FACTORS INFLUENCING THE DECISION OF MOBILE HANDSETS PURCHASING AMONG YOUTHS: A CASE STUDY OF DLHI AND NCR REGION

Dr. Manish Agarwal Professor KIET School of Management Email:magarwal75@rediffmail.com)

ABSTRACT The cell phone market is experiencing tough competition amongst all the cell phone sellers, each providing cheaper and attractive handsets. A variety of handsets have been launched to attract the customers. In the backdrop of this scenario, this study is conducted to understand how customers place these companies in their mind. This study tries to judge the perception of respondents by taking into account top end features, basic features, brand image, economy, additional features, and versatility physical characteristics provided by handset sellers with the help of factor analysis. The study suggests that the handset sellers should be considering the above mentioned factors to equate the opportunity. Keynotes: Brand image, Economy, factor analysis, Mobile handset, Top end features, Telecom Industry. I. INTRODUCTION The telecom network in India is the fifth largest network in the world meeting up with global standards. Presently, the Indian telecom industry is currently slated to an estimated contribution of nearly 1% to India’s GDP. The Indian Telecommunications network with 280 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world and represents unique opportunities for U.S. companies in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005, is reached to 280 million in 2008. The attractiveness of the Indian market brought in some of the largest global players and

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telecomindiaonline.74 million Over all Tele-density: 24.22 million (down from Dec figure of 39. Mobile phone usage has permeated across various economic classes as well as professional categories.25) Wireless user base (GSM. Millions of citizenship cards to be issued with biometric identification.org/ci%20pdf/Telecom.html The paper is organized as follows. CDMA and WLL (F) ): 242.62 million New Subscriber Additions in January: 8. Year 2006-07 witnessed 66 per cent growth in networks.com/indian_telecom_stats. Section 6 underscores the analysis of data and interpretation of the results. 2 . 20 million broadband subscribers with 2MBPS bandwidth. while Section 5 delineates methodology of the study. Finally.8 billion e-Governance programme. In the next three years.000 common service centers in villages. (Source: http://www.major Industrial houses to invest in telecom. Section 3 and 4 provides the need of the study and objectives of the study respectively.63 % Fixed-line user base: 39. literature pertaining to the perceptions of users towards the mobile service and handset sellers is reviewed. 40 million high speed Internet subscribers. Of these at least 150 million will be in rural areas where farmer-entrepreneurs are changing the countryside. Section 7 concludes the study. Wide Area data networks in 23 states.40 million Total broadband subscriber base: 3. US $ 5. The Market Opportunities India is the fastest growing telecom network in the world today and second largest in Asia. the plans are: • • • • • • • • 500 million telephone connections. 100. Mobile handset sales were nearly 100 million a year and PCs six million plus.convergenceindia.24 million Source: http://www.pdf) Table 1: Telecom Statistics: (till January 2008) Total telephone subscriber base: 281. In Section 2.

II. choices between mobile phone brands were affected by features. While choice and regularity of service were found to be the dominant choice between network providers. Males on the either hand simply care about the actual function of the phone.900 on an average for the next handset. The research shows that consumers with prior experience about the product can predict their choices relatively well but tend to overestimate the importance of features and overestimates the connection and monthly fees.” Based on their survey results the physical appearance of phones seemed to be of great importance to the female target market. The 3 . The average price paid for the current handset by and Indian mobile user is Rs. The results indicated that while price and properties were the most influential factors affecting the purchase of a new mobile phone.3.700. The ‘incremental spend’ for the next hand has grown to Rs. call rates and free calls which are related to mobile phone purchasing. to identify the decision making process of the consumers while purchasing a cell phone. connection fee. Gupta (2007) concluded that Indian mobile user is willing to spend Rs. et al. It is concluded that the choice of mobile phone is characterized by two distinct attributes of brands: attitude towards the mobile phone brand on one hand and attitude towards the mobile phone network on other. access cost.200 indicating that the experienced users are willing to spend higher amount for purchase of their next handset.3. The study was built on six parameters – telephone features. (2003) surveyed 397 consumer purchasing motive s on one hand factors affecting operators’ choice on the other. Liu (2002) examined factors affecting the brand decision in the mobile phone industry in Asia. where as audibility. mobile-tomobile phone rates. REVIEW OF LITERATURE Pakola et al.6. Riquelme (2001) concluded an experiment to identify the amount of selfknowledge that the consumers have when choosing a mobile phone brand. price and friends operators were regarded as the most important in choice of mobile service operator. Karountzos. Out of the 56 participants who owned cell phones. (2003) surveyed 61 participants out of which 92% owned cell phones. about 60% responded that they “needed it” as opposed to because they “wanted it.

METHODOLOGY OF THE STUDY The study is based on the primary data collected from the students of various disciplines of Ghaziabad district with the help of well crafted.survey indicated that specifically color and weight is much more important to females than to males. This meant for the participants that the mobile phone did not work. and size of the phone were the main factors affecting their choice of the new model. V. III. The sample of the study consisted of 150 students who have mobile phone 4 . for the right segment . respondents agreed that price. brand.NEED OF THE STUDY The review of the literature reveals that mobile purchase is a high involvement decision which comprises of both external and internal factors. (2005) surveyed 66 participants in Finland about their buying behavior. OBJECTIVE OF THE STUDY This study is being carried out to identify the factors that influence on the purchasing decision of the mobile phone among the youth in an age group of 22 to 30 yrs in NCR region. A statistical approach. Fundamentally. Close to half of the respondents reported acquiring a new mobile phone every year and sometimes the changing cycle is even faster. the screen was out of order or keypad was so consumed that the numbers were invisible. in the right place with right price and finally with the right branding. some respondents bought new phones in order to get an innovator and/or opinion leader status. IV. et al. Therefore it is necessary for the marketers to keep in mind the various factors which undergoes while the purchase of a mobile phone so that they can place the phone accordingly . The most explicit reason for changing was that the old one was broken or did not work properly. Karjaluoto. battery was weak. the calls were interrupted. pre tested and structured questionnaire. While mobile phones were also acquired due to new features including color display and polyphonic ring tones. for example due to weak audibility. ‘factor analysis’ has been used for the study.

This is an exploratory research which will help us in determining the purchasing behavior of youth for mobile phones. Factor Analysis The explanatory factor analysis is used in order to identify the factor affecting the choice of mobile hand sets with special reference to youths from 150 respondents in NCR region. These showed that partial correlations were low. Factor analysis is used to identify the factors affecting the choice of mobile handset.from different colleges of Ghaziabad. B. BCA MBBS Total Sample Size 50 25 25 25 25 150 The respondents being the adopters of mobile phone were selected by non probabilistic and convenience sampling technique (who ever seen using/have possession of mobile phone). Sc. To test the suitability of the data for factor analysis. VI. Tech.it reveals that there are enough correlations to go ahead with factor analysis. Anti-image correlations were computed. The demographics of the respondents were as follows: Table 2: Demographic Features of Respondents Respondents PGDBM B. respondents had to rate it according to the level of importance on five-point Likert Scales. indicating that true factors existed in the data. DATA ANALYSIS The Data collected through the questionnaires was coded using SPSS. SPSS has been used for the analysis of data. 5 . The questions inquiring the choice of a mobile phone user and the operator were implemented with 21 statements. the following steps have been taken: • • The correlations matrices are computed and examined .

only the factors having latent roots or Eigen values greater than 1 are considered significant. Kaiser-Meyer-Olkin measure of sampling adequacy is computed. Rotation methods. ChiSphericity Square df Sig.668. 0. mediocre. marvelous.90 or above. middling. It is pretty good extraction because we are able to 6 . 0.80 or above.60 or above. Factor Influencing Mobile Handset Purchase There are only seven factors each having eigen values exceeding one for mobile handset purchase. & below 0.70 or above. and all the factors with latent roots less than 1 are considered insignificant & disregarded.• Kaiser-Meyer-Olkin measure of sampling adequacy (MSA) for individual variables are studied from the diagonal of partial correlation matrix . Table 3: KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy. • To test the sampling adequacy. chi square = 1861. unacceptable.924 210 . The measure can be interpreted with the following guidelines: 0. Bartlett's Test of Approx.000 Hence all these standards indicate that the data is suitable for factor analysis. 0. 0.059% of the total variations for the purchase of the handsets.92 significant at 0.000) as well as support for the validity of the factor analysis of the data set.it is found to be sufficiently high for all variables.668 1861.50. meritorious. which is found to be 0.50 or above miserable. It is indicated that the sample is good enough for sampling • The overall significance of correlation matrix is tested with Bartlett test of sphericity for choice of mobile phone (approx. . The index for the present solution accounts for 70. For extracting factors we have employed principal components analysis and latent root criterion. As per the latent root criterion. orthogonal rotation with Varimax were also applied.

753%.053 9. 7.118% .053 9.435 1.718 11.769 7 .577 2.394 6.650 7.394 6.034 48.118 7.718%.091 2.081 70.185 63.778 44.553 1.698 34.966 98.906 64.799 2. (i.788 56.628 1.000 1. 3.072 1.521 82.890% respectively. 5.203 .397%.456 11.606 2.851 23.193 97.072 1.467 1.677 87.760 .182 .677 .650 7.430 .984% and 6.000 3.192 3.174 89.000 1. 6 and 7 are 14.084 .531 .851 23.410 .934 . Table 4: Total Variance Explained Com pone nt Initial Eigen values Total % of Cumulativ Variance e% Extraction Sums of Squared Loadings Total % of Varian ce Cumulativ e% Rotation Sums of Squared Loadings Total % of Variance Cumulativ e% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 4.251 . The percentage of variation explained by factor one is 15.101 4.322 1.101 23.778 44.636 59.698 34.636 59.866 91.444 .392 1.198 14.059 1. 11.739 3.081 70.630 93.197 .270 1.916 41. from 21 statements to 7 underlying factor).618 74.799 2.397 6.964 .720 .890 15.000 Note: Extraction Method: Principal Component Analysis Table 5: Communalities Size Brand Popularity Initial 1.800 .198% & that of 2.534 94.753 7.447 15.288 96.456 11.978 1.335 1.101 23.723 100.e.984 6.240 5.887 85.240 5.859 52.998 78.067 5.906 64.577 1.250 1.152 .435 1.562 2. 6.277 .859 52. 4.059 .867 99.676 .342 1.840 3.101 2.067 5.059 Extraction .457 2.198 29. 7.economize the number of choice factors.169 70.978 1.970 4.

613 .677 .000 1.814 .800 .5 for all the questions.670 .000 1.840 .000 1.000 1.531 Large communalities in Table 5 indicate that a large number of variance has been accounted by the factor solution.Design/Style Color Price Weight Features Quality Service Accessories Plan Reception Bluetooth Calendar Camera Media Player Video Capture Speaker Phone FM Touch Screen 1.000 .000 1.752 .000 1.756 .578 .000 1.000 1.000 1. They are bigger than 0.000 1.691 .747 .694 .000 1.000 1. 8 .688 .000 1.657 .625 .744 .000 1.000 1.000 1.814 . This is the indicator of suitability of the questions.000 1.

136 .019 -.051 -.363 .040 .036 .303 -.165 -.217 .172 6 .110 .406 .123 -.397 -.809 .288 .120 -.452 -.096 .184 -.466 .890 .076 .105 7 -.069 .219 .129 .026 .872 .050 .110 .141 .079 .685 -.012 .255 .047 .373 .285 -.076 .006 -.052 .078 -.090 .298 .361 .124 .023 .168 -.147 .219 .082 .011 .081 .100 .023 .164 .148 .191 .341 .087 -.138 Component 4 -.247 -.081 .113 .641 2 .169 .240 -.232 .438 .029 .030 .812 .061 -.075 .008 .138 .868 .129 .024 .703 -.130 .004 .421 -.069 -.031 .039 -.467 .332 .345 .598 .009 .029 .487 .066 -.239 3 .327 .254 -.195 -.Table 6: Rotated Component Matrix (a) 1 .123 .015 -.042 .120 -.045 .136 .019 .198 -.281 .205 .159 .753 .824 -.054 .092 -.616 .311 .076 .038 -.250 .188 .296 .037 .684 .060 .050 -.076 .122 .131 .152 .114 .032 Size Brand Popularity Design/Style Color Price Weight Features Quality Service Accessories Plan Reception Bluetooth Calendar Camera Media Player Video Capture Speaker Phone FM Touch Screen 9 .211 .050 .051 -.018 .058 5 .060 .045 .737 .423 -.487 .853 .719 .309 .132 -.647 .040 .

The youth considered top end 10 .872 0.487 0.703 0.809 -0.647 0.868 -0.824 0.467 F5 Additional Features FM Speaker Calendar F6 Versatility Color 0.452 0.737 0.616 0.685 F1 Top End Features F2 Basic Features F3 Brand Image F4 Economy Price Accessories 0.684 0.8530.753 0.4 .890 F7 Physical Characteristics Weight Size Features 0.641 0.812 0.719 0. 0.438 Table 7 has been formulated from SPSS data output. The variables are extracted from the graph with factor loading greater than 0.Table 7: Factors Factor Numbers Name of Dimension Factors Bluetooth Camera Media Player Video Capture Touch Screen Quality Service Plan Reception Brand Popularity Design/Style Factor Loading 0.598 0.

FM and Calendar. Brand Image is the third factor. S. These seven factors include all the factors that were aimed to study the mobile purchase decision. Additional Features.com/press/oct16. It indicated that the awareness of youth to cope up with new technologies and features. The fifth factor is the additional features like speaker. The fourth factor is the Economy indicated that respondents want good value for the money they invested in the purchase of mobile handsets. The last factor. Brand Image. The second significant factor was the basic features provided by the manufacturers. The present study is based on sample of 150 youths from the total population in the NCR region and has shown the relationship between the factors and the buying decision of the customer through factor analysis. Media player video capturing and Touch screen.html 11 . REFERENCES Gupta.features as the first dominating factor. Versatility in the form of color also gets due weight age by today’s youth. http://www. ‘IDC India Mobile Handset Usage and Satisfaction Study’. which also provide value for money is also been considered as important one by the respondents. CONCLUSION The conclusion of the study shows that there are seven major factors which influence the mobile purchase decision of youth. VIII. It indicated the youth judged the credibility of handsets on the basis of basic features provided by the Mobile manufacturers. Economy. The youth preferred the mobile phones that were having features like Bluetooth. The study may show some deviation due to complexity in consumer taste & preferences in different region.idcindia. physical characteristics of the mobile handsets plays a vital role in influencing the purchase of mobile handsets. The brand image of the company helped them in choosing a particular mobile phone. VII. These factors are Top end Features. Basic Features. camera. Versatility and Physical Characteristics. The study suggests that the marketer should be considering the above mentioned factors to equate the opportunity. (2007). In this factor the role of manufacturer played a significant role in influencing choice of mobile phone.

Natrajan. Journal of Product and Brand Management.pdf Liu. ‘Do Consumers Know What They Want?’. G. Ralph. J. (2003). 3. F. M. Marketing Research: An Applied Orientation. No.oasis. J. (2003).. H. Karvonen. and Sevento. pp. Prentice Hall.convergenceindia. 18. Karountzos.com/indian_telecom_stats.. Pakola. ‘The Effects of Promotional Activities on Brand Decision in the Cellular’. Vol.. A. (2005). New Jersey. New Delhi. K. Koivumäki..com/documents/RevisedConsumerProject. Ronald. Websites: http://www. Proceedings of 2nd EMAC Conference Track: New Technologies and E-marketing. Lynn. ‘The Decision Making Process among Consumers when Purchasing a Cell Phone’. 4th Edition. C. R. Indian Branch. L.pdf 12 . No. T. J. H. Torres. ‘Factors Affecting Consumer Choice of Mobile Phones: Two Studies from Finland’. Journal of Euro marketing. and Salo. Manninen.. Journal of Consumer Marketing. pp. A. M. 7-17.telecomindiaonline.. (2006). and William. B. http://mariajtorres. J. The ICFAI Journal of Management Research. 59-82. Malhotra. 14. M. Karjaluoto.. and Vinanzaca. pp.org/ci%20pdf/Telecom. E. T. 11.oulu. M. 1. Rodriguez. (2002). C. Lescano.Hair. 4th Edition Pearson Education. ‘An Investigation of Consumer Behavior in Mobile Phone Markets in Finland’.. (2001). 437-448. R. Ristola. J. Vol. pp.. M. Vol. 5. 42-51. ‘Perception of Mobile Telephony among Youth’. Multivariate Data Analysis. Accessed from www. A. N. Vol. Kesti... (1995). C. K.fi Riqulme.html http://www. (2005).

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