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Impact of product-related and social factors on purchase intention of smart-

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DOI: 10.2139/ssrn.3238642

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 Impact of product-related and
social factors on purchase intention of
smart-phone buyers in Nepal

Arhan Sthapit* Vol. 4(1) 2018

Faculty of Management, Tribhuvan University, Kathmandu, Nepal

https://orcid.org/0000-0002-2799-4936
Wilaiporn Laohakosol
Ayush Sharma
Shinawatra University, Bangkok, Thailand
* Corresponding author: arhansthapit@gmail.com

Abstract
The paper examines the impact of product-related factors
(price, quality, and country of origin, product feature) and
social factors (social influence and compatibility) on the
purchase intention of smart-phone buyers in the Kathmandu
Valley, Nepal. Based on the primary data survey method,
questionnaires were administered on 340 graduate students Article History
of seven business schools inside the Kathmandu Valley Received: 30 May 2018
selected through a judgmental sampling technique. The Revised: 18 June 2018
results of the causal-comparative analysis, based on Accepted: 22 June 2018
correlation and regression analyses, showed that among the
considered independent variables, compatibility, social Keywords
influence and product features would significantly influence Country of origin
the purchase intention of the smart-phone buyers, while Compatibility
price, quality and country of origin had no significant Purchase intention
relationship with the purchase intention. However, all the Price quality
independent variables were found to be positively correlated Social influence
with the purchase intention of smart-phone buyers. The
implication of findings is that the Nepali buyers are more
likely to purchase smart-phones if they find attractive
product features compatible with their needs and social
sphere.

Article citation: Sthapit Arhan, Laohakosol Wilaiporn and

Sharma Ayush (2018), Impact of product-related and social
factors on purchase intention of smart-phone buyers in
Nepal, The Sankalpa: International Journal of Management
Decisions, Vol.4, Issue 1, pp 115-138, ISSN 2454-7425,
https://orcid.org/0000-0002-2799-4936
116 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

1. Background
Smart-phones have become an inevitable part of contemporary life because of
their versatile applicability and usage and are widely being adopted as a modern
means to communication (Szymczak, 2013). Smart-phone technology, with its
pervasive acceptance and powerful functionality, is inevitably changing peoples’
behaviours; especially that of young adults (Chow et al., 2012). Apart from the essential
capabilities to make voice call, video call, SMS and MMS, smart-phones have ad-
ded other utilities which have repositioned them as a ‘new information medium’
(May & Hearn, 2005). The need of the young adults to be connected round the
clock and perform versatile activities demanded by their duties has created the
need to integrate smart-phone into their day to day activities (Mudondo, 2014).

Smart-phones are very popular among the young generation or rather

‘Generation-Y’ who are technologically oriented and depend on these digital devices
(Shabrin, et al., 2017). The trend of having a smart-phone among Nepalese people
is also increasing as indicated by the mobile phone penetration rate of 113.68 per
cent in the fiscal year 2015/2016, which is fuelling the emergence of different
brands and sophisticated devices in the Nepalese market (NTA, 2016). Thus, with
the ever increasing demand of smart-phones in the domestic market it is essential
to know the underlying factors that influence consumers to buy a smart-phone
and the factors that influence them during the process of purchasing one. Mobile
phone is the third largest traded commodity in Nepal after petroleum products
and iron, and its market is growing at a rapid pace in Nepal (DoC, 2016). As per
the data of Customs Department for the fiscal year 2015/2016, Nepal imported
mobile phones worth about USD 52.27 million (NPR 5.75 billion) in the fiscal year
2013/14 and the mobile phone industry recorded a transaction of USD 227.27 mil-
lion (NPR 25 billion) in Nepal in Fiscal Year 2015/2016 (DoC, 2016). The same re-
port also estimated the size of Nepali domestic mobile phone market at USD 109
million (NPR 12 billion), with an annual growth rate of 40 per cent. Smart-phones
of various brands are competing in price and specification and at present there
are more than 40 brands available in Nepal (NTA, 2016). Despite the large market
size no proper research has been conducted to understand the factors affecting
 Sthapit et al., Impact of product-related and social factors ..... | 117

consumes’ smart-phone purchasing intention. There is lack of comprehensive studies

on the factors that influence the purchase intention of smart-phones among Nepalese
consumers.

Therefore, the main objective of the present study is to examine the effect
of product-related factors (price, quality, country of origin, product features), and
social factors (social influence and compatibility with lifestyle), on purchase intention
of smart-phone buyers in the Nepalese context. Thus, this research has made an
attempt to fill the gap by investigating into the factors that influence the purchase
intention of smart-phone buyers residing in the capital Valley of Kathmandu (Nepal).

2. Literature Review
This section presents the review of relevant literature concerning the variables
considered in the study.

2.1 Purchase Intention

Warshaw and Davis (1985) stated that purchase intention is an advance plan to
purchase certain products or services in future which may not always lead to
actual buying due to the influence of various factors that influence the ability to
perform. Similarly, Dodds and Monroe (1985) stated that purchase intention is a
behavioural tendency of a customer who intends to purchase a product. In other
words, what the consumer think and will buy in their mind represents the purchase
intention (Blackwell, et al., 2001). Purchase intention thus can help in determining
the future purchase actions of buyers. As per Dodds, et al., (1991), purchase
intention measures the possibility of a consumer’s lead to purchase action.
Schiffman and Kanuk (2000) also expressed similar view by stating that, there is a
high possibility to purchase a particular product when the purchase intention is
stronger. In alignment with the consumer decision making process, purchase intention
indicates that consumers will go through the various stages of the decision mak-
ing process: need recognition, information search through external environment,
evaluation of alternatives, make purchase decisions and post-purchase experience
(Zeithaml, 1988; Dodds, et al., 1991; Schiffman & Kanuk, 2000). Purchase intention
is one of the common effectiveness measures and is often used to anticipate response
behaviour (Kotler, 2000). For marketers, purchase intention helps them in market
118 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

segmentation and targeting along with helping them in making crucial product
decisions like where the product should be launched (Sewall, 1978; Silk & Urban,
1978). Thus, purchase intention is a considerable index to predict consumer’s
behaviour (Xie & Chaipoopirutana, 2014) and it can be used for future
demand prediction too (Armstrong, et al., 2000). Finally, purchase intention is a
common effective measure used to foresee a response behaviour (Li and Biocca,
2002) and it has been linked to various other important variables by various
researchers. Studies have discovered a positive relationship existing
between purchase intention and relative advantage, price, social influence
and product compatibility (Juha, 2008; Joep et al., 2011; Yue & Stuart, 2011).

2.2 Price

Price is one of the most important hints in the marketplace (Chew et al., 2012). Price
will always be the key concern of consumers’ before making any purchasing decision
(Smith & Carsky, 1996), and its dynamics can be explained form the viewpoint of
economics and consumer elements. From the economic perspective, price is rep-
resented as constraint to be trade-off products for each unit with maximum utility, in
a marketplace where there is no hidden information while exchanging products.
Nagle and Holden (2002) also stated similar viewpoint by stating that price plays
an important role as a monetary value whereby the consumers to trade it with the
services or products that were being sold by the sellers. The issue of price has been dis-
cussed as critical factor requiring consideration with limited budget on purchase
intention (Erickson & Johansson, 1985). As per Mitra (1995), price can be thought
as information embedded in intrinsic attribute information. When consumers purchase
a product they establish a set of acceptable price range for that particular product
and as per Dodds (1991), purchase intention tends to be reduced when the actual
price on products is higher than acceptable price range and vice versa. In alignments
with this viewpoint, Peter (1969) also stated that if the price is lower than the ac-
ceptable price range, consumers will lack the confidence towards the products quality.

The level of price is found to have positively affected the behavioural

intentions mainly because price establishes image of the brand in the eyes of the
consumers (Aaker, 1991). In a consumer’s logic, a high (low) price connotes a
high (low) quality and image (Chow, et al., 2012). The earlier statement
 Sthapit et al., Impact of product-related and social factors ..... | 119

aligns with the findings of Jacob and Olson (1977), who argued that the price is a
signal to simulate the consumer‘s perception on purchasing products and the
price can reflects psychology response on consumers mind after contacting price.
Simultaneously, the consumer makes decision whether to buy the product or not
based on integration of all information available. The price is a helpful sign to
deduce by consumer in relation to products (Erickson & Johansson, 1985). Price is
estimated by perceived quality and perceived sacrifice (Monroe & Krishnan, 1985)
implying that high price results in high product quality and eventually enhancing
purchase intention directly.

In the nut shell, the price of a product is one of the most important
marketing mix tools which are currently used excessively to attract consumers to
a certain product/service or store and is a psychological construct that is not only
relevant to retailer success but also relevant to consumers for making buying
decision (Evanschitzky et al., 2004).

2.3 Perceived Quality

Aaker and Gray (1982) defined perceived quality as the consumers’ perception of
the superiority or overall quality of a service or product with respect to its
intended purpose. Zeithaml (1988) also defined perceive quality as a consumer’s
subjective evaluation of the product and as a customers’ expectations and
judgments about the performance of products. Perceived quality is the estimation
made by the consumer relying on the whole set of basic as well as outer
dimension of the product or the service (Grunert et al, 2001).

Perceived quality is often associated with brands and the brand name has
direct influence on customer’s perception toward the quality of the offering
(Lay-Yee et al., 2013). The study further stated that experienced consumers can
give a reason why they want to repurchase a particular product and can
differentiate among competitive brands. Olshavsky (1985) and Rowley (1998)
view quality as a form of an overall evaluation of a product. Similarly, Holbrook
and Corfman (1981); Rowley (1998) suggested that quality would act as a tool to
infer about relative value judgment. The above definitions of perceived quality
(quality) are based on the user-based approach (Garvin, 1983). As per Garvin
(1983) there are mainly two basic approaches to quality discussed as
product-based quality; referring to the amounts of specific attributes or
120 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

ingredients of a product, and manufacturing-based quality; referring to

conformance of manufacturing specifications or service standards.

In relation to purchase intention, perceived quality is one of the important

factors affecting the buying decision of the customer and directly influences the
purchase intention (Recker et. al., 2015). As per Saleem et al. (2015), initially
customers have some perceptions about the product quality, price and styles
before going to purchasing the product and after using the product, purchase
intention increases as well as decreases because of the direct interaction with the
product, thus these variables having a mutual effect on each other.

2.4 Country of Origin

Country of origin (COO) is defined as “the country of manufacture or assembly”

(Bilkey & Nes, 1982; Han & Terpstra, 1988), it can be identified by “made in” or
“manufactured in” labels (Nagashima, 1970). With the trend of globalized
production system and emergence of multinationals, country of origin is referred
to the country where corporate headquarters of the company marketing the
product or brand is located (Erickson & Johansson, 1985). According to
Nagashima (1970), COO is defined as “the picture, the reputation, and the
stereotype that businessmen and consumers attach to products of a specific
country. This image is created by such variables as representative products,
national characteristics, economic and political background, history, and
traditions.”

Country of origin is one of the extrinsic cues of a product which may be

used in the consumer product evaluation process (Erickson & Johansson, 1985),
and may become part of a product’s total image (Eroglu & Machleit, 1989).

From previous research, COO has both direct and indirect effects on
product evaluation. COO can act simply as an attribute of the product and be
utilized in much the same way as other more specific attributes to arrive at
product evaluation (Hong & Wyer, 1989), when consumers are familiar with the
product (Maheswaran, 1994) and attributes information is unambiguous. Also, a
product’s country of origin can stimulate subjects’ interest in the product and
consequently leads them to think more extensively about product information
and its evaluation implications. Hong and Wyer (1989) further state that country
image can be used as signal to infer products’ quality directly without considering
 Sthapit et al., Impact of product-related and social factors ..... | 121

other attribute information thus affecting the purchase intention. Country image
is consumers’ general perceptions of quality for products made in a given
country (Han, 1989). This signalling effect of country of origin can be classified as
halo and summary constructs (Erickson et al., 1984). For halo effect, consumers
infer product quality from country image and country image directly affects con-
sumers’ belief of product attributes, thus indirectly influencing the overall
product evaluation through these beliefs (Erickson & Johansson, 1985; Han,
1989). For summary construct, consumers organize country-specific information
by generalizing the product information about brands with the same country of
origin to such an extent that the brands are perceived to have similar attributes
(Han, 1989). As Concluded by Maheswaran (1994), COO is used in product
evaluation as a stereotyping process that allows consumers to predict the
likelihood of a product manufactured in a certain country having certain features.

2.5 Product Features

Feature is a characteristic of a product or service to meet the satisfaction level of

consumers’ needs and wants, which comes with the ownership of the product,
usage, and utilization of the product; and smart-phone features includes
hardware and software (Lay-Yee, et al., 2013). Smart-phone feature is the most
important factor affecting the consumer purchase decision (Osman, et al., 2011).

2.6 Social Influences

In the context of virtual community, social influence has direct impact on

purchase intentions on the product/service promoted in the community (Bickart
& Schindler, 2001). The concept of customer intention is dominantly based on the
‘Theory of Reasoned Action (TRA)’, which accounted for social influence effects
on intentions by the inclusion of the subjective norm concept (Fishbein & Ajzen,
1975).The notion that humans are influenced by the choices, behaviors and also
belief of others has become nearly obvious across the social sciences and has been
summarized in multiple terms like social influence; social proof; peer pressure;
bandwagon effects; conformity; herding (Cialdini & Goldstein, 2004).

The impact of social influence has been demonstrated in countless

domains, including littering (Cialdini et al., 1990), voting (Gerber et al., 2008),
donating to charities (Reingen, 1982), expressing prejudice (Apfelbaum, et al., 2008),
122 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

choosing jobs (Higgins, 2001), investing in the stock market (Hong, et al., 2004), and to
adoption and rejection of consumer products (Berger & Heath, 2007).

Social influence functions by directing the information processing of the buyers

to focus on a relevant set of information involving reality, relations with others, and the self
(Asch, 1951). Asch (1951) further stated that social influence brings changes in the mean-
ing, especially by applying the values and ideologies shared with self-relevant social
groups and thus alters the social meaning of consumption and purchasing decisions.

2.7 Compatibility

Compatibility is an important concept in the market with high level of demand

externalities and fluctuating purchase intention of the customers (Gatignon &
Robertson, 1991). In the case of technical products like smart-phones compatibility
is an important factor influencing the customers’ perception and purchase inten-
sion (Kaushal & Kumar, 2017). A compatible product enables customers to design
their lifestyle closer to their expectation and preferences (Farrell & Saloner, 1985).

2.8 Review of Related Studies

In regard to purchase intention of smart-phones and purchase behaviour, research

done by Coelho et al. (2013) validated that the intention of a consumer to pur-
chase a private label smart-phone positively influences the consumer’s purchase
decision, thus validating the significance of purchase intention. While in concern
to price, quality, country of origin, product feature, social influence, compatibility
and smart-phone purchase intention of the buyers, there are several researches that
indicate positive relationship between these variables individually or in a group.

Chow et al., (2012) in the Malaysian context found that Price, Com-
patibility and Social Influence had positive impact on the buyers Purchase
Intention of smart-phones, while Relative Advantage had negative impact.
Similarly, Lay, et al., (2013) found significant relationship between the independ-
ent variables: price concern, product feature concern and social influence concern
with smart-phone purchase decision of Generation-Y in the Malaysian context.
 Sthapit et al., Impact of product-related and social factors ..... | 123

Further, Juwaheer et al. (2013) in Mauritian context revealed that young

customers identified pricing as a key determinant while selecting mobile phones
and further unveiled that mobile phone features and young consumers’ lifestyle
had significant impact on mobile phone selection.

Another Malaysian study by Ibrahim, et al., (2013) analyzed the antecedents

that shaped the consumers’ purchase intention of smart-phone expressed similar
viewpoint as the above-mentioned research works in regard to the influence of social
influence on purchase intention of smart-phone buyers. The study posited that social
influence significantly would influence smart-phone purchase intention of young
adults. However, the same research showed that relative advantage, price and compat-
ibility were insignificant towards their purchase intention. Social influence makes
higher impact than such other factors as relative advantage, price, and compatibility in
attracting young people to make a purchase of smart-phones (Ibrahim et al., 2013).

In addition, a Pakistani study by Arif and Aslam (2014) found significant

relationships existing between the independent variables (viz., social influence, so-
cial need and convenience), and purchase behaviour (dependent variable). Social
need, social influence and convenience were used to assess students’ dependence
on smart-phone and purchase behaviour was measured by taking students' de-
pendence as independent variable (Arif & Aslam, 2014). In concern to Perceived
Quality and Purchase Intention of Smart-phones, research conducted by Naing
and Chaipoopirutana (2014) in Myanmar pointed out that these variables had
moderate positive relationship between them and indicated that perceived quality
is one of the major influencing factors for consumers’ smart-phone selection pro-
cess. A higher perceived quality of the smart-phones means that the buyers’ pur-
chase intention of that product is also higher (Naing & Chaipoopirutana, 2014).

In relation to country of origin (COO) and purchase intention research

done in the Iranian context by Hanzaee and Khosrozadeh (2011) showed that
COO had a significantly positive impact on purchase intention. If a country of
origin image is positive, marketers should take advantage of it and include the
features of COO image in their advertising strategies (Hanzaee & Khosrozadeh,
2011). Similar conclusion was reached by other Iranian researchers Ghalandari
and Norouzi (2012), while studying the role of product knowledge on the
124 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

relationship between COO and purchase intention of mobile phones. Among 154
Korean respondents, Chen and Kang (2012) tried to understand the perspective
regarding ethnocentrism, brand country of origin image, perceived quality and
purchase intention of smart-phone brands, and concluded that the level of brand
country of origin image had a significant effect on the purchase intention, apart
from the perceived product quality significantly mediating the relationships
between these two variables.

In addition, researchers also related product feature of the smart-phone

with its purchase intention and purchase demand of the smart-phones. According
to Chow et al. (2012); who studied the factors affecting the demand of the
smart-phone among young adult, product feature is one of the factors that affect
the demand of the smart-phone. Similarly, research done by Chow et al. (2012)
stated that the operating system of the smart-phone is an important feature
influencing the buyers’ purchase intention of the smart-phone and further stated
that the operating system enabled to attract consumers to switch their phones
from traditional mobile phones to smart-phone.

Further, Kaushal and Kumar (2017) in the Indian context found that
among the independent variables: compatibility, dependency, social influence,
relative advantage, convenience, product feature, price and brand name, only
compatibility, dependency and social influence were significantly affecting the
buyers’ intention to purchase smart-phones.

Similarly, Haba et al., (2017) studied the factors leading to consumer

perceived value of smart-phones and its impact on purchase intention of working
professionals in Malaysian capital of Quala Lumpur by applying confirmatory
factor analysis (CFA) and structural equation modelling (SEM) path analysis. The
Malaysian study reported that social value and perceived ease of use had no effect
on smart-phone purchase intention among Malaysian, but perceived usefulness,
economic value and brand image had an indirect effect on smart-phone purchase
intention. It is, therefore, relevant to investigate the factors affecting the purchase
intention of smart-phone buyers in Nepalese capital city of Kathmandu.
 Sthapit et al., Impact of product-related and social factors ..... | 125

3. Hypothesis Formulation and Theoretical Framework

Based on the literature review the following hypotheses are derived:
(i) There is no significant positive relationship between price and purchase
intention of smart-phone buyers in Nepal;
(ii) There is no significant positive relationship between perceived quality and
purchase intention of smart-phone buyers in Nepal;
(iii) There is no significant positive relationship between country of origin and
purchase intention of smart-phone buyers in Nepal;
(iv) There is no significant positive relationship between product feature and
purchase intention of smart-phone buyers in Nepal;
(v) There is no significant positive relationship between social influence and
purchase intention of smart-phone buyers in Nepal; and
(vi) There is no significant positive relationship between compatibility and
purchase intention of smart-phone buyers in Nepal;

In compliance with the literature review and the corresponding

hypotheses formulated, a conceptual framework is constructed as shown in
Figure-1.

Figure 1: Theoretical framework of the research

Price

Quality

Country of Origin Purchase Intention

Product Feature

Social Influence

Compatibility

4. Study Methodology
The present study used primary data collection method and a descriptive causal
comparative research design to determine the relationship between the
dependent and the independent variables. The primary data were collected using
126 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

a five-point Likert scale survey questionnaire. The survey questionnaire was

devised on the basis of the works of Boulding and Kirmani (1993); Rao et al.
(1999); Ailwadi et al. (2001); Shirin and Kambiz (2011); and Chew et al., (2012).
The questionnaire was distributed to the students of seven graduate
business schools inside the Nepali capital Valley of Kathmandu. There are more
than 100 graduate business schools operating inside the Kathmandu Valley, and
their students are one of the heaviest user groups of smart-phones in Nepal (NTA,
2016), and have been adjudged as a user group to provide credible response on
smart-phone purchase behaviours in Nepal. Hence, a judgemental sampling
method was adopted to sample the graduate students to measure their purchase
intention of smart-phones. The total number of students in the sampled colleges
was 2,200 students in the graduate level, which represents the total population of
the present study. Considering the known population, a sample size of minimum
333 was determined using the formula of Yamane (1967) at 5 per cent margin of
error. Out of the 351 questionnaires distributed, 340 were found to be complete
and usable; it posted a successful response rate of 96.86 per cent: it has been taken
as satisfactory for having no room for non-response bias.

Table 1: Reliability test: cronbach’s alpha of scale items

Variables No. of items Cronbach’s alpha
1. Price 5 0.798
2. Quality 4 0.889
3. Country of Origin 4 0.870
4. Product Features 4 0.916
5. Social Influence 4 0.902
6. Compatibility 3 0.835
7. Purchase Intention 5 0.902
Source: Authors’ Calculations (2018).

With the Cronbach’s alpha value ranging from 0.689 to 0.916 (Table-1), all
the items on the questionnaire-scales have been inferred as reliable, since the
coefficient (calculated value) of Cronbach’s alpha greater than 0.60 is usually
taken as indicative of reliability. Hair, Black, Babin, Anderson, and Tatham (2009)
recommended that the lower limit for Cronbach’s alpha be 0.70. The study
analysed the data using correlation and regression analyses.
 Sthapit et al., Impact of product-related and social factors ..... | 127

5. Data Analysis and Findings

The study analysed the relationship between the independent variables: price,
product quality, country of origin, product feature and social influence, and the
dependent variable: purchase intention in relation to the smart-phones in case of
Nepal. The primary data collected using a 5-point Likert scale survey
questionnaire was analysed using correlation and the regression analyses. The
following section presents the results of the correlation and regression analyses.

6.1 Correlation Analysis

Table-2 shows the correlations between the independent variables (namely, Price,
Perceived Quality, Country of Origin, Product Feature, Social Influence and
Compatibility), with the dependent variable of Purchase Intention of
smart-phone buyers.

It evinces that all the independent variables have significant positive

relationship with dependent variable at significance level of 0.01. All the
correlations between the independent variables are less than 0.9. It indicates that
the possibility of multi-collinearity is negligible. The range of correlation
coefficient between the independent variable and the dependent variable varies
with the value of 0.399 and 0.720. Compatibility, Social Influence and Product
Features have higher correlation coefficients with the smart-phone purchase
intention of the buyers with correlation coefficients values 0.720, 0.612 and 0.565
respectively.

Table 2: Correlation coefficients between the independent and dependent

variables
Variables 1 2 3 4 5 6 7
1. Price 1
2. Quality 0.694** 1
3. Country of Origin 0.384** 0.353** 1
4. Product Feature 0.577** 0.760** 0.337** 1
5. Social Influence 0.528** 0.422** 0.450** 0.568** 1
6. Compatibility 0.447** 0.490** 0.365** 0.633** 0.558** 1
7. Purchase Intention 0.433** 0.421** 0.399** 0.565** 0.612** 0.720** 1
Source: Authors’ Calculations (2018).
**. Correlation significant at the 0.01 level (2-tailed)
128 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

Therefore, buyers are more likely to purchase smart-phones if they are:

compatible with their lifestyles, comply with the suggestions and recommendations
from their social sphere and, if the smart-phone has more features. The remaining
variables, however, have smaller values of correlation coefficients with the
dependent variable indicating that their co-movements are weak.

6.2 Regression Analysis

The regression model fit well with the data when performing a regression
of product based and social factors (six variables) with the purchase intention [F =
80.255, p < .05 as shown in Table 3]. Similarly, the value of adjusted R2, the
coefficient of determination, figuring 0.584 indicates that the independent variables
taken for the study explain to the tune of 58.4 per cent of variations in the
dependent variable smart-phone purchase intention of the buyers as shown in
Table 3. The remaining 41.6 per cent of the variations in the dependent variable is
due to the influence of other variables not considered in the present study.
Further, as the p-values of the independent variables: compatibility, social
influence and product feature are greater than 2, the corresponding null
hypotheses related to these variables are rejected, and the hypotheses related to
remaining independent variables: price, quality, country of origin could not be
rejected.
Discussions: The findings can be related to previous literature works. The present
study has rejected the ‘price’ as a significant predictor of purchase intention of
smart-phone buyers: it has complied with the Malaysian study of Ibrahim et al.
(2013), but contradicted with two other Malaysian studies of Chow et al. (2012)
and Lay et al. (2013); and with the Mauritian study of Juwaheer et al. (2013).
However, the present study findings on product features, compatibility
and social influence is similar to the Malaysian studies of Chow et al. (2012) and
Lay et al. (2013); as well as with Mauritian study of Juwaheer et al. (2013).
Likewise, the present study is similar to the Malaysian study of Ibrahim, et al.
(2013) and Pakistani study of Arif and Aslam (2014), as far as the effect of social
influence in purchase intention of smart-phone buyers is concerned.
Further, the findings in relation to the ‘country of origin’ and perceived
quality are in contradiction with the Iranian study of Hanzaee and Khosrozadeh
(2011); and Korean study of Chen and Kang (2012); as well as a Myanmar study of
Naing and Chaipoopirutana (2014). As the relationship between ‘country of
 Sthapit et al., Impact of product-related and social factors ..... | 129

origin’ and purchase intention of mobile phone buyers is mediated by product

knowledge, in the buyers with low product knowledge, the effect of production
origin country on willingness (intention) to purchase mobile phones is more than
those with high one (Ghalandari & Norouzi, 2012).

Table 3: Regression analysis between the dependent and independent

variables
Multiple Regression
PI=β0+β1Pr+β2Qty+β3COO+β4PF+β5SI+β6Com+ε;
PI=0.374+0.026Pr+0.057Qty+0.122COO+0.068PF+ 0.214SI+ 0.551Com+ε
Multiple Regression Analysis
Coefficient
(Constant) 0.374
(0.034)
Factor 1: Price (Pr) 0.026
(0.616)
Factor 2: Quality (Qty) 0.057
(0.343)
Factor 3: Country of Origin (COO) 0.122
(0.073)
Factor 4: Product Features (PF) 0.068
(0.050)
Factor 5: Social Influence (SI) 0.214
(0.000)
Factor 6: Compatibility (Com) 0.551
(0.000)
F-Value 80.255
(0.000)
R2 0.591
Adjusted R2 0.584
Note: The numbers in the parentheses indicate p-values.

Unlike the product-related factors, social factors (comprising social

influence and compatibility) are statistically significant in the context of smart
phone purchase intention of Nepali buyers.
130 | The Sankalpa: International Journal of Management Decisions, Vol.4, Issue 1

The summary of hypotheses testing is presented in Table-4.

Table 4: Results of hypothesis testing

p-value
SN. Hypotheses (critical Status
value = 0.05)

1 There is no significant positive relationship between 0.616>0.05 Accepted

price and purchase intention of smart-phone buyers in
Nepal

2 There is no significant positive relationship between 0.343>0.05 Accepted

perceived quality and purchase intention of
smart-phone buyers in Nepal

3 There is no significant positive relationship between 0.073>0.05 Accepted

country of origin and purchase intention of
smart-phone buyers in Nepal

4 There is no significant positive relationship between 0.050≤0.05 Rejected

product features and purchase intention of
smart-phone buyers in Nepal

5 There is no significant positive relationship between 0.000<0.05 Rejected

social influence and purchase intention of smart-phone
buyers in Nepal

6 There is no significant positive relationship between 0.000<0.05 Rejected

compatibility and purchase intention of smart-phone
buyers in Nepal

Note: Based on calculations from Table 3

Table 4 consisting the hypothesis testing results indicates that the p-values
of the independent variables compatibility, social influence and product features
are less than the critical value of 0.05 at 5 per cent level of significance, indicating
that the null hypotheses corresponding to these variables, i.e., hypotheses 4, 5 and
6 are rejected; it denotes that these factors directly influence the Nepalese buyers’
intention to purchase smart-phones.

However, in relation to the factors of price, perceived quality and country

of origin, the respective p-values are greater than the critical value of 0.05 at 5 per
 Sthapit et al., Impact of product-related and social factors ..... | 131

cent, implying that there is lack of sufficient evidence to reject the corresponding
null hypotheses. Alternatively then, these hypotheses are accepted. It implies that
there is need for initiating further studies to better comprehend the influence of
these variables in the Nepalese context.

6. Conclusion and Implications

The present study indicates that Nepali buyers are more likely to purchase
smart-phones if they find attractive product features compatible with their needs
and social sphere. Further, the study suggests that price, quality and the country
of origin do not have much influence on the Nepali buyers’ intention to purchase
the smart-phones. The study underscores the smart-phone marketers’ need to
design their strategy considering the product features, compatibility with lifestyle
and social sphere desired by the buyers, while promoting their respective brands.
Further, it indicates that marketers could tap into social media marketing and
generate favourable word-of-mouth to promote their smart-phone brands and
generate positive purchase intention. The study thus highlights the importance of
social factors in influencing the purchase intention of electronic products like
smart-phones. Thus, future researchers could further extend the work on other
related social factors and make the study more inclusive apart from probing into
the mechanism of how the social factors influence the buyers’ purchase decision.

Notes
Exchange rate of NPR 110 for a unit of US dollars considered as of June 17, 2018.

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Biographic Note
Dr. Arhan Sthapit is Asst. Professor at Faculty of Management, Tribhuvan
University, Kathmandu, Nepal. He was educated in Nepal, India and USA in
Management and Journalism. With 22 years of industry experience, he specialises
in HRM and international business. He has been credited with publication of 27
research papers and 7 textbooks, and is involved in editing six research journals.

Dr. Wilaiporn Laohakosol is Lecturer at Shinawatra University, Bangkok,

Thailand. She has published a number of research papers in national and
international journals of repute. Her area of specialisation is management science,
and her research interest lies in strategic management and business. She can be
reached at wilaiporn.l@siu.ac.th.

Mr. Ayush Sharma is an MBA student at Shinawatra University, Bangkok,

Thailand. He can be reached at ayush.gci2015@gmail.com.

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