Consumers Preferences on Mobile Phone Plan Application - Term Paper Example

Analysis of consumer’s preferences on mobile phone plan application and evaluative criteria Executive summary Mobile phones have become one of the key necessities of our day to day activities. There are various inventions that are constantly coming up and the companies in the telecommunication industry try as much as possible to stay ahead of each other. This means that more features, cell phone makes and consumer preffered service plan are constantly changing and thus the consumer is faced with a tough choice in choosing his or her preferred mobile phone and plan type. This report thus will try to demonstrate the rate at which each of the features on the consumer preference is important to their selection of a particular cell phone type. Two parts of the survey, one using the consumers preferred cell phone type against his or her selective criteria and the other using distinctive design techniques on the importance of the selective criteria to the consumer are applied. Using the data collected from the survey of three consumers and analyzing using the compensatory decision rule, observations were made on the credibility of this formula against the real consumer’s choice. Further theoretical assessment and analysis of the behavior of the respondents was used to try to explain their choices and the difference between the statistical analysis and their real choice after which conclusion was made concerning the selected cell phone and plan. Table of Content Executive summary 2 Introduction 4 Decision matrix 5 Application of compensatory decision rule 7 Analysis of choices 10 Conclusion 13 References 14 1.0. Introduction The use of mobile phones has become a necessity for the majority of people in the modern world. Due to most companies in the telecommunication industry competing on the cell phone type and service plan, there has been an increased competition in the selling of the mobile phone plans. The producers try to match each mobile phone features with that service plan that would be attractive to the consumer and thus help them reduce competition against their opponent company. All these have left the consumer in a tough spot as he/she has to face the choice selection of the best option that will give him/her maximum satisfaction. In this project, I interviewed three potential consumers on their preferred cell phone plan against the selective criteria and also on their view of the importance of the evaluating criteria, the main objective being to evaluate the consumer’s true preference against his preference when calculated by the compensatory decision rule. The other purpose of the research was to use theoretical perspective to try and explain the difference between the above features and their effects to consumer preference. To start with I created a decision matrix, using six randomly selected latest makes of mobile phones and their plan options and also eight consumers selective criteria namely warranty, operation system, camera quality, size, total plan cost, ease of use, color and storage size and presented it to three potential consumers who were to rate the on a scale of between one to five their most preferred option. These same consumers were then also required to rate between a scale of up to 100 the importance of this selective criteria to them. The results are presented in the table below. 2.0. Decision matrix CONSUMER PERCEPTION EVALUATIVE CRITERIA BLACKBERRY BOLD 9900 FOR $ 500 AND THE $ 30 /MONTH POSTPAID PLAN IPHONE 4S FOR $ 650 AND THE $ 35/ MONTH PREPAID PLAN NOKIA LUMIA 800 FOR $ 480 AND THE $ 35/ MONTH PLAN PREPAID PLAN DORO PHONEEASY 610 FOR $ 150 AND THE $ 30/ MONTH POSTPAID PLAN SUMSUNG GALLAXY 11 FOR $ 560 AND THE $ 35/ MONTH PREPAID PLAN SONY EXPERIA S FOR $ 290 AND THE $ 30/ MONTH POSTPAID CAMERA QUALITY 4 2 3 5 4 3 OPERATING SYSTEM 5 4 1 1 3 2 PLAN 2 3 1 3 4 5 TOTAL COST COLOUR 1 5 4 2 5 3 EASE OF USE 1 2 5 4 3 3 SIZE 4 5 2 1 2 4 STORAGE SIZE 2 2 1 2 4 2 WARRANTY 3 4 3 2 5 3 KEY: 1= V. POOR, 2= POOR, 3= AVERAGE, 4= GOOD, 5= EXCELLENT. THE IMPORTANCE OF THE EVALUTATIVE CRITERIA TO THE THREE BUYERS EVALUATIVE CRITERIA PERSON A PERSON B PERSON C CAMERA QUALITY 20 30 15 OPERATING SYSTEM 70 50 90 TOTAL PLAN COST 30 60 70 OLOUR 10 15 10 EASE OF USE 90 80 80 SIZE 60 20 30 STORAGE SIZE 60 50 70 WARRANTY 30 10 20 OUT OF 100 POINTS EACH 3.0. Application of compensatory decision rule The compensatory rule was used to calculate the preferences of the three consumers based on their decision matrix. This compensatory decision rule, which is a statistical analysis method, states that the brand which will rate the highest in accordance to the total sum of the judgment of the consumer on the relevant criteria of evaluation will be chosen. This formula can be written mathematically as; Rb = ∑ni=1 WI BIb Where; Rb is the overall rating of the brand b, Wi is the weight attached to that evaluating criteria, Bib is the evaluation of brand b on evaluation criterion I and N is the number of evaluation criteria Using this rule for each individual to calculate their preferred mobile phone and plan option, we find that; For person A Black berry = 20(4) + 70(5) + 30(2) + 10(1) + 90(1) +60(4) + 60(2) + 30(3) = 1040 Iphone =20(2) + 70(4) + 30(3) + 10(5) + 90(2) + 60(5) + 60(2) + 30(4) =1180 Nokia = 20(3) + 70(1) + 30(1) + 10(4) + 90(5) +60(2) + 60(1) + 30(3) = 920 Doro = 20(5) + 70(1) + 30(3) + 10(2) + 90(4) +60(1) + 60(2) + 30(2) = 880 Samsung = 20(4) + 70(3) + 30(4) + 10(5) + 90(3) +60(2) + 60(4) + 30(5) = 1240 Sony Ericson = 20(3) + 70(2) + 30(5) + 10(3) + 90(3) +60(4) + 60(2) + 30(3) = 1100 From these calculations person A will most likely prefer Samsung galaxy 11 for $ 560 and the $ 35/ month prepaid plan. For Person B Black berry = 30(4) + 50(5) + 60(2) + 15(1) + 80(1) +20(4) + 50(2) +10(3) = 795 Iphone =30(2) + 50(4) + 60(3) + 15(5) + 80(2) + 20(5) + 50(2) + 10(4) =815 Nokia = 30(3) + 50(1) + 60(1) + 15(4) + 80(5) +20(2) + 50(1) + 10(3) = 780 Doro = 30(5) + 50(1) + 60(3) + 15(2) + 80(4) +20(1) + 50(2) + 10(2) = 830 Samsung = 30(4) + 50(3) + 60(4) + 15(5) + 80(3) +20(2) + 50(4) + 10(5) = 1115 Sony Ericson = 30(3) + 50(2) + 60(5) + 15(3) + 80(3) +20(4) + 50(2) + 10(3) = 1310 From the compensatory decision rule, person B will choose Sony Experian s for $ 290 and the $ 30/ month postpaid because it is the one that rates highest. For Person C Black berry = 15(4) + 90(5) + 70(2) + 10(1) + 80(1) +30(4) + 70(2) + 20(3) =1060 Iphone =15(2) + 90(4) + 70(3) + 10(5) + 80(2) + 30(5) + 70(2) + 20(4) =1180 Nokia = 15(3) + 90(1) + 70(1) + 10(4) + 80(5) +30(2) + 70(1) + 20(3) = 835 Doro = 15(5) + 90(1) + 70(3) + 10(2) + 80(4) +30(1) + 70(2) + 20(2) = 925 Samsung = 15(4) + 90(3) + 70(4) + 10(5) + 80(3) +30(2) + 70(4) + 20(5) = 1340 Sony Ericson = 15(3) + 90(2) + 70(5) + 10(3) + 80(3) +30(4) + 70(2) + 20(3) = 1165 From these calculations person C will also most likely prefer Samsung galaxy 11 for $ 560 and the $ 35/ month prepaid plan. 4.0. Analysis of these choices The compensatory decision rule states above the three consumers’ preferred mobile phone plan. However, when asked on which mobile phone each of them would prefer, the results were completely different. For instance person A according to the compensatory rule would prefer Samsung galaxy 11 for $ 560 and the $ 35/ month prepaid plan, contradicting his true choice of Sony Experian s for $ 290 and the $ 30/ month postpaid. Person Bs selection of Sony Experian s for $ 290 and the $ 30/ month postpaid also goes contrary to her true choice of Blackberry Bold 9900 for $ 500 and the $ 30 /month postpaid plan. For person C however, the compensatory decision rule concurred with his true choice of the Samsung galaxy 11 for $ 560 and the $ 35/ month prepaid plan. This means that the compensatory decision rule majorly depended on their ranking of the evaluating criteria that is responsible for their preferences. This difference in the compensatory decision rule is due to their varied belief and trust in the method and criteria used to rank their preferences, as well as their choices for various selective features in the mobile phones. Taking a look at the difference in choices, it is evident that these consumers use different evaluating factors rather than the compensatory decision rule to make their judgment as per which mobile phone plan to choose. These factors may vary from demographics i.e.; income, age, etc to personality i.e.; traditionalist and non traditionalist, introvert and extrovert etc. these can be further discussed below; 4.1. Traditionalist vs. non traditionalist A traditionalist person would go for a mobile phone plan that he has belief on in relation to selected selective criteria where as a non traditionalist person would not mind the historical selective criteria and would just go for the best mobile phone plan in the market. Liu (2002) did a study on these choices for a mobile phone plan and argued that for non traditionalists, new technology features such as SMS, internet, memory size etc was the major influencing factor for their selection of mobile phone plan. He further stated that the traditionalist personality will go for an already existing feature that they had previously found attractive when selecting their previous phones in the selection of their current one. This argument is also supported by Yun and Kim (2003) and Yun and Kim (2004) who argued that the design of a phone and its service plan selection was affected by whether the individual was a traditionalist or not. 4.2. Introvert vs extrovert An introvert person is someone who likes keeping to him/herself and is not social whereas an extrovert individual loves to socialize with people. This opposite personality traits can also affect the individual’s selection of a mobile phone plan. For instance, Ling et al (2006) and Isiklar (2007) examination of mobile phones and design features namely camera, internet, wireless connectivity, color screen, SMS system, call log, stated that more outgoing consumers preferred those with internet and camera while the conservative ones preferred the ones with the basic features such as SMS and call log. This means that the extroverts selection of the mobile phone plan will be determined by the phones capability of socializing where as the introverts will prefer only those phone plan with basic selective features. 4.3. Age factor as a choice determiner Age also plays a significant role in the selection of mobile phone plan. For instance, Mack and Sharples (2009) state that the younger generation is more likely to select a mobile phone plan with more modern and latest features as opposed to the older generation who only selects the phones with features they consider necessary. A survey study done by Hakoama & Hakoyama (2011) showed that majority of the youths in universities in East Coast of Malaysia possess high technical phones as compared to those of their parents and lecturers. Studies also by Coghill (2001) stated that the youth are also in constant contact with each other and therefore will prefer a mobile phone plan that will enable them have a longer chatting rate at lower cost. They are therefore more likely to select a cell phone plan that offers their requirement as opposed to their older parents who will select a mobile phone plan that is not that expensive as they don’t spend more on the services. 4.4. Income An individual’s income level will determine the type of mobile phone plan they have. For instance, an individual with higher income will prefer a more expensive mobile phone and plan as compared to an individual with lower income (Rice and Katz, 2003). Comer (2008) also agrees with this fact. He says that the more the income level of an individual, the less he/she worries about the mobile phone plan costs and the less the income level, the more the worry on the mobile phone and service plan costs. This means that individuals will settle on the best possible mobile phone plan that fits their budget. 5.0. Conclusion In as much as the compensatory decision rule can concur with some individual’s choice, selection of mobile phone plan, it is not an accurate measure of the individual’s true choice. As seen and discussed above, it is evident that there are various factors that affect the consumers selection of a mobile phone plan and therefore use of statistical methods may not really show the real values. It is therefore important to take into consideration all the variables involved in order to come up with a more specific and accurate solution. References Coghill, R. (2001). Inappropriate measures, The Ecologist, 28-29. Professional Geographer, 252- 269. Comer J. C., (2008). Worldwide diffusion of the cellular telephone, 1995-2005, The Professional Geographer, 252-269. Hakoama M. and S. Hakoyama, (2011). The impact of cell phone use on social networking and development among college students, The AABSS Journal, 1-20. Isiklar K., (2007). Positive contributions of mobile phones to society, A Research Report for the Mobile Society Research Institute, UK: Mobile Government Consortium Ling C., W. Hwang and G. Salvendy, (2006). Diversified users’ satisfaction with advanced mobile phone features, Universal Access in the Information Society. Liu C. M., The effects of promotional activities on brand decision in the cellular telephone industry, Journal of Product & Brand Management, 11(1) (2002), 42-51. Mack Z. and S. Sharples, (2009).The importance of usability in product choice: A mobile phone case study, Ergonomics, 1514-1528. Rice R. and J. Katz, (2003). Comparing internet and mobile phone usage: Digital divides of usage, adoption, and dropouts, Telecommunications Policy, 8-9. Yun, M.H. and J. Kim, (2004). Identifying mobile phone design features critical to user satisfaction, Human Factors and Ergonomics in Manufacturing, 14(1). Yun, S. Han, and J. Kim, (2003). Incorporating user satisfaction into the look-and-feel of mobile phone design, Ergonomics, 46(13-14) Read More