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Factors Affecting Consumer Buying Behavior of Mobile Phone Devices

The increasing trend in Smartphone among the people is the main reason that has amplified the interest to research on the topic. People’s obsession about the Smartphone has been increasing rapidly. The aim of this research is therefore to find out consumer behaviour of Smartphone buyers in Indian Market. The research is trying to find out that why do people desire to purchase a smartphone, what influence people in purchasing a smartphone and what motivate them in making the purchase decision.Different consumers have different characteristics in their life that also influences their buying behaviour. Social factors such as family, groups, roles and status) and personal factors (such as age, occupation, lifestyle, personality and self-concept) are those characteristics that could influence the buyer behaviour in making final decision.Nowadays cheaper smart phones are also available in the market. But why people buy expensive smartphones? Price, quality, brand, country of origin, marketing, sales, word of mouth etc. could be several factors that a consumer may think before buying a Smartphone.How much does brand of smartphone affect the buying decision of a customer? As there are various types of smartphones available in market with varying price; what is the difference between them? And how they impact the customer buying decision?This research also aims on the marketing strategy of the smartphone companies to influence the buying behaviour of customer. These strategies include Promotional campaigns, Tie-Ups with network carrier etc.

Hand phone and Internet are thetwo technologies that have major impact on politics, economy and social in the 21st century (O’Leary & O’Leary, 2005). The converging of hand phone and internet (Baily et al, 2001)had given birth to smartphone. It has been just few years, and exactly from the introduction of the first iPhone (2007), since the smartphone became a mass consumption product, though smartphones have been around for many years. The first device able to combine voice, data and PIM applications was an IBM product known under the name of “IBM Simon”. The IBM Simon was first presented in 1992 at the CONDEX, the computer industry trade show that takes place in Las Vegas, and was launched into the market the following year by a company called BellSouth (Schneidawind, 1992).

IndianMarket OverviewIndia is one of the fastest growing economies all over the world and a live example which depicts the development is the growth of the telecommunication industry in India, especially the in the field of mobile communication. There is a continuous increase in disposable income; there has been a radical shift in the attitude and aspirations of the consumers. Mobile phone has become essential parts of personal and business life. The recent growth of mobile phone usage is an observable fact that crosses all age and gender boundaries. Due to fierce competition in the field of mobile communication the need arises for the study to know how consumer behaves in the time of purchase. India is currently the 2nd largest mobile handset market in the world and is about to become an even larger market. Buoyed by the high demand for smartphones, the mobile handset market in India is estimated to have grown by 14.7% in financial year 2013 to touch Rs.35,946 crore, according to a Voice & Data Survey compared toRs.31,330 crore in financial year 2012 (, 2014). The mature Indian mobile consumers are increasing their preference for high-end handsets and the younger demographics desires to use mobile web technologies that could see the smartphone marketsrevenues soar. TechNavio’s analysts forecast the Smartphone market in India to grow at a Compound Annual Growth Rate of 116.4 per cent over the period 2011-2015. One of the important factors contributing to this market growth is the increasing demand for all-in-one devices. The Smartphone market in India has also been witnessing an increasing availability of dual SIM smartphones. However, lack of specific applications for Indians could pose a challenge to the growth of this market. Smartphones has penetrated everywhere and peaked out in many countries. India, the second largest telecom market by subscriber base after China, witnessed phenomenal growth in last decade. The total subscriber base as of June 2013 was 903 million as compared to 22.8 million total subscribers in 1999. Mobile subscribers accounting for 96.7% of total subscriber base are responsible for this phenomenal growth in telecom. The country has achieved overall teledensity of 73.5, urban teledensity of 145 and rural teledensity of 42. Average revenue per user (ARPU) and Minutes of Usage (MOU) are stabilizing for both GSM as well as CDMA service operators (The Indian Telecom Services Performance Indicators, 2013). With a fast growing younger demographic and rapidly expanding economy, the country’s smartphone numbers are poised to expand at a much faster pace as compared to rest of the world. 11Price remains the main criteria when buying any consumer electronic device in India, including a mobile device. The Indian smartphone phone market mainlydepends upon the price, features, stability and style. Most of the Indians buying smartphone are middle income groups and above. As a developing economy, India is a most suitable place for investment. Strong marketing strategies, established retail outlets, customer satisfaction are the tools to succeed in any market. Indian smartphone market is expected to grow as the 3G network coverage is increasing and there is increase in demand of high in smartphones in 2014. Smartphone manufacturer are concentrated on building application stores and improving service quality to offer an attractive value proposition and strengthen their market position. The Indian market was ruled by Nokia phones (3Q2013, 2013). Other brands like Motorola, Samsung, Sony and LG failed to compete with Nokia phones as Nokia phones are more easy to use as compared to the cell phones of other companies. Now, Samsung is the main player in Indian smartphone market with 1/3rdof Indian market share. Indian brands like Micromax and Karbonn are at the second and third position in market share with 21% and 10%. Global companies like Sony, Nokia and Apple are ranked fourth, fifth and sixth.

Nokia was the undisputed leader of the Indian mobile phone sector, with 54% of total volume sales in 2009. Nokia benefits form a strong brand image and a reputation for high quality products. According to industry sources, Nokia has the distinct advantage of having the strongest retail network, with a presence in almost 90% of retail outlets selling mobile phones. 12However, with the entrance of new companies, such as Micromax, G five and Karbonn in the mobile phone business, the share of Nokia has dropped significantly, from 60% in 2009 & 2010 (, 2014). 1.3 Impact of Smartphones on Indian market“A 10% increase in mobile and broadband penetration increases the per capita GDP by 0.81% and 1.38% respectively in the developing countries.”-World Bank. Smartphone has created new dimensions for business in Indian market. It is not only the Smartphone sellers enjoying the business but it also created a new area for mobile application developing companies in India, Internet services provider and other sectors of life to utilize the Smartphone to gain competitive advantages. There has been an extreme growth in broadband and Internet service providers business in past few years and one of the main reasons for this drastic increase in their business is the ever increasing use of Smartphone‘s and growth of Smartphone and mobile applications. In a very small duration a huge number of Smartphone have been sold that provided an opportunity to businesses to invest in mobile application development and allowed to introduce new business dimensions in market space. As it is easy to change settings and make customizations on Smartphone, therefore there are several programs for Smartphone‘s from different sellers including Blackberry, Android, iPhone and Microsoft etc.Mobile Application Market is another business sector introduced by Smartphone‘s. Different mobile operating system vendors have their own mobile application technology hence having a different market for Mobile Applications. Smartphone‘s also impacted advertising business sector as well. Advertising is an old concept but the features of Smartphone have made it more effective and no doubt it is an additional positive impact of mobile application for business. Mobile application publisher, distributor and service provider are getting large revenue by providing ads as a part of mobile application. There are some negative impacts of smartphones. The major impact of Smartphone is on PC market. According to a survey by Compete, a web analytics firm, a large number of people almost up to 65% are using their smart phones to read news feeds, post status updates, read & reply to messages and post photos. This shows that now people are leaving PCs and moving towards Smartphone‘s.Studies have investigated the demographic characteristics of smartphone users which are Males 53%. They are more likely to have a smartphone than females which is only 47%13(Entner, 2010). The smartphone user tends to be younger than the general cell phone audience. Smartphone features like, text to speech, GPS and social Websites are helping people to easily remain integrated with society. Using these services and many more features, People can easily communicate to their needs, seek assistance from others and remain connected to society.1.4 Market challengesIndian smartphone market is an emerging market; there are many smartphone companies that are targeting India as their market. Some of the major international companies are Samsung, Apple, Sony, Nokia, Motorola, LG etc. the market share of international brand are decreasing as local brands like Micromax and Karbonn are launching smartphone with android operating systems and large screen at very low price compare to the international brands. For example, Canvas 4 by Micromax is a smartphone with android 4.3, quad-core processor and has 13MP camera with a 5 inch screen; it was launched at in India below INR 19000 as the smartphones with same features in international brand like Samsung, Apple or Sony is around INR 40000. The sales of local brands are increasing as Micromax market share was 5.6% in 2012 and in 2013 it was 22.7% (Times, 2014). 1.5 Research QuestionsThe study intends to answer these research questions:1. How does attitude and subjective norms affect the consumer behaviour towards smartphones in the Indian Market?2. What are the effect of culture, social status and marketing activities in form of external influence on the consumer for purchasing smartphone in Indian market?3. What are the effect of perception, motivation and emotion in form of internal influence on the consumer for purchasing smartphone in Indian market?4. How does social concept and lifestyle affect the consumer decision making process in Indian market?5. Does the consumer if affected by cost and features of smartphone while purchasing? Does it affected by consumer social status?6. Does the consumer if affected by brand of smartphone? Does it benefit the consumer to make decision and selecting alternatives?141.6 Research ObjectiveThe research objectives for this study are as follows: 1. To identify to what extent evaluation of outcomes and beliefs affect consumers attitudes and intention to purchase in the smartphone market in India.2. To develop a framework on the effects of external influence and internal influence which affect self-concept and life style of the consumer which result in purchasing decision making process.3. To analyse what are the factors which influence and eventually motivate the customer to buy smartphone inIndian market. 4. To analyse the theoretical implication of brand of smartphone in Indian market and what are the effect on purchase decision making process.1.7 Dissertation Structure and OverviewChapter One provides a general introduction to the research which covers an introduction, background to the study of smartphone market, Indian market overview, market analysis , the aims and objectives of the research. Chapter Two provides a review of the literature and covers the foundations for the researchframework. In this chapter the researcher looks to define the main concepts of the study, identify the core factors of the decision making process through a consumer behaviour model and identifying as how the external and internal factors are motivation consumer in decision making process. In addition, this chapter lays out the arguments for the research, identifying themes and refining research questions and work to build a conceptual framework that can be tested throughout the research.Chapter Three provides details of research methodology process which includes details about the empirical field work, including the sampling techniques, design and testing of questionnaire instrument, survey research implementation and overall data gathering. It also includes ethical issues and any potential limitations of the research.15Chapter Four provides details of data analysis in which the results of the survey are analysed. This includes details of data collected through graphs and tables. Chapter Five provides a discussion of the research results and conclusion of dissertation. This chapter examines the potential implications of the findings and analyses all facts through research questions and identify if the research objectives where achieved.Chapter six providesan area of self-reflection where the researcher will give an overview of learning methods with reference to his own, as well as analyse the dissertation writing experience and his performance and developmen

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