BUYER BEHAVIOUR OF CELL

PHONES

EXECUTIVE SUMMARY

Mobile phones have become basic element of communication. Consumers

are showing preference towards smartphones as it has diverse usages to
different users in accordance with their necessities. With dramatic increase
in mobile phone usage in recent years, people take into account various
factors while they decide purchasing a mobile phone.
Indian mobile market has witnessed a paradigm shift. India is one of the
fastest growing markets for mobile handsets globally and is expected to
reach 13.5% market share by 2019 as per the joint report of ASSOCHAM
& KPMG, 2016. As per the same report the key drivers of the growth are
popularity and availability of mobile handsets and improved availability of
data services in India. Affordable price of the mobile handsets is yet
another key driver of growth. Mobile phone usage has changed drastically.
As observed in the market, besides communications, people are using
mobile phones for social networking, gaming, Internet surfing,
entertainment, camera, online shopping, banking and many more. As per
the survey by ASSOCHAM (2011), a lot many Indians are changing their
mobile phones in less than two years. Growing young population and
changing life styles are also the key determinants of growth of mobile
phone industry. So it can be clearly envisaged that smart phones market
holds an immense opportunity for companies. If companies want to
overpower their competition it becomes imperative for them to understand
how consumers decide for smart phone purchase or what is the consumer
buying behaviour towards them. The present study aims towards providing
insights for consumer buying behaviour towards smart phones so that it
can help companies in deciding type of smartphones to be introduced in
the market. This has changed the competition scenario in the market where
once the dominant position of Nokia has been taken by Samsung and the
likes. Hence the market players in the smartphone industry have
understood that studying mobile phone buying behaviour has to become a
regular feature as the product life cycle has shortened. The pace of
introduction of new models/features in the existing series or launching of
new series in smartphones has gone up tremendously with almost every
brand launching more than 10 models each year. E.g. Globally Apple,
Xiaomi, Samsung or OnePlus range sees atleast 1-2 new introduction in
their existing series with IPhone 8 & X, Xiaomi Mi6, Samsung S9, S9+
and OnePlus 6 etc. respectively.
Customer buying is not mere transfer of item from seller to buyer.
Consumer wants buying to become a happy affair. They would like to see,
touch and feel the commodities that they buy. Understanding this
psychology for the consumer many organizations have come to make
purchase of happy affair.
The study aims at determining the factors that influence the consumers to
buy mobile phones(smart phones) and their impact on the customer
satisfaction with respect to their purchase decision of different branded
mobile phones. The consumer buying a variety of mobile phones which
satisfy their wants and they are always influenced by the purchasing
activities by some considerations which lead them to select a particular
brand or a particular store in preferred to others. The purpose of this study
is to investigate the factors affecting the decision of buying mobile phones.
The study was undertaken on mobile phone users, ten decision factors of
consumer buying behaviour were derived. The findings showed that
“speed and performance” has the highest positive impact on the
satisfaction followed by “brand advertising” and “recommendations and
reviews”.
KEYWORDS

.Consumer buying behaviour

.Smart phones
.Features of mobile phones
.Consumer purchase decisions
.Factors affecting buying behaviour

INTRODUCTION

ABOUT THE STUDY

Consumer buying is not mere transfer of item from seller to buyer.
Consumer wants buying to become a happy affair. They would like to see,
touch and feel the commodities that they buy. Understanding this
psychology for the consumer many organizations have come to make
purchase of happy affair.

MARKETING
Marketing is more important as it relates to consumer and their needs,
whatever may be the objectives of business, the main in which it has to
concentrate will be marketing. Business today, concentrating on marketing
is found to be fairly successful though success depends on many other
factors.

CONSUMER BUYING BEHAVIOUR

 The main aim of marketing is to meet and satisfy target customers need
and wants buyer behaviour refers to the peoples or organization conduct
activities and together with the impact of various influence on them
towards making decision on purchase of product and service in a market.
The field of consumer behaviour studies how individuals, groups and
organization select, buy, use and dispose of goods, service, ideas, or
experience to satisfy their needs and desires understanding consumer
behaviour and knowing customer are never simple. The wealth of products
and service produced in a country make our economy strong. The
behaviour of human being during the purchase is being termed as “Buyer
Behaviour”.

Communication is one of the most talked topics in today’s business world.

Among the different modes of communication, mobile phone is becoming
reliable and efficient vehicle to reach from one person to another.
Globally, with the advent of technology, mobile features phone converted
to smart phones have become paramount of individuals. A report “The
Mobile Economy 2017” by GSMA (Global System Mobile Association)
shoes that there are 4.8 billion unique subscribers in 2015 and by 2020 it is
supposed to reach 5.7 billion. The report also identified 81% growth in
smart phone market globally. This clearly highlights the opportunity for
mobile phone companies globally.

LITERATURE REVIEW

Consumer behaviour is “the decision process and physical activity

individuals engage in, when evaluating, acquiring, using or disposing of
goods and services(Loudon & Bita, 1994).
Understanding the consumer behaviour concept is very critical for survival
and profitability of firm. Consumers are central to organizational success
and the organization that understand this are more successful in their
business operations(Blackwell, Miniard, & Engel,2006).
Consumers are individuals and households that buy the firms product for
personal consumption(kotler,2004).It often used to describe two different
kinds of consuming entities: the personal consumers and the organizational
consumers(Krishna,2010).
According to Senecal et al (2005) marketers should analyze consumer’s
mind where they buy what they buy and why they buy. Why they choose a
particular product is a mystery because there is a lot to find out.

Consumer behaviour involves studying how people buy, what they buy,
when they buy and why they buy. When a consumer wanted to make the
purchase decision, they will pass through the process through recognition,
search information, evaluation, purchase feedback. At last, the consumer
will choose a product or brand to consume from various choices in the
market. However these factors affecting the behaviour of consumers vary
due to diverse environmental and individual determinants.
Consumer buying behaviour is influenced by two major factors. These
factors are individual and environmental. The major categories of
individual factors affecting consumer behaviour are demographics,
consumer knowledge, perception, learning, motivation, personality,
beliefs, attitudes and life styles. The second category of factors is
environmental factors. Environmental factors represent those items outside
of the individual that affect individual consumer’s decision making
process. These factors include culture, social class, reference group, family
and household. The above mentioned factors are the major determinants
behind the decision of consumers to opt a given good or
service(Blackwell, Miniard, and Engel) 2006.
According to Karjaluoto et al (2005) study of factors affecting consumer
choice for mobile phones in Finland found that price, brand and size of the
phone are the main factors in purchase of any new mobile phone. It also
highlighted the importance of innovative services, multimedia, design,
outside influence and reliability as significant factors.
Ling et al (2006) surveyed College students to identify their preference for
the mobile phones. The result showed that physical appearance, size and
menu of the mobile phone are the most determinant factors affecting the
buying behaviour of consumers.
Xihao, H., & Yang, J. (2006) too measured the influence of the reference
group on the purchasing behaviour and found “a strong influence of
reference group on cell phone consumers in their purchasing decisions.
Informational influence on consumers found to be highest compared with
utilitarian influence and value-expressive influence.”
Mark and Sharples (2009) found usability as the most important factors of
mobile choice; other features like aesthetics and cost too were important.
Consumer behaviour towards mobile phones has also been segregated with
respect to age groups and gender differences and substantial research has
also been done in that respect. One such research is by Singh and Goyal
(2009) who examined importance of physical appearance, brand, value
added features, core technology features, price and postsale services across
three different age groups (18-30, 30-50, and 50 above) and two gender
groups. Overall physical appearance got the highest importance followed
by brand and postsale services. Also Physical appearance, brand, value
added features, and core technical features influence the age group of 18-
30 years more than consumers of other age groups. The consumers of age
50 years and above are price sensitive as they have given greater
importance to price than any other age group. Male respondents have
highest rated brand closely followed by physical appearance. On the other
side, female respondents gave highest importance to physical appearance
and least importance to core technical features.
Based on research by Khasawneh (2010) on mobile phones, it was found
that products brand name influence customers’ evaluation and affect to
their buying decision. This can also be supported by the research work of
Norazah (2013), brand name was found to have a significant effect on the
demand for smartphones among Malaysian students.
Ahmed and Qazi (2011) investigated buying and re-buying mobile
purchase behaviour of 500 University students in Pakistan for adoption
and consumption patterns. Consumer prefers service provider offering
services to suiting to their requirements and features of a mobile phone.
Favourite brand is Nokia and preferred service provider U-phone.
Islam (2011) studied mobile phone adoption amongst farmers in the rural
area of Bangladesh. Nokia was the most preferred brand due to
affordability.
Singla and Bansal (2011) researched on factors that affect choice criteria
of consumer for mobile handset and the study revealed that important
features of handsets are price, product, design, availability and brand
image.
Osman (2012) in their study found that consumers made purchases on the
basis of design and other consideration of mobile functionality.
According to Ibrahim, Kassim, & Mohamood (2013) Promotion mix
included celebrity endorsement, marketing frequency and exchange offers
as the determining factors. It was also found that social influence works
more on young customers while purchasing smart phones. Consumers
collect information on product from various sources, co-workers, friends,
family etc; before making a product purchase.
Azira, R. et al. (2015) examined factors influencing purchasing intention
of Smartphone among university students in Malaysia and deduced that
“Three of four variables in study namely product features, brand name,
and social influence have a significant relationship with product purchase
intention and have positive correlation amongst them.”
Kaushal, SK and Kumar Rakesh (2016) conducted study of 159 students
and young professionals from city of Lucknow to find out presence of any
significant difference between factors like Compatibility, Product Features,
Price, Brand, relative advantage, dependency, social influence and
convenience that affect consumer's (male or female) purchase of
Smartphone. Results of the study revealed that only Compatibility,
Dependency and Social Influence had a significant effect on purchase
intention of Smartphone users. Only convenience factor showed a
significant difference between male and female purchase intention.
Kushagra et al (2017) in their elaborate study involving 417 respondents
on Impact of Brand Cues on Young Consumers’ Preference for Mobile
Phones using Conjoint Analysis and Simulation Modelling deducted that
the attributes or brand cues influencing youth can be broadly classified as
extrinsic cues and intrinsic cues. Extrinsic cues were found to be brand
name and price while Camera quality, RAM, Operating system and battery
power were intrinsic cues. Literature review for consumer behaviour
towards mobile phones clearly highlights the importance of technology,
price, brand, recommendations and product features. Not only this, it also
highlights that this preference differs across the demographics of the
consumer and marketers must take into account this difference while
formulating strategy to sell their product.

OBJECTIVES

The purpose of the study is:

1. To understand the consumer behaviour while purchasing mobile phones.
2. Factors affecting consumer choice.
3. To know the satisfaction level of the consumer.

RESEARCH METHODOLOGY
In the broadest sense, research can be defined as a systematic process of
gathering data, information and facts for the advancement of knowledge. It
is an organized and systematic way of finding valid answers to the selected
research questions. The process of research must be systematic and follow
a series of steps. The research includes creative work undertaken on a
systematic basis in order to increase the collection of knowledge and the
use it to develop new applications. It is used to ascertain facts, reaffirm the
results of previous work, solve new or existing problems, support
theorems, or develop new theories. A research project may also be an
expansion on past work in the field. To test the validity of instruments,
procedures, or experiments, research may reproduce elements of previous
projects, or the project as a whole.

Research methodology can be defined as a process used to collect

information and data for the purpose of making business decisions. The
methodology includes publication research, interviews, surveys and other
research techniques, and could include both present and historical
information. Research methodology is a systemic method/process dealing
with identifying problem, collecting of facts or data, analyzing these data
and reaching at certain conclusion either in the form of solutions towards
the problem concerned or certain generalization for some theoretical
formulation. It also comprised of a number of approaches and inter-related
and frequency overlapping procedures and practices. Since there are many
aspect of research methodology, the line of action has to be chosen from a
variety of alternatives. The choice of suitable method can be arrived at
through assessment of objectives and comparison of various alternatives.

This study was conducted to know the factors affect people decisions of
mobile phone purchasing. Secondary data was obtained to analyse the
various factors. This secondary data was obtained from various reports,
manuals, different journals and publications for assessing existing
findings, internet, books and documents.

DATA ANALYSIS AND INTERPRETATION

From the collected secondary sources of data and literature review, ten
decision factors of consumer buying behaviour were analysed with respect
to smart phones were taken like price advantage, physical dimensions,
brand & advertising, reviews & recommendations, speed & performance,
battery life, camera, availability, design colour and exchange possibility.
The usage of mobile phone is not limited to making and receiving calls,
rather people use it for messaging, checking mails, listening to music,
browsing on net and many more. It has become a mini computer for them.

FACTOR ANALYSIS

India is the leading and second largest smartphone market in the world.
Samsung and apple’s dominance on India’s luxury smartphone market.
The Samsung electronics and apple Inc are the two largest manufacturers
of smartphones in the world, followed by Huawei technologies and other
Chinese smartphone companies in India such as Xiaomi, Vivo, Oppo and
One Plus.
The top ten mobile phones purchased in India :
.Samsung
.Xiaomi
.One Plus
.Apple
.Vivo
.Oppo
.Lenovo(Motorola)
.LG
.Nokia
.HTC

Once the data was collected on different parameters /variables then the
grouping of these variables into factors was done using factor analysis.

Accordingly ten factors were derived from factor analysis. These 10

factors are:
1. Price Advantage: It is the most important factor. Pricing includes all the
price related factors that the customers consider before buying mobile
phones. It states that the customers’ psychology that influences buyer’s
decisions of purchasing mobile phone.

2. Physical dimensions: This is the important factor. Physical attributes

include all the physical characteristics of mobile phone like pixels,
Bluetooth, size, weight and others.

3. Brand and Advertising: This factor also plays important role. It shows
that customers also make their purchasing decision based on brand image/
value and also advertisement aired in various media(influenced by
celebrity endorsement).

4. Reviews and Recommendations: It is the most influenced factor. Some

respondents take the suggestions from their friends, neighbour’s and
colleagues before purchasing mobile phones. Reviews regarding the
phones are also evaluated.
5. Speed and Performance: The speed and the operational facilities
/performance of the phones are also considered in buyer’s decision of
purchasing.

6. Battery: The battery is one of the most important parts of a mobile

phone. Buyer’s emphasize on battery back up.

7. Camera: The camera in a mobile phone is also an important factor

which is used to capture photographs, record videos.

8. Availability: The availability of the phone in the market also impacts on

buyer behaviour.

9. Design and Colour: The design, which may include pattern, size, weight
etc..and attractiveness of the colour also induces buyer behaviour.

10. Exchange Possibility: The buyer also considers the possible ways for
exchange of the phones before buying.

RESEARCH MODEL

The research is exploratory in nature to find out which decision factors

impacts the satisfaction of mobile phone users.

Framework for consumer buying behaviour i.e. Research Model

Physical Dimension

Design & Colour

Battery life

Camera

Speed & Performance Perceived

Satisfaction
Recommendations &
Reviews

Brand Name

Price advantage

Availability

Exchange possibility

RESULTS

Out of the ten independent factors, seven factors have been found to have
significant positive impact on the dependent variable i.e. satisfaction of the
mobile user with respect to their buying decision. Out of which camera has
the highest preference indicating that this is the most important factor that
influence the satisfaction level of the mobile phone user followed by speed
& performance and battery life. Product dimensions design & colour and
availability related factors were not significant in influencing the perceived
satisfaction of the consumer with respect to mobile phone buying decision.
CONCLUSION

The study has provided useful insights about the factors considered
important by consumer while buying smart phones. Ten decision factors of
consumer buying behaviour identified through literature review with
respect to smart phones were taken like i) Price Advantage, ii) Physical
Dimensions iii) Brand & Advertising iv) Reviews & Recommendations v)
Speed & Performance, vi) Battery Life vii) Camera viii) Availability ix)
Design & Colour and x) Exchange Possibility.
The factor analysis results showed that seven factors out of ten were found
important by them viz. i) Price Advantage, ii) Brand & Advertising iii)
Reviews & Recommendations iv) Speed & Performance, v) Battery Life
vi) Camera and vii) Exchange Possibility. Out of these seven factors,
finally shortlisted through secondary sources analysis revealed that “Speed
& Performance” has the highest positive impact on the customer
satisfaction followed by “brand & advertising” and “recommendations &
reviews”. This finding is useful for the manufacturer in designing a
product with focus on the technological aspect of the smartphone. Studies
by Saif et al (2012), Sata (2013), Azira, R. et al. (2015) etc. support the
results. Advertising plays an important role in influencing buying
behaviour and popularizing the brand which eventually becomes one of the
important factor for building consumer intention and purchase towards
smartphones. Studies by Singh and Goyal (2009), Khasawneh (2010),
Norazah (2013) etc. support the results. Consumers normally give
importance to recommendations and reviews received through social
media, blogs, communities, friends, colleagues etc. Studies by (Lachance
et al., 2003). Bristol and Manglegurg (2005), Xihao et al (2006) etc.
support the results.
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