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Project Report
Project Report
Summer Internship Project Report on A Study of Factors Influencing Consumer Buying Behaviour of Wireless Internet Broadband Connection
in Sistema Shyam Teleservices Ltd. Pune
DECLARATION
I, the undersigned, hereby declare that the Project Report entitled A Study of Factors Influencing Consumer Buying Behavior of Wireless Internet Broadband Connection is written and submitted by me to the University of Pune, Pune in partial fulfillment of the requirements for the award of degree of Master of Business Administration under the guidance of Prof. Rachita Bhattacharya. It is my original work and the conclusions drawn therein are based on the material collected by me.
Jyoti A. Gohil
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Contents
Particulars Acknowledgement List of Tables List of Figures Executive Summary Introduction 1.1 Consumer Buying Behavior 1.2 Literature Review 1.3 Need For the Study 1.4 Statement of the Problem 1.5 Objectives of the Project 1.6 Scope of the Study Profile of the Organization 2.1 Sector Profile 2.2 Company Profile 2.3 Product Profile Research Design and Methodology 3.1 Research Design 3.2 Sampling Design 3.3 Sources and Methods of Data Collection 3.4 Methods of Data Analysis and Statistical Techniques 3.5 Limitations of the Study Data Presentation, Analysis and Interpretation 4.1 Age Profile of the Sample Population 4.2 Qualification of the Respondents 4.3 Number of People in the Family 4.4 Income of the Family
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Sistema Shyam Teleservices (SSTL) 4.5 Different Uses of Internet 4.6 Influence of Different Sources of Information on consumer buying decision 4.7 Influence of company brand name on customer purchase decision 4.8 Influence of Net Speed on customer purchase decision 4.9 Influence of area wise connectivity on customer purchase decision 4.10 Influence of company price of the product on customer purchase decision 4.11 Influence of tariff plan on customer purchase decision 4.12 Influence of availability of product in the store on customer purchase decision 4.13 Influence of convenience in handling on customer purchase decision 4.14 Influence of Different promotional activities undertaken by MTS on customer purchase decision 4.15 Influence of offers/discounts provided on customer purchase decision Findings And Observations Suggestions and Recommendations Bibliography Questionnaire 26 27 28 29 30 31 32 33 34 35 36 37 38 A C
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Acknowledgement
First of all I would like to thank the Management at Sistema Shyam Teleservices LTD. (MTS) for giving me the opportunity to do my two month project training in their esteemed organization. I am highly obliged to Mr. Arun Vajpai (Area Sales Manager) who has provided me guidance, inspiration, perspective and stimulating discussion, through the project. His constant review and excellent suggestions throughout the project are highly commendable. A study like this cannot be completed without help from other persons and therefore I would like to express my gratitude to Prof. Rachita Bhattacharya to provide me crucial guidance in the analytical part of this project. My heartfelt thanks to all executives who helped me gain knowledge about the actual working and the processes involved in various departments. Finally I would like to thank our friends and family member for giving me constant support and encouragement.
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List of Tables
Table No.
Table No. 1 Table No. 2 Table No. 3 Table No. 4 Table No. 5 Table No. 6 Table No. 7 Table No. 8 Table No. 9 Table No. 10 Table No. 11 Table No. 12 Table No. 13 Table No. 14 Table No. 15 Table No. 16 Table No. 17 Table No. 18
Page No.
16 18 18 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
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List of Figures
Figure No.
Figure No. 1 Figure No. 2 Figure No. 3 Figure No. 4 Figure No. 5 Figure No. 6 Figure No. 7 Figure No. 8 Figure No. 9 Figure No. 10 Figure No. 11 Figure No. 12 Figure No. 13 Figure No. 14 Figure No. 15 Figure No. 16
Page No. 14 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
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Executive Summary
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Growth on the Data Cards, especially happen when business travelers, academicians as well as other professionals need to access emails and corporate applications as well as personal requirements during urgent trips and travels. The buying decision of a buyer is influenced by an various consumer decision and expectation. He expects best performance maximum durability and more dependability from a product or service. The decision making is a process whereby a buyer decides to purchase a particular product out of various available alternatives depending upon his ability to purchase and willingness to purchase. This process of selection and final selection is known as buying decision making. MTS is new in India and has entered in India since September 2008. Within several months, it has surprised other players in the market with its services and wants to capture the market. From the whole population, sample size of 100 people was selected for data collection. All the necessary data was collected from the selected sample using questionnaires, interviews and schedules. The procedure adopted in the present study is simple random sampling. In this all units in the population has an equal chance of inclusion in the sample. From the study, it is found that there exist many factors which influence the consumer buying decision of wireless internet broadband connection. They include price, quality, availability of the product, brand name, advertisement of the company. Influence of companys sales promotional activities has little influence on buying decision of consumer while they purchase wireless internet broadband connection.
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Introduction
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A. Social Factors
Social factors refer to forces that other people exert and which affect consumers purchase behavior. These social factors can include culture and subculture, roles and family, social class and reference groups.
Example:
Culture is the fundamental determinant of a persons wants and behavior. By taking into consideration Reference group, these can influence/ affect the consumer buying behavior. Reference group refers to a group with whom an individual identifies herself/ himself and the extent to which that person assumes many values, attitudes or behavior of group members. Reference groups can be family, school or college, work group, club membership, citizenship etc. Reference groups serve as one of the primary agents of consumer socialization and learning and can be influential enough to induce not only socially acceptable consumer behavior but also socially unacceptable and even personal destructive behavior. For example, if fresher student joins a college / university, he/she will meet different people and form a group. In that group there can be patterns of values, for example style of clothing, handsets which most of group member prefer or even destructive behavior such as excessive consumption of alcohol, use of harmful and addictive drugs etc. So, according to how an individual references him / her to that particular reference group, this will influence and change his/her buying behavior.
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B. Psychological Factors
These are internal to an individual and generate forces within, that influence her/his purchase behavior. The major forces include motives, perception, learning, attitude and personality.
Example:
Attitude is an enduring organization of motivational, emotional, perceptual and cognitive processes with respect to some aspect of our environment. Consumer forms attitude towards a brand on the basis of their beliefs about the brand. For example, consumers of Sony products might have the belief that the products offered by Sony are durable; this will influence those customers to buy Sony products due to this attitude towards the brand.
C. Personal Factors
These include those aspects that are unique to a person and influence purchase behavior. These factors include age, stage in the life cycle, occupation, economic circumstances, lifestyle, values and situational factors. Example: Lifestyle is an indicator of how people live and express themselves on the basis of their activities, interests, and opinions. Lifestyle dimension provide a broader view of people; about how they spend their time, the importance of things in their surroundings and their beliefs on broad issues associated with life and living and themselves. This is influenced by demographic factors and personality. E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer. So according to their lifestyle and profession, the buying behavior of people differs from one another.
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The most obvious is for marketing strategyi.e., for making better marketing campaigns. For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers brand choices. A second application is public policy. In the 1980s, Accutane, a near miracle cure for acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken by pregnant women. Although physicians were instructed to warn their female patients of this, a number still became pregnant while taking the drug. To get consumers attention, the Federal Drug Administration (FDA) took the step of requiring that very graphic pictures of deformed babies be shown on the medicine containers. Social marketing involves getting ideas across to consumers rather than selling something. Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use. The best solution, obviously, would be if we could get illegal drug users to stop. This, however, was deemed to be infeasible. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. As a final benefit, studying consumer behavior should make us better consumers. Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain.
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Furthermore, consumer choice behavior can either be approached by utilizing different choice models (see, e.g., Chintagunta, 1999; Bockenholt and Dillon, 2000; Swait and Adamowicz, 2001) or neural networks to model selection decisions (e.g., Papatla, Zahedi and Zekic-Susac, 2002). Papatla et al. (2002) examined empirically brand choice and store choice in regard to margarine, detergent and tissue. The research found that while neural networks have higher probability of resulting in a better performance, hybrid models guaranteed equal or better results than stand-alone models. It has also been pointed that many decision strategies used by consumers can change due to person-, context-, and task-specific factors (Dhar, Nowlis and Sherman, 2000; Swait and Adamowicz, 2001). Therefore, mathematical modeling has its limitations in regard to the fact that consumers tend to utilize different approaches to make choices. Thereby, researchers should pay more attention to factors like task complexity and context in modeling choice behavior (cf. Swait and Adamowicz, 2001). Moreover, Coupey, Irwin and Payne (1998) found that the influence of task and context factors might be greater in situations in which consumer has little prior knowledge and experience. It is widely accepted that the traditional problem solving approach involving rational decision making to the study of consumer choice may not be suitable for all situations, or is at least incomplete to understand choice behavior. Limited information search and evaluation of alternatives led to a situation in which consumer choice is also driven by hedonic considerations (e.g., Dhar and Wertenbroch, 2000). In general, a common distinction to be made is that while the utilitarian goods usually are primary instrumental and functional, hedonic goods provide fun, pleasure and excitement. It has been noted that many choices have both utilitarian and hedonic features (Batra and Ahtola, 1990), and thus it can also be proposed that the choice between mobile phones has both utilitarian (e.g., communication, time planning) and hedonic (e.g., games, camera) features. The younger the consumer the more hedonistic features consumers tend to value in mobile phones (Wilska, 2003). Quite similarly, consumer choice can also be approached from the perspective of conscious and non conscious choice (e.g., Fitzsimons et al., 2002). Quite many choice situations occur outside of conscious awareness and with limited information search (Kivetz and Simonson, 2000) and it can be stated that many choices have both conscious and non conscious motives. Fitzsimons et al. (2002) found that in many cases non conscious influences affect choice much more than is traditionally believed by researchers.
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B. Secondary Objectives
To understand how social factors affect customers buying decision To understand how psychological factors influence customers buying decision To understand how personal factors influence customers buying decision
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c) 3G Services
The Department of Telecom has taken the pioneering decision of launching of 3G services by BSNL and MTNL and initiation of process for auction of spectrum for 3G services to private operators. Allocation of spectrum for third-generation (3G) and broadband wireless access (BWA) services was done through a controlled simultaneous, ascending e-auction process. All the 71 blocks that were put up for auction across the 22 service areas in the country were sold, leaving no unsold lots. Auction for 3G spectrum ended on May 19, 2010 after 183 rounds of intense bidding over a span of 34 days. The Government is expected to morph revenue worth US$ 14.6 billion. All the available slots across 22 circles have been sold to seven different operators.
d) Data Services
The sales (shipments) of data cards and USB modems crossed the one million mark (1,002,169 nos.) in the 12 months ending June 2009, according to the findings of IDCs India Quarterly Data Card and USB Modem Market Review, Q2 CY2009. The sharp increase in the demand for data cards/USB modems in the last four quarters has gone up from 1.76 lakh units in July-September 2008 quarter to 4.05 lakh in April-June 2009. While in the quarter ending July-September 2008 one data card/USB modem was sold for every 4 notebook computers, this number improved to 3.2 data cards/USB modems sold for every 4 notebook computers in the April-June 2009 quarter. One-thirds of the million data cards/USB modems were sold (shipped) in the first six months July 2008-Decemeber 2008 while two-thirds were sold (shipped) in the second half January-June 2009. Currently the Wireless Internet market is dominated by CDMA operators in the country. CDMA data card/USB modem shipments accounted for nearly 69% of the total market in Q2 CY2009. The average sales value (ASV) or price of a data card/USB modem is around Rs. 3,000; going forward, with increasing demand, prices are likely to come down. This will help improve the overall penetration of wireless internet/broadband. Currently data cards/USB modems are available mostly in bundled offerings from operators. However, with increasing demand, IDC India expects more open market data cards becoming available, thus providing an opportunity to customers to choose their favorite service provider along with their preferred device. Incumbent operators (BSNL and MTNL) are pushing 3G data cards/USB modems to increase subscribers on their recently launched 3G service networks. Private telecom operators are yet to launch 3G services in the country.
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Sistema Shyam TeleServices (SSTL) is the fastest growing telecom company in the competitive Indian market, with over 4 million voice subscribers and 70,000 data customers. SSTL has tied up with Mobile TeleSystems OJSC, a JSFC Sistema company of Russia, to bring the globally acclaimed telecom brand MTS - to India. MTS is the 8th largest telecom brand in the world. Millward Brown has recently voted MTS as the 72nd ranked Brand from among the Top 100 Brands in the world. SSTL is a joint venture company between Sistema {LSE-SSA} of Russia and Shyam Group of India. Sistema is the majority share holder in this joint venture with a 73.71% equity stake, along with the Shyam Group, holding a 23.79% stake and the remaining 2.5% being held by the public. SSTL has been allocated spectrum to provide mobile telephony services in 22 circles across the country. Presently SSTL offers voice & data services in Rajasthan, Bihar/Jharkhand, Kolkata, West Bengal & Sikkim, Chennai, Tamil Nadu, Kerala, Karnataka, Mumbai, Maharashtra/Goa, and Haryana/Delhi & NCR. With the launch of the Andhra Pradesh circle, SSTL will be in 12 circles.
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Plug & Play enabled Speed up to 3.1 Mbps Fastest uploads at a speed to up to 1.8 Mbps Micro SD card slot for data storage Stylish swivel modem for flexible usage
2) MBlaze Standard
Plug & Play enabled Speed up to 3.1 Mbps Fastest uploads at a speed to up to 1.8 Mbps FREE browsing on your favorite websites like www.yahoo.co.in , www.wikipedia.org , www.makemytrip.com ,www.cricinfo.com , www.shopping.indiatimes.com.
Particulars.
Free Usage
250 MB 350 MB 750 MB 1 GB 2 GB 3 GB 6 GB Unlimited 10 GB 15 GB 30 GB 50 GB 10 GB Night 3 GB 9 GB 18 GB 30 GB 45 GB 6 GB 18 GB 36 GB 60 GB
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charges are valid for 30 days only applicable rates and any other applicable government levies will be
charged extra Credit limit will be decided as per the payment record of first 3 months from activation Unutilised data limit will get lapsed with the end of validity period MBlazer Night usage of 10 GB is valid only between 11PM to 7AM Tab. No. 3 MBlaze Postpaid Plans
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Sistema Shyam Teleservices (SSTL) 4.1 Age Profile of the Sample Population
Age Less than 18 Years Between 18-23 Years Between 23-28 Years 28-45 Years More than 45 Years Percentage 9 23 46 14 8
Interpretation:
Most of the people are in the age group of 18 to 28 years who are either studying or working in some firms. These people are using internet for various purposes regularly.
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Interpretation:
It can be seen that most of the people are well educated having a graduate or post graduate degrees. These people are those who use internet regularly are the most likely customers of wireless internet connection.
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Interpretation:
Most of the family consist of 4 to 6 family members which mother, father and their children. Also some families have their grandparents along with them. Out of 4-5 members in each family at least 2-3 of use internet.
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Interpretation:
It is found that families have their income in the range of Rs.15000Rs.40000. These are those working in one or the firm with high spending power. These people need internet for their business needs and also for their family use.
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Interpretation:
It can be observed that mostly use internet either to get in touch with their friends and colleagues or for downloading various stuffs from the internet. Hence they would like to have internet with unlimited download plans.
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Sistema Shyam Teleservices (SSTL) 4.6 Influence of Different Sources of Information on consumer buying decision
Sources of Information Friends Relatives Internet Expert Reviews Newspaper/Magazines Television Ads Percentage 33 21 12 9 7 18
Interpretation:
From the above statistics, it is seen that while gathering information about data service people mostly rely on the opinions of their friends and relatives other than any other source. The reason behind this would be that they find the experiences shared by the friends/relatives more true and reliable than any other source.
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Interpretation:
It can be seen above that people while going for any technically advanced product, people prefer branded products than local products as they feel branded products are good in quality and are warranty products to use.
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Interpretation:
Nearly 50% percent of the people say that Net Speed is important while he/she is to have a wireless internet connection. Good net Speed is required to surf all the websites easily.
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Sistema Shyam Teleservices (SSTL) 4.9 Influence of area wise connectivity on customer purchase decision.
Importance Extremely Important Somewhat Important Neither Important nor Unimportant Somewhat Unimportant Not at all important Percentage 39 54 6 1 0
Interpretation:
Large number of people found that internet connectivity of data card should be good across various localities as wireless internet is purchased by customers so that they can use it anywhere they want.
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Interpretation:
It can be observed that price of the product plays an important part while purchasing product as people dont like to spend more of their hard earned money in stuff like internet data card; when they have a wired internet at their house.
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Sistema Shyam Teleservices (SSTL) 4.11 Influence of tariff plan on customer purchase decision
Importance Extremely Important Somewhat Important Neither Important nor Unimportant Somewhat Unimportant Not at all important Percentage 36 29 23 12 0
Interpretation:
Tariff Plans are the regular expense that they have to pay every month. Hence they want minimum tariffs available while selecting the data card.
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Interpretation:
According to study, the Data card should be easily available for the people as they would not waste their time in searching the product since it is not very important for them and they do their work using other wired connection.
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Sistema Shyam Teleservices (SSTL) 4.13 Influence of convenience in handling on customer purchase decision
Importance Extremely Important Somewhat Important Neither Important nor Unimportant Somewhat Unimportant Not at all important Percentage 15 37 21 19 8
Interpretation:
People will not buy such products which are difficult to handle when they are to be carried along while travelling. Hence the product should be such that it an be easily carried along and easy to use.
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Sistema Shyam Teleservices (SSTL) 4.14 Influence of Different promotional activities undertaken by MTS on customer purchase decision
Promotion Activities TV Advertisement Friends Retail Stores Company Sales Executive Newspaper/Magazines Other Sources Percentage 5 18 14 53 7 3
Interpretation:
It is found company sales team is highly influential in convincing people to go for MTS. Also the reason behind this would be less promotional activities done by MTS through other media sources.
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Sistema Shyam Teleservices (SSTL) 4.15 Influence of offers/discounts provided on customer purchase decision
Importance Extremely Important Somewhat Important Neither Important nor Unimportant Somewhat Unimportant Not at all important Percentage 23 35 22 13 7
Interpretation:
It is observed that when it comes to purchasing wireless internet card, people go for the one giving attractive offers or discounts. As along the product they get extra benefits to use
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Following are the factors that affect the buying behavior of the consumers with respect to wireless internet connection
A) Personal factors 1) Age & Life cycle stage: From the survey it is cleared that 69% of people in Pune that were in the survey are in the age group of 18-28 years. These are students from colleges or working individuals with high spending income. Efforts need to be taken to capture this group. 2) Education: Most of the population under survey in Pune is well educated with degree in their hand. Therefore it can be concluded that Education is an important stimulus affecting consumers buying behavior B) Social factors 1) Number of people in the family: Most of the families have 4 to 6 members in it. These include parents, their children and the grandparents. These peoples need could become an influencing factor for the company. 2) Source of Information: Friends and relatives have maximum influence on the buying decision of an individual. C) Psychological factors Various psychological factors influence an individuals buying decision. These factors are brand name of the company, price of the product, promotional activities carried out by the company, availability of the product in the market, tariff plans and offers and discounts available on the product. 1) Brand Name: For 54 % of people brand name is very important for having the data card. 2) Price of the product: 67% people find price as an important factor while taking the purchase decision. Hence price should be such that the customers feel to buy.
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Recommendations on 4 Ps
Product The product should focus on improving service response i.e. better customer service and greater connectivity. This can be done by increasing customer service facility by setting up more number of customer care centers.. The product should come up with technical advancement like having an inbuilt memory in the data card. During study it was found out that in and around Pune good connectivity is not available. So MTS should increase its infrastructure and reach the areas where it is not present like Dehuroad, Talegaon, Sinhgad, some parts of Kothrud, etc. Price MTS has the lowest plans available with them and their modem prices are competitive with the other players. Still MTS should keep focus on reducing extra usage rates and become a price leader for price sensitive heavy usage segments. Special plans and packages should be provided to corporate customers requiring minimum 5 connections or more than 5 connections Promotion MTS is investing very less in the promotion of MBlaze. Therefore it should increase its promotion activities. It should use pull strategy to promote MBlaze. In pull strategy various methods of promotion like advertising, sales promotion, participating in trade fairs and exhibitions, etc. which are targeted towards the customers to attract them to buy the product.
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Bibliography
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Bibliography
Journals
Beatty, S.E. and Smith, S.M. (1987). External search effort: An investigation across several product categories. Journal of Consumer Research, 14 (1), 83-95 Moorthy, S., Ratchford, B. and Talukdar, D. (1997). Consumer information search revisited. Journal of Consumer Research, 23 (4), 263-277. Alba, J.W., and Hutchinson, J.W. (2000). Knowledge calibration: What consumers know and what they think they know. Journal of Consumer Research, 27 (September),123-156 Coupey, E., Irwin, J.R. and Payne, J.W. (1998). Product category familiarity and preference construction. Journal of Consumer Research, 24 (4), 459-468. Chernev, A. (2003). When more is less and less is more: The role of ideal point availability and assortment in consumer choice. Journal of Consumer Research, 30 (2), 170-183. Solomon, M.R. (2001). Consumer Behavior. Buying, Having, and Being. 5th ed. NJ: Prentice-Hall. Bockenholt, U. and Dillon, W.R. (2000). Inferring latent brand dependencies. Journal of Marketing Research, 37 (1), 72-87. Swait, J. and Adamowicz, W. (2001). The influence of task complexity on consumer choice: A latent class model of decision strategy switching. Journal of Consumer Research, 28 (1), 135-148. Press Release of IDC India Ltd. Dated September 18, 2009.
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Websites
http://www.cybermedia.co.in/press/pressrelease137a.html http://www.mtsindia.in/corporate/about-sstl.html http://www.mtsindia.in/corporate/about-mts.html http://www.eurojournals.com/ejsr_28_4_03.pdf
Books
Kothari C. R., Research Methodology, 2nd Edition, New Delhi, New Age International (P) Ltd. Publishers, 2004 Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha, Marketing Management,13th Edition, New Delhi, Pearson Education, 2008 Leon G. Schiffman, Leslie Lazar Kanuk, Consumer Behavior,9th Edition, New Delhi, Prentice Hall of India Pvt. Ltd., 2007
Newspapers
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Questionnaire
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Questionnaire
Respected madam/sir, As a part of my project I would like to gather some information from you which will help me in an in depth study of project. The information provided by you will be kept confidential and will be used for academic purpose only. I would be obliged if you co-operate with me in filling the questionnaire. 1. Name . 2. Gender 3. Age a) Male b) Female
a) Less than 18 years b) Between 18-23 years c) Between 23-28 years d) Between 28-45 years e) More than 45 years
4. Qualification of the Respondents a)10th pass or below c) Graduate e) Professional Courses 5. Size of the Family c) 4-6 members
6. Monthly Income of the Family a) Less than Rs.15000 b) Between Rs. 15000-Rs.25000 c) Between Rs. 25000-Rs.40000 d) More than Rs. 40000 7. Do you have an internet connection?
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a) Yes
b) No
Brand Name of the Company Net Speed Area wise Connectivity Price of the Product Monthly Tariff plans Availability of the Product Convenience of Handling Special Offers/Discounts
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a) Yes
b) No
12. If yes, how did you come to know about MTS MBlaze? a) TV Advertisement b) Friends c) Retail Stores d) Company Sales Executives e) Newspaper/Magazines f) Any Other Source (Please Specify).... 13. Now that you know about MTS MBlaze would you like to purchase it? a) Yes b) No 14. Any Suggestions Thank you!!!
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