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Marketing Management TABLE OF CONTENTS Question One…………………………………………………………………...1 Question Two…………………………………………………………………...5 Question Three………………………………………………………………....10 Question Four…………………………………………………………………..13 Question Five…………………………………………………………………...16 Bibliography………………………………………………………………….....21 Figures Figure 1.1………………………………………………………………………...5 Figure 1.2………………………………………………………………………...9 Figure 1.3……………………………………………………………………......11 Figure 1.4………………………………………………………………………..13 Figure 1.5………………………………………………………………………..14 Figure 1.6……………………………………………………………………......18 Tables Table 1.1………………………………………………………………………....20 MBA Year1 Page 1

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Marketing Management

TABLE OF CONTENTSQuestion One...1 Question Two...5 Question Three....10 Question Four..13 Question Five...16 Bibliography.....21 Figures Figure 1.1...5 Figure 1.2...9 Figure 1.3......11 Figure 1.4..13 Figure 1.5..14 Figure 1.6......18 Tables Table 1.1....20

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Marketing Management Question One Many companies are now embracing target marketing to compete more effectively in the market place. According to Kotler and Keller, (2006:40) instead of scattering their market effort (a shotgun approach, they should focus on those consumers they have the greatest chance of satisfying (a rifle approach). 1.1 Discuss how Cell C has segmented the market and profiled the distinct group of buyers who differ in their needs and preferences for cellular phones. A shotgun shots a number of small bullets with the hope that at least some of them hit the target. In the same way, 'shotgun marketing' involves reaching as many people as you can, such as mass marketing through TV, Cable, radio and the web without a particular end-target in mind. On the other hand, a rifle brings things into focus, takes a careful aim, and then only you

pull the trigger. 'Rifle marketing', thus, typically involves selecting target audience based on their demonstrated interest. According to Kotler & Armstrong (2001:64), market segmentation is the process of dividing a market into distinct groups of buyers on the basis of needs, characteristics, or behavior who might require separate products or marketing mixes. The different ways of segmenting a market are geographic segmentation, demographic segmentation, psychographic segmentation and behavioral segmentation. Geographic segmentation is dividing a market into different

geographical units such as nations, states, regions, countries, cities or neighborhoods whilst demographic segmentation is dividing the market into groups based on the demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality. Psychographic segmentation is dividing a market into different groups based on social class, lifestyle, or personality characteristics and behavioral segmentation is dividing a market into groups based on consumer knowledge, attitude, use, or response to a product. In addition, a firm can use different segmentation variables like socio cultural variables, use-related characteristics, use-situation factors, benefits sought, etc. for segmenting a market. The main bases used by Cell C for segmenting the market and profiled the distinct groups of buyers who differ in their needs and preferences for cellular phones were geographical segmentation use of clever distribution to make it available everywhere by using a number of distributing systems. Cell C has also used demographic segmentation in terms of age, and MBA Year1 Page 2

Marketing Management income to profile its different customers. Cell C was able to take everyone needs into account by designing multiple packages for each of its market segments, that is, from the youth segment and the corporate market segment. Income segmentation was also used to meet the needs of different income groups by providing the best deal for those who are more prices sensitive and at the same time offered interesting corporate packages to corporate users.

1.2 Discuss how Cell C targets each of its identified segments with appropriate market offerings. Kotler & Armstrong (2001:64) confirms that market targeting is the process of evaluating each market segments attractiveness and selecting one or more segments to enter. Cell C used a differentiated marketing strategy where there is many marketing mixes for different segments of the market. It has targeted several market segments and designed separate offers for each. The youth segments which is an attractive segment for Cell C was able to design an appropriate offering to meet their needs in terms of up-to-date technologies cellular phones with high-tech functions and at the same time cheaper than competitors as Cell C subsidized a portion of the handsets to make cheaper contract and service rates to them. Moreover Cell C innovated its service by offering both pre- and postpaid and SIM card with more storage capacity. The service provided by Cell C allows for more flexibility and can be adapted to the need of the different users. In order to be more cost effective, the segments served by Cell C can easily swap between the different tariffs structures available. Furthermore, duration of contracts is more flexible and the customers can choose a 12 and 24 months contracts, a service that has not been offered by its two main competitors. Cell C has also not neglected its corporate customers, a market which is more difficult to attract. Different types of contract have been designed to be able to meet to the needs of the different companies using Cell C services. Different products offering are available with different pricing strategies and with appropriate promotional strategies that helped Cell C to build a profitable relationship with the corporate customers. Cell C is also engaged in providing after sales service to all its customers by installing a customer call centre where all the different customers may have free access to and have their

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Marketing Management problems solved and can also make their valuable suggestions for the improvement of services offered by Cell C. In fact this strategy of Cell C is helping the company to be in close contact with its different types of customers and at the same time to bring customer loyalty.

1.3 Explain how Cell C positions its brand in the minds of its target audience. Kotler & Keller (2009:276) tells us that the American Marketing Association gives the definition of branding as being: a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of the competitors. Essentially, a brand is the flag which signifies to the buyer what they can expect from purchase in terms of quality, service, functionality, etc. A brand is a recognition factor which, particularly at the point of sale, can help a buyer to reach a purchase decision. To develop a brand takes time and involves long term planning and investment which is the case for Cell C which started its advertising campaign well before the brand has been launched. The main objective of Cell C was to bring complete awareness of Cell C in the minds of its public. That was the reason why Cell C uses the different media from television, radio outdoor communication and the press to communicate with its customers. The use of specific messages and associating nature with the brand name was not innocent on the part of the company. In fact the messages were used to gain commitment of the target customers emotionally and attached them to the brand name. Cell C wanted to position itself as a very strong brand in terms of excellent quality, up-to-date technology, a solution to all customers in terms of cellular phones without any barrier in terms of cultures background, economic background. Cell C can accommodate all types of customers. Cell C also wants to build its reputation in terms of its capability to serve the new generation; the youth market segments who is always on the move looking for innovative products.

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Marketing Management Question Two Once a company identifies its primary competitors, it must ascertain their strategies, objectives, strengths and weaknesses. 2.1 Evaluate how Cell C analyses its competitor. The competitors forces form part of the macro environment and it is very important to analyze its competitors before deciding on what marketing strategies to be adopted to be to compete on the market and at the same time to be able to its market place. The best way to analyze its competitors for Cell C would be to do a SWOT analysis, that is analyzing the strengths and weaknesses of its competitors and also identify opportunities and threat. The SWOT analysis as shown in figure 1.1 below provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W).Those external to the firm can be classified as opportunities (O) or threats (T).

Strength Internal Internal capabilities that may help a company reach its objectives

Weaknesses Internal limitation that may interfere with the companys ability to achieve its objective

Opportunity External External factors that the company may be able to exploit to its advantage

Threats Current and emerging external factors that may challenge the companys performance Negative

Positive Figure 1.1: The SWOT matrix MBA Year1

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Marketing Management The strengths of the competitors are as follows: i. Vodacom and MTN are strong brand names and therefore this makes it difficult for a third licensee to enter the market. ii. Vodacom and MTN have good reputation among customers as they occupy 54% and 40% of the market share respectively. This means customers buy more often. iii. Both MTN and Vodacom provide prepaid facilities besides already providing postpaid facilities. iv. v. vi. vii. Vodacom and MTN were able to build their networks over a realistic time period. Vodacom and MTN provide nationwide coverage as soon as they were operational. Both Vodacom and MTN provide per second billing system. Both MTN and Vodacom enjoy constant visibility either through advertising or through their massive sponsorship spend. The weaknesses of the competitors are as follows: i. MTN and Vodacom still operate 900 GSM networks and regularly experience capacity problems particularly Vodacom which has the biggest market share. ii. MTN and Vodacom have designed too many packages (MTN has 10 and Vodacom 12) and customers find it difficult to choose from these packages. The external environmental analysis may reveal certain new opportunities for profit and growth. Some of the opportunities of Cell C are as follows: i. Cell C has increased its distribution network since customers look for availability and convenience while purchasing a product. ii. Cell C has been able to break exclusivity agreements with certain retail outlets which used to sell only MTN. iii. Cell C has launched a clever distribution mechanism where packages are ordered over the telephone and delivered within 48 hours. iv. Cell C provides scope for faster call switching and wireless opportunities as it been granted a GSM 1800 license. v. Cell C provides a 32k SIM card for both pre- and postpaid services.

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Marketing Management vi. Cell C has launched a simplified, easy-to-follow suite of products where there are simply five chat packs and therefore is easier for customer to choose. vii. Cell C offers a unique degree of flexibility within its prepaid package where customers are to swap between different tariff structures. Also, the contracts can be either 12- or 24month. viii. Cell C offers the cheapest call rates all around. Whilst Vodacom and MTN announce a price increase in September 2002, Cell C chose to hold its tariffs. Changes in external environmental also may present threats to the organization. Some of the treats which Cell C might face are as follows: i. Cell C launched per second billing system. However this was already initiated by both Vodacom and MTN. ii. iii. iv. Cell C will have to manage skillfully due some difficulties. It is very difficult to hold on to any competitive market. Cell C will have the difficult task to maintain itself as a brand differentiator on the market.

2.2 Discuss the specific strategies Cell C used to challenge and attack its competitors in order to gain market share.

To be successful, Cell C must do a better job than its competitors of satisfying target customers. Thus marketing strategies must be geared to the needs of consumers and also to the strategies of competitors. Thus, Cell C focuses on marketing mix strategies in order to gain market share. According to Kotler & Armstrong (2001:67), marketing mix is referred to as the set of controllable tools the firm blends to produce the response it wants in the target market, so it consists of everything the firm can do to influence the demand for its product. The many possibilities can be collected into four groups of variables known as the four Ps: product, price, place and promotion. This can be shown in the figure 1.2 below. Product: Cell C adopted a differentiated marketing strategy where it targets several market segments and designs separate offers for each. Thus Cell C has launched a simplified, easy-to-follow suite of products which includes all features and combination of goods and MBA Year1 Page 7

Marketing Management related services. Unlike its competitors, it offers only five chat packs with different tariff structures. Therefore, the consumers will not be confused while choosing their pack. Cell C also provides an exceptional degree of flexibility within one of its prepaid package where the consumer is able to swap between different tariff structures. Consumers have the opportunity to choose between 12- or 24-month contracts. Cell C targets the youth generation with its product Club Chat where the latter will always be in contact with their peers. This is called market niche where the youth benefits from special offers. Cell C has been able to persuade users of a competing network to switch to theirs by telling them that only a small adjustment need to be done and they can still keep their old number. Pricing: Cell C adopts a market-penetration pricing strategy in order to penetrate the market quickly and deeply and thus winning a large market share. Pricing is basically setting a specific price for a product or service offered. In a simplistic way, Kotler & Armstrong (2001:68) refer to the concept of price as the amount of money that customers have to pay to obtain the product. Cell C offers two pricing options with each of its pack it offers: All Day and Standard. Therefore, the consumer can choose between a flat rate for all calls or variable billing base on peak and off-peak periods. Unlike its competitors, Cell C is offering the cheapest call rates all around. It offers discount call rates to regularly dialed numbers. Cell C has maintained to hold its tariffs even though Vodacom and MTN announced a price increase. Place: Placement involves all company activities that make the product available to the targeted customer. Unlike its competitors, Cell C has worked hard to increase its distribution network since availability and convenience are the major concerns of customers while buying a product. It thus distributes its products not only through Cell C-owned dealers and retail outlets but also through certain retail outlets which previously only sold MTN products. Cell C also initiated a clever distribution mechanism: Cell C Direct; where the customer is able to purchase a Cell C contract package from his home by just placing an order over the phone and the delivery is within 48 hours in main centers and from 2-3 days in outlying areas. Promotion: Cell C also adopts promotional strategies through which it communicates the benefits and values of its products and persuades targeted customers to buy them. The promotion is done through advertising via different media such as Television, Radio, Outdoor and Press. Cell C provides promotion to each segment of the market such as the MBA Year1 Page 8

Marketing Management youth where they benefit 20 free SMS messages and get a 10% discount on four predetermined numbers. Thus the product allows them to pay less. In its Easy Chat package, it gives customers an additional 10% discount on all calls to two predetermined numbers. It provides subsidization for both consumer and business market. The business users benefit from a 20% discount on all international calls and also the cheapest call rates. Cell C also uses innovation strategy where it provides scope for faster call switching and wireless opportunities to its users. It also offers SIM cards with better storage capacity (32K) as compared to its competitors. Product Variety Quality Design Features Brand name Packaging Services Target customers Intended positioning Promotion Advertising Personal selling Sales promotion Public relations Place Channels Coverage Assortments Locations Inventory Transportation Logistics Price List price Discounts Allowances Payment period Credit terms

Figure 1.2: Source (Kotler & Armstrong: 2001, 67) the four Ps of the marketing mix

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Marketing Management Question Three It is evident from the case study that Cell C relies heavily on the promotion mix to create awareness. Critically analyze Cell Cs promotional mix strategies. According to Kotler & Armstrong (2001:512), a companys total marketing communications mix, or promotion mix, consists of the specific combination of advertising, personal selling, sales promotion, and public relations tools that the company uses to pursue its advertising and marketing objectives. The five major types of promotion are: i. Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. ii. Personal selling: Personal presentation by the firms sales force to make sales and build customer relationships. iii. Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service. iv. Public relations: Building good relations with the companys publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. v. Direct marketing: Direct communications with carefully targeted individual consumers to obtain an immediate responsethe use of mail, telephone, fax, e-mail, and other nonpersonal tools to communicate directly with specific consumers or to solicit a direct response.

Each type of promotion has its own tools. Advertising includes print, broadcast, outdoor, and other forms. Personal selling includes sales presentations, trade shows, and incentive programs. Sales promotion includes point-of-purchase displays, premiums, discounts, coupons, specialty advertising, and demonstrations. Direct marketing includes catalogues, telemarketing, fax transmissions, and the Internet. Thanks to technological breakthroughs, marketers can now communicate through traditional media (newspapers, radio, telephone, and television), as well as its newer forms (fax machines, cellular phones, pagers, and computer). These new technologies

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Marketing Management have encouraged more companies to move from mass communication to more targeted communication and one-on-one dialogue. Cell C adopted integrated marketing communications where it fully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products as shown in figure 1.3 below. Various advertising campaigns were done by Cell C such as Just a number where it demonstrates consumers were known as a number rather than an individual. In fact, Cell Cs advertising campaign started well before the brand had been launched. The majority of Cell C advertisements have been done on television since it is the most dominant medium. Cell C has been almost permanently on air. Radio campaign was also done to promote the prepaid package. However, radio is used as a strategic tool to communicate product innovations. Cell C has a big outdoor presence since its advertisements happen to appear on billboards at different places such as the airport and townships. Better mass coverage is achieved through the press. According research carried out in Feb2002, it has been noticed that greater customer awareness (81%) has thus been achieved through Cell Cs advertisement.


Personal Selling

Sales & Promotion Public relation

Consistent, clear and compelling company and product messages

Direct Marketing Figure1.3: Source: Kotler & Armstrong (2001:515): Integrated marketing communication MBA Year1 Page 11

Marketing Management Therefore the result reflected a successful advertising campaign. Another promotion mix of Cell C is sales promotion where consumers benefits from the facilities provided by the company, for example; the Club Chat package which targets mostly the youth generation. It is one-month contract package with no credit check and no fixed monthly fee. Moreover, users get an additional 20 free SMS messages monthly and 10% discount on four predetermined numbers. Cell C offers the cheapest call rates all around. It proposes its users discount call rates to frequently dialed numbers. Cell C has decided to maintain its tariffs despite a price increase on the competitors side. It also offers 20% discount on international calls to the corporate market. In order to establish better customer relationship and customer loyalty, Cell C has set up a world-class call center. The most highly remarkable feature of this centre is caller recognition. Cell C has worked extremely hard to improve its distribution network. It thus distributes not only through Cell C-owned dealers, Cell C franchise stores but also through certain retail outlets which used to sell only MTN products. It has also got a clever distribution mechanism, Cell C Direct, where consumers who wish to buy a package can place his/her orders over the phone. Cell C has also innovated in its product thus giving consumers a better choice while purchasing any package. The SIM cards have better storage capacity and there is scope for wireless opportunities. Another major mass-promotion tool is public relations. Public relations is used to promote products and thus they can have a strong impact on public awareness at a much lower cost than advertising. One of the major tools used is news. In the case of Cell C, the medium used is the press which is primarily the domain of the service provider whose responsibility is to communicate promotional offers to the customers.

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Marketing Management Question Four Consider the statement: Cell C hopes to achieve a sustainable 25% market share by 2009. You do believe that the target is attainable? Justify using evidence from the Case study as well as secondary research.

It can be observed that from figure 1.4 below, both MTN and Vodacom have market shares equal to or exceeding 35%. However, Cell C has managed to grow its market share to 10% since its entry in 2001.

Figure 1.4: Source: Company annual reports, and ICASA (www.econex.co.za, research note 4, June 2006)

Cell C entered the market in 2001 and has gained some market share since then. However the ICASA discussion document on mobile pricing (ICASA, July 2005) stated that Cell Cs entry has not led to a reduction in mobile tariffs, as might be expected with more competition. At a general level, the Authority is of the view that the overall picture pertaining to call rates in the country is not encouraging. The reality of the situation is that low income consumers are subjected to much higher prices. Contract or post-paid users on the higher end tariff plans are charged lower rates in contrast to those who are on the lower end tariff plans. The fact that handsets for contract customers are subsidized and the usage rates are lower raises concerns that pre-paid users may potentially be subsidizing post-paid users. Figure 1.5 below shows a MBA Year1 Page 13

Marketing Management comparison of Cell C and Vodacom and MTN tariffs when Cell C entered the market during 2001. At the time of Cell Cs entry, their tariffs were cheaper for all the product classes in the standard pre-paid category.

Figure 1.5: Pre-paid standard plans at the time of Cell Cs launch. The same was not true for Cell Cs offering in the contract categories. In the contract categories, comparison of call charges are more complex, as these offerings typically bundle usage (i.e. call minutes) as part of the subscription charges. As far as subscription charges were concerned at the time of Cell Cs entry, these were all below Vodacom and MTN levels across the range of contract offerings. However, Cell Cs tariffs were not necessarily cheaper on the contract offerings. It seemed that initially Cell C targeted the pre-paid market, but more recently (2005) it has increased its share of the contract market to 15% (2005). Cell Cs share of the prepaid market was 9% in 2005, giving it a total market share of 10% (2005). The pre-paid market is the largest part of the market with a ratio of pre-paid to contract for the entire SA mobile market of 85:15 (AMPS, 2005). However, average revenue per user (ARPU) is much lower in the prepaid than in the contract sector. Cell C also had a late mover disadvantage,

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Marketing Management having entered the market place considerably later than its competitors. The earlier entrants had time to establish subscriber bases and to reduce unit costs. The current deep pockets of Vodacom and MTN constitute a significant competitive advantage over Cell C, specifically into advertising and all forms of promotion. Cell C also has the added cost of the roaming agreement with Vodacom, to achieve the same coverage as its competitors. However, to understand why Cell C has not made significant inroads into the market shares of Vodacom and MTN issues at the interconnection level become important. Mobile customers make different types of calls, including calls on the same network (e.g. calls between two Vodacom subscribers) and calls to customers of other networks (e.g. calls between one MTN and one Vodacom subscriber). For the latter, call costs are influenced (among other things) by interconnection fees charged by the other network for terminating the call. In South Africa, recent studies have shown that interconnection rates are excessively high and do not adhere to the regulatory requirement that interconnection fees should be cost-based (South Africa Foundation, 2005: 17). While all three of the mobile operators may be charging these high interconnection fees, these fees may significantly reduce the competitiveness of Cell C. Because of its small size relative to Vodacom and MTN, Cell C subscribers are likely to make a large number of calls to Vodacom and MTN subscribers. The high cost of the interconnection may therefore serve as an incentive for potential customers to subscribe to one of the larger networks (rather than Cell C). The section above has explored several reasons why Cell C has not managed to grow a larger market share since its entry in 2001. Therefore, the target of attaining 25% of market share will not be possible for Cell C.

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Marketing Management Question Five The key to any service delivery firm is customer satisfaction. With regards to this, discuss how the SERVQUAL model can be used by Cell C to evaluate its service delivery.

One of the major ways to differentiate a service firm is to deliver consistently higherquality service than competitors. The key is to meet or exceed the target customers servicequality expectations. Service quality can thus be defined as the difference between customer expectations of service and perceived service. If expectations are greater than performance, then perceived quality is less than satisfactory and hence customer dissatisfaction occurs (Parasuraman et al., 1985). The SERVQUAL approach which is the most common method used for measuring service quality can be used by Cell C to evaluate its service delivery. Model of Service Quality Gaps There are seven major gaps in the service quality concept, as shown in figure 1.6 below. The model is an extension of Parasuraman et al. (1985). The three important gaps, which are more associated with the external customers, are Gap1, Gap5 and Gap6; since they have a direct relationship with customers. i. Gap1: Customers expectations versus management perceptions: as a result of the lack of a marketing research orientation, inadequate upward communication and too many layers of management. ii. Gap2: Management perceptions versus service specifications: as a result of inadequate commitment to service quality, a perception of unfeasibility, inadequate task standardization and an absence of goal setting. iii. Gap3: Service specifications versus service delivery: as a result of role ambiguity and conflict, poor employee-job fit and poor technology-job fit, inappropriate supervisory control systems, lack of perceived control and lack of teamwork. iv. Gap4: Service delivery versus external communication: as a result of inadequate horizontal communications and tendency to over-promise. v. Gap5: The discrepancy between customer expectations and their perceptions of the service delivered: as a result of the influences exerted from the customer side and the shortfalls (gaps) on the part of the service provider. In this case, customer expectations

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Marketing Management are influenced by the extent of personal needs, word of mouth recommendation and past service experiences. vi. Gap6: The discrepancy between customer expectations and employees perceptions: as a result of the differences in the understanding of customer expectations by front-line service providers. vii. Gap7: The discrepancy between employees perceptions and management perceptions: as a result of the differences in the understanding of customer expectations between managers and service providers.

This model identifies seven key discrepancies or gaps relating to managerial perceptions of service quality, and tasks associated with service delivery to customers. The first six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6 and Gap 7) are identified as functions of the way in which service is delivered, whereas Gap 5 pertains to the customer and as such is considered to be the true measure of service quality. The Gap on which the SERVQUAL methodology has influence is Gap 5.

SERVQUAL methodology Clearly, from a Best Value perspective the measurement of service quality in the service sector should take into account customer expectations of service as well as perceptions of service. The SERVQUAL instrument has been the predominant method used to measure consumers perceptions of service quality. There are five determinants of service quality and they are as follows: i. ii. iii. iv. Tangibles: Physical facilities, equipment and appearance of personnel. Reliability: Ability to perform the promised service dependably and accurately. Responsiveness: Willingness to help customers and provide prompt service. Assurance: (including competence, courtesy, credibility and security); Knowledge and courtesy of employees and their ability to inspire trust and confidence. v. Empathy: (including access, communication, understanding the customer).Caring and individualized attention that the firm provides to its customers.

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Word of mouth communications Customer

Marketing Management Personal needs

Past experience

Expected Service Gap 5 Perceived Service

Gap 6

Provider Gap 1 Gap 3

Service delivery (including pre- and post contacts)

Gap 4

External communications to customers

Employee perception of consumer expectations Gap 7 Gap 2

Translation of perception into service quality and specifications

Management perception of consumer expectations Figure 1.6: Source: Parasuraman et al., 1985; Curry, 1999; Luk and Layton, 2002: Model of service quality gaps

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Marketing Management The SERVQUAL-Model is based on a set of twenty-two questions within the five dimensions, which check different aspects of service quality in a business environment. It is important to note that without adequate information on both the quality of services expected and perceptions of services received then feedback from customer surveys can be highly misleading from both a policy and an operational perspective. However, various qualitative group interviews could be conducted to adjust the questions to the needs of Cell C. Overall; a good number of questions based on the SERVQUAL-dimensions could be developed through this method and can thus be transferred into a quantitative questionnaire, using a 7-point Likert-type rating-scale for each item. This questionnaire could then be distributed to the different group of Cell C subscribers such as the youth, corporate users and normal users. These multiple distribution methods are chosen in order to obtain feedbacks from the different groups of consumers. However, only the returned valid questionnaires would be analyzed. Data Analysis The reliability of the data could then be tested using Cronbachs Alpha for each SERVQUAL-dimension, each Cell C package and each user (package and user). The alphas for the five factors could vary between 0.60 and 0.92 with an average value of 0.77, which suggests a successful adaptation of the SERVQUAL approach to measure service quality of Cell C. The validity could be tested using the face and construct-validity concept. The face-validity could be suggested by the different groups of users whilst construct-validity could be obtained by comparing the results of the SERVQUAL-dimensions with a global satisfaction question. These data provide evidence that subscribers who are overall satisfied also tend to rate the individual SERVQUAL-questions higher than unsatisfied subscribers. Responses to each SERVQUALdimension could then be scored and submitted to multi-factorial analyses of variance (ANOVA) Different packages such as easy chat, business chat, active chat, casual chat and so on and different user group such as youth, business users and so on could be served as betweensubject variables. An example of expected results could be shown in table 1.1 below (please note that these figures are not real; they have been used just to give an example).

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Marketing Management Youth Dimension Tangibles Reliability M 6,27 6,18 SD 0,66 0,53 0,87 0,50 0,73 M 6,05 6,27 6,11 6,45 6,09 Business Users SD 0,66 0,41 0,60 0,42 0,74 M 5,91 6,04 6,66 4,96 5,79 Casual Users SD 0,87 0,82 0,77 0,83 0,92

Responsiveness 5,85 Assurance Empathy 6,30 5,91

Table 1.1: Means and Standard Deviation for each SERVQUAL dimension, differentiated by user group Therefore it can be concluded that the concept of measuring the difference between expectations and perceptions in the form of the SERVQUAL gap score proves to be very useful for assessing levels of service quality. In order to benefit from the service quality index, Cell C must constantly benchmark their service levels based on their service attributes to performance. From these indices, Cell C could identify inadequacies in their service quality. With inadequacies established, Cell C could distinguish essential service attributes that offer the highest possibilities in enhancing the criterion, e.g. customer satisfaction or business performance.

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Marketing Management

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[Accessed 1st May 2010]. y Kotler, P & Armstrong, G. (2001). Principles of Marketing. (9th Edition). Upper Saddle River, New Jersey: Prentice Hall. y Kotler, P & Keller, KL. (2009). Marketing Management. (13th Edition). Upper Saddle River, New Jersey: Prentice Hall. y Lewis, B.R. and Mitchell, V.W. (1990), Defining and measuring the quality of customer service, Marketing Intelligence & Planning, Vol. 8, No. 6, pp. 11-17. Available from: www.emeraldinsight.com/10.1108/EUM0000000001086 [Accessed 1st May 2010]. y Luk, Sh.T.K. and Layton, R. (2002), Perception Gaps in customer expectations: Managers versus service providers and customers, The Service Industries Journal, Vol.22, No.2, April, pp. 109-128. Available from : www.informaworld.com [Accessed 1st May 2010] y Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1985), A conceptual model of service quality and its implication, Journal of Marketing, Vol. 49, fall, pp. 41-50. Available from:http://areas.kenan-flagler.unc.edu/Marketing/FacultyStaff/zeithaml/Selected Publications/A Conceptual Model of Service Quality and Its Implications for Future Research.pdf [Accessed 1st May 2010]. y Shahin, Arash. (2002), SERVQUAL and Model of Service Quality Gaps: A Framework for Determining and Prioritizing Critical Factors in Delivering Quality Services. Available from: http://www.proserv.nu/Docs/Servqual.pdf [Accessed 2nd May 2010]. y SWOT Analysis.PPT. Available from: http://www.4shared.com/document/HnBvPcDO/SWOT_Analysis.html [Accessed 29th April 2010]. y The Competitiveness of the SA Mobile Market - Will the entry of Virgin Mobile increase competition? Research note 4, June 2006. Available from: www.econex.co.za [Accessed 1st May 2010]. MBA Year1 Page 21