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:
A Graduate Research Project
Submitted to,
Mr.
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 BuyingBehavior of Smartphones Users in Kathmandu” would not have been possible without thehelp 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:
Factors Affecting Consumer Behavior of Smartphone Users
Table of Contents
List of Tablesi
Lists of Figuresiv
Executive Summaryv
Chapter 1: Introduction1
1.1Background1
1.2Problem Statement4
1.3Research Objectives6
1.4Research Questions6
1.5Research Hypothesis7
1.6Research Limitation8
1.7Theoretical Framework9
Chapter II: Literature Review10
2.1 Literature Review10
2.1.1 Consumer Behavior10
2.1.2 Brand Image11
Factors Affecting Consumer Behavior of Smartphone Users
4.2 Findings and Result52
Chapter 5: Summary, Conclusion and Recommendation54
5.1 Summary and Conclusion54
5.2 Recommendation55
References57
Appendix60
Factors Affecting Consumer Behavior Smartphone Users i
List of Tables
Table 1: Distribution by Gender23
Table 2: Distribution by Gender24
Table 3: Distribution by Family Main Occupation25
Table 4: Distribution by Income Level26
Table 5: Cross tabulation of current brand of mobile by gender27
Table 6: Cross tabulation of current brand of smartphone by age28
Table 7: Ranking of Brand Preference of Smartphone29
Table 8: Analysis of factors affecting purchase decision of smartphone users30
Table 9: Chi-square test of Age and Current smartphone brand31
Table 10: Chi-square test of Income and Current brand of Smartphone32
Table 11: ANOVA table for Willingness to spend and Age33
Table 12: ANOVA table for Willingness to spend and Income level34
Table 13: Observed frequency table for age and preferred brand35
Table 14: Expected frequency table for age and preferred brand35
Table 15: Chi-square test for age and preferred brand36
Factors Affecting Consumer Behavior Smartphone Users ii
Table 16: Observed frequency table for income and preferred brand37
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
In today’s consumer-driven societies, it is important to have in-depth understanding and awareness of consumers and their behaviour which would help manufactures in both marketing and sales. As being end users of tangible products and services, a deep understanding of cultural environments to achieve their goals – underpins all marketing activities, service provisions and policy formulations are obligatory.
It is vital to the profitability and success of any business venture, service provider, or organization to understand the psychology of the consumer. It is important for marketers to understand what prompts a consumer to buy a particular product and what stops them from purchasing. Thus, the role of marketing is very important in upgrading the pace of industrialization, which is responsible for developed and strong economy.
Every buying behaviour and decision-making process of buyer differs with each other but the buying process may be identical. Generally, the buyer’s buying process consists of five-stages: problem recognition, information search, evaluation of alternatives, purchase and post purchase evaluation. The initial stage of consumer buying process is the problem recognition and it occurs when buyer becomes aware of the fact that there is difference between a desired state and an actual condition.
After becoming aware of the problem or need, the buyer becomes searches for the information regarding availability of brands, product features, seller’s characteristics, process and other relevant aspects. Duration and intensity of search efforts depends on the buyer’s experience in purchasing and nature of the product to be purchased. During the stage, buyer develops evoked set (the set of brands of products), which then the buyer actually considers while making a specific brand choice.
Product in the evoke set have been evaluated on the third stage of buying process. To evaluate the products in the evoked set, a buyer establishes a set of criteria to compare the product characteristics. Using the criteria and considering the importance of each, a buyer rates and eventually ranks .....
It is helpful for the marketers and producers to synchronize the marketing efforts to target the most prominent group of customers.
Mobile phone companies have found various reasons to sell their mobile phones as the emerging varied applications which have become handy via smart phones have become a necessity with ease for the users. It is the basic reason for growth in demand for smart phones.
Kathmandu, as a center of the Nepalese economy, has the largest smartphone market in Nepal. Marketers must have detail knowledge of buyer’s behaviour to explore market potential and to invade market. Due to continuous changing environment of Nepalese economy, education, learning, technological advancement, etc., the upgraded and new applications of
Factors Influencing Consumer Behavior of Smartphone Users 5
smartphones are very significant in practical life. It has also enhanced communication, education, businesses, etc.
After knowing that there are wide ranges of smartphone users, they possess diverse buying behaviour. With the increase in mobile phone brands in the market, lots of mobile dealers are cropping up old established brands and new brand of mobiles are entering the market. With the increase in competition locally as well as from global dealers, Nepalese mobile phone dealers are coming up with new and promotional campaigns and schemes to attract the customers.
Companies like Apple, HTC, Huawei, One Plus, Samsung, Oppo, etc. have invested a lot of money in Research and Development(R &D) department just to make various innovations and make people life easier on .....
To test correlation among various factors influencing buying decision of smartphone users.
To help make suggestions to the dealers and customers.
1.4 Research Questions
The main aim of this research will be to find various attributes which influences the consumer behaviour while buying a smartphone. The research questions are as follows:
What are the key variables involved in purchase of smart phones?
What is the relationship between the key variables?
Do moderating variables affect the key variables while purchasing smartphones?
Does an individual’s willingness and ability to pay for a smartphone influence his/her brand preference?
Factors Influencing Consumer Behavior of Smartphone Users 7
1.5 Research Hypothesis
H1: There is significant relationship between age group and current brand of smartphone
H2: There is significant relationship between income group and current brand of smartphone
H3: There is significant relationship between willingness to spend and age
H4: There is significant relationship between willingness to spend and income level
H5: There is significant relationship between age an.....
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 purchasing mobile phones.
Limited Coverage Area
There are still few shortcomings in conducting this research although the objective of the research is achieved. It is insufficient and almost impossible for the researcher to conduct the survey with wider coverage and secondly it would be very costlier to cover wider range. Research is limited in a geographical coverage that only focuses in Kathmandu which is a very small part of Kathmandu City.
Small Sampling Size
Only 109 respondents will be surveyed because of the limited time frame and cost. Although this will be enough to satisfy our objective, more respondents could result in more versatile result.
Factors Influencing Consumer Behavior of Smartphone Users 9
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