eachof the six dimensions of customer value plays anantecedent role toward creating strategic performancefor a CMO. Each of the six dimensions of customervalue is hypothesized to affect strategic performance.Thus hypotheses H1 through H6 were formulated toexamine the causal relationship between each of the sixdimensions of customer value and strategic performancefor cellular mobile services.H1: Functional value will positively affect strategic

performance in cellular mobile services.H2: Social value, will positively affect strategic

performance in cellular mobile services.H3: Emotional value will positively affect strategic

performance in cellular mobile services.

H4: Conditional value will positively affect strategicperformance in cellular mobile services.

H5: Epistemic value will positively affect strategicperformance in cellular mobile services.

H6: Monetary value will positively affect strategicperformance in cellular mobile services.

III. RESEARCH DESIGN

3.1 Population and SamplingThe research method for this study was designed toinvestigate influence of customer value dimensions onstrategic performance in cellular mobile services. In orderto achieve the objective of the study, all the CMOs inIndia were considered as the population for this study.The population consisted of 14 service providers andthe sample survey was derived from the Annual reportof Telecom Regulatory Authority of India- March 2010.A total of six service providers were purposivelyselected based on the inclusion and exclusion criteriafor the study.

Inclusion criteria: All CMOs who are operating inIndia from the year 2005, since we need to evaluatelong term performance. Exclusion criteria: It was foundthat around 92 % of the market share was controlledby these six service providers. Based on market shareas on 31 March 2010 (TRAI, Annual Report -2010),those CMOs market share is less than 10 % wereexcluded from the study. There are six service providersnamely BSNL, Reliance Communications, VodafoneEssar Limited, Bharti Airtel Ltd., Tata Teleservices Ltd.,and Idea Cellular Limited.

For respondents the researcher used purposivesampling technique taking into consideration therespondents’ availability, willingness to share theinformation, location of subscriber where already thirdgeneration (3G) technology was launched, and use ofvalue added services which is a very important criterionfor selection of respondents to the study.

3.2 SampleAs on March 2010 the country had 584 million mobilesubscribers, which is the population for the research.



Based on sample size calculation formula which is verymuch used by American Marketing Association, wecalculated sample size. At Confidence Level of 95 %and Confidence Interval of ‘3’ the sample size neededis 1067. To collect data from cellular mobile users, selfadministered questionnaire survey was conducted inBombay, Chennai, Hyderabad and Bangalore.Cosmopolitan cities that are sources of major revenue,of these Bombay and Chennai belongs to Metro circleand Bangalore and Hyderabad belongs to circle A. Forthe present study, data was collected from 300respondents from each city totaling to 1200 cellularmobile users. Self administered Questionnaire was usedto collect data which is one of the better methodsbecause of large sample size. 60 % of the respondentswere males and the rest 40% were females.Demographic information for the sample is provided inTable 1.

Table 1Demographic information

Categories Frequency Percent

18- 30 690 57.5

31- 40 459 38.3

Age 41-50 35 2.9

More than 50 16 1.3

Total 1200 100


Male 720 60

Gender Female 480 40

Total 1200 100


Undergraduate 258 21.5

Education Graduate 549 45.8

Postgraduate 393 32.8

Total 1200 100


Student 352 29.3

Occupation Salaried 757 63.1

Business 81 6.8

Housewife 10 0.8

Total 1200 100

3.3 MeasuresTo evaluate the influence of customer value dimensionson strategic performance in cellular mobile services,scale items were developed using items from variableson the basis of operationalisations used in past researchwith some modifications. For the present study twentytwo items on six dimensions of customer value wereadapted from already used and tested by (Pihlströmand Brush 2008) and are presented in Appendix A.Fourteen items on the four dimensions of strategicperformance were used for the study and is presentedin Appendix A. All of the scale items used a five pointLikert scale ranging from 1 (very low) to 5 (very high)and were modified for cellular mobile services context.A preliminary version of instrument was pilot tested with58 respondents in Bangalore city. The pre test was usedto identify items that might be unclear in terms of wordingand the instrument was revised based on the pre testinput. To test the reliability of the constructs, reliabilityanalysis was conducted using SPSS. The rationale forinternal consistency is that the individual items of thescale should all be measuring the same construct andthus highly correlated (Nunnally 1978). One type ofdiagnostic measure is the reliability coefficient thatassesses the consistency of entire scale, with Cronbach’salpha being the most widely used measure (Nunnally1978; Cronbach 1990). The reliability coefficient forthis exploratory study ranged from 0.75 to 0.95, (shownin Appendix A) all within acceptable ranges describedin the literature. The generally agreed upon lower limitfor Cronbach’s alpha is 0.7, although it may decreaseto 0.60 in exploratory research (Saraph Benson andSchroeder 1989). Since all the scale items used in theresearch are selected from literature review henceconfirmatory factor analysis was used which is a bettermethod for use in research where hypotheses about thegrounded theoretical model exist (Bollen 1989). Theconfirmatory factor analysis was used to determinewhether the number of factors and the loadings ofmeasured indicators (items) confirmed to what wasexpected, based on theory. In using confirmatory factoranalysis a factor loading of 0.50 and above on a specifiedfactor has been considered to be acceptable (Hair etal. 1998), and in the research all the items showed values



above this level. The Kruskal-Wallis test was used toanalyse the data. The Kruskal-Wallis test evaluateswhether the population medians on a dependent variableare the same across all levels of a factor. The independentor grouping variable divides individuals into two or moregroups, and the dependent variable assesses individualson at least an ordinal scale. To identify the relationshipbetween variables, we used Pearson correlationbetween the variables. The regression analysis wasapplied to investigate the relationships betweendependent and independent variables to determine theregression coefficient.

IV. RESULTSThe data and research findings have been processedusing statistical processing software SPSS. Table 2presents mean and standard deviation of all thedimensions of customer value, and strategicperformance.

Table 2

Descriptive Statistics

Dimensions Mean Std. Deviation

Functional value 3.60 0.65

Social value 3.45 0.80

Emotional value 3.49 0.75

Conditional value 3.29 0.75

Epistemic value 3.01 0.84

Monetary value 3.59 0.80

Strategic performance 3.58 0.69

The estimated non standardized coefficients, andstandardized coefficients, t statistics for the hypothesizedrelationship of customer value dimensions on strategicperformance is shown in Table 3. Among the sixdimensions of customer value except conditional value(β=.051, p = 0. .040 not significant) all have a significanteffect on strategic performance.

Table 3

Beta Coefficients of Customer Value Dimensions

Customer value Un standardized Standardized Hypotheses Supporteddimensions Coefficients Coefficients

B Std. Error β t p

Functional value .260 .028 .246 9.365 .000 H1 YES

Social value .126 .024 .138 5.313 .000 H2 YES

Emotional value .179 .028 .184 6.438 .000 H3 YES

Conditional value .051 .025 .051 2.060 .040 H4 NO

Epistemic value .060 .019 .066 3.199 .000 H5 YES

Monetary value .241 .021 .262 11.366 .000 H6 YES

4.1 Hypotheses TestingIt is found in Table 3 that all the standardized pathcoefficients (excluding conditional value) relating the sixdimensions of customer value with customer satisfactionhave expected positive sign and are statisticallysignificant at (p<0.01); hypotheses H1, H2, H3, H5,and H6 are accepted. Whereas hypothesis H4 isrejected and it has some positive influence on strategicperformance but it is statistically not significant.

Table 4

Model Summary of Customer Value Dimensions

Customer R R Adjusted R Std. Error ofvalue Square Square the Estimate

dimensions .757(a) .573 .572 .52832

The regression model yielded 57.3 percent influenceof customer value dimensions on strategic performance



(Table 4). Hence customer value dimensions havesignificant influence on strategic performance. Amongthe significant factors influence of monetary value standsfirst (β=0.262) followed by functional value (β=0.246),emotional value (β=0.184), social value (β=0.138) andepistemic value (β=0.066) as shown in Figure 1.

Figure 1: The Research Model for the Study

Note: * indicate significance at p<0.01

V. FINDINGSThe six dimensions of customer value were measuredas antecedents of strategic performance in this study.The results of regression analysis show that all thedimensions influence significantly except conditional valuewhich has insignificant effect on strategic performance.

Based on the result, monetary value played the mostimportant role in strategic performance for cellularmobile services, followed by functional value, emotionalvalue, social and epistemic value. Conditional valueinsignificantly affects customer value means customersmay not perceive it as value in cellular mobile services.Thus, this study concluded that the theory of customervalue influences strategic performance was valid forcellular mobile services.

VI. DISCUSSIONThe theoretical framework based on the concept ofcustomer value and superior performance theory waswell supported in the study. Although the results of thestudy indicated that conditional value had no significanteffect on strategic performance in cellular mobileservices, other dimensions of customer value i.e.functional value, social value, emotional value, epistemicvalue, and monetary value had significant effects.

The study shows that monetary value has thestrongest effect on strategic performance in cellularmobile services. It signifies that customers look for valuethey get when they pay. The innovative services shouldbe such that it gives them monetary benefits like(transportation charges to access bank, ticket bookingin remote places which give advantages) in cellularmobile services.

Functional value has positive and significant effecton strategic performance in cellular mobile services.Functional value is characterized by timeliness, ease ofuse, efficiency and reliability. The service providers needto focus on these characteristics of functional value sothat it positively affects strategic performance in cellularmobile services.

Emotional value has positive and significant effecton strategic performance for cellular mobile services.Emotional value is characterized by fun, pleasure, relaxand feel good factors. Emotional value can be deliveredfrom developing services that provide entertainment tothe customers which contribute significantly to customervalue and influences on strategic performance with thecellular mobile services.

Social value has positive and significant influenceon strategic performance for cellular mobile services.Social value in cellular mobile services can be providedby developing services that provide social networkingthrough cellular mobile services, developing as a brandedservice provider in the society. The social value withthese characteristics will contribute significantly tostrategic performance.

Epistemic value is another dimension that positivelyand significantly affects cellular mobile strategicperformance. The epistemic value is characterized by



curiosity, new way of doing things and adopting latestand advanced technologies in cellular mobile services.Cellular mobile service providers need to innovate anddevelop new services that create curiosity in customersso that it can contribute in creating customer value andadapt latest technology quickly to contribute to strategicperformance.

Conditional value did not have strong effect onstrategic performance for cellular mobile services.Characteristics of conditional value are real timeinteraction and information, independent of place andtime that creates the customer value for cellular mobileservices. Overall, this empirical study of the effects ofcustomer value on strategic performance of cellularmobile services was verified both theoretical andpractically.

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Appendix A: Measurement items, factor analysis results and reliability (Cronbach’s alpha)Constructs Scale Items Factor

Loadings Alpha Source

The price of this mobile service is acceptable. 0.85 This mobile service is good value for money. 0.88 Monetary

Value This mobile service is better value for money than what I would pay for the same service via other channels 0.83

0.87

Dodds and Monroe1991; Sweeney and Soutar 2001; Pihlström and Brush , 2008

I save time and money when I order the information via the mobile service 0.73 I value the ease of using this mobile service 0.8 I value the option of using this service instantly via my mobile device 0.69 Using this mobile service makes my life easier 0.78 Using this mobile service is an efficient way to manage my time 0.76

Functional value

I value the option of using this mobile service without others noticing 0.74

0.87 Anderson and Srinivasan, 2003; Pihlström and Brush , 2008

Using this mobile service helps me to feel accepted by others 0.86 Using this mobile service makes a good impression on other people 0.88 Social value Using this mobile service gives me social approval 0.84

0.95

Soutar and Sweeney, 2003; Sweeney and Soutar, 2001; Pihlström and Brush , 2008

Using this mobile service gives me pleasure 0.83 Using this mobile service makes me feel good 0.88 Using this mobile service makes me feel relaxed 0.8

Emotional value

I value the option of sending emotional messages to my friends via this mobile service 0.73

0.86

Soutar and Sweeney 2003; Sweeney and Soutar, 2001; Pihlström and Brush , 2008

I value the information / entertainment this service offers, with the help of which I get what I need in a certain situation 0.83

I value the independence of place and time offered by the use of this mobile service 0.82 Conditional

value I value the real time information and interaction that this service makes possible 0.85

0.75 Pihlström and Brush , 2008

I used this mobile service to experiment with new ways of doing things 0.84 I used this mobile service to test the new technologies 0.89 I used this mobile service out of curiosity 0.85 I did a right thing in selecting this service provider 0.83 My choice is a wise one 0.74

Epistemic value

I feel good experience with this service provider 0.56

0.9 Pihlström and Brush , 2008

I am satisfied with my decision to choose this service provider 0.848

I did a right thing in selecting this service provider 0.832

My choice is a wise one 0.742 Customer

Satisfaction

I feel good experience with this service provider 0.562

0.810 Westbrook and Oliver’s, 1991

My service provider meets all my expectations 0.794

My service provider never disappoints me 0.731

My service provider is honest and sincere in addressing my concerns 0.648 Customer

Trust

I can rely on my service provider for all my requirements 0.748

0.914 Delgado-Ballester et al., 2003; Tariq and Moussaoui, 2009

I want to continue with this service provider 0.631

I recommend others about this service provider 0.794 Customer Loyalty

I am proud to be a customer of this service provider 0.538 0.762 Kish, 2000; Bridgewater,

2001

Even if another service provider has same features as this I would prefer to use this service provider

0.734

If I have to choose among brands of service providers I prefer to use this service provider

0.771 Brand Equity

Even if another service provider has same tariff plan as this I prefer to choose this service provider

0.848

0.864 Holehonnur et al., 2009

Kaiser-Meyer-Olkin Measure of Sampling Adequacy =0.904

Documents

Empirical Study of Customer Value and its Impact