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BUSINESS RESEARCH METHODS

PROJECT
ON

CONSUMER BEHAVIOR IN
SELECTING MOBILE PHONES

SUBMITTED TO
MRS. SARIKA TANDON

SUBMITTED BY
SHREYA MEHTA
MD. FARAZ
NAMITA AHUJA
NEHA CHAUDHARI
NIDHI SHARMA
NITIN TRIPATHI
TABLE OF CONTENTS

1. Problem Definition…………………………………………………………………....4
1.1. Background………………………………………………………………………4
1.2. Problem Statement……………………………….………………………...........5

2. Literature Review……………………………………………………….....................6

3. Approach to the problem……………………………………………………..........…8

4. Hypothesis Question………………………………………………………………….9

5. Research design...........................................................................................................9
5.1. Preliminary investigation………………………………………………………..9
5.2. Collection of Quantitative Data……………………………………………......10
5.2.1.Measurement and Scaling Procedures
5.2.2.Questionnaire Design
5.2.3.Survey
5.3. Sampling Process…………………………………………………....................10
5.3.1.Target population
5.3.2.Sample Size
5.3.3.Sampling technique

6. Fieldwork………………….…………………………………………………………
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7. Data Interpretation and analysis


……………………………………………………..12
7.1. Data Analysis Plan…………….……………………………………………12
7.2. Methodology………………………………………………………………..14
7.3. Analysis and Interpretation………….......………………………………… 16

8. Results
……………………………………………………………………………….17

9. Limitations and caveats ………………………….


…………………………………..18

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10. Questionnaire……………………………………...…………………………………
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11. Bibliography…………………………………………………………………………23

ACKNOWLEDGEMENT
We take this opportunity to convey our sincere thanks and gratitude to all those
who have directly or indirectly helped and contributed towards the completion of
this project.

First and foremost, we would like to thank Mrs. Sarika Tandon for her constant
guidance and support throughout this project. During the project, we realized that
the degree of relevance of the learning being imparted in the class is very high.
The learning enabled us to get a better understanding of the nitty-gritty of the
subject which we studied.

Next we would like to thank all those who were kind enough to spare their time
to fill our questionnaires and give us an opportunity to conduct a research on this
topic.

We would also like to thank our batch mates for the discussions that we had with
them. All these have resulted in the enrichment of our knowledge and their inputs
have helped us to incorporate relevant issues into our project.

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1. PROBLEM DEFINITION

1.1 Background

Mobile users today want their handsets to be converged devices handling multiple
functions, entertainment being the most important among them. They want their mobile
to be fully loaded with top-end features, but they want all that at affordable costs.

Integrated digital camera, music player and stereo FM radio are the three main features
which would drive users towards upgrading their handsets. These features are available
in mid range and high-end handsets so far, and the common user now demands these
features in ordinary handsets which can be affordable. On the other hand, MMS has
failed to catch the fancy of the masses due to its high costs of transmission over the
networks and relatively cheaper alternate modes of downloading videos available
through Internet.

Other features like Games, Calculator, Reminders/Scheduler/Organizer, Polyphonic


ringtones etc have become hygiene features and are a must for any handset. None of
these features is a differentiator anymore.

Apart from Integrated Camera, Music player and Stereo FM radio, a Speaker phone is
another feature that emerges as the driver for replacing the current handset. This feature
can be a most cost effective differentiating feature for the low end phones.

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Most handset vendors have been bringing out new models at fairly regular intervals. The
maximum activity takes place at the high end, where the launch of a newer model makes
the older model cheaper, shifting it to the mid segment. However, the low-end handset
users, who make up a huge number, don’t get access to such features as the prices of
such phones do not fall below a certain level. The dissatisfaction among the existing
users stems from this, as they are unhappy at not being able to avail these high-end
features.

1.2 Problem Statement

The aim of study is to objectively understand the behavior of mobile phone users in age
group of 18 to 28 years and further capture their satisfaction level that is influenced by
various technical and non technical factors. Specific aspects to be studied were:
• Usage pattern in terms of purpose of mobile phones for various categories of
consumers
• Level of the satisfaction of users
• Reasons for dissatisfaction
• Level of satisfaction with gadgets and added services provided
• Liking for various attributes of the mobile phone instrument
• Usage Pattern of functionalities and added services provided

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2. LITERATURE REVIEW

The whole world is going mobile. Phones, computers and media devices now fit in our
pockets and can connect us to a variety of information sources and enable
communication nearly everywhere we go. There is considerable interest in exploiting the
almost universal appeal and abundance of these technologies for their educational use.

Most previous reviews of mobile technologies and learning have been concerned with
the use of these technologies to address specific curriculum areas. In this review, we take
an activity-centered perspective, considering new practices against existing theories. Our
review of the literature reveals six broad theory-based categories of activity, and
identifies a number of examples of the use of mobile technology in each of them:

1. Behaviorist – activities that promote learning as a change in learners’ observable


actions
In the behaviourist paradigm, learning is thought to be best facilitated through the
reinforcement of an association between a particular stimulus and a response. Applying
this to educational technology, computer-aided learning is the presentation of a problem
(stimulus) followed by the contribution on the part of the learner of the solution
(response). Feedback from the system then provides the reinforcement. In
a mobile learning context, classroom response systems like ‘Classtalk’ and ‘Qwizdom’
fall in this category.

2. Constructivist – activities in which learners actively construct new ideas or concepts


based on both their previous and current knowledge

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In the constructivist approach, learning is an active process in which learners construct
new ideas or concepts based on both their current and past knowledge. Learners are
encouraged to be active constructors of knowledge, with mobile devices now embedding
them in a realistic context at the same time as offering access to supporting tools. The
most compelling examples of the implementation of constructivist principles
with mobile technologies come from a brand of learning experience termed
‘participatory simulations’, where the learners themselves act out key parts in an
immersive recreation of a dynamic system.

3. Situated – Activities that promote learning within an authentic context and culture
Situated learning posits that learning can be enhanced by ensuring that it takes place in
an authentic context. Mobile devices are especially well suited to context-aware
applications simply because they are available in different contexts, and so can draw on
those contexts to enhance the learning activity. The museum and gallery sector has been
on the forefront of context-aware mobile computing by providing additional information
about exhibits and displays based on the visitor’s location within them.

4. Collaborative – Activities that promote learning through social interaction


Collaborative learning has sprung out from research on computer-supported
collaborative work and learning (CSCW/L) and is based on the role of social interactions
in the process of learning. Many new approaches to thinking about learning developed in
the 1990s,. Mobile devices can support mobile computer supported collaborative
learning (MCSCL) by providing another means of coordination without attempting to
replace any human-human interactions, as compared to say, online discussion boards
which substitute for face-to-face discussions

5. Informal and lifelong – Activities that support learning outside a dedicated learning
environment and formal curriculum
Research on informal and lifelong learning recognises that learning happens all of the
time and is influenced both by our environment and the particular situations we are faced
with. Informal learning may be intentional, for example, through intensive, significant
and deliberate learning ‘projects’ (Tough 1971), or it may be accidental, by acquiring
information through conversations, TV and newspapers, observing the world or even
experiencing an accident or embarrassing situation. Such a broad view of learning takes
it outside the classroom and, by default, embeds learning in everyday life, thus
emphasising the value of mobile technologies in supporting it.

6. Learning and teaching support – activities that assist in the coordination of learners
and resources for learning activities
Education as a process relies on a great deal of coordination of learners and resources.
Mobile devices can be used by teachers for attendance reporting, reviewing student
marks, general access of central school data, and managing their schedules more

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effectively. In higher education, mobile devices can provide course material to students,
including due dates for assignments and information about timetable and room changes.

3. APPROACH TO THE PROBLEM

Objective or theoretical framework


The objective of this research is to identify the factors that influence a person into
making a decision to buy a certain brand of mobile Handset.
As mentioned in the Literature Review, according to industry analysts, this category has
grown only on promotions and for now, except for promotions, nothing seems to be

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working. Therefore, ideally, this research should be able to bring to the fore, certain other
factors that could lead to a growth of this segment.
At the very least, the research should corroborate the existing assumptions regarding the
influencing factors. It should be in a position to verify that the steps various players are
taking to stimulate volumes are in the right direction, and would eventually lead to an
increase in market share.

Research Questions
I. What are the different “Customer Segments” depending upon the preferences?
II.What is the perception of people towards the leading brands of Mobile Handsets?
III.What are different factors that influence the customer when He/She buys a Mobile
Handsets?
IV.Who are the major Influencers in the purchase decision of Mobile Handsets?

4. HYPOTHESIS TESTING

1. H0: Peers do not have an influence on the purchase decisions of mobile handsets
Hα: Peers have an influence on the purchase decisions of mobile handsets

2. H0: Price does not influence consumer buying behavior


Hα: Price influences consumer buying behavior

3. H0: Features are not related to the changing preference of the mobile users
Hα: Features are related to the changing preference of the mobile users

5.RESEARCH
5.RESEARCH DESIGN

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The methodology followed for analyzing the consumer behavior of mobile phone
customers is as shown in the figure.

5.1 Preliminary Investigation


This phase involved preliminary investigation of the various factors which could
possibly affect the consumer’s perception about the various brands and in turn
influence the purchase decisions of the consumer. We primarily used three
methods to identify the various factors. The Secondary data gathered was
analyzed to understand the current scenario of the cell phone segment. The
analysis of the secondary data also helped us find different attributes which affect
the mobile phone segment.

5.2 Collection of Quantitative data


Measurement and Scaling Procedures: Non-Comparative Rating scale is used
in which respondents evaluate only one object at a time, and for this reason non
comparative scales are often referred to as monadic scales. Non comparative
techniques consist of continuous and itemized rating scales.
We have used continuous rating scale in order to rate the choices for purchase
considerations and the sources of purchase decisions.

Questionnaire Design: This phase involved the design of the questionnaire on


the basis of the potential factors identified as influencing the customer behavior.
Research problems were listed and then the information needed was identified.
The questions were then prepared in order to fulfill the information requirements
as identified earlier.

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Survey: Different Survey methods were used for collection of data. The principle
method used was Personal Interviewing of the respondents. In-Home
interviews were conducted by us at various locations in Mumbai. We also did
Mall Intercept at popular markets like lower Parel and andheri. Due to the
shortage of time, we conducted a few telephonic interviews to maintain diversity
in data.

5.3 Sampling Process

Target Population: The target population is the collection of elements or objects


that process the information sought by the researcher and about which inferences
are to be made. Our target population involves the users, deciders and buyers of
mobiles. The users include the old and the young population.

Sample Size: It denotes the number of elements to be included in the study. Due
to time constraints the sample size chosen is 100.

Sampling Technique: A mixture of quota and stratified method was used for
sampling, with care being taken to get responses from customers of different age
groups and different family sizes.

5. FIELDWORK

The survey was conducted keeping in mind the users and deciders of the mobile
Handsets. The survey was conducted in the Bandra and andheri Areas of Mumbai. We
made several trips to the local market and also in college premises of IBS mumbai to
gather information from relevant people.

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6. DATA INTERPRETATION AND ANALYSIS

6.1 Data Analysis Plan

This chapter shows how the information needed to answer the three key research
questions have been extracted via the questionnaire.

Q1 explicitly asked the respondents if a mobile handset is used in the family or by them.
The questionnaire was not administered to the respondents that answered NO to this
question. Such respondents have not been included in the sample size of 60 that has been
mentioned.

Q2 to Q6 of the questionnaire are used to get the general details about the respondent
(age, educational qualification, annual income, family size and number of children in the
family. Q4 explicitly asked the respondents about the size of the family and Q6 asked
about the number of children in the respondent’s family.

Q7 explicitly asks the brand preference of the respondent about the mobile handset.

Q8 asks the respondents to rate the importance of the following purchase


considerations on a scale of 1(Very unimportant) to 5 (Very Important):

a. Battery Life
b. Voice quality
c. Weight
d. Size
e. Appearance
f. Ease of use/User Interface
g. Time required to charge the phone
h. Price

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These attributes were decided after a thorough secondary data analysis. However some
of these attributes might have similar effect on the consumer preference. Therefore we
conduct a factor analysis to find out the factors to which one or more of the above
variables belong.

Q9 asks the respondents to rate the Sources of Information influencing the Purchase
Decision. The following sources were considered:
a) Advertisement
b) Internet
c) Corporate Person
d) Family
e) Past experience
f) Retailer
g) Word of mouth
The respondents were asked to rank the factors in order of importance.

Q10 ask the respondents to score each of the brands on the various product attributes on
a scale of 1 – 5.
Five major selling brands were tested on the various product attributes
mentioned. The brands included in the test were:
a) Nokia
b) Sony Erickson
c) Samsung
d) LG
e) Motorola

Q11 and Q12 are used to determine the brand loyalty of the respondent towards the
mobile Handsets, thus asking the switching pattern of the users.

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Q13 in the Questionnaire attempts to find the Brand Personality by asking customers
the perceived traits of each of the leading brands of mobile handsets available in the
market today. It is very important to realize that these are not the attributes that the
mobile handsets to possess, via its advertisements and other promotional activities. For
e.g. Nokia in it’s campaign claims that “Connecting People”, but rather the attributes the
customer feels that the mobile possesses.

6.2
6.2 Methodology

The methodology to conduct the study was composed of different tasks as follows:
1. Review of literature: A review of literature on consumer satisfaction in telecom
industry was undertaken in order to define the comprehensive scope of the study and
ensuring its objectivity.
2. In- Depth interviews: IDIs were conducted across 10 people. 6 of these were students
from the IBS campus and 4 were staff. The purpose of these interviews was to
understand the user of mobile phone, to know their buying process for these phones, to
understand the attributes important for the phones and to know what the users
considered as a important.
3. Focused group discussion: 1 FGD of 5 people was conducted. It consisted of
youngsters between the ages of 20-26 with 3 males and 2 females. The FGD consisted
of existing users of mobile phones of Nokia brand. The objective of the discussion was
to understand the attributes that the user of a this mobile phone values and to know
their perceptions about various brands.
4. Questionnaire: The inputs from the above two helped us in the questionnaire
formation. Important attributes were identified and incorporated. Also, the research
objectives helped us identify the nature of questions we needed to ask.

Empirical Research - Sampling

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A survey of 100 sampled respondents was conducted online as well as offline. There
were 60 online responses while the remaining respondents were contacted offline. These
online and offline surveys were conducted between 10th December 2007 and 13th
December 2009.

Information Needed
• Market share and relative positioning of different brands
• Opinions about attributes of ideal mobile phone
• Satisfaction level of mobile users
• Most important drivers of buying
• Barriers to switching from a one range to other
• Perceptions of Nokia phone vis-à-vis competitors
• Triggers that lead to a need for replacing existing phone

Measurement and Scaling


Ordinal Scale: The product categories are being ranked in terms of the consumer
preferences

Likert Scale: The companies are being rated according to different categories and the
categories are rated according to different attributes on a scale of 1-5.

Sampling Plan: We intend to carry out our survey on a population which would
comprise of youngsters in the 18-28 years age group.

Sampling Data
1. Target Population: Men and women in the age group of 18 to 26.
2. Sampling frame: IBS campus, Hiranandani
3. Sampling Technique: Quota sampling based on age and sex.
4. Sample Size: 100

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6.3 Analysis and Interpretation

Sources of Information influencing the Purchase Decision

a. Battery Life
b. Voice quality
c. Weight
d. Size
e. Appearance
f. Ease of use/User Interface
g. Time required to charge the phone
h. Price
The data was collected from within the campus and outside the campus in a ratio of 3:2.
We collected around 100 responses in all – 60within the campus and 40 in places like
Multiplexes. Some of the responses were not complete and in all 94 responses – 34 from
outside the campus and 60 from the campus. We ran the following analysis on the data
collected. The results of the analysis are shown in the appendix.

1. Cross Tabulations of the number of males and females on income, age, education
is made.
2. Binary Logit Analysis on the attributes of mobile phones liked users.
a. Derived a function that determines whether the current mobile phone is
Nokia or other.
i. The Coefficients of the function are given in the results in the
appendix.
b. Battery life emerges as a major determining feature.
c. Appearance has a negative score implying Nokia users prefer simple
looking phones. This makes sense when viewed in the light of success of
MotoRazr.

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d. Also the probability of a non-user switching to Nokia was obtained as
66%. And the probability of a Nokia user switching was obtained as 30%.
3. Binary Logit Analysis on the Psychographics and Demographics of the sample
population by Nokia users and non-Nokia users.
a. No psychographic factor emerged as a distinguishing characteristic.
Gender and age emerged as the best discriminating variables but at a very
low significance.
b. By using cross tab it was verified that people in the middle-age segment
and females preferred Nokia to others. This could be the ease of use with
which Nokia is associated.
4. Binary Logit analysis on the multimedia features of the mobile phones of Nokia
and non-Nokia users.
a. No particular feature emerged as significant.
b. But Camera and Radio emerged as discriminating factors but at very low
significance values.

7. RESULTS

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A major portion of the population seemed to prefer Nokia phones due to
user-friendly and reliable nature. And many people seem to like Motorola
probably because of more fashionable look. There is a high probability of
switching the mobile phone brands from both Nokia to the other brands and
other brands to Nokia. Amongst features, Camera and Radio has the highest
priority with the respondents. Battery life emerges as a major determining
feature for the selection of the mobile phones. Price does not emerge as
significant selection criteria. But for the value-seeking consumer, Nokia has
an opportunity to occupy mind space by communicating its ease of use,
battery life and simple looks.
Factor Analysis
Factor Analysis yields 3 factors
 Purchase Feasibility (Promotion, Shelf-Presence, Packaging & Economy)
 Likeability (battery Life, Brand)
 Utility (Stability,FM and Camera, Colour)

Two most important factors came out to be:


 Battery Life
 FM and Camera

Purchase Influence Factors


Two most important factors for families:
 Advertisement
 Family Income

Brand Loyalty

 Customers more often stick to one brand


 No significant difference in scores for the brands analyzed

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8. CONSTRAINTS/LIMITATIONS

Since this Project was intended to initiate us to the methodologies and techniques of
Business Research Methods, therefore there are a number of constraints in terms of
Manpower and Resources to conduct a large-scale survey. The scope of the project was
limited to learning.
There have been a number of limitations because of which the survey may not be
indicative of the views of the target population. A few of these have been mentioned
below.
 The Sample size used for the research is less.
 The Sample consisted of primarily students.
 The Target Area was limited to College and the nearby markets.
 Consultation with Experts would have largely improved quality of the Research.
 The Questionnaire was not extensive and more issues could have been addressed.
 The responses obtained might be inaccurate or biased, inadvertently or
deliberately.
 The sample of the respondents chosen for the study might not be representative.
 Analysis of the proposed aspects might differ depending on the tools and
techniques used.

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9.QUESTIONNAIRE

1. Do you currently own a mobile phone? Yes


No
2. Which brand and model?
3. When did you purchase the current phone?
a. < 3 months
b. 3 to 6 months
c. 6 months to 1 year
d. 1 to 2 years
e. More than 2 years
4. Rate your current phone on a scale of 1 to 5 on the following
attributes? ( 1= Not at all good 5 = Extremely Good)
1 2 3 4 5
a Battery Life
b Voice quality
c Weight
d Size
e Appearance
Ease of use/User
f Interface
Time required to
g charge the phone
5. Are you planning to buy a mobile phone in the next 6 months? Yes No
6. Have you decided on the brand and model? Yes No
7. If yes, which one is it?

8. What is the price range of mobile phone you are looking for?
a. <3000
b. 3000 to 6000
c. 6000 to 9000
d. 9000 to 15000
e. More than 1500

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9. What are the reasons for changing your phone/buying new
phone? (Tick all applicable)
a. Joyous Occasion (Promotion/Achievement)
b. Bigger budget
c. Received as gift
d. Old phone is not working well
e. Needed different features
f. I am bored with the old phone
g. I have been using the old phone for a long time
h. A new model has come into the market
i. There is an offer with the new phone
10. Rate the following features from 1 to 5 based on their importance to you. (1=
least important and 5 = most important)
1 2 3 4 5
a Bluetooth
b Music Player
c Video Player
d Integrated Camera
GPRS/Net access
e on phone
f Hands free
g FM Radio
h Internal memory
i 3G
11.Rank the following attributes of a mobile phone based on their
importance.
a. Battery Life
b. Voice quality
c. Weight
d. Size
e. Appearance
f. Ease of use/User Interface

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g. Time required to charge the phone
h. Price
i. Multimedia features
12. Please rate the following attributes that describe you on a scale of 1 (least
applicable) to 5 (best applicable)
1 2 3 4 5
a I like to take pictures on the move
b I like to spend time with my friends
c I like to download software from the internet
d I like to go to multiplexes to watch movies
I am more likely to take a well researched and considered decision when I
e
decide to purchase something.
f I like to save money for future
g I enjoy being active
h I believe we are on the earth to enjoy ourselves
i I like to listen to music while traveling
j I am a heavy user of the internet
k I like to buy a new product and try it out
l I prefer style over sturdiness of the product
m I like to reward myself after completing a difficult assignment
n I like to read technology related magazines
o I like to go to parties
p I like to know about the life styles of celebrities
q When I see an interesting product I generally buy it
r I prefer simplicity over sophistication
Personal details:
1. Name:
2. Age:
3. Gender:
4. Family Income:
5. Number of family members: 6.Education
Bibliography

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• http://www.idcindia.com/default.asp
• http://www.trai.gov.in/Default.asp
• http://www.india-cellular.com/FAQ.html
• www.myfreesurvey.com

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