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Factors Affecting Consumer Behavior of Smartphone Users


A Survey on


Factors Affecting Consumer Behavior of Smartphone Users in Kathmandu Valley


Submitted by,


MBA-A, (2017-19)


ACE Institute of Management


PU Registration Number: 2017-2-22-0446


A Graduate Research Project


Submitted to,


Mr. Pravat Uprety


Faculty: Business Research Methodology


ACE Institute of Management


As a partial fulfilment for the Degree of


Masters of Business Administration


Kathmandu


August, 2018

Factors Affecting Consumer Behavior of Smartphone Users


Letter of Acknowledgement


This graduate research project “A Study on Factors Influencing Consumer Buying Behavior of Smartphones Users in Kathmandu” would not have been possible without the help and guidance of several individuals who in one way or another contributed their valuable assistance in the preparation of this project.


First of all, I would like to thank our course instructor Mr. Parvat Uprety for all the support, guidance, and motivation throughout the period of this research project. It would have been impossible to complete the research project on the prescribed format without his supervision and guidelines.


I would also like to appreciate ACE Institute of Management and thank Department of MBA, Pokhara University for designing such a practical course in our faculty.


And also to all those respondents who helped me by filling the questionnaire and helped me to complete my research work.


Last but not the least, I would like to extend my sincere gratitude towards my family and friends who supported and encouraged me during the period of my research work.


_______


PU Registration Number: 2017-2-22-0446

Factors Affecting Consumer Behavior of Smartphone Users


Table of Contents


List of Tables i


Lists of Figures iv


Executive Summary v


Chapter 1: Introduction 1


1.1 Background 1


1.2 Problem Statement 4


1.3 Research Objectives 6


1.4 Research Questions 6


1.5 Research Hypothesis 7



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Factors Affecting Consumer Behavior Smartphone Users vi



The variables under investigation in this study included product features, brand image, price, peer influence and service quality. From the research it was found out that Apple and Samsung were the most popular brand and people preferred smartphones. Peer influence, brand image and service played a major part while consumer considered purchasing smartphones. The study also highlighted that on the basis of income level, difference was found among respondents when they considered the variables/factors like product features, looks and design and performance while making the purchase of smartphone.

However there was no significant relationship between income level and other variables.

Factors Influencing Consumer Behavior of Smartphone Users 1


Chapter 1: Introduction


1.1 Background


The history of mobile phone usage in Nepal dates back to 1999 when NTC started providing GSM mobile service from May 1999. Mobile phones have emerged as an important means for communication in Nepal. Its role has been significant in the development of various industries of Nepal. Mobile phones were considered as means of pleasure and luxury some years back, but today it has become the need of almost all people in Nepal for business purposes, convenience as well as for maintaining one's status in the society.

At the beginning when NTC started its GSM mobile service with post-paid service then there were very few mobile phone users that also within Kathmandu valley only. Later NTC started pre-paid service and distributed more than one lakh sim cards. It also improved its network services throughout the country which increased the mobile users in Nepal. Queue were started to be seen outside Nepal telecom's offices for sim card which showed the mobile phone popularity across Nepal.

With evolution of other mobile telecommunication service providers like NCELL and UTL, today, almost every adult in Nepal possess a mobile phone of and each individual's mobile phone varies in model and brand from the other's.


According to Mobile Phone Importers Association (MPA), mobile phones are the third largest traded commodity in Nepal after petroleum and iron products. Total transaction of Rs. 36 billion was estimated by just selling mobile phones by the end of the year 2016. Despite heavy taxes in the mobile phone, the import of mobile phones is increasing every year by 40%. Government collected Rs 1.65 billion VAT in the mobile phones in the year 2015.Mobile phones have made a significant change in lifestyle of people. (Republica, 2016)

Factors Influencing Consumer Behavior of Smartphone Users 2


By February 2016, there were 27.85 million mobile subscribers in Nepal against 26.49 million populations. According to Department of Customs, Nepal imported 4.16 million handsets worth Rs14.63 billion as of 2016-17 fiscal year and growth by 33.1 percent year-on-year. (Khanal & Rijal, 2016)


With the multiple uses, smartphone sales are booming all over the world. Use of the smartphones among people is not just for calling and texting nowadays; rather it has expanded for e-banking to e-shopping as well. Use of social media applications is widely popular among all age groups in the whole world. According to the survey conducted 20% people check their phones within 15 minutes of waking up and about 50% had installed Facebook (social site) on their smart phones. (Kelion, 2017)


Smartphones nowadays are replacing more of our gadgets, such as alarm clocks and digital cameras. One of the surveys found put that the average smartphone owner spends more than two hours each day using the device. Smartphone owners on an average uses phone for 25 minutes to browse the web, 17 minutes to social networking, 13 minutes to play games and 16 minut.....

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Factors Influencing Consumer Behavior of Smartphone Users 4



sets. If the evaluation yields, on the next stage is the purchasing stage. During this stage, consumer selects not only the product or brand to buy but also select seller from the store from which s/he will buy the product. The actual act of purchase occurs during this stage. But, not all decision process leads to a purchase; the individual may terminate the process prior to purchase.

After purchase, a buyer starts to evaluate the product and its satisfaction, known as poet-purchase evaluation. The outcome of the post-purchase evaluation is either satisfaction or dissatisfaction which feeds back to other stages of the decision process and influences subsequent purchase.


1.2 Problem Statement


With the advancement of technology day by day, mobile phones have made the life of the users easier and day by day companies are finding various reasons for people to buy it. Despite the fact that smart phones have grown as a necessity today, very few researches have actually been conducted inside Nepal to trace the root cause of the urge to purchase smart phones.

It is helpful for the marketers and producers to synchronize the marketing efforts to target the most prom.....

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With the entrance of many new phones in the market, people have many choices. Choices have made mobile phone market very competitive. New innovative ads and campaigns are one of the components that influence their buying behaviour of smartphones. Besides these, factors such as brand attitude, features, and accessories provided, quality, word of mouth also plays a significant role in influencing buying behaviour.

Various social factors such as family, groups, role, status etc. and personal factors such as age, occupation, lifestyle etc. have a major contribution in manipulating final decision while buying smart phones.


This research will be guided towards determining the preferences of various mobile phone brands by smartphone users in Kathmandu. The major problems identified regarding the mobile phone brands is to determine the most preferred brand by consumers and to identify the attributes which are significant in preference of a specific brand.

Factors Influencing Consumer Behavior of Smartphone Users 6


This research will be focused on finding the various attributes of consumers while buying smartphones. This research will help the companies to focus on factors that influence consumers to buy their product. This research will limit the sample on the students of Kathmandu.


1.3 Research Objectives


The main objective of this study is to understand the consumer preference of mobile brands and the various factors affecting the choice of brand. The objectives of the study are as follows:


  1. To study the brand preference for mobile phones among the people of Kathmandu Valley.


  1. To determine key variables involved in purchase of smartphones.


  1. To test correlation among various factors influencing buying deci.....

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  1. H7: There is significant relationship between gender and preferred brand


  1. H8: There is significant relationship between income level and factors influencing purchase decision


  1. H9: There is significant relationship between gender and factors influencing purchase decision


  1. H10: There is significant relationship between price and current brand


  1. H11: There is significant relationship between brand image and current brand


  1. H12: There is significant relationship between peer influence and current brand


  1. H13: There is significant relationship between product features and current brand


  1. H14: There is significant relationship between service quality and current brand


  1. H15: There is significant relationship between design and current brand


  1. H16: There is significant relationship between accessories provided and current brand


  1. H17: There is significant relationship between performance and current brand


  1. H18: There is significant relationship between income level and satisfaction from pricing

Factors Influencing Consumer Behavior of Smartphone Users 8


1.6 Research Limitation


Studies of factors influencing consumer behaviour of smartphone users is a common trend among the MBA students with the specialization in marketing. A number of studies have been carried out on smart phone users in Nepalese market.


So far, there have been studies conducted on consumer behaviour of smart phones in Nepal focused on youths. This research topic is conducted to figure out the buying behaviour patterns of consumer while .....

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2.1 Literature Review



2.1.1 Consumer Behavior


Consumer behaviour has always been the subject for study of the marketers. Consumers tend to buy the product referring to past learning experiences, however, if something changes appreciably (accessories provided, product availability, service), the buyer considers the alternative brands (BURNETT). Marketers tend the consumer behaviour by triggering the various wants and needs of consumers.

According to Kotler and Keller, “Consumer behaviour is the study of how individuals, groups and organization select, buy, use and dispose of goods, services, ideas or experience to satisfy their needs and wants.” (Kotler & Keller, Analyzing consumer market, 2012)


Consumers are the actors of the marketplace where they play different roles. They act as information provider, influencer, payer and also a disposer of product and services. Behaviour of consumer incorporates ideas from various sciences such as psychology, biology, chemistry and economics. Accordingly, different consumers behave differently towards varieties of products and services due to the individual factors such as consumer’s nature, lifestyle and culture.

Other several factors also such as increase in income level, education level and marketing factors also hit the behaviour .....

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