THE RELATIONSHIP BETWEEN PRICES AND CUSTOMER LOYALTY IN TELECOMMUNICATION SECTOR IN TURKEY

Abstract

Customer Loyalty is very important aspect in telecommunication sector because customer loyalty measures the relationship between customer and organization. Customer loyalty defined as number of customer shares of specific brand and customers repurchasing frequently the same product without changing the brand to another competitor’s product that provides same product with same service and quality.The aim of our research is to discuss about customer loyalty in telecommunication sector in Turkey. Nowadays Turkey has 79 million subscribes. There is currently three GSM firm in Turkey which are Turk Telekom, Vodafone, and Turkcell. In this research two of them are used which are Turk Telekom and Turkcell. The data period is 2012Q1-2018Q4 which is consisted of 56 observations. At first to measure the customer loyalty we use number of mobile customer of the companies, secondly we use inflation to use price of the tariffs. We estimate panel data regressions which are Ordinary Least Squares, fixed effect model and random effect model. The results show that inflation has no effect on number of mobile customer variable which is the proxy of customer loyalty. This result show that increasing price has no effect on number of customer thus shows the existence of customer loyalty.