Famous Mobile Telephone Brand Affects Consumer Behaviour - Coursework Example

Abstract Consumers generally, may see the brand identification of a company and be tempted to purchase the company’s products. The common aim of all activities in an organisation as far as marketing is concerned is making new and loyal customers. Traditionally, in order to provide customer loyalty, firms applied classical techniques such as placing strategies or pricing strategies based on services or products. To attain these organisations focuses their management plans around the buyers and they appraise their achievement based on the market performance. (Baack and Clow, 2004) Recently, the adoption of cellular phones has been remarkably rapid in various corners of the globe, and particularly in United Kingdom where mobile phones are common with everyone at these days. Although the study of mobile phone usage remain to be unexamined genre in the field of research, this investigative study attempts to examine the consumer buying behaviour in the mobile phone markets. This study will interview 200 consumers in the UK and examine their motives in buying cellular phones as well as those factors that operate their operator choice. The study reveals price, friend’s operators and audibility as the significant factors influencing the choice of cellular phone operator with property and price emerging to be the most prominent factors affecting buying of new cellular phones. In conclusion the study discusses some contributions in consumer behaviour and gives recommendation to be used for future research in this unexamined field. Introduction International rivalry and technologic innovations has brought novelty to the marketing theory, to counter this, organisations have focused on buyer qualifications in their strategies instead of their services or products. Moreover, firms respond according to consumer qualifications to creating and taking advantages of market opportunities. This makes consumer behaviour to be the focus of all marketing deeds. Consequently, the theme of consumer behaviour is frequently examined. Consumer buying decision is an intricate process, which is affected by various factors. (Riquelme, 2002) This paper is aimed at studying the motives behind consumer behaviour, thereby providing insight to cellular phone services usage, value-added services and collecting broad information about the users. While it remains evident that players in the wider business of telecommunication regularly undertake market research, there is a problem whereby the obtained research outcomes remains inside the company thus leaving consumer behaviour in the cellular phone industry as unexamined genre. Based on the above information this survey first illustrates trends in the information communication technology sector (ICT) in order to depict the fundamental issues in consumer behaviour. This goes along with the review of current studies regarding factors that appear to affect consumer intentions in espousing new cellular phone features and services, for instance, sending emails and multimedia messaging service (MMS) as well as the choice of cellular phone operator. (Riquelme, 2002) Literature review Current times could be the most interesting one to investigate the perceptions of new cellular phone services as well as studying the cellular phones buying motives. Even though various occasions have challenged the call for new cellular phone services, recent trend in the industry of mobile telephony is that we are shifting from second-generation cellular phones to the third generation cellular phones. This implies that a cellular phone will not only be a handset used for speaking but a device that gives customers a selection of new diverse services for example, multimedia messaging service and accessing the internet where handsets are simply used as internet connectors and real browsing is carried out via PC or laptop, allowing larger and sharper screens to the users. i.e. the ability of new generation mobile phones to access Network without place and time constraints thus allowing consumers to have relatively cheap and easy access to the Net through computers. (Riquelme, 2002) The shift from modem connections to GPRS networks and wireless internet connection is one of the recent developments in the field of mobile telephony. In general the actual benefits to third generation mobile handsets implies cheaper, easier and faster access to the Internet, and most essentially, not limited to place. Recent consumer study of 470 early adopters carried out on behalf of Tarifica by 3Gportal.com (http://www.tarifica.com) has revealed that the third generation cellular phones has the prospective to thrive if instigated and marketed to the right individuals with much emphasis on actual consumer needs. The initial third generation success will depend on efforts towards launching operator strategies along with major services, for instance, peer to peer communication as well as the services available. Cellular phone usage and choice Recent study on factors determining the choice of brand in the various corners of the globe has established that, the choice for a mobile phone is based on two different attitudes towards brands i.e. attitude towards the network on one side and attitude towards cellular phone brands on the other side. Whereas regularity and price of service emerged to dictate between the providers of network, preferences between cellular phone brands were dictated by new technological features for instance, SMS-options and memory capacity, more than the way they were affected by size. Actually this trend is expected to be towards mobile phones with larger screens and better capability and not towards the small phones. A different study was conducted by Riquelme (2002) where he experimented with 94 consumers to establish the level of self-knowledge possessed by consumers in their choice between cellular phone brands. The study focused on six major attributes (i.e. access cost, telephone features, mobile to mobile phone rates, connection fee, free calls and call rates) that the cellular phone buying respondents had on the importance rate. The study reveals that those customers possessing prior knowledge with a particular mobile phone brand can foresee their choices comparatively well although consumers had a tendency to underestimate the importance of connection fee, monthly access fee and mobile to mobile phone rates while overestimating the importance of free calls, features and call rates. Recent report by In Stat/MDR (2002) institute of research, colour displays are currently driving customers into shops to buy new cellular phones and associated devices, for instance, PDAs. The revelation that colour display is viewed as a significant choice criterion for customers than new features or high data rates becomes quite interesting considering the fact that other conducted research have not touched on the importance of colour display. The report further indicates increasing demand for those handsets with colour display and that come the year 2008 all PDAs and cellular phones will be equipped with a colour display. The trend has begun in the Asian countries, for example, in Japan millions of colour display handsets are sold annually. This speedy diffusion is believed to depend primarily on the cost of manufacturing; presently a colour display is more expensive when compared to a black and white display. According to this report the manufacturing costs are $56-72 and $7-12 respectively. These and other factors are analyzed next with statistics on Consumers from United Kingdom. United Kingdom can be classified among those countries that are taking a leading role in the mobile phone industry. Not only because of Nokia but also other micro and macroeconomic factors for example, long geographical distances as well as the society’s demonstrated positive attitude towards new technologies that have enhanced the diffusion of cellular phones in United Kingdom (Liu, 2003) Survey data and methods The information was by means of interviews and questionnaires within specified institutions of education within the Oulu area in United Kingdom. The survey involved three target groups, the first group consisted of high school students aged between 14 and 17 years. The second group comprised of first year from the school of Human Resource Management at Cambridge University and were aged 18-24 years. Continuing students at the school of Human Resource management at Cambridge University formed the last group. Their age ranged between 21 to 38 years with most of them being below 30 years. The data comprised of 320 questionnaires, out of which 168 were male students and 152 were female students. All the respondents had no less than one cellular phone in use at the time of the review, reflecting the real situation among the region’s population. (Stat/MDR, 2002) Questions on the choice of operator and on the acquisition of cellular phones were developed with 11 statements for the respondents to choose and eventually rate based on a 5 point Likert scales. This was based on two sources i.e. own knowledge as well as the existing statements regarding earlier conducted interviews. In the first target group the subject was cellular phone acquisition while in the second was operator choice. (Stat/MDR, 2002) Consumer buying behaviour relating to the choice of a cellular phone and operators choice are not clearly known in theory, i.e. no known existing universally acceptable knowledge on the factors affecting the customers decision making. Consequently, the obtained outcomes contain some limitations and should therefore be considered as tentative. The interview process involved posing various questions to each respondent. The interview questions assumed an open-ended structure where respondents were expected to answer the questions (orally) without being restricted to certain answers. Interview questions to my six interviewees relating to the ads from classic cars magazines. 1. What ad did you remember seeing in the magazine? 2. What caught your attention to look at the ad? 3. What interested you most about the ad and the product? 4. Do you have intention of buying this product or have you bought one recently? 5. Can you describe the advert for me? 6. What does this advert say/mean to you? 7. What do you like about the advert? 8. What would motivate you to buy this brand or what reasons could you identify that would make you buy this brand? The responses to these questions confirmed that almost every interviewee remembered seeing a mobile phone advert; to many the advert was well planned and captivating. The three interviewees who had not bought this product before were intending to acquire one, they had developed a positive attitude towards this product leading to their choosing of the same i.e. attitude towards the cellular phone brand and attitude towards network. Outcomes The data revealed that cellular phones are purchased earlier and earlier. 24 per cent of the oldest surveyed group purchased their cellular phones at the age of 18, 23 per cent at the age of 19 and 15 per cent at the age of 20. In contrast, 33 per cent of the high school students (youngest group) purchased their cellular phones at the age of 15, 27 per cent at the age of 14 and 18 per cent at the age of 13. As a result, it can be conclude that age in buying the first cellular phone has continued to decline from 18 to 15 years in just few years. (Olalonpe, 2002) Factors affecting the choice of a cellular phone Properties and prices emerged to be the most significant motives affecting the decision to buy recent models of cellular phones as displayed by the respondents. According to the analysis over 85 percent and nearly 80 per cent, for properties and prices respectively, had a feeling that properties and prices had influenced their decision making relatively more. Prices appeared to control the decision making in this sample survey more than it did to the entire population, since average disposable income was relatively low in the target groups. (Olalonpe, 2002)Salesman’s recommendation or employer’s order were taken to be the least significant motives. A factor scrutiny to the 11 statements indicates that three factors were taken into consideration in terms of a more than one eigenvalue. Sphericity test by Bartlett was greatly important showing high connection between the variables used. The second factor analysis in this study met the tests mentioned above. The first face can be termed as manufacturer since the maximum loadings refers to three variables concerned with image, properties and new services. (Olalonpe, 2002) The second factor mainly demonstrates loading for four variables pertaining to market conditions. Audibility and price scooped the top loadings for the second factor. Factor number three is defined by two elements concerning other peoples influence. Therefore it can be referred to us influential persons. Most of the total variance (20 per cent) was explained by the influence of the manufacturer. Factors Motive Telemarket conditions Manufacture Influential person Services Image Properties Price Audibility Type Free calls Salesman Family Employer Friends .72 .65 .64 .55 .79 .83 .78 .73 .64 .57 .48 Table A. Factor investigation on choice of cellular phones Factor affecting operator’s choice The selection of the operator was primarily influenced by audibility and price, 83 per cent of the respondents indicated that charges by mobile phone operators relatively influenced their choice. Additionally, audibility became the second most significant motive with 82 per cent holding the feeling that audibility had relatively influenced their decision. Other motives that were of considerable importance are friend’s choice of the operator, free calls, properties and contract type. (Autio, 2005) A factor analysis involving eleven statements was conducted where four factors that explained 62 per cent of the variables variance were established. The factors are quality of the operator, influential persons, components in pricing and lastly, features and brand. The first factor bears the uppermost loadings of four variables regarding operator’s characteristics and brand. Quality which is the second factor possesses the highest loadings in three variables concerning the type, audibility and price. Components in pricing become the third factor since two of the highest loading for this factor concerns the family’s operator type and free calls. Influential person is the final factor and it refers to salesman’s or employer’s influence. Features and brand, the first factor records the highest influence that explains 22 per cent in variability. Factors Motive Influential persons Components in pricing Quality Features and brand Image Services Properties Friends Price Audibility Type Family Free calls Employer Salesman .79 .68 .78 .58 .81 .60 .51 .80 .76 .71 .51 Table B. Factor analysis on operator decision Respondents were asked question on the services they were using by then and also their plans in employing the services in future. The commonly used services at the moment are ringing tones and logos. More than 70 per cent of these respondents had placed orders for tones and logos for their cellular phone services. 61 per cent of the respondents had ordered a mobile bill inquiry service for their cellular phones while 54 per cent of the respondents ordered for the call forwarding service. 5 per cent of the respondents had never used at least one of the four services. Information collected reveals that the use of cellular phone services would be maintained at the same level in the next one year. Respondent’s responses on their intentions of applying the new cellular phone services, for example, MMS indicates that quite a number did not attach much importance to these services. Higher prices for these services emerged to be the significant motive reflected by the number of significant users. According to the research data more than 90 per cent of each sample group had a feeling that higher prices had greatly influenced their using of these services. Amusingly, ignorance or inability to use these services impacted less on the respondents. In addition, two third of each sample group argued that poor usability impacted less on their using of the services. Other factors that affect the use of cellular phone services for instance, poor functionality, small screen size and slow transfer of data impacted less on the possible usage. (Wagstaff, 2004) Conclusion Two research methods were used in this study i.e. questionnaire and interview with an aim of enhancing our understanding of the cellular phone market in general and particularly to examine the factors that influence consumers buying behaviour. The study aimed to explore the less researched field of operator choice and use of cellular phone services. Outcomes of the study have revealed that the age of purchasing cellular phones has declined to 14-15 from 18-19 among the residents in the UK. Factors influencing cellular phone purchase were found to be quality, components in pricing, influential persons and brand features. Lastly, it was only 15 per cent of the respondents who had the view that their adoption of the cellular phone services would increase in the next one year. To my opinions the trend is likely to change in the near future since both the young and the old are demonstrating continued interest on the use of cellular phones. Although the outcomes of the research are tentative, the results adds to the existing literature (though scarce) on consumer decisions in cellular phones markets. To the managers the findings gives some interesting aspect on the choice of cellular phones through their claims that choice of the operator is greatly affected by audibility and price and by arguing that buyers tend to attach much value on properties as opposed to other peoples view. Presently, United Kingdom’s operator market is the most competitive with the price discount acting as drivers of competition. Audibility and price were equally found to be significant variables influencing consumer’s decision making. From the above conducted survey and interviews it indicates clearly that Consumer behaviour is the study of choosing. Although the research methods used produced results that are somehow reliable, it had its own weakness and limitations. Firstly there were no enough funds to ensure that a well representative sample was adopted. A good research sample would involve interviewees from every corner of the UK a thing that would involve a lot of money. New and advanced mobile phone technology has not reached many people in the region making it hard to carry out an exhaustive research. Enough resources should be allocated to future research so as to arrive at accurate and more satisfying results. Some interviewees were not cooperative in answering the research questions thus giving unreliable data. Appendix The following are the Interview questions to my six interviewees relating to the ads from classic cars magazines. 1. What ad did you remember seeing in the magazine? 2. What caught your attention to look at the ad? 3. What interested you most about the ad and the product? 4. Do you have intention of buying this product or have you bought one recently? 5. Can you describe the advert for me? 6. What does this advert say/mean to you? 7. What do you like about the advert? 8. What would motivate you to buy his brand or what reasons could you identify that would make you buy this brand? The answers to the above questions as given by the respondents; 1. The cellular phone ad. 2. I have been intending to try their services 3. The ad was well structured and the product looked great 4. Yes/ I own one 5. The ad is eye catching, exhilarating and well presented 6. It tells me that the product is great 7. Its believable 8. The range of services it offers Reference Auken, V. (2004), New Drivers of Marketing Thought, Journal Of Economic And Social Research. Volume: 4, pp38-54 Autio, M. (2005), Mode Of Spending In Finnish Youth Consumer Culture, International Journal Of Consumer. Journal of Consumer Culture. Vol.2, pp85-95 Baack, D. and Clow, E. (2004), Integrated Advertising, Promotion and Marketing Communications, Journal of Advertising Research. 14(1), pp66-138 Bradner, J. (2000), Giving Away Their Future. Cambridge, Cambridge University Press Dholakia, N. (2003), “Marketing in a Post Modern World”, European Journal of Marketing.volume 3: pp111-151 In-Stat/MDR (2004), Research Report Available From, http://www.instat.com (Accessed November 12, 2007) Jones, S. (2002), Tarifica Report Available from, http://www.tarifica.com (Accessed November 12, 2007) Liu, M. (2003), Effects of Promotional Activities on Brand Choice in Mobile Telephone Industry, Journal of brand and product management, 12(1), pp44-56 Olalonpe, R. (2002), “Electronic Shopping: Young People as Consumers”, International Journal of Consumer Studies. Vol.8, pp81-94. Riquelme, P. (2002), Do Customers Know What They Want? The journal of consumer marketing, 16(2), pp436-452 Sharon, D. (1999), Applied Multivariate Techniques. Journal of Consumer Research.Vol.7, pp312-365 Wagstaff, C. (2004), SMS. Far Eastern Economic Review, 132(14), pp45-52 Read More