Consumer Behaviour Of Mobile Phones In India

Consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching, purchasing and post consumption of a product or service. Consumer behavior involves study of how people buy, what they buy, when they buy and why they buy. It blends the elements from psychology, sociology, socio- psychology, anthropology and economics. It also tries to assess the influence on the consumer from groups such as family, friends, reference groups and society in general. Buyer behavior has two aspects: the final purchase activity visible to any observer and the detailed or short decision process that may involve the interplay of a number of complex variables not visible to anyone.

Everybody in the world is the consumer. Each of us buys and sells or consumes goods and services in the life. Consumer behavior is very complex and is determined to a large extent by social and psychological factors. Consumer behaviour can be defined as those acts of individuals directly involved in obtaining, using and disposing of economic goods and services.

The relevance and importance of understanding consumer behaviour is rooted in the modern marketing. The needs of not even two consumers are the same. Therefore, they buy only those products and services, which satisfy their wants and desires. To survive in the market, a firm has to be constantly innovating and understand the latest consumer needs and tastes it will be extremely useful in exploiting marketing opportunities and in meeting the challenges that the Indian market offers. A study of consumer behaviour is significant for regulating consumption of goods and thereby maintaining economic stability. Within the broad framework of marketing, the area that entices the most researchers is the study why a consumer behaves in a particular way. The complexity of the behavior, however, varies with the nature of the product and the need, which it is required to satisfy. The study of consumer behavior is the study of how individuals make decisions to spend their available resources on consumption of related items.

Consumer behavior is an applied discipline. Its application exists at two different levels of analysis. One is at the micro level perspective and other at the macro level perspective. Micro level seeks application of the knowledge faced by the individual, firm or an organization. The macro perspective applied knowledge of consumer includes the aggregate level of problem faced by large groups or by society as a whole.

Consumer behavior provides a sound basis for identifying and understanding consumer needs. It is the act of the individuals directly involved in obtaining and using economic goods and services. The study of consumer behavior is an essential component of marketing. The adoption of marketing concept by the marketers provides the impetus for the study of consumer behavior.

Incase of New Product Introduction in the market, there is a risk of product failure. To increase the chances of success of new products, better information of the consumer behavior is required. Their desires, tastes and preferences are to be taken care of. So from all these aspects the study of consumer behavior is important.

Factors Affecting Consumer Buying Behavior
Consumer buying behavior is influenced by the major three factors:
1. Social Factors
2. Psychological Factors
3. Personal Factors.

Social Factors
Social factors refer to forces that other people exert and which affect consumers’ purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups.

Example: By taking into consideration Reference group, these can influence/ affect the consumer buying behavior. Reference group refers to a group with whom an individual identifies herself/ himself and the extent to which that person assumes many values, attitudes or behavior of group members. Reference groups can be family, school or college, work group, club membership; citizenship etc. Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only socially acceptable consumer behavior but also socially unacceptable and even personal destructive behavior. For example, if fresher student joins a college / university, he/she will meet different people and form a group, in that group there can be behavior patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / herself to that particular reference group, this will influence and change his/her buying behavior.

Psychological Factors
These are internal to an individual and generate forces within that influence her/his purchase behavior. The major forces include motives, perception, learning, attitude and personality. Example: Attitude is an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment. Consumers form attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand. Personal Factors

These include those aspects that are unique to a person and influence purchase behavior. These factors include demographic factors, lifestyle, and situational factors. Example: Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people about how they spend their time the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality. e.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle and profession, the buying behavior of people differs from one another.

CONSUMER BUYING DECISION PROCESS
Definition:
Consumer buying decision process is the processes undertaken by consumer in regard to a potential market transaction before, during and after the purchase of a product or service. Consumer decision making process generally involves five stages. Those are as follows: a. Problem Recognition

b. Information Search
c. Alternatives Evaluation
d. Purchase Action
e. Post – Purchase Action
a. Problem Recognition:
Purchase decision making process begins when a buyer becomes aware of an unsatisfied need or problem. This is the vital stage in buying decision process, because without recognizing the need or want, an individual would not seek to buy goods or service. There are several situations that can cause problem recognition, these include: • Depletion of stock

• Dissatisfaction with goods in stock
•Environmental Changes
• Change in Financial Situation
• Marketer Initiated Activities
It’s when a person recognizes that she cannot make a call from her mobile phone that’s when she recognizes that her phone has been damaged i.e. the phone has hardware problems and needs to be repaired or buying a new piece.

b. Information Search:
After the consumer has recognized the need, he / she will trying to find the means to solve that need. First he will recall how he used to solve such kind of a problem in the past, this is called nominal decision making. Secondly, a consumer will try to solve the problem by asking a friend or goes to the market to seek advice for which product will best serve his need, this is called limited decision making.

Sources of information include:
• Personal sources
• Commercial Sources
• Public sources
• Personal experience

c. Alternatives evaluation:
Consumers’ evaluates criteria refer to various dimension; features, characteristics and benefits that a consumer desires to solve a certain problem. Product features and its benefit is what influence consumer to prefer that particular product. The consumer will decide which product to buy from a set of alternative products depending on each unique feature that the product offers and the benefit he / she can get out of that feature. Example: When that user got enough information concerning the different brands of mobile phones available in the market, she will decide which kind of a mobile phone and brand she’s going to buy depending upon her need for that particular mobile, either a mobile for multimedia and entertainment, smart-phone or classic phone.

d. Purchase Action:
This stage involves selection of brand and the retail outlet to purchase such a product. Retail outlet image and its location are important. Consumer usually prefers a nearby retail outlet for minor shopping and they can willingly go to a far away store when they purchase items which are of higher values and which involve higher sensitive purchase decision. After selecting where to buy and what to buy, the consumer completes the final step of transaction by either cash or credit.

Example: After selecting brand of the phone and model from different alternatives of mobile phones, she will make a final decision of where to buying that phone and make the final transaction procedures.

e. Post-purchase Actions
Consumer favorable post-purchase evaluation leads to satisfaction. Satisfaction with the purchase is basically a function of the initial performance level expectation and perceived performance relative to those expectations. Consumer tends to evaluate their wisdom on the purchase of that particular product. This can result to consumer experiencing post purchase dissatisfaction. If the consumer’s perceived performance level is below expectation and fail to meet satisfaction this will eventually cause dissatisfaction, and so the brand and/ or the outlet will not be considered by the consumer in the future purchases. This might cause the consumer to initiate complaint behavior and spread negative word-of-mouth concerning that particular product.

From marketing perspective, some researchers stated that consumer purchase intention can be studied through the classical five steps: Need-information search-evaluation of alternatives-purchase- post purchase evaluation. The five step model is usually suitable for decision making that assumes rational problem solving behavior and in most cases complex decision making. To acquire the new mobile phone follows this traditional view of buying process. It has been noted that purchase intention have both utilitarian and hedonic features, and thus it can also be proposed that the purchase intention between mobile phone have both utilitarian (e.g., communication, calendar, time planning, and email service to PCs) and hedonic (e.g., games, music, and camera) features. The younger the consumer the more hedonic features consumers tend to value in mobile phones.

Another important aspect that has risen from different studies is that consumer purchase new phone due to the fact that their existing one’s capacity is not appropriate referring to the idea that new technology features such as built-in cameras, better memory, radio, more developed messaging services, and color displays are influencing consumer purchase intention to acquire new models . Thus, it can be expected that new features will influence the intention to acquire new model phones. In addition, price of the phone is also the most important factor in the purchase intention of mobile phone model. Also, this researcher mentioned that price of the phone has been identified as a critical factor in the purchase intention of the mobile phone model, especially among younger people.

Literature Review
Business Today (May 3, 09) In India the number of mobile subscribers will cross 400 million ,making it the world’s second largest market. Next revolution, the mobile phones has moved from being a simple communication tool to an all round entertainment & information devices. Services are being enabled increasingly by more & more powerful processors onboard mobile devices. 10% of the 1.2 billion handsets sold in 2008 as smartphones.

The Economics Times (Apr 2008) B K Modi controlled Spice Mobiles today launched the first Indian branded 3G and CDMA200 handsets in technological collaboration with Qualcomm and said it is targeting half a million of these handset sales in the current fiscal. We aim to sell four million standard handsets in the current fiscal and target half a million 3G handsets sales separately”, Spice Mobiles Vice President Dilip Modi said. C-810 (the CDMA enabled handset) is priced at Rs 6500 while the GSM 3G handset is priced at Rs.8500.

Informa Telecoms and Media (Mar. 09) predicts the global mobile market is expected to add more than 1 billion subscribers and reach almost 3 billion overall or 43 percent penetration by the year 2010. While Asia, the Middle East and Africa will experience the highest growth rates, Informa reports “several countries are already reporting penetration rates of over 100% and Western Europe’s regional penetration is set to breach 100% in a couple of years.”

Indian Cellular Association (March 09). says that a record addition of 15 million new telecom subscribers in January 2009 has cheered the mobile handset market. After a lacklustre 2008 when the Indian cellphone market saw near flat sales growth, the handset turf has grown 10% in January, claims the apex national body of handset vendors. Strategy Analytics offered their thoughts on the potential global mobile market, predicting the “worldwide cellular user base will increase from 1.7 billion at the end of 2005 to 2.5 billion by the end of 2010, a 38 percent penetration rate.” Union Budget 2008-09 , Mobile phone users would now have to shell out more money for buying new handsets, with the government proposing to levy one per cent excise duty on them.

Phil Kendall at Strategy Analytics, commented, “Voice usage will increase from 5.6 trillion minutes in 2005 to 12.6 trillion in 2010. GSMbased systems will continue to dominate the cellular landscape, accounting for 81 percent of subscribers and 76 percent of service revenues in 2010, though CDMA’s more rapid evolution to 3G will see it dominate 3G subscriber volumes in the medium term.

Objectives of Research:
Primary Objective :
• To study the perception & Buying Behavior of customers towards various mobile brands with special reference to Mobiles.
• Factors that influence decision making in purchasing a mobile phone • Major features which a customer looks for in a Mobile Handset • Brand awareness of Mobile in the market.
• Factors which help in increasing the sale of mobile phone.
• Various sources from which mobiles are purchased.

Scope of the Study
The scope of the study is to get the first hand knowledge about the buying behavior of consumers towards different brands of mobile handsets in Hyderabad city. The scope is restricted to study the factors affecting the preference of consumers while choosing a mobile handset in Hyderabad city only.

Limitations of the study
Sincere efforts have been made to collect authentic and reliable information from respondents, however the report is subject to following limitations:

i. Some respondents were reluctant to give the information, so their responses may be biased. ii. Time could be a major limitation as it may have affected the inferences drawn in the study. iii. Sample may not be the true representative of the universe. iv. Study was conducted in Hyderabad only. So the results of the study may not be applicable in other areas.

INDUSTRY PROFILE
History
Information technology dates back to 5000BC, when people started using alphabets as a medium of communication. However, its actual emergence started with the first ever use of the computer. The real modern mechanical computer was conceived in 1822 by Charles Babbage. Then came the electromechanical age in 1840s with the discovery of different ways to harness electricity and the information was converted into electric impulses. This led to the beginning of telecommunication and telegraphy in late 1800s. As the loading coil and vacuum tube made possible the early telephone network, the wireless revolution began only after low cost microprocessors and digital switching became available. Since then, four generations of computers have evolved. Each generation represented a step that was characterized by hardware of decreased size and increased capabilities. The first generation used vacuum tubes, the second transistors, and the third integrated circuits. The fourth (and current) generation uses more complex systems such as very large-scale integration or System – on- a – chip.

Mobile rigs were the beginning of mobile phones for use in vehicles such as taxicab radios, two way radios in police cruisers, and the like. A large community of mobile radio users, known as the mobile’s, popularized the technology that would eventually give way to the mobile phone. The concept of using hexagonal cells for mobile phone base stations was invented in 1947 by Bell Labs engineers at AT&T and was further developed by Bell Labs during the 1960s.

One of the first truly successful public commercial mobile phone networks was the ARP network in Finland, launched in 1971. The first hand held mobile phone to become commercially available was the Motorola DynaTAC 8000X, which received approval in 1983. Until the late 1980s, most mobile phones were too large to be carried in a jacket pocket, so they were usually permanently installed in vehicles as car phones. With the advance of miniaturization and smaller digital components, mobile phones got smaller and lighter.

Current scenario
Mobile phones have gained a lot of popularity and are the considered to be great multimedia tools. Mobile phones are being used for entertainment purposes due to the introduction of new features everyday. They have become more than just call making and receiving devices. Mobile phone handsets now have more business-friendly applications that can enhance anybody’s business. With emerging technology, mobile phones have become more than communication devices; they are the tools to stay ahead of competitors and peers in the present times. Soon mobile phones will evolve from communication tools to integrated communication devices, media terminals, credit cards, and remote controls. Global mobile handset market

The phenomenal rise of the mobile phone has seen its image change from a yuppie status symbol to a daily essential. Along the way, it has created thousands of jobs, changed the way we do business, and made an awful lot of money for investors. Today Key Handset technologies include GSM, CDMA, and, Wi-Fi VoIP, TDMA, 3G, 4G and Bluetooth. Worldwide mobile phone sales cruise to 990.8 million units in 2006, up a hefty 21.3% from 2005’s 816.6 million units. The estimated growth figures are—6.4% in 2007, 4.8% in 2008 and 2.6% in 2009. Notwithstanding the gradual decline in the growth figures, the annual handset sales are predicted to reach more than US $ 3 Billion by 2009.The total number of mobile phone subscribers in the world was estimated at 2.14 billion in 2005. Around 80% of world’s population have mobile phone coverage as of 2006.

This figure is expected to increase to 90% by the year 2010. With the periodic introduction of new features and multimedia tools in the mobile handsets due to technological advances, more and more people in the Asian continent fancy buying them. There are many diversities and complexities in the Asian mobile handset market due to types of customers, government regulations, regional/geographical wireless infrastructure, and the purchasing power. Basically, the Asian market looks at the mobile handsets as status symbols. The market is seen best for the low-end phones, but there is a huge rise in the demand for flashier and costlier phones. India, China, Korea, and Malaysia are fast evolving as the biggest markets for mobile handsets and in coming years they will mainly carry on the global handset sales.

Major Global Players
Nokia Corporation is currently the world’s largest manufacturer of mobile telephones. It produces mobile phones for every major market and protocol, including GSM, CDMA, and W-CDMA (UMTS). The corporation also produces telecommunications network equipment for applications such as mobile and fixed-line voice telephony, ISDN, broadband access, voice over IP, and wireless LAN.Nokia’s Mobile Phones division provides the general public with mobile voice and dataproducts across a wide range of mobile devices. The division aims to target primarily high-volume category sales of mobile phones and devices, with consumers being the most important customer segment. Nokia believes that design, brand, ease of use and price are mainstream mobile phones’ most important considerations to customers. Nokia’s product portfolio includes camera phones with features such as mega pixel cameras which appeal to the mass market.

Motorola is an American multinational communications company based in Schaumburg, Illinois, a Chicago suburb. Most of Motorola’s products have been radio-related, starting with a battery eliminator for radios, through the first walkie-talkie in the world, defense electronics, cellular infrastructure equipment, and mobile phone manufacturing. Motorola has recently been regaining market share in the cellular-phone business from Nokia, Samsung, and others due to stylish new cellular phone designs.

Samsung Electronics is one of the world’s largest IT companies by revenue.
The company also claims to be have the highest brand value among consumer electronics companies. Headquartered in Seoul, South Korea, it is part of the Korean Samsung Group, operating in approximately over 100 countries. It is the number 1 mobile phone manufacturer in Asia. Sony Ericsson is a joint venture established in 2001 by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones. Both companies have stopped making their own mobile phones. The reason for this merger is to combine Sony’s consumer electronics expertise with Ericsson’s technological leadership in the communications sector. The company’s global management is based in Hammersmith, London. It also has research & development teams in Sweden, Japan, China, Canada, the Netherlands, the United States, India and the United Kingdom. LG Electronics is one of the world’s leading electronics companies. It is part of the Korean LG Group, operating in approximately 80 countries. Its mobile phones division provides CDMA, GSM, 3G Handsets.

BenQ-Siemens is the mobile communications subsidiary of Taiwanese BenQ Corp.. The division was formed out of BenQ’s acquisition of the struggling Siemens mobile group in 2005. The stated goal of the company is to pull together BenQ’s lifestyle experience, their renowned design team and Siemens’ engineering capabilities to create a new leader in the mobile communications arena. The newly-formed company won the most iF design awards in 2006, and also won many design awards in Germany’s reddot competition. Mobile Handset Market in India

The cell phones industry has shown a remarkable growth in the last decade. In 1989 the number of its subscribers was zero in India. India’s love affair with cell phones started in the mid-1990s, as the mobile revolution took hold and India had just 10 million mobile and landline connections. Delhi was the first state to launch cell phones in India. Growth then soared in the last four years due to regulatory change and falling costs of calls and handsets. India’s wireless market is a test bed for alternative infrastructure, handsets, billing systems, business models and marketing strategies that will likely prove applicable .

On a numerical basis, India is the biggest growth market adding about 6 million cell phones every month. CAGR for mobile phones is 86% in India. It is one of the fastest growing mobile markets in the world; in April 2006 mobile subscriber base crossed 100 million mark. This has been accomplished by rethinking handsets, network infrastructure, enhanced services and content. More than two-third of mobile subscriptions are with GSM operators and rest with CDMA. India has one of the lowest mobile phone tariffs in the world resulting in low Average Revenue per User (ARPU) of 9.04 USD per year (CDMA 5.74 USD and GSM 8.89 USD).

Indian land area covered by mobile networks is approx 30%. CAGR of Mobile Market Value for 2004- 2009 is 36.9%.With 156.31 million cell phones; teledensity in the country is still low at 17.45%. Fewer than eight in every 100 Indians use mobiles, compared with China’s 30 per cent. In India, about 13 percent of people have cell phones which has increased from 8% in 2005 and is expected to reach 40 percent within a few years. A lack of investment in the infrastructure needed to support landline services means there are only 50 million fixed-line users in the country, leaving the stage set for mobile operators. India is expected to have the third largest mobile user base, behind China and the US, by the year end and will become the second largest market of mobile handsets by 2010. Indian cellular market would account for 11% of the overall Asia Pacific and Japan market by 2009 and is expected to reach 500 million subscribers by end of 2010 with CAGR of 33.7% for 2004- 2010.

Major players in India
The major players in the handsets segment in India include Nokia, Motorola, Sony Ericsson, Samsung, LG, Philips, Panasonic, Bird, Sagem and BenQ. Nokia has retained the top slot in Indian market with 70 % share, while US giant Motorola has 15 % share and Sony Ericsson has gained around 8% share this year. Samsung has 5% share and LG has 1.8% share.

Research Methodology
Methodology means the way or manner by which the study is accomplished, which refers to the full outcome of the process at a glance. It includes some chronological steps that are necessary to complete the study successfully. Mode of operation differs with the nature of the study. Methodology is always a compromise between options and choices and is frequently determined by the availability of relevant resource and time. It is very important in the sense that it gives one an idea about how the study has been conducted. In other words, methodology helps to organize, represent, and analyze data and information. And their logical expression in a systematical chronology is to achieve the ultimate goal of the thesis. The methodology is adopted for the current research work is presented in a sequential manner.

3.1 Research design
3.2 Sampling technique and sample size selection
3.3 Data collection
3.4 Data processing, analysis and presentation
3.5 Limitation
Research design
A research design is a plan, structure and strategy of investigation so conceived as to obtain answers to research questions or problems. It is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. The researcher designed this study in a descriptive manner. On the basis of the schedule and with the help of tables and figures the data has been presented in a descriptive way.

Sampling technique and sample size selection
Mobile phone shops, residence were the area of survey. So, Random Sampling procedure was applied for choosing the sample. In this case the simple random sampling was applied. This study considers 200 samples.

Data collection:
Two hundred respondents in the study area have been considered for collecting data. Necessary data has been collected through Questionnaire survey. Two types of data have been collected for this study which are briefly discussed below:

Primary data:
Primary data for this study has been collected from main survey instruments i.e. Questionnaire. Questionnaire: In common parlance questionnaire is an instrument or a list of questions that are directly or indirectly related with the study. According to the objectives and requirements of the study a questionnaire has been framed to collect the required information regarding all indicators used and other relevant information.

Secondary data:
In any study secondary data plays a crucial role from the inception to destination which on the one hand strengthens knowledge base and saves time and resources on the other. At the initial stage it gives first hand information about the topic of the study and later it is used to supplement the empirical data. Secondary data have been collected for this study from different published and unpublished documents such as research reports, different institutions, journals, articles and internet

Data processing, analysis and presentation
In order to analyze, processing of raw data is very much significant. In this stage, mainly data is being processed and analyzed for the study. Without processing raw data, it is hard to analyze the raw data. After processing, it is needed to present data for analysis in an appropriate way. An attempt has been taken to entry the data into different statistical computer software with a view to analyze data to reach in a decision. All the collected data (primary and secondary) have been processed and analyzed chronologically. The findings have been presented in this report appropriately with the help of figures and tables.