Research Project Consumer Preference for Smart phones

Business Research Methods

BY: AKANKSHA KOCHHAR MITISHA GAUR KASTURI RICHA MANDHYAN (11BSP1270) (11BSP0553) (11BSP0442) (11BSP0809)

12

A PROJECT REPORT ON BUSINESS RESEARCH METHODOLOGIES

Submitted to Prof. Vipin Khurana

In the partial fulfillment of the requirements for Business Research Methodologies Course in the PGPM Program

By Kasturi(11BSP0442) Mitisha Gaur (11BSP0553) Akanksha Kochhar (11BSP1270) Richa Mandhyan(11BSP0809)

| Research

on Consumer Buying Behaviour - Smart Phones

AUTHORIZATION

This report is to be submitted as a partial fulfillment of the requirement of PGPM Program of ICFAI Business School. Semester II Course Business Research Methodologies Professor Prof. Vipin Khurana

| Research

on Consumer Buying Behaviour - Smart Phones

ACKNOWLEDGEMENT This project comes out to be a great source of learning and experience. A lot of effort has been put by various people to make this project a success. This has greatly enhanced our knowledge about the business research methods. The successful completion of this project rests on the shoulder of many persons who have helped us directly or indirectly. We wish to take this opportunity to express to all those without whose help, completion of this project would have been difficult. We are indebted and thankful to all the individuals who have guided, advised, inspired and supported us in making this project a success. We express our gratitude to our honorable guide Prof.Vipin Khurana for giving us the opportunity of developing the project and his able guidance, inestimable, motivation and constant encouragement throughout our project. Without his help, this project would never have been successfully analyzed.

24th January, 2012

| Research

on Consumer Buying Behaviour - Smart Phones

TABLE OF CONTENTS 1. Executive Summary - Major Findings - Observations 2. Introduction Introduction Objective of the study Methodology Sources of data Sample size Methods of data collection Instrument used

3. Literature review: - The Background - The Promoters, if applicable - The Company and its Product line, if applicable - Features/Results of previous study 4. Survey Questionnaire

| Research

on Consumer Buying Behaviour - Smart Phones

EXECUTIVE SUMMARY

Major Findings
In this research, we need to find out what all a smart phone customer takes into account while purchasing the product. Through the survey, we can find out the relationship between different brand of Smartphone and consumers purchase decision, that between prices of different product and his purchase decision, and the how various features of a phone available affects the purchase.

Observations
For Samsung, it can design models with more attractive functions or appearance and keep its advantages lower cost and better durability. So, it can have more competitive rather than Apple. For Apple, its users are almost short-term users who are trendy and not concerned about the durability. Apple can improve itself by controlling the cost and the durability. It can make more potential users who have lower budget for buying smartphone to choose iPhone. For Blackberry, it can be the business look of the product and the major features provided by the product. Its customers are usually working executives who are required to be in touch with the clients all the time and therefore require quality internet access. Blackberry with its bbm services is also attracting youth.

| Research

on Consumer Buying Behaviour - Smart Phones

INRODUCTION
The market research study is based to find the effect of different factors on the buying behavior of consumers while purchasing/selecting mobile phones of different brands. What is consumer buying behavior? Buying behavior is the decision processes and act of people involved in buying and using products. Need to understand: Why consumers make the purchases that they make? What factors influence consumer purchase? The changing factors in the society.

As a customer we are all unique and this uniqueness is reflected in the consumption pattern and process purchase. The study of consumer behavior provides us with reasons why consumers differ from one another in buying using products and services. We receive stimuli from the environment and the specifics of the marketing strategies of different products and services, and responds to these stimuli in terms of either buying or not buying product. In between the stage of receiving the stimuli and responding to it, the consumer goes through the process of making his decision.

Stages of consumer buying behavior: 1. 2. 3. 4. 5. 6. Problem recognition Information search Evaluation of alternatives Purchase decision Purchase Post-purchase evaluation

| Research

on Consumer Buying Behaviour - Smart Phones

Types of consumer buying behavior: Types of consumer buying behavior are determined by: Level of involvement in purchase decision. Importance and intensity of interest in a product in a particular situation. Buyers level of involvement determines why he/she is motivated to seek information about certain products and brands but virtually ignores others. Todays Indian consumers: The Indian consumer today is highly aware about the product, price, quality and the options available with him. The purchasing is done by keeping all these factors in mind. Today, price is not the only consideration as it was a few years back when prices played a major role in purchasing. The Indian consumers of today are unique in the following aspects: 1. Indian consumer of today gives preference to features of a product rather than its brand name. 2. The consumers today are not confined to a single brand and prefer change rather than sticking to the same brand. 3. They are spending thick and fast on premium and luxury products. 4. There is a stiff competition in the Indian market today and it has become a buyers market from sellers market. Completion has reduced prices to a great extent and has forced the manufacturer to maintain product quality to sustain in the highly competitive market.

| Research

on Consumer Buying Behaviour - Smart Phones

RESEARCH PROBLEM
Research on consumers buying behaviour in cellular industry.

We are interested in an experiment to find the effect of different factors on the buying behavior of consumers while purchasing/selecting mobile phones of different brands. We have selected 3 main factors- Price, Features and Customer loyalty as selection criteria used by customers. The brands selected are Samsung, Blackberry and Apple. We are interested to know if consumer purchase is influenced by various mobile brands and also if various factors have a significant effect on the consumer purchase.

HYPOTHESIS: For brands:

Ho : S = B = A H1 : is are not all equal

For factors:

Ho : P = F = C H1 : is are not all equal

| Research

on Consumer Buying Behaviour - Smart Phones

OBJECTIVE OF THE STUDY

The research study tends to follow and achieve specific objectives: 1. The data collected from this survey will be used to evaluate the consumer behavior. 2. To know the personal views of customers regarding choices among various brands of mobile phones. 3. To study which brand of mobile phone is mostly preferred by people as per their choices. 4. Find out the factors influencing the people at the time of purchasing mobile phonePRICE, FEATURES and CUSTOMER LOYALTY. 5. To observe the effect of each criteria on consumers preference towards a particular brand of mobile phone. 6. Identifying the brand perception and buying behaviour.

10

| Research

on Consumer Buying Behaviour - Smart Phones

RESEARCH METHODOLOGY

Research methodology is a systematic way to solve the research problems. It refers to search for knowledge, a scientific and systematic search for information. Marketing research is the systematic design, collection, analysis and reporting of data and finding relevant to a specific marketing design, collection, analysis and reporting of data and finding relevant to a specific marketing situation facing the company. RESEARCH OBJECTIVES To understand the problem thoroughly. Rephrasing the same into meaningful terms from an analytical point of view.

RESEARCH PROBLEM How consumers purchase smartphone?

RESEARCH DESIGN This is a descriptive type of research. Survey method is adopted using questionnaires with appropriate scaling techniques. The type of the data required will be primary which will be collected by the questionnaires.

RESEARCH DESIGN This is a descriptive type of research. Survey method is adopted using questionnaires with appropriate scaling techniques. The type of the data required will be primary which will be collected by the questionnaires.

INFORMATION NEEDS Information of users and potential users is needed including age, gender, occupation, monthly salary, brand and other factors of buying smartphone.

11

| Research

on Consumer Buying Behaviour - Smart Phones

RESEARCH INSTRUMENTS- Questionnaire designs As the questionnaire is self administered one, the survey is kept simple and user friendly. Words used in questionnaire are readily understandable to all respondents. The questionnaire comprises of questions which are according to the research and these are convenience for the respondents.

SAMPLING PLAN POPULATION- Everyone using mobile phone. SAMPLING TECHNIQUE- Stratified quota sampling. Strata of the population taken as youth of age group 20-35 yrs, divided into quota of 50% students and 50% working executives. SAMPLE SIZE- 20-30 Students 20-30 working Executives

12

| Research

on Consumer Buying Behaviour - Smart Phones

SOURCES OF DATA
Data collection means collections of information, facts or figures for the problem. Primary data collection: Primary data is the first hand information obtained by investigator. Primary source is one itself collects the data. From the questionnaire, we determine the relationship between different brand of Smartphone and consumers purchase decision, that of prices of different product and his purchase decision and how various features of a phone available affects the purchase.

Secondary data collection Secondary data is collected by others already and the researcher is using that information for his own research purpose. We have taken information from the website of 3 major brands we are considering. Also studied the trends provided by various mobile comparing websites.

13

| Research

on Consumer Buying Behaviour - Smart Phones

Data Collection
Data collection is a term used to describe a process of preparing and collecting data. The purpose of data collection is to obtain information to keep on record, to make decisions about important issues, to pass information on to others. Primarily, data are collected to provide information regarding a specific topic. A formal data collection process is necessary as it ensures that data gathered are both defined and accurate and that subsequent decisions based on arguments embodied in the findings are valid. The process provides both a baseline from which to measure from and in certain cases a target on what to improve. There was a data collection plan that we followed upon. The plan includes the following three stages to undergo. 1. Pre collection activity agreement on goals, target data, definitions, methods. 2. Collection data collection 3. Present Findings usually involves some form of sorting] analysis and/or presentation. Pre-Collection Activity This involved the decision on the methods of data collection that was supposed to be carried upon in our research on consumer smart phones buying behaviour. We have selected 3 main factors- Price, Features and Customer loyalty as selection criteria used by customers. The brands selected are Samsung, Blackberry and Apple. We are interested to know if consumer purchase is influenced by various mobile brands and also if various factors have a significant effect on the consumer purchase

14

| Research

on Consumer Buying Behaviour - Smart Phones

Methods of Data Collection

Data collection methods for impact evaluation vary along a continuum. At the one end of this continuum are quantitative methods and at the other end of this lie qualitative methods. Therefore it is necessary to go about the best and accurate way of collection with regards to the research problem. There are multiple ways to collect information to answer most questions. The ideal situation would be to collect from more than one source and/or to collect more than one type of information. In our case, we decided to take up Questionnaire form of data collection. The selection of this method for collecting information underwent several concerns including: resources available, credibility, analysis and reporting resources. Questionnaires refer to forms filled in by respondents alone. These can be handed out or sent by mail and later collected or web-based. This method can be adopted for the entire population or sampled sectors. A questionnaire requires respondents to fill out the form themselves. Since our questionnaire was being surveyed to a sample population, it was preferable for u to prepare several smaller, more targeted questionnaires, each provided to a subsample. Also, the questionnaire method in the project is used for a complete enumeration, there was special care that we took to avoid overburdening the respondent and we hope that we succeeded to an extent. There were two ways in which we used the questionnaires to collect our data. These were:1. Paper-Pencil questionnaires:Print-outs of the questionnaire were distributed among people, taken back and evaluated on the basis of their chosen options. It is generally assumed that people are more truthful while responding to the questionnaires regarding controversial issues in particular due to the fact that their responses are anonymous. 2. Web-based questionnaires:Use of internet based research. This means receiving an e-mail on which you would click an address that would take you to a secure web-site to fill in a questionnaire. This type of research is quicker and less detailed. We posted the questionnaire on social networking websites as well as emailed them to different groups which in turn gave us the collected data too.

15

| Research

on Consumer Buying Behaviour - Smart Phones

Instruments Used
The instruments used in the research project are:a) Survey:Survey methodology is the field that studies the sampling of individuals from a population with a view towards making statistical inferences about the population using the sample. The major instrument employed in our research is the survey methodology for data collection by questionnaires. b) MS Excel:Usage of excel sheets for data summarization, building of tables, pie charts and portraying data differentiation. c) Analysis tools and techniques:Different types of analysis to be performed on the data and the tools and techniques that are to be performed on the data for better findings and results are another instrument used in the research project.

Tools and techniques planned for analysis

For the analysis of data we have planned to go along three kinds of analysis to ensure proper results and enumeration of data collected. The findings will therefore be based on the following kinds of analytical methods. CLUSTER ANALYSIS Cluster analysis or clustering is the task of assigning a set of objects into groups called clusters so that the objects in the same cluster are more similar in some sense or another to each other than to those in other clusters. It can be achieved by various algorithms that differ significantly in their notion of what constitutes a cluster and how to efficiently find them. Popular notions of clusters include groups with low distances among the cluster members, dense areas of the data space, intervals or particular statistical distributions. The appropriate clustering algorithm and parameter settings (including values such as the distance function to use, a density threshold or the number of expected clusters) depend on the individual data set and intended use of the results. For the project this would be regarding knowing the different customer segments and analysis the buying behaviour of the customers with respect to the three parameters we have taken into consideration as our research design. This would lead to proper knowledge of different behavioural patterns of the customers with respect to smart phones availability of different brands.

16

| Research

on Consumer Buying Behaviour - Smart Phones

DISCRIMINANT ANALYSIS Discriminant analysis is a statistical method that is used by to understand the relationship between a "dependent variable" and one or more "independent variables." A dependent variable is the variable that a researcher is trying to explain or predict from the values of the independent variables. In discriminant analysis, the dependent variable must be a "categorical variable." The values of a categorical variable serve only to name groups and do not necessarily indicate the degree to which some characteristic is present. Here, in discriminant analysis we intend on profiling each segment of the customers demographically on the basis of our collected data. The variables in our discriminant analysis will be the lifestyle of the customers we have focused on as well as the demographics. REGRESSION ANALYSIS Regression analysis is the statistical technique that identifies the relationship between two or more quantitative variables: a dependent variable, whose value is to be predicted, and an independent or explanatory variable (or variables), about which knowledge is available. Regression analysis is used to understand the statistical dependence of one variable on other variables. The technique can show what proportion of variance between variables is due to the dependent variable, and what proportion is due to the independent variables. In this analysis, we anticipate to identify significant factors affecting smart phone choice by the customers. The variables that will be taken into consideration are likelihood of choosing a particular smart phone brand, price, features and customer loyalty. ANOVA ANALYSIS OF VARIANCE Analysis of variance (ANOVA) is a collection of statistical models, and their associated procedures, in which the observed variance in a particular variable is partitioned into components attributable to different sources of variation. In this analysis too, we propose to identify significant factors affecting the smart phone choice of the customers. The variables that will be taken into consideration are likelihood of choosing a particular smart phone brand, price, features and customer loyalty. Consequently we expect to have trustworthy findings based on our data collected after we are completed with the analysis of our data.

17

| Research

on Consumer Buying Behaviour - Smart Phones

LITERATURE REVIEW
THE BACKGROUND:

18

| Research

on Consumer Buying Behaviour - Smart Phones

 Introduced Smartphone Galaxy S2 initially in Singapore, Malaysia and South Korea in June 2010. Sold 235 million mobile handsets in the year 2009. Samsungs flagship mobile handset line is the Galaxy S II, which many consider a direct competitor of Apple's popular iPhone. Primary operating systems are androids, Symbian, Microsoft Windows Phone, and Linux based Limo and Samsungs proprietary Bada. Wide range of Wireless Service Providers (AT&T, Verizon, Sprint and all major global providers)

19

| Research

on Consumer Buying Behaviour - Smart Phones

20

| Research

on Consumer Buying Behaviour - Smart Phones

Samsung Customers
Monthly income of Samsung's users
3% $5001-$10000 > $20001 15% $10001-$15000

0%

< $5000 $15001-$20000

18% 64%

21

| Research

on Consumer Buying Behaviour - Smart Phones

SWOT ANALYSIS OF THE COMPANIES

BLACKBERRY

Own wirelesstransmission network/equipment Blackberry Enterprise Server Innovative and strong foundation of technological assets Dominance in the business Sector Brand and reputation

Limited Product breadth Market Target is limited Network is not as strong as competitors

Strengths

Weaknesses

Opportunities

Threats
Encrypted email system banned in certain countries Apple offering business-look cell phones significant reduced sales of Blackberry Competitors developing similar application/interface that takes away RIMs software advantages.

Develop new targetmarket Develop new products to deepen the market penetration Possibility to establish RIMs own Mobile wireless network (like AT&T)

22

| Research

on Consumer Buying Behaviour - Smart Phones

SWOT ANALYSIS OF THE COMPANIES

APPLE - iPHONE

First mover advantage Ownership of technological patents Apple is one of the most established brand Cultural, fashion identity Customers loyalty Brand and reputation

Dependence on third party provider Less appeal to corporate customers Technological complication

Strengths

Weaknesses

Opportunities

Threats

Sharp rise in consumer demand New target market High Potential Software

New powerful entrant -Google Many similar or substitute products Intense competition with major rivals Increasing bargaining power of buyers

23

| Research

on Consumer Buying Behaviour - Smart Phones

SWOT ANALYSIS OF THE COMPANIES

SAMSUNG ANDROID

Technological Benefits Brand Advantage Music Phone category

Late start Joint Venture enterprise and cultural Integration Low effective distribution channel Low End Segment

Strengths

Weaknesses

Opportunities

Threats

Focus on low end phones Sharp rise in consumer demand

iPhone

Global Economic Crisis Strong Competitors

24

| Research

on Consumer Buying Behaviour - Smart Phones

RESULTS OF PREVIOUS STUDY

1. User Experience

2. OS used in Smart Phones in 2010

25

| Research

on Consumer Buying Behaviour - Smart Phones

3. Smartphone Market share

4. Operating System preference

26

| Research

on Consumer Buying Behaviour - Smart Phones

5. Smartphone Consumer share

27

| Research

on Consumer Buying Behaviour - Smart Phones

SURVEY QUESTIONNAIRE

Q1. Name _________________________ Occupation___________________________

Q2. Which brand of mobile phone do you currently use? 1- Nokia 2- Samsung 3- Apple 4- Blackberry 5- HTC 6- Other__________________

Q3. Which operating system do you use? 1. 2. 3. 4. iOS Android Symbian Other_____________

Q4. When did you purchase your current handset? 1- 0-6 months 2- 6 months 1yr 3- 1-1 yrs 4- 1 - 2 yrs 5- More than 2 yrs

Q5. What function(s) do you frequently use in your mobile phone? 1. Camera 2. Text message 3. Internet 4- Games 5- Music playing

Q6. Which was the previous phone you were using? 1- Nokia 2- Samsung 3- Blackberry 4- Apple 5- HTC 6- Others________________

28

| Research

on Consumer Buying Behaviour - Smart Phones

Q7. What were the drawback(s) of the mobile phone you used? 1. Applications(Apps) 2. Update efficiency 3. Battery life 4- Technical support 5- Resolution 6- Other specify___________________________

Q8. At what price did you purchase your current phone? 1- Less than 5000 2- 5000-10000 3- 10000-15000 4- 15000-20000 5- 20000-25000 6- More than 25000

Q9. What is(are) your consideration(s) in buying a phone? 1- Camera 2- Sound 3- Operating system 4- Memory space 5- Appearance 6- Others__________________

Q10. What made you buy this product? ____________________________________________________________________________

Q11. Are you satisfied with your current phone? 1- Yes 2- No

If no, Q12. Which phone will you plan to buy and when? __________________________________________________

SIGN-__________________

29

| Research

on Consumer Buying Behaviour - Smart Phones