Effect Of Telecom Pricing Strategies On Customer Satisfaction: The Case Of East Addis Ababa Zone

Abstract

The purpose of this study was to examine effect of pricing strategies on customer satisfaction on EthioTelecom, the case of east Addis Ababa zone. The study addressed four research questions, which sought to establish the effects of low-cost leadership pricing on customer satisfaction, differentiation pricing on customer satisfaction, psychological pricing on customer satisfaction, and pricing strategy concerns in EthioTelecom. The research adopted a mixed research design where 1000 made the population. The stratified simple random sampling technique was fit for the study. The tool used to collect the data was a structured questionnaire. A sample of 286 questionnaires was adequate and was arrived at using Yamane formula although 286 all respondents returned the questionnaires. Statistical Package for Social Sciences (SPSS Version 24) analyzed data based on descriptive and inferential statistics. The study also used a correlation analysis to establish the relationship between the dependent variable and the independent variables and data presented in tables and figures. The study established that economies of scale was a competitive advantage that EthioTelecom has over smaller entities and they disagreed that EthioTelecom products are sold at lower prices in the market. It came out that EthioTelecom applies psychological strategy in its pricing and this has an impact on the consumer’s price perception. Results established that consumers are interested in price promotions and consumers experience pride and positive feelings because of attributing positive outcomes to them. The study concluded that consumers tend to spread positive word-of mouth and make repeat purchases when they feel they have a good relationship with the service provider. It was agreed that perceived price changes like price increases, rebates, or deviations from a reference price may have significance for consumer feelings. Similar research should be conducted in other telecommunication firms for additional study in order to generalize the findings. Furthermore, a study might be conducted to examine the effects of pricing on customer satisfaction, how customer satisfaction influences pricing strategies, and what customer satisfaction challenges are affecting pricing strategies among the country's top telecommunication corporations. Alternatively, the objectives should be targeted toward the consumers so that direct feedback on elements impacting their behavior can be obtained.