CONSUMERS’ buying BEHAVIOUR

IN
PURCHASE OF laptop

Table of Contents
ACKNOWLEDGEMENT...............................................................................................................4
ABSTRACT....................................................................................................................................5
INTRODUCTION...........................................................................................................................6
BACKGROUND.............................................................................................................................8
What is the Consumer Behavior Report?........................................................................................9
What is the Portable Laptop Trends Report?...............................................................................9
Future Laptop Trends..................................................................................................................9
CONSUMER BEHAVIOR REPORT...........................................................................................10
RESEARCH METHODOLOGY..................................................................................................10
Data Collection..........................................................................................................................10
Questionnaire Design and Measures of Constructs...................................................................11
DATA ANALYSIS and RESULTS..............................................................................................12
Demographic Profile of the Respondents..................................................................................12
Brand Usage Profile of the Respondents...................................................................................12
The Features Influencing Consumers’ Laptop Purchase Decisions..........................................15
CONCLUSIONS...........................................................................................................................20
REFERENCES..............................................................................................................................22

1
ACKNOWLEDGEMENT

I hereby convey my deep acknowledgement to all those who made it possible for me to complete
this project, by extending their support and continuous co-operation.
I would like to acknowledge the consistent encouragement extended by Dr. Kamal Ghosh Ray,
Director and Dr. Ch.S.Durga Prasad, Dean-Academic Planning of Vignana Jyothi Institute of
Management.
My sincere gratitude to A.Ramesh Associate Professor whose constant guidance, efforts,
heartfelt support, suggestions and consideration helped me in the successful completion of this
project.
Finally, I would like to thank my friends Mr. Sreedhar, Dhruwa Institute Of Management,
Hyderabad. Mr.Ravi Kumar, University of Hyderabad, Hyderabad, Mr. Sharath Chandra,
Vignana Jyothi Institute Of Management, Hyderabad Delhi and my VJIM batch mates without
whom this dissertation work would not have been successfully completed.

2
ABSTRACT

A customer is anyone makes regular purchases from a company or a store, while a consumer is
one who makes any transactional decisions of economic nature including buying of goods and
services. Consumer can be both personal consumer who buy for his or her own person and
family consumption and organizational consumer which could include nongovernmental
organization, political groups, companies and governments. Consumer behavior is the study of
how individuals, group, and organizations select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants. Buying Behavior refers to the buying behavior of
the ultimate consumer. Buying Behavior is the decision processes and acts of people involved in
buying and using products which includes social and mental processes. This study was
undertaken in order to find out the factors influencing consumer’s purchase decision of laptop.
And the findings of this first objective will provide the basis for the second research objective in
the study. Secondly, it is intended to find out whether there are differences among consumer
groups of a laptop company with respect to the importance given to the factors influencing
consumers’ laptop purchases. The customer base of a company consists of three groups of
consumers stayers (those who had never switched from a previous brand), satisfied switchers
(those who switched for reasons other than dissatisfaction) and dissatisfied switchers (those who
switched because they were dissatisfied from their previous brand).This study, thus looks into
the understanding of the attitudes of these three different groups of customers which plays an
important role when implementing effective and feasible retention and loyalty strategies.
Furthermore, it is also crucial to understand whether there are differences among these groups in
terms of the factors affecting their future laptop purchases when they are upgrading their laptops.

3
INTRODUCTION

Laptop sales in India have risen drastically, which accounts for over 25% of the total personal
computer market. Laptop sales only accounted for a 3% of the total personal computer till 2003.
The sales of the laptops has reached a mark of 0.68 million unit in fiscal year 2006-2007 which
accounts for a growth of 59% over the same period in fiscal year 2005-2006. Sale of desktop
computers and laptops has touched the mark of 8.5 million units in the fiscal year 2007-2008.
There are various main players in the Indian notebook market. The objectives of the study are to
understand the brand position in the minds of the laptop owners and to map their perception. It
also focuses on mapping the dealer perception about the top performing brands in the laptop
sales. From the study it was found that customers prefer a particular brand compared to others.
This particular brand is preferred mainly by the youths because of the good configuration
available and its brand image. The company being studied seems to be lacking in considered
attributes. Businessmen however use a combination of all the brands; this could be probably
because of the various applications of theirs. The customers find cash discount and free
accessories most attractive while making a purchase. A reasonable percentage of people also
have a mind to accept new offers also. The success rate in achieving good market share by the
highly preferred company by customers proves that the advertising media plays a crucial part in
promoting their products. The dealers find the incentives by this particular company most
attractive compared to other IT and technology companies.
There are seminal studies on consumer purchase decision models in the literature, however,
consumer purchase decisions vary greatly depending on the product to be purchased. Therefore,
sectoral studies are needed to delineate the factors affecting consumer purchase decisions in
various product markets. The International Data Corporation (IDC, 2006) report mentioned that
in 2005 consumers continued to respond very positively to very attractive price points, but
portable demand in the business space remained very strong too. According to What Laptop
(2005), Dell was the number one choice in worldwide with 7.9 million sales. It was followed
respectively by HP (7.4 million), Toshiba (5.8 million), IBM (4.3 million), and Acer (3.9
million) in year 2004. Furthermore, revenue generated from notebooks has long surpassed
desktops, thanks to higher average selling prices for notebooks. According to CRN (2006) in
June 2005, notebook sales accounted for $216.1 million, or $1,442.66 per notebook whereas

4
desktops accounted for $113.9 million, or $762.98 per unit. The average notebook price fell 11.8
percent from $1,635.07 in the year-ago month and in the same period, desktop prices fell 5
percent from $803.38 (CRN, 2006). In addition, new product launches to the market, acquisitions
and mergers in the sector, rapid developments in the nano-technology, integrated wireless
networking, and decreased prices make it extremely vital for the companies to understand the
factors underlying consumers’ laptop purchase decisions.
The customer base of a company consists of three groups of consumers: stayers (those who had
never switched from a previous brand), satisfied switchers (those who switched for reasons other
than dissatisfaction), and dissatisfied switchers (those who switched because they were
dissatisfied from their previous brand). Understanding the attitudes of these three different
groups of customers plays an important role when implementing effective and feasible retention
and loyalty strategies. Furthermore, it is also crucial to understand whether there are differences
among these groups in terms of the factors affecting their future laptop purchases when they are
upgrading their computers.
The objectives of this study are twofold. Initially, it is aimed to determine the factors influencing
consumers’ laptop purchases, and the findings of this first objective will provide the basis for the
second research objective in the study. Secondly, it is intended to find out whether there are
differences among consumer groups of a computer company with respect to the importance
given to the factors influencing consumers’ laptop purchases. In the following part a brief and
recent literature will be given about consumers’ purchase decisions.

5
BACKGROUND

The literature on purchase decision in this part has been limited to IT related purchase decisions
due to the product category which will be examined in this current study. Consumers can prefer
certain products, brands or companies over others, and to understand the reason behind these
choices is exceptionally essential in order to market existing products more effectively than
rivals. Consumers’ demographic profile, purchase perceptions, and their attitudes towards
products or brands influence their purchase decisions. Jarvenpaa and Tedd (1996/1997) identify
many factors that affect a consumer’s electronic shopping purchase decision: product
understanding, shopping experience, customer service, and consumer risk. Geisler and Hoang
(1992) identify five steps in the decision process to purchase IT:
1. Establish or articulate the need for IT.
2. Establish or determine which unit(s) will receive the new or modified IT.
3. Select the technology.
4. Select the suppliers.
5. Authorize the purchase and sign the authorization to commit the necessary funds.
The authors conclude that services companies follow a relatively logical and analyzable decision
process. According to decision making model, consumers process the environmental cues; the
physical factors of the product, psychosocial cues, such as advertising, and consumers put these
cues into a set of perceptions that shape their preferences. Based on these preferences, consumers
make their choices subject to situational constraints, such as price. According to Hong and Lerch
(2002), people evaluate various objective features when buying an IT product, and because of
imperfect information and simplifications according to the decision rules people often abstract
these various features into few perceptual dimensions such as ‘usefulness’ and ‘price’. In another
research conducted by Kim et al. (2002), small-office/home-office professional (SOHO)
procurement choices are influenced by a number of salient dimensions (i.e. income,
performance, price, inter-purchase time, network externalities). Furthermore, surveys have
repeatedly identified performance and price as two of the most important attributes in SOHOs'
PC purchase decisions. In a more recent study, Dillon and Reif (2004) examine factors
influencing consumers’ e-commerce commodity purchases, and find that a history of e-
commerce purchasing have a more positive attitude towards on-line buying.

6
What is the Consumer Behavior Report?

The Consumer Behavior Report is designed to give merchants, media and industry analysts
insight into shopping trends, pricing and market share. Each month, a different topic will be the
focus of the report.

What is the Portable Laptop Trends Report?

The portable laptop is the topic of PriceGrabber.com March 2008 Consumer Behavior Report.
Portable laptops trends and data were collected from a survey of 1,868 online consumers
conducted in February 2008. Additional data is sourced from Market Reporter, a statistical
database that tracks consumer shopping behavior on PriceGrabber.com. The Notes from the
Green section is compiled by Olivia Zaleski, an eco friendly blogger for PriceGrabber.com Shop
Green section. The focus of the Shop Green section is to provide more than 20,000 products to
help consumers live a greener lifestyle. PriceGrabber.com is a major shopping comparison
engine, with more than 26 million unique users per month and up-to-date daily pricing of
products supplied more than 12,000 sellers.

Future Laptop Trends

What does this mean for the future of laptops? As laptops become smaller, will traditional sized
laptops become obsolete? In a recent PriceGrabber.com survey, 44 percent of online consumers
say they would travel more often with their laptop if it was a portable-style. Smaller laptops and
devices are certainly more attractive to consumers, as long as the price and performance are
comparable.
Gartner states: By 2012, half of all workers will use devices other than their laptops when they
travel. Even though notebooks continue to shrink in size and weight, traveling workers lament
the weight and inconvenience of carrying them on their trips. Vendors are developing solutions
to address these concerns: new classes of Internet-centric pocketable devices at the sub-US$400
level; and server and Web-based applications that can be accessed from anywhere.

7
CONSUMER BEHAVIOR REPORT

March 2008
Eighty-eight percent of respondents say they would consider a portable-style laptop when
purchasing a new laptop; however, performance and price play a significant part in their
decision to purchase.

RESEARCH METHODOLOGY

Data Collection
In line with the research purposes of this study, a questionnaire was prepared and then it was
spread in the city Hyderabad. With the help of my friends I could spread this questionnaire and
collect the data of consumer buying behavior on purchase of laptop. Since this research was
focused on the factors influencing laptop purchase decisions of consumers, it was seen
appropriate to perform a traditional survey. In addition, a cover letter, which had explained the
purpose of the study, with the questionnaire was sent to the customers.
During the data collection of this research, most of the electronic shops were selling IBM laptops
as well as desktops. Hence, even though IBM no longer exists as a PC brand name, Lenova was
included to the questionnaire as IBM launched Lenova logo for its expansion. Another PC brand
Compaq was eliminated from the questionnaire, since it was long ago merged with HP.
Furthermore, in order to omit the confusion of national or international brand distinction from
the minds of consumers, only international brands were examined in this study.
The laptop brands examined in this research were limited by the following brands: Acer, Dell,
HP, HCL, Lenova, and Sony.
A total of 122 responses were collected, but only 48 of the respondents declared that they had a
laptop. Furthermore, 4 of the responses were eliminated since they were considered as unusable,
so as a consequence, 44 of the responses were covered in this study.

8
Questionnaire Design and Measures of Constructs

In the first part of the questionnaire, the consumers were asked whether they had a laptop or not,
and those who had a laptop were only considered in the survey. The brand name of their laptop
was also asked to the consumers. As stated earlier, this course of independent study has
classified the consumer base of a company into three groups: stayers, satisfied switchers, and
dissatisfied switchers. Therefore, the consumers in this study replied to the question about
whether the current brand that they were using was their first laptop brand or whether they had
switched from a previous laptop brand. As a following question, consumers, who had switched,
were asked to state the reason of why they switched from a previous laptop brand to their current
brand. The options for switching included (a) overall dissatisfaction from the previous laptop
brand, and (b) reasons other than dissatisfaction. These questions helped us divide respondents
into three groups as (1) stayers (those who had never switched from a previous laptop brand), (2)
satisfied switchers (those who switched for reasons other than dissatisfaction), and (3)
dissatisfied switchers (those who switched because they were dissatisfied from their previous
laptop brand).
One of the objectives of this study was to investigate the factors that influence consumers’ laptop
purchase decisions. For that purpose, a list of laptop features was stated in the questionnaires,
which were gathered from the analysis of PC journals as well as personal interviews with the
experts from the sector. The consumers were asked which factors they found important when
they were purchasing a laptop. Finally, demographic questions such as age, education and gender
were also asked.

9
DATA ANALYSIS and RESULTS
Demographic Profile of the Respondents

Of the 44 respondents, approximately 22% were female whereas 78% were male. Additionally,
almost 85% of all respondents were under the age of 35. The age structure of the participants of
this survey was as follows: 31.5% of the consumers was between 18-25 year old, 53.2% was
between 26-35, 11.6% was between 36-45, and finally 3.7% was 46 and above. The education
level of the respondents was high as expected; 4.6% of the respondents were high school
graduates, 86% were university or school of applied disciplines graduates or students, and 8.6%
had a MA or Ph.D. degree

Brand Usage Profile of the Respondents

The participants were asked to choose the laptop brand that they were using at the time of the
survey. Table 1 illustrated the frequency distribution of laptop brands by the respondents of the
survey. In other words, the frequency of laptop brands used by the respondents can be
summarized as follows: 4.5% Acer, 18.18% Dell, 22.7% H.P, 13.6% HCL, 6.8% Sony, 18.18%
Lenova and 18.9% other brands.

Table1. Frequency Distribution of Laptop Brands

FREQUENCY DISTRIBUTION OF LAPTOP BRANDS

BRANDS FREQUENCY PRECENTAGE %

ACER 2 4.50%

DELL 8 18.18%

H.P 10 22.70%

HCL 6 13.60%

SONY 3 6.80%

LENOVA 8 18.18%

OTHERS 7 18.90%

10
 PRECENTAGE %

ACER
DELL
H.P
HCL
SONY
IBM
OTHERS

The respondents of this study were also asked whether the current laptop brand that they were
using was their first laptop brand or whether they had switched from a previous laptop brand.
Furthermore, the participants who declared that they had switched from another brand, were
asked to state the reason of why they had switched. The alternatives for switching included (a)
overall dissatisfaction from the previous laptop brand, and (b) reasons other than dissatisfaction.
Hence, the laptop users were classified into three groups: (a) stayers (those who did not switch),
(b) satisfied switchers (those who switched for reasons other than dissatisfaction), and (c)
dissatisfied switchers (those who switched because they were dissatisfied from their previous
laptop phone brand). Table 2 demonstrated that 62.4% of the respondents were stayers, while
25.7% of them were satisfied switchers and 11.9% of them were dissatisfied switchers.

11
Table 2. Distribution of Respondents According to Three Consumer Groups

THREE CUSTOMER GROUPS

FREQUENC
  Y PERCENTAGE (%)
STAYERS 28 62.38%
SATISFIED
SWITCHERS 11 25.68%
DISSATISFIED
SWITCHERS 5 11.90%
TOTAL 44 100.00%

PERCETAGE (%)

STAYERS
SATISFIED SWITCHERS
DISSATISFIED SWITCHERS

12
The Features Influencing Consumers’ Laptop Purchase Decisions

Consumers, who participated to this survey, were given a list of features related with laptops and
then they were asked to show how important these features for them while purchasing a laptop.
Respondents who found a feature “very important” gave “4” to that item while others who found
it “unimportant” gave “1”. Hence, as it was seen in Table 3, processor speed and type, memory
and hard disk capacity, guarantee and warranty conditions, wireless internet and display
resolution quality became the top five features which had the following highest mean values
respectively: 3.80, 3.66, 3.66, 3.62, 3.58. It was also noteworthy to mention that all the features
listed in the survey were considered important by the respondents since the lowest mean value
was 2.65 for the feature of TV/Audio Connection.

13
Table:3 Importance of Laptop Features in Consumers’ Purchase Decisions

Importance of Laptop Features in Consumers’ Purchase Decisions

ITEMS N MEAN STANDARD DEVIATION

Processor speed and type 44 3.8 0.413

Memory & Hard Disk Capacity 44 3.66 0.524

Guarantee & Warranty 44 3.66 0.522

Wireless Internet 44 3.62 0.529

Display Resolution Quality 44 3.58 0.519

Maintenance & Repair 44 3.57 0.612

Price 44 3.53 0.615

DVD-CD Player 44 3.44 0.608

Speakers 44 3.39 0.742

Weight 44 3.38 0.672

Stand by Duration 44 3.37 0.684

Payment Conditions 44 3.21 0.819

Bluetooth 44 3.11 0.829

Design & Color 44 3.07 0.752

Brand Image 44 2.99 0.865

Infrared Technology 44 2.93 0.9

TV/Audio Connection 44 2.65 0.938

14
 4

3.5

2.5

MEAN
1.5 STANDARD DEVIATION

0.5

Importance of Laptop Features in Consumers’ Purchase Decisions

15
The mean importance scores for three groups of consumers with respect to factors influencing
laptop purchase decisions are presented in Table 4. According to this table, dissatisfied switchers
gave less importance to “price and payment conditions” when compared to stayers and satisfied
switchers. Furthermore, stayers found “price and payment conditions” factor more important
than satisfied switchers. In addition, it has to be noted that “connectivity & mobility feature” has
the lowest mean score across all groups of consumers. On the other hand, “core technical
features” has the highest mean score for all consumer groups (stayers: 3.68, satisfied switchers:
3.66, and dissatisfied switchers: 3.69) which means that stayers, satisfied switchers, and
dissatisfied switchers gave the highest importance to this factor among all factors, and the three
consumer groups did not show any difference with respect to core technical features. On the
other hand, the second most important factor was found to be “post purchase services” for all
three groups of consumers.

16
Table 4. Differences in Three Consumer Groups About Importance of Laptop Purchase
Decision Factors

SATISFIED DISSATISFIED
STAYERS SWITCHERS SWITCHERS

  Mean N Mean N Mean N

connectivity & mobility   2.7978 28 2.8482 11 2.9551 5

Value Added Features   3.2026 28 3.0694 11 3.1581 5

Post Purchase Services   3.5993 28 3.5685 11 3.5833 5

Peripheral Specifications   3.3598 28 3.3167 11 3.4 5

Core Technical Features   3.6846 28 3.6627 11 3.6923 5

Physical Apperarance   3.2328 28 3.1905 11 3.2821 5

Price & Payment Conditions   3.4387 28 3.3155 11 3.141 5

17
CONCLUSIONS

Year by year the number of people who are using and owning personal computers (PC)
substantially increases in all over the world. Contrary to the introduction years of computers,
today they have been used by almost all age groups, and by both males and females, and the gap
between age groups and the gap between males and females with respect to computer
usage/ownership decreases. Furthermore, consumers’ desire for portable and attractively
designed PCs forces the companies to produce laptops/notebooks. In addition, extended battery
life, price cuts, prevalence of home-offices, and integrated wireless networking also cause to the
increased sales of laptops. On the supply side of the market, the companies try to make profit and
even survive in a highly competitive environment. Furthermore, the rapid development in
technology, particularly in nano-technology, leads companies to make huge amounts of
investments in R&D. Moreover, the acquisitions and mergers in the sector and new players in the
market also influence the companies operating in IT industry. In such a volatile industry, it
becomes extremely important to learn the factors that are influencing consumers’ purchase
decisions. The customer base of a company is comprised of its current customers and those
customers who are attracted from competitors. In addition, the customers who are acquired from
competitors can be either satisfied switchers or dissatisfied switchers. Hence, it is equally crucial
to learn about whether there is a difference among stayers, satisfied switchers and dissatisfied
switchers with respect to their laptop purchase decision factors. This issue becomes
exceptionally vital when the consumers decide to upgrade/change their laptops.
In this study, it has been found that there are seven factors which influence consumers’ laptop
purchase decisions. These factors can be stated as follows: core technical features, post purchase
services, price and payment conditions, peripheral specifications, physical appearance, value
added features, and connectivity and mobility. On the other hand, stayers, satisfied switchers and
dissatisfied switchers demonstrate a significant difference only in one factor: price and payment
conditions. The results show that when compared to stayers and satisfied switchers, dissatisfied
switchers give less importance to price and payment conditions related factor.
From the managerial perspective, the findings of this study imply that when a consumer of a
company decides to buy a new laptop or in technical terms to upgrade his laptop, the company
should consider which customer base he belongs to. For instance, if the consumer is a stayer, the

18
company can offer price discounts when he decides to upgrade his laptop. Likewise, the
company can give special promotions to stayers when they bring their former laptop and
exchange it with a recent model of the company’s laptops. It is also seen that among all factors,
mobility and connectivity factor has received the lowest importance from three groups of
consumers. This can be attributed to the fact that due to the nature of laptops, being mobile is an
expected feature. Another explanation to this result can be that consumers usually do not like to
use technological words such as infrared and Bluetooth, they prefer to say connecting to Internet
or mobile phone, sending pictures and documents to printer, and etc. Hence, it will not be
sufficient and efficient to merely underlie this feature in advertisements. If this feature has to be
mentioned in ads then the tone and the words used should be plain and explanatory. However,
since all consumer groups find core technical features and post purchase services extremely
important, these features should be emphasized in advertisements. It has to be also noted that
post purchase services factor is tremendously important since it is directly related with
customers’ brand loyalty.
This study recommends companies to invest in technology through R&D and create
differentiation at utmost level. This research has been limited to laptop/notebook sector and the
factors influencing consumers’ purchase decisions in this market, since sectoral differences play
a vital role, it is also recommended to replicate this study in distinct sectors.

19
REFERENCES

1)http://www.consumermate.com/survey-report-on-consumer-buying-behavior-on-electronic-
products.html
2)http://www.google.co.in/#hl=en&biw=1345&bih=583&q=consumer+buying+behavior+
on+purchase+of+laptop&aq=f&aqi=&aql=&oq=&gs_rfai=&fp=73a526cd30607c24

3) http://www.learnmarketing.net/consumer.htm
4) http://www.scribd.com/doc/28726420/Consumer-Buying-Behaviour-on-Electronic-Products
5)
https://mr.pricegrabber.com/March_CBR_Portable_Laptop_Trends_ v9_FINAL.pdf
6) http://www.udel.edu/alex/chapt6.html
7) www.pricegrabber.com

20