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Research Article ISSN 2229 – 3795

ASIAN JOURNAL OF MANAGEMENT RESEARCH 443 Volume 2 Issue 1, 2011

A study on the factors affecting choice criteria of consumers for mobile handsets A comparative analysis in Ludhiana & Sangrur districts

Sheetal Singla 1 , Sanjeev Bansal 2 1 Assistant. Professor, Department of Business Studies,

Bhai Gurdas Institute of Engineering & Technology, Sangrur 2 Associate Professor, Department of Management & Humanities Sant Longowal Institute of Engineering & Technology, Longowal

[email protected]

ABSTRACT

Mobiles have now come up with a big impact in India. Mobile users today want their handsets to be loaded with multiple functions, entertainment being the most important among them. They want their mobile to be fully loaded with topend features, but at the same time they want all these at affordable costs. The research was conducted in order to identify and compare key attributes that influence mobile phone purchasing between Sangrur & Ludhiana consumers. The samples were collected from 795 consumers from Ludhiana & Sangrur Districts. The paper is an attempt to analyze the variables that influence the behavior of the mobile phone users to remain loyal to their existing service providers, to judge their satisfaction & dissatisfaction level and the impact of family members in the buying decision of mobiles by the consumers.

Keywords: Mobile Handsets, Key Attributes, Consumer Behavior, Service Providers

1. Introduction

The rapid growth and development in information technology and mobile devices has made the Indian mobile phone service markets more and more competitive. In order to sustain its present growth rate in the telecom sector. Mobile phones have become an integral part of human daily life and a major source of personal communication across the universe. By the end of 2007, there were approximately 3.3 billion mobile phone users worldwide which is equivalent to a penetration rate of 49% of the last year. According to the Ministry of Information and Communication Technology (2008), the mobile phone penetration rate in India increased its growth rate to over 50% in 2006 in comparison to 35% in 2005. The mobile phone market grew by 41.3% between 2003 and 2007.Within this competitive market, it is essential for mobile phone companies to better understand purchasing behavior to enable them to acquire new customers and retain existing ones. Blackwell et al., (2001) demonstrated that culture has a profound influence on ‘how’ and ‘why’ consumers purchase a range of products and services. (Foxell et.al., 1994) stated that the consumer’s motivation of product and service choices as well as lifestyle could be shaped by cultural dimensions. According to a Gartner report, after China, India would be fastest growing mobile telephony market in Asia Pacific. Cellular penetration would increase to 38.6% in 2011 with 58% of rural population and 95% of urban population possessing mobile phone. The market will be driven by prepaid connections, which will account for more than 93% connections. The low

A study on the factors affecting choice criteria of consumers for mobile handsets A comparative analysis in Ludhiana & Sangrur districts Sheetal Singla, Sanjeev Bansal

ASIAN JOURNAL OF MANAGEMENT RESEARCH Volume 2 Issue 1, 2011

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rural mobile penetration of 2% represents an immense opportunity for cellular players. The call rates will further drop to become closer to fixedline rates, further lowering the entry barrier. Indian telecommunication Industry is one of the fastest growing telecom markets in the world. The mobile sector has grown from around 10 million subscribers in 2002 to reach 150 million by early 2007 registering an average growth of over 90%. The reasons for regular increase in the growth rate in telecom sector are low tariff Rates, lesser pulse rates, & regular fall in handset prices. Srivastava (2005) stated that the mobile phone has shifted from being a ‘technological object’ to a key social object as communication with others is the main purpose for mobile phone purchasing. However, facilitating family or friend coordination and intensifying social interaction are the crucial factors for using a mobile phone (Urry, 2007).According to Castells et al., (2007, p.85), “obtaining a mobile phone is a milestone that indicates success, not only financially but also culturally in term of the integration within society”. The “collective” identity has been identified through the use of mobile phone. Marquardt (1999) has claimed that mobile phones affect social relationships. Mobile phone usage has resulted in greater electronic interactions between friends and family at the expense of face to face interaction which have been dramatically reduced. Consequently, it could be proposed that mobile phones are changing individual cultural norms and values (Rauch, 2005).

1.1 Indian Players in Mobile Telecom Sector

The Indian Players was open independently at vast level in the mid nineties. This industry is now among the most prosperous & rising industry nowadays. A Number of Private Players like Bharti Enterprises, BPL Mobiles, Hutchison, Reliance, Vodafone, Aircel, Tatas,BSNL, MTNL etc. have ventured into this sector.

Indian Telecom companies basically offer two types of industries:

Cellular Services

The major players in this segment are Bharti, Hutchison, BPL Mobiles that use the Global Satellite Management (GSM) Standard. With this Standard, telephone calls can be made to & received from any place.

Basic Services

Major Players are BSNL, Tatas, Reliance using the code division multiple access (CDMA) standard, which offers limited mobility. Calls can be made to & received from certain fixed areas.

There are 13 service providers in India. With the new entrants like Fly, iNQ, Videocon, Lava, i Ball, Beetle, Palm, Sagem etc. in the mobile manufacturing segments , mobile purchasers have a choice with themselves not only of which operator to select and which technology but also what handsets they want.

2. Objectives

1. To study consumer choice for mobile companies. 2. To study the most important factors for consumers in mobile handsets.

3. To study the customer satisfaction/ dissatisfaction level.



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3. Literature Review

(Wagner, 2005) ‘The success of mobile learning will ultimately revolve around a mosaic of rich converged experiences. These experiences will rest, in turn, on a foundation of converged network and device technologies, wireless services, rights management, content management, search management, and transactional processing power. As with the implementation of any innovative scheme, significant technical and administrative challenges will be encountered. These will be met along with amore illdefined challenge: ‘How can the use of mobile technologies help today’s educators to embrace a truly learnercentered approach to learning?’ Robins (2008) this paper is about marketing the next generation of mobile telephones. The study is about third generation of cell phone technology, what is usually known as “3G” for short. There are various issues about that new innovative. One is how to price 3G handsets and services at a level which will enable telephone operating companies to recoup the high prices they have already paid to governments for operating licenses. Second the technology is not yet complete, there are no agreed international standards and companies do not yet know what new services the technology will prove capable of delivering effectively. All variants of 3G remain dependent on largely unproven technology. Marketing 3G is going to be about services which are new and in many cases, yet to be designed. At the same time, it will involve services which can also be obtained by computer and other means. It follows that the marketing task will be high risk. First, 3G has no obviously unique selling proposition to build on except, perhaps, the combination of live video and easy portability. Second, the potential customers have not yet had adequate opportunity to signal their service likes and dislikes. Third, the cost and complexity of service provision leave doubt about the market’s reaction to price. (S.L.Rao and I. Natrajan) explains that the prime focus of the service providers is to create a loyal customer base by benchmarking their performances and retaining existing customers in order to benefit from their loyalty. With the commencement of the economic liberalization in 1991, and with a view to expand and improve telecom infrastructure through the participation of the private sector, the Government of India permitted foreign companies holding 51 percent equity stake in joint ventures to manufacture telecom equipment in India. The Indian Government has announced a new policy, which allows private firms to provide basic telephone services. There had been a monopoly of the stateowned department of telecommunications. However, several companies are expected to benefit from the policy change. Jha (2008), in his study analyzed that it is the youth which is the real growth driver of the telecom industry in India. Considering this fact, the paper is an attempt to give a snapshot of how frequently young people use their mobile phones for several embodied functions of the cell phones. Data was collected from a sample of 208 mobile phone owners, aged between 20 and 29. The study sheds light on how gender, monthly voucher amount and years of owning mobile phones influence the usage pattern of this device. Findings of the study would be helpful for the telecom service providers and handset manufacturers to formulate a marketing strategy for different market segments. They need to bridge the gap between the services promised and services offered. The overall customers’ attitude towards cell phone services is that they are satisfied with the existing services but still they want more services to be provided. Kumar (2008), in their study titled “Customer Satisfaction and Discontentment visa vis BSNL Landline Service: A Study” analyzed that at present, services marketing plays a major role in the national economy. In the service sector, telecom industry is the most active and attractive. Though the telecom industry is growing rapidly, India's telecom density is less than the



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world's average telecom density as most of India's market is yet to be covered. This attracts private operators to enter into the Indian telecom industry, which makes the Bharat Sanchar Nigam Limited (BSNL) more alert to run its business and survive in the market. Seth et al (2008), in their study titled “Managing the Customer Perceived Service Quality for Cellular Mobile Telephone: an Empirical Investigation” analyzed that there is relative importance of service quality attributes and showed that responsiveness is the most importance dimension followed by reliability, customer perceived network quality, assurance, convenience, empathy and tangibles. This would enable the service providers to focus their resources in the areas of importance. The research resulted in the development of a reliable and valid instrument for assessing customer perceived service quality for cellular mobile services.

4. Research Methodology

The study conceptualizes to find out the factors that impinge on the loyalty of customers. A Questionnaire was framed in the format of Likert scale for data collection. The responses ranged between highly agree to highly disagree. Universe of the study was 795 customers.

The main questions answered through the study are:

1. Mobile company’s customers prefer the most? 2. Are the customers satisfied with their service providers?

3. What are the major important factors that influence customers the most?

The data was analyzed in this way:

a) Columnwise the tables give options of the question have been analyzed. b) Rowwise the tables give the various subgroups of classifying variable.

c) Chi^2 Test of independence and Coefficient of contingency C based on the same have been computed.

d) For scales data following statistics have been computed: WAS: Weighted Average Score

AVG: Average (Arithmetic Mean) SD: Standard Deviation

CV: Coefficient of Variation F (df1, df2): One Way ANOVA

e) All ranks have been converted into scores. Higher score means most preferred option.

5. Data Analysis

5.1 a) Which Company Mobile do you Use?

Table 1 a: Preference of Consumers while Purchasing Mobiles City\ Attributes Nokia Samsung Sony Ericsson Motorola/LG



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Ludhiana 51.4 13.03 10.53 9.52 Sangrur 57.1 10.61 7.87 7.32

Gender Male 56.72 10.82 8.2 6.81 Female 47.75 14.41 11.71 12.61 Education level Primary 53.27 9.35 11.21 11.21 UnderGraduate 55.94 15.35 5.45 7.43 Graduate 54.3 9.77 10.16 7.03 Post Graduate 53.04 12.17 10.43 9.57 Occupation Service 55 14.67 7.33 10.67 Business 54.12 8.63 10.59 7.45 Students 54.93 12.68 11.27 4.23 Others 52.66 11.24 9.47 7.69 Income Level Upto 10000 49.38 8.02 6.17 12.96 1025000 58.27 13.67 11.51 6.12 2550000 52.2 14.29 7.14 9.89 Abv 50000 54.34 9.83 10.4 6.36

*All figures are in percentage terms

Table 1 b: Preference of Consumers While Purchasing Mobiles City\ Attributes Rel/TATA Others Chi Sq Values Ludhiana 7.27 8.27 Sangrur 8.08 9.09

Chi^2=5.22 (df:5)

Gender Male 8.03 9.42 Female

6.76 6.76

Chi^2=14.32* (df:5) C=0.13;

Education level Primary 10.28 4.67 UnderGraduate 8.42 7.43 Graduate 7.03 11.72 Post Graduate 6.52 8.26

Chi^2=16.93 (df:15) C=0.14;

Occupation Service 7 5.33 Business 6.67 12.55 Students 8.45 8.45 Others 10.06 8.88

Chi^2=20.25 (df:15) C=0.16;

Income Level Upto 10000 15.43 8.02 1025000 5.04 5.4 2550000 9.34 7.14 Abv 50000 2.89 16.18

Chi^2=53.68** (df:15) C=0.25;

*All figures are in percentage terms



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Figure 1a: Preference of Consumers While Purchasing Mobiles in Ludhiana District

Figure 1b: Preference of Consumers While Purchasing Mobiles in Sangrur District

5.2 Mobile Brands Used

In Ludhiana, Out of total 399 sampled customers, 205 consumers own a Nokia mobile handset which comes to 51 percent share of the market. This is followed by Samsung (13%), other Chinese new handsets by 8% each, by Sony Ericson (11%) & Rel/Tata by 7%, and Motorola/LG by (10%).

In Sangrur District, Out of 396 sampled customers, 226 consumers own a Nokia mobile handset which comes to 57 percent share of the market. This is followed by Samsung (11%), other Chinese new handsets by 9% each, Sony Ericson & Rel/Tata by 8% and Motorola/LG by (7%).

So this comparative study shows that in urban city with the very frequently upcoming of reasonable Chinese handsets, people still refer Nokia as No. 1 if launched at fewer prices with the same features.

Table 2a: Satisfaction Level from the Recent Mobile Phone City\ Attributes WAS Average SD CV Ludhiana 1.13 4.13 0.77 18.64 Sangrur 0.98 3.98 0.87 21.86 Gender Male 1.05 4.05 0.85 20.99 Female 1.08 4.08 0.86 18.63



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Education level Primary 1 4 0.89 22.25 UnderGraduate 1.05 4.05 0.81 20 Graduate 1.06 4.06 0.84 20.69 Post Graduate 1.08 4.08 0.79 19.36 Occupation Service 1.09 4.09 0.73 17.85 Business 1.06 4.06 0.85 20.94 Students 1.06 4.06 0.82 20.2 Others 0.99 3.99 0.94 23.56 Income Level Upto 10000 0.98 3.98 0.87 21.86 1025000 1.04 4.4 0.8 19.8 2550000 1.02 4.02 0.86 21.39 Abv 50000 1.19 4.19 0.76 18.14

Table 2b: Satisfaction Level from the Recent Mobile Phone

City\ Attribut es

H Dissatisfied

Dissatisfied Indifferent Satisfied H Satisfied

Chi Sq Values

Ludhiana 3 9 52 206 129 Sangrur 11 15 41 231 98

Chi^2=13.03* (df:4)

Gender

Male 10 21 70 303 169 Female 4 3 23 134 58

Chi^2=5.58(df:4) C=0.08; t=0.475(df:793)

Education Primary 2.8 1.87 16.82 49.53 28.97 Under graduate

.99 3.96 12.38 54.46 28.22 Graduate 1.56 3.91 11.33 53.52 29.69 Post Graduate 2.17 1.74 9.13 59.57 27.39

Chi^2=10.21 (df:12) C=0.11; F=0.25(df:3, 791)

Occupation Service 1.33 1.33 10.67 60.67 26 Business 1.96 3.14 11.76 52.94 30.32 Students 1.41 1.41 18.31 47.89 30.99 Others 2.31 6.51 10.65 50.89 29.59

Chi^2=18.38 (df:12) C=0.15; F=0.52 (df:3, 791)

Income level Upto 10000 1.23 6.17 12.96 52.47 27.16 1025000 2.16 2.16 10.43 60.07 25.18 2550000 2.75 2.75 11.54 56.04 26.92 Abv 50000 0.58 1.73 12.72 47.98 36.99

Chi^2=19.4(df:12 ) C=0.15; F=2.17(df:3, 791)



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Figure 2a: Satisfaction Level from the Recent Mobile Phone

Figure 2b: Satisfaction Level from the Recent Mobile Phone

5.3 Level of Satisfaction

In Ludhiana district, the satisfaction level of users was analyzed on a five point scale ranging from ‘Highly Dissatisfied’ to ‘Highly satisfied’. 32 percent of the consumers say that they are highly satisfied with the services, while 1 percent responded as ‘Highly Dissatisfied’. A major group of consumers either say that they are ‘satisfied’ (52%) and 13 percent as Indifferent.

While in Sangrur District, the satisfaction level of users was also analyzed on a five point scale ranging from ‘Highly Dissatisfied’ to ‘Highly satisfied’. 25 percent of the consumers say that they are highly satisfied with the services, while 3 percent responded as ‘Highly Dissatisfied’. A major group of consumers either say that they are ‘satisfied’ (58%) and only 10 percent as Indifferent.

5.4 Reasons of Dissatisfaction

My study gives the view that the major reasons for dissatisfaction among the respondents in Ludhiana & Sangrur were poor quality of signals and higher costs. Poor quality of signals means unavailability of signals, call failure, call drop downs, unsolicited calls etc. Complaints about billing errors, Bad quality of customer care services. Many respondents have multiple reasons also for dissatisfaction. Companies have to make efforts in providing some



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concessional schemes to families & friends also & giving good numbers to more profitable customers.

Table 3 a: Important Features Preferred by Respondents While Purchasing a Mobile Phone

City\ Attributes Price Availability Look Status Sym Size

Ludhiana 65 55 91 36 32 Sangrur 88 41 87 34 25 Gender Male 105 65 132 54 39 Female 48 31 46 16 18 Education level

Primary 17 12 33 6 7 Under Graduate 34 26 51 22 13 Graduate 54 38 46 23 20 Post Graduate 48 20 48 19 17 Occupation Service 59 39 64 25 19 Business 48 31 60 24 19 Students 12 9 18 4 6 Others 34 17 36 17 13 Income Level Upto 10000 26 16 37 16 8 1025000 57 31 67 20 24 2550000 33 28 36 17 12 Abv 50000 37 21 38 17 13

Table 3b: Important Features Preferred by Respondents While Purchasing a Mobile Phone City\ Attributes Security Shape Many Chi Sq Values

Ludhiana 30 8 82 Sangrur 11 24 88 Chi^2=23.39**(df=7) Gender Male 34 26 59 Female 7 6 50

Chi^2=7.49(df=7)

Education level

Primary 3 3 26 UnderGraduate 12 4 40 Graduate 16 10 49 Post Graduate 10 15 53

Chi^2=25.20(df=21)

Occupation Service 19 12 63 Business 17 8 48 Students 3 3 16 Others 2 9 41

Chi^2=13.57(df=21)

Income Level Upto 10000 6 6 42 Chi^2=13.11(df=21)



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1025000 13 13 54 2550000 8 8 39 Abv 50000 5 5 33

Figure 3 a: Important Features Preferred by Respondents in Ludhiana Districts

Figure 3 b: Important Features Preferred by Respondents in Sangrur Districts

5.5 Likings for Various Attributes of Handsets by consumers

In Sangrur, Consumers were asked to reveal their likings for various attributes of the mobile phone instrument. Price (24%), Looks of handsets (23%) & many that includes ease in use, more batteries in a cell, dual SIM etc. by 3% are the attributes valued most by the customers followed by Availability of the handset (11%), Status symbol by 9%, Shape by 7%, and last but not the least is Security by 3%.

In Ludhiana, Consumers were asked to reveal their likings for various attributes of the mobile phone instrument. More value was given by Ludhiana customers to Looks of the handsets by 25% after that it comes to many that includes ease in use, more batteries in a cell, dual SIM etc. by 22% & afterwards Price by (18%), Availability of the handset by 15%, Status symbol by 10%, Security by 8% and Shape by 2%.



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So, my study shows the comparison of behavior of consumer for 2 districts which shows that consumers are now want good looks in cell phones in fewer prices & consumers prefer ease in use features in mobiles in Ludhiana, people prefer more looks in cell phones & afterwards price feature is preferred but in Sangrur city respondents have the view that price is most preferred factor while purchasing mobile handsets as compared to others.

5.6 Conclusion / Suggestions/ Findings

1. The satisfaction level of users was analyzed on a five point scale ranging from ‘Highly Dissatisfied’ to ‘Highly satisfied’. Only 32 percent of the consumers say that they are highly satisfied with the services, while 1 percent responded as ‘Highly Dissatisfied’. A major group of consumers either say that they are ‘satisfied’ (52%) and 13 percent indifferent. While in Sangrur District, the satisfaction level of users was also analyzed on a five point scale ranging from ‘Highly Dissatisfied’ to ‘Highly satisfied’. 25 percent of the consumers say that they are highly satisfied with the services, while 3 percent responded as ‘Highly Dissatisfied’. A major group of consumers either say that they are ‘satisfied’ (58%) While only 10 percent as Indifferent.

2. The major reasons for dissatisfaction were poor quality of signals and higher costs. Poor quality of signals means unavailability of signals, call failure, call drop downs, unsolicited calls etc. Complaints about billing errors, Bad quality of customer care services. Many respondents have cited multiple reasons also for dissatisfaction.

3. Major Findings in the consumer likings in mobile companies are for Nokia as top position due to its durability reason, Samsung as No. 2 due to looks & lesser handset costs. Other Chinese sets as no. 3 & then the others.

4. Poor network coverage, Frequent Network Problems, High call rates, Influence from family and friends are the most important factors which affects the switching behavior.

5. It is found that there is a relation between switching the service provider and the factors (Customer service, service problem, usage cost, etc.)

6. From the study, it is abundantly clear that call rates lead the consumers more to switch to the service provider. So, mobile service providers need to satisfy the consumer with minimum call rates.

7. Mobile service providers should invest more on improving their network coverage in order to retain their consumers.

8. Mobile service providers have to provide more attractive offers for family and friends also. Exciting offers still hold a major sway.

9. Mobile service provider should satisfy their current consumers by providing them innovative offers.

10. Mobile service provider should accept valid feedbacks from consumers regularly and make sure that they satisfy the consumers.

This study is conducted to make the people understand today’s mobile phone market scenario & generally analyze the consumer buying behavior of two cities from where I took the sample size. The study was more focused on the unexamined area for mobile phones choices



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features, Mobile brands & customer satisfaction/dissatisfaction level. The findings also suggest that managers of these mobile operators should shift their focus on building corporate image and analyze more carefully the reasons for consumers to switch brands in this industry in order to increase loyalty among these consumers. The results show that consumers give preference not only to price of cell phone but also to the availability & look as second priority & then to others . In companies consumers are brand loyal for Nokia, then to Samsung & afterwards to other Chinese handsets & then to Motorola, LG, Tata etc.

Although, the results of the study are tentative, the findings contribute to the existing literature regarding mobile phone markets. The results provide the interesting aspects of the mobile phones. There are more interesting factors that influence consumer behavior towards cell phones more rigorously to find out the consumer choices.

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ASIAN JOURNAL OF MANAGEMENT · PDF fileIndian Telecom companies basically offer two types of industries: ... Sheetal Singla, Sanjeev Bansal ASIAN JOURNAL OF MANAGEMENT RESEARCH