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INTERIM REPORTMRP

Name: Pallab Sarkar

Enrollment No.: 09BS0001516

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KEY BUYING FACTORS OF CONSUMERS OF

MOBILE PHONES

MRP

INTERIM REPORT

Submittedto: Submittedby:

Dr. Dipankar Dey Pallab Sarkar

Associate Dean 09BS0001516

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ACKOWLEDGEMENT

I feel it a privilege to express my sincere indebtedness to my faculty guide to Dr. Dipankar

Day for his efficient and able guidance and continuous impetus and encouragement given by

him, wheneverI had doubt on the project or on my issue pertaining to the subject as such. It

was a great honour and privilege to work with him and to benefit from his valuable

knowledge and expertise.

In this preparation of the project I have received encouragement and support from various

persons. Naturally, I owe a deep intellectual debt to numerous persons who have contributed

to my understanding of various issues. Last, but certainly not the least, I would like to thank

my friends, who have helped me with their valuable inputs and suggestions whenever I

approached them.

Pallab Sarkar

IBS KOLKATA

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TABLE OF CONTENT

INTRODUCTION 4

Consumer behaviour 5

Mobile phone choice 6

Decision making model 7

Challenges faced by retailers to sell mobile handsets 7

Current trends in mobile market 8

HAND SET MARKET SHARE IN INDIA 11

OBJECTIVES OF PROJECT 13

RESEARCH OVERVIEW AND METHODOLOGY 14

LIMITATION OF STUDY 15

QUESTIONNAIRE 16

References 19

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INTRODUCTION

Project Title: Key buying factors of consumers of mobile phones.

DescriptionofProjectinbrief:

The study attempts to investigate consumer motives in cellular phone market.

The research purpose is to study the motives that affect the consumer behaviour as well as

give insights into the use of mobile phone services including the perceived value added

services, and to collect the general information about the users.

The current trend in the mobile phone industry is that we are experiencing a shift from second

generation mobile phone to third generation. This means that the mobile phone will not only

a device used for speaking but a handset that allows consumers a variety of new different

services such as internet access multimedia message service(MMS).

The purpose of the research is to find out the key-success-factors of any mobile handset

which are valued by the customers and may influence the decision making process of

consumers. The study attempts to find out the factors affecting the brand decision in mobile

phone industry.

Mobile phone markets are one of the most turbulent market environments due to increased

competition and change. Thus, it is of growing concern to look at consumer buying decision

process and cast light on the factors that finally determine consumer choices betweendifferent mobile phone brands.

Currently, several families of standards coexist: Global System for Mobile communication

(GSM), Code Division Multiple Access (CDMA), Time Division Multiple Access (TDMA)

and Personal Digital Cellular (PDC). There is not yet a universal mobile phone. In addition,

each standard offers an endless range of features.

The key buying factors of consumers of mobile phones/ handsets may be determined by

surveying the customers with the help of proper questioner and visiting different retail outlets

of mobile handsets to know what actually a potential customer look for. Finally, a conclusion

may be drawn to with the help of tool like SPSS.

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CONSUMER CHOICE BEHAVIOR

From marketing perspective, consumer choice behaviour can be studied through the classical

five-step (needinformation searchevaluation of alternativespurchasepost-purchase

evaluation) problem solving paradigm or through the progression of consumer choice from a

product class to brand choice (Dorsch, Grove, and Darden, 2000). The five-step model is

usually suitable for decision making that assumes rational problem solving behaviour and, in

most cases, complex decision making.

The acquisition of a new mobile phone follows this traditional view of buying process, but is

in many situations also affected by symbolic values related to brands.

Consumer choice behaviour has some important prevailing conditions that must be taken into

account while studying choice. In the light of the classical problem solving buying behaviour,

consumers engage in information search before making the actual choice. Consumer decision

making process is usually guided by already formed preferences for a particular alternative.

This means that consumers are likely to make the choice between alternatives based on

limited information search activity and without detailed evaluation of the other alternatives

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MOBILE PHONE CHOICE

The study was built upon six key attributes (telephone features, connection fee, access cost,

mobile- to-mobile phone rates, call rates and free calls) related to mobile phone purchasing

respondents had to importance rate.

Mobile phone choice and use has also been found to be related to prior consumption styles.

Because individual differences in consumption patterns are obviously identifiable, we

hypothesize that background variables especially have an influence on mobile phone choice.

y H1: Demographic factors have an influence on the evaluations of different attributesrelated to mobile phone choice. Specifically, gender and social class will impact on

the evaluations of the attributes as men belonging to higher social class seem to be

more technology savvy.

y H2: Consumers value personal time planning properties in the choice of new mobilephones.

y H3: New technical properties increase consumer willingness to acquire new phonemodels.

y H4a: When choosing between different mobile phone models, consumers value largerscreen size but the whole phone should be small enough and light to carry in pocket.

y H4b: When choosing between different mobile phone models, consumers valuefamiliar brands.

y H5: When choosing between different mobile phone models, especially lower incomeconsumers have a price limit that restricts the choice to fewer models.

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DECISION MAKING MODEL

This model is important for anyone making marketing decisions. It forces the marketer to

consider the whole buying process rather than just the purchase decision (when it may be too

late for a business to influence the choice!)

The model implies that customers pass through all stages in every purchase. However, in

more routine purchases, customers often skip or reverse some of the stages.

We will follow this model and analyse what customer think in every step while purchasing a

mobile handset.

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TRENDS IN MOBILE HANDSET MARKET OF INDIA

The India Mobile Handsets industry grew to record 36.35 million shipments for the first time in a

single quarter in Q1 2010 (January-March2010), according to the IDC report, India Mobile Handsets

Tracker, Q1 2010, June2010 release.This was a growth of39.5%year-on-year (Q1 2010 over Q12009) in terms of unit shipments.

Overthe last fewyears the mobile phonehas morphed to become no less than the 'Swiss Knife' of

personal communication devices. How many persons do weknowwho have stopped wearing a wrist

watch or a stop watch or carrying an FM radio player or a calculator or a flashlight...the list is

seeminglyendless.Today mobile phones are availablewith up to 32 GB internal memory and a 12-

megapixel camera.

In fact, IDC data shows that almostevery day a new mobilehandset model is launched by a vendor

with an innovation. Some features address basic userconcerns in an emerging market like India-

lack of access to 24x7 power supply to recharge batteries (30-day recharge cycle phones, solar

powered handsets), operating in noisy, dusty and/orhumid conditions (high decibel speakers, dust-

proof lamination,water-proof outer casing),working/living in areas withhigh incidence of power

outages (LED flashlight)etc. Other features address more aspirational needs such as a digital camera

with flashlight (to use in impromptu social situations such as office parties, friends' birthdays or a

beautiful sunset), a primary memory card slot (to store favourite music tracks/audio downloads),

and an A2DP-enabled headset (to be ableto experiencehigh qualitywireless music/audio replays

while atthe sametime seamlesslyreceivecalls).

Still other features on advanced application-enabled devices address the need,especially amongst

youth and young executives, to be in continual touch with friends and peer groups via social

networking sites (touch screen and social networking applications-enabled phones). Devices that are

WiFi-enabled, 'push mail' enabled orwith an on-board GPS application find buyers amongst senior

business executives who want to stay in touch while travelling or on vacation.

Table 1 and Figure 1 show percentages of growth in shipments ofhandsets with new, innovative

features overthe lastthreeyears -2007 up to 2009, as a proportion oftotal India mobilehandset

shipments.

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Source: IDC's India Mobile Handsets Tracker, Q1 2010, June 2010 release

Figure 1. India Mobile Handsets Market: Feature Evolution Trends, 2007 to 2009

Source: IDC India, 2010

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As the market for mobile handsets matures, the entire spectrum of handsets ranging from

basic mobile phones, to feature phones and advanced smartphones is expected to witness

many new innovations and enhancements in looks, features, network access-capability (3G-

enabled phones etc.), and applications-capability (phones pre-loaded with e-book readers

etc.). With all major handset vendors and some leading software vendors having launched or

on the verge of launching their application stores, the buyer/user of mobile devices in India is

in for a virtual treat in the quarters and years ahead.

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HANDSET MARKET SHARE IN INDIA

y April-June 2010 mobile sales touch 38.63 million units, up 6.3% QoQMulti SIM mobile phones account for38.5% oftotal sales

y 'Emerging Vendors' garner 33.2% ofIndia market in 2Q 2010Nokia, Samsung, GFive, Micromax and Spicetop vendors in Jan-Jun 10halfyear

y Chennai, September 28, 2010: According to market intelligence and advisory firm IDCsIndia Quarterly Mobile Handsets Tracker, 2Q 2010, September 2010 release, shipments of

mobilehandsets in India grew by6.3% quarter-on-quarter (2Q2010 over 1Q2010)to touch an

all timehigh of38.63 million units in a single quarter.

y In a significant new development,the study found that Dual- and Triple-SIM card slot phoneshave grown to touch as much as 38.5% ofthetotal India Mobile Handset shipments, fromless

than 1% in 2Q2009 (April-June2009 quarter).

y During the last6 months (January-June2010)thetop five mobilehandset vendors in India wereNokia, Samsung, GFive, Micromax and Spice.

India Mobile Handsets Market: New Vendor Contribution to Shipments, Q1 2008 to Q2 2010

Source: IDC India, 2010

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OBJECTIVES OF PROJECT

y To know the key buying factors of consumers of mobile phones.y To understand consumer buying behavior for purchasing the handsets.y To know the attributes of mobile handsets valued by customers.y To know the effect of technology on consumers choice. y To know the influence of mobile brand on consumers handset purchase decision.y To know the marketing strategies of major handset players in India.y To know the effect of brand on purchasing a mobile handset.

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RESEARCH OVERVIEW AND METHODOLOGY

Data will be collected that are relevant to the current analysis include the

following:

yDemographic and behavioural profiling: Detailed demographic and psychographic dataare to be collected for segmentation and profiling.

y Characteristics of current phone: Complete information is to be collected describing therespondents current mobile phone including presence, use and importance of features.

y Mini-competitive assessment: This section involved a two-part shelf test of 17 mobiledevices that were considered to be direct competitors for the mid-tier, feature-rich device

market. The debranded devices included both recently-introduced models and accurate

physical models of yet-to-beintroduced devices.

y Imagery/Perceptual mapping: Participants provided ratings on key performance factorsof mobile handsets from the mini-competitive assessment

y Discrete choice exercise: A set of discrete choice experiments is structured for eachrespondent. Each experiment presented two alternatives from the 17 models completely

described on a set of attributes, including brand, features and price. Participants were

also given the option to stay with their current handset rather than buy one of the

alternatives. They were asked to indicate whether they would purchase one of these new

devices if they were available now and, if so, which they would most likely choose.

The discrete choice exercises are the centerpiece of the analysis. These exercises were

structured to support statistical estimation of the quantitative effects of each of the phone

features, price, and brand on the choice between competitive products. They were also

structured to evaluate the degree to which consumers were drawn to purchase a new device

rather than retain their current handset.

The following attributes were measured and analyzed in the discrete choice modeling

(DCM):

Form factor (the style and design of the handset)

y Pricey Brandy Display size and qualityy Battery talk timey Camera

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y Bluetooth capabilitiesy Messagingy Video clipsy 3D soundy Downloadable gamesy Situational response

Methodology:We may use the following mythologies:

y Exploratory and Descriptive Experimental Research: The study and research is bothexploratory as well as descriptive in nature. The sources of information are both

primary and secondary. The questionnaires are prepared and personal interviews are

conducted to collect the consumers perception and buying behaviour, through these

questionnaires.

y Sampling: Sampling Technique: Random Sampling-Initially, a rough draft was preparedkeeping in mind the objective ofthe project. A pilot studywas done in orderto knowthe

accuracy of the Questionnaire. The final Questionnaire was arrived only after certain

importantchanges are done.Thus my sampling came outto be judgmental and convenient.

y Sampling Unit: Therespondents who are asked to fill out questionnaires are sampling unit.Thesecomprise of MNCs, Government Employees, Self Employees, Housewife,etc.

Research Instrument: Structured Questionnaire.

Contact Method: Personal Interview.

The area ofresearch is KOLKATA, INDIA.

Limitations of the Study:The studyhas the following limitations:

1) The study is confined to a certain parts of Kolkata and does not necessarily shows apattern applicable to all of Country.

2) Some respondents are reluctant to divulge personal information which can affect thevalidity of all responses.

3) Samples are limited.

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QUESTIONNAIRE

NAME: ___________________________________________

1) Age

(a) 18 to 30(b) 31 to 50

(c) 51 to 65

2) Occupation

(a) Service

(b) Business

(c) Profession

(d) Housewife(e) Retired

3) Income

(a) 50,000 to 1,00,000

(b) 1,00,000 to 5,00,000

(c) More than 5,00,000

4) Family members

(a) 2

(b) 3

(c) 4

(d) More than 4

5) Do you do a research before purchasing a mobile phone?

(a) Yes ..

(b) No .

6) Where do you look to for information when purchasing a mobile phone?

(a) On line research

(b) Advertisement

(c) Consumer Magazines

(d) Store-to-store comparison

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(e) Previous knowledge

(f) One store visit

7) What will be the range of your nest mobile handset?

(a) Below Rs 5000

(b) Below Rs 10000

(c) Below Rs 20000

(d) Above Rs 20000

8) Do you consider brand of the mobile while purchasing mobile handset?

(a) Yes ..

(b) No .

9) Who influence your decision of purchasing your handset?

(a) Father

(b) Mother

(c) Spouse

(d) Friends

(e) No one

10) Do you look for latest technology while purchasing handset?

(a) Yes ..

(b) No .

11) Which size mobile you consider?

(a) Small

(b) Medium

(c) Large

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REFERENCES

y http://www.trai.gov.iny Business todayy http://www.infibeam.comy

Kotler

y http://en.wikipedia.orgy Marketing Research- Naresh Malhotra