Consumer Behavior Project on

CONSUMER BUYING BEHAVIOR OF

MOBILE HANDSETS

Fr. Casimir Raj

Report by

206: Anmol Rohatgi | 220: Heemanish Mide | 260: Vivek Rajgopal

October 10, 2008

Xavier Institute of Management & Research, Mumbai

Mumbai University

Acknowledgment

We would like to thank

Fr. Casimir Raj

for providing us with an opportunity to work on this project. We are also grateful
for his support and guidance provided through the completion of the project. We
are also thankful to all the people directly or indirectly involved in completing
this project. This includes the 100 respondents who were patient and cooperative
in responding to our questionnaires. And finally we are thankful to the staff in the
library that helped us in getting resources for our secondary information.

- Anmol Rohatgi, Heemanish Mide, Vivek Rajgopal

Executive Summary
The concept of “buying behavior” is of prime importance in marketing and has
evolved over the years. It is important to understand consumer buying behavior
as it plays a vital role in crating an impact on purchase of products. The human
wants are unlimited and always expect more and more. Mobile handsets are no
exception to this behavior. This lead to constant modifications of mobile
handsets and today we see a new model coming into the market practically
every month. In this research study our findings gave us thorough insights of
consumer buying behavior of mobile handsets. We find that consumers consider
various parameters while buying mobile handsets. Factors such as price and
functions availing and the utility and its hedonic aspects our considered very
important We have been able to also infer that people sub consciously register
the brand, tend to recall. We also come to understand that most dealers have
showed a tendency to market the mobile handset which as per consumers
requirement. On the whole, the market is a very important place to study the
behavior of consumers and also provide useful insights what a consumer
requires in a product. It is only through research that an company will be able to
study the buying behavior of consumers.

Index

1. CONCEPTUAL FOUNDATION 1. Consumer Behavior 2. MOBILE INDUSTRY IN

INDIA 2. RESEARCH METHODOLOGY 3. DATA ANALYSIS 1. Understanding
Consumer Behavior 2. Understanding Brand Preference 3. Other observations 4.
Hypothesis 3. RECOMMENDATIONS 4. CONCLUSION 5. Bibliography &
Webliography 6. Annexures

Conceptual Foundation

“The Consumer is not a Moron….She is your Wife….Complex and Smart…. ”

CONSUMER BEHAVIOR

Not understanding your consumer’s motivations needs and preferences can hurt.
The aim of marketing is to meet and satisfy target consumer’s needs and wants.
The field of consumer behavior studies how individuals or groups of individuals
select, buy, use and dispose of goods or services. Understanding consumer
behavior and “knowing consumers” is not simple. Consumers may say one thing
and do another. They may not be in touch with their deeper motivations. They
may respond to influences that change their minds at the last minute. But
studying consumers provides clues for developing new products, product
features, prices and altering marketing strategies accordingly. Let us try and
understand the buyer behavior process.

Problem Recognition:

Perceiving a Need

Information Search:

Seeking Value

Alternative Evaluation:

Assessing Value

Purchase Decision:

Buying Value

Post purchase Behavior:

Value in Consumption or Use

Problem Recognition

The buying process starts when the buyer recognizes a problem or need. The
need can be triggered by internal or external stimuli. Marketers need to identify
the circumstances that trigger a particular need. By gathering information from a
number of consumers, marketers can identify the most frequent stimuli that
spark an interest in a product category. They can then develop marketing
strategies that trigger consumer interest.

Information Search
An aroused consumer will be inclined to search for more information. Consumer
information sources fall into four groups

Personal Sources:

Family, Friends, Neighbors, Acquaintances

Commercial Sources :

Advertising, Salespersons, Dealers, Packaging, Displays

Public Sources :

Mass Media, Consumer-Rating Organisations

Experiential Sources :

Handling, Examining, Using the Product Knowing about the sources will help the
companies in preparing effective communications for the target market.

Alternative Evaluation

How does the consumer evaluate competitive brands and make a final value
judgment? There is no single process used by all consumers or by one consumer
in all buying situations. But some basic concepts will help us in understanding
consumer evaluation processes.

First,

the consumer is trying to satisfy a need.

Second,

the consumer is looking for certain benefits from the product solution.

Third,
 the consumer sees each product as a bundle of attributes with varying abilities
for delivering the benefits sought to satisfy this need.

Purchase Decision

In the evaluation stage, the consumer forms preferences among the brands in
the choice set. The consumer may also form an intention to buy the most
preferred brand. However, two factors can intervene between the purchase
intention and purchase decision.

The first factor

is the attitudes of others and

the second

factor

is unanticipated situational factors such as loss of income, some other urgent

purchase etc. In executing a purchase intention, the consumer may make up to
five purchase sub-decisions,

Brand decision

Vendor decision

Quantity decision

Timing decision


Payment-method decision

Post-Purchase Behavior

After purchasing the product, the consumer will experience some level of
satisfaction or dissatisfaction. The marketer’s job thus, does not end when the
product is brought. Marketers must monitor post-purchase satisfaction, post-
purchase actions and post-purchase product uses.

AN EXAMPLE OF A PURCHASE BEHAVIOR BY A CONSUMER IS GIVEN BELOW

Problem Recognition

The need was recognized when my old mobile phone stopped working. I was
using Nokia 5200 and suddenly it stopped working and when given for repair, I
was informed that the mobile can not be repaired. The process of getting my
mobile repaired took some 10 days i.e. for almost 10 days I was without a mobile
phone. The need was felt when it was my birthday and I was not able to be in
touch with my friends and family. Since I use my mobile even to surf my mails
and internet I was not even able to do that. All this caused a lot of in convince
and finally I had to go for a new mobile phone.

Information Search

For me my mobile phone is a high involvement product. Since am a student with

limited disposable income I purchase a mobile once in a wile. I don’t change my
mobile set unless and until it stops working and therefore at the time of making
a decision to buy a new mobile I went through all the various mobile phones
available in my budget and of my preferred brand. i always look for various
offers and even compared rates at various stores and mobile dealers.

Alternative Evaluation

In identifying the various alternatives I went through various mobiles available of

my preferred brand. I even discussed with my family members and friends about
which mobile do they recommend. I met various dealers and stores to know the
latest Nokia launches and various offers available with all these dealers. No
check out the rates and features I even visited various web sites where I
compared all the features and prices of various brands available in my budget.
Since I am a Nokia loyalist so I never preferred changing my mobile brand.
although the other brand offers were really tempting but they were still not able
to influence me to change my brand. The only issue was which mobile model I
should go for. There were various mobiles available and were almost similar
apart from some features difference and design. Finally I decided to go for Nokia
3120 which was economical, had a good design, was Nokia latest launch and was
satisfying almost all my needs i.e. it was a 3g phone so apt for internet surfing
and with all the latest features.

Purchase Decision

Finally the action taken by me was purchasing Nokia 3120. The mobile store had
am offer of getting a hand free on every purchase but some how that model was
not available with them. i waited for few days and then I finally bought the
mobile from e store. Although that hands free offer was not available but that
was urgency since I was not able to avoid the need of having a mobile.

Post Purchase Behaviour

Am using the mobile since past 2 months and till now am quits content with my
decision. Its working pretty well and is apt for me.

Mobile Industry in India

With rapid consumerism sweeping the country, India has emerged as the second
largest mobile handset market, poised for explosive growth by 2007. The major
drivers for growth have been the demand and also the existence of companies
providing the most technologically advanced handsets at justifiable prices. The
technological developments have been the driving factor for the increasing
demand graph. The mobile handset market in India is estimated to be worth
Rs.8.05billion (US $2billion) as of 2004/05 and will surge by 62% with
approximately 100-million subscribers nationwide by 2007. It is also learnt that
the Indian mobile subscribers are willing to pay for upgrades, value-based
services, and advanced models that provide better services. There has been a
growth in the mobile handset market in India and the demand is increasing with
the increasing tele-density. The market is overloaded with the number of mobile
handset providers due to which the customer is able to bargain for a reasonable
price for the mobile. The various players are Nokia, Samsung, Motorola, Sony
Ericsson, Alcatel, Panasonic, Siemens, BenQ, Mitsubishi ,Philips ,NEC ,Sagem
,LG ,Sharp, Sendo, Innostream, Pantech, VK Mobile, Palm, O2, i-mate, Qtek,
BlackBerry, Haier, Bird, Eten, HP and XCute. Dominated largely by Nokia with a
total market share of 60%, followed by Samsung (14%) and Motorola (7%)
respectively, Indian mobile handset market is currently catering to 45 million
subscribers (June 2005). Recent records show that Indian GSM cellular user base
has grown from 43 million, as estimated in May, to 45 million in June 2008,
representing a growth of 3.50% in the month under review, witnessing large and
propitious foreign investors flooding the market eyeing for large chunks. In
addition, recent changes imbibed in the government policies that price mobile
handsets at a lower end with flexible custom-duty for new entrants are startling
the market with multiple models largely

10

aimed to higher and middle-income groups. Industry sources, though, view the
market to be at its nascent stage, many large EMS (Electronic Manufacturing
Services) companies are seriously considering setting up their handset facilities
in India.

MAJOR PLAYERS

Nokia

A world leader in mobile communications, Nokia has established itself as the

leading preferred brand in many markets. Backed by its experience, innovation,
user-friendliness and secure solutions, Nokia is the world's leading supplier of
mobile phones, fixed, mobile and IP networks. Nokia offers a line of versatile
business phones incorporating mobile voice, mobile messaging, email solutions
and business-critical applications and all the latest applications to meet the
needs of different user groups.

Samsung

Samsung manufactures leading models in all segments of the mobile handset

market. The company's aim is to launch a slew of mobile phones with unique
features that satisfy different customer and market segments. Samsung's key
insight is that apart from technology and functionality, a critical factor for
generating customer preference would be 'glamour' and 'innovation'. Innovation
is just one of the things that have kept Samsung at the top of the mobile market.
The conglomerate has made great strides in customer satisfaction through a
strong local presence via a dual partner distribution strategy. It has an all-
pervasive supply chain that delivers greater value to over 5,000 sales points and
retailers.

Motorola
Motorola offers market-changing icons of personal technology - transforming the
device formerly known as the cell phone into a universal remote control for life.
A leader in multi-mode, multi-band communications products and technologies,
Mobile Devices designs, manufactures, sells and services wireless subscriber and
server equipment for cellular systems, portable energy storage products and
systems, servers and software solutions and related software and accessory
products.