Chapter-1

INTRODUCTION TO
CONSUMER BEHAVIOR AND
MOBILE PHONES
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1.1 Introduction
Among the progress and growth of developed and developing
economies in the world,
India has become one of the fastest growing economies
throughout the world. Indian
economy has placed in the fourth position by the year 2050
according to Goldman
Sachs BRICS. One of the dazzling facts that grow India’s
economic cycle has been the
dynamism of the service sector.
The telecom sector and its services have been recognized as an
important tool for socio
economic development for a nation. Globalization,
Liberalization and Privatization are
the three Indian growth boosters. The growth of telecom sector
in the preliberalization
has been phenomenal. Indian service sector flooded
performance is the forwarded step
in the growing economies of the world. In the telecom sector
the significant role of
consumers can’t be undermined. The mobile phone market is
one of the vast areas to
study the technological revolution in the mobile sector escort
booming market for the
mobile phones.
The mobile phone sector in India has become very popular
nowadays. Its growth is so
prodigious that it has crossed most of the industries.
Undoubtedly, consumers have
made an indelible landmark on the economic landscape due to
their premeditated
importance in reengineering the products and services. There is
a significant impact of
consumer behavior on the strategic decisions made by the
mobile sector companies. In
technology driven businesses, understanding the voice of
consumers and their buying
patterns has emerged a tough challenge for the mobile
companies. The reason for the
growth of this sector is consumer involvement as human being
spends most of his time
in interacting with others. In modern business scenario
consumers are considered as the
inception point and the last corner of marketing activities. In
the era of diversified
competition where customer is the king, success depends not
only on the efficiency of
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the managers in delivering what they have promised but at the
same time responsibility
lies on the organization to develop such an harmonious
atmosphere and culture within
the organization where value for the services are provided and
quality services could be
offered to achieve the higher level motivational need of
customer satisfaction. An
organization has to synchronize all its activities towards the
enhancement and
achievement of satisfaction of the consumer at every stage. For
achieving customer
satisfaction, understanding of dynamic consumer behavior is
essential. Understanding
the consumer behavior is the most prominent topic to
understand by the marketers so as
to frame marketing strategies for customer satisfaction. India
being a developing
market and being a nation of diverse cultures and traditions it
becomes mandatory for
mobile companies to have a deep understanding of buying
behavior of consumer and
buying patterns of mobile phones by Indian consumers. With
the advent of
globalization and the sequel changes in the country many
mobile companies have
started making a foray into Indian mobile market due to its sky-
scraping potential. As a
result of tremendous growth in mobile sector, mobile
penetration in the mobile market
has overshadowed all other means of communication.
1.1.1 Customer and Consumer
Study of consumer behavior has emerged as an applied
discipline. Marketers have to
deal with two inseparable market participants – Customers and
Consumers.
A customer is also called a client, a buyer, a shopper or
immediate purchaser or final
user of the product. The term ‘customer’ is typically used to
refer to one who regularly
purchase a product from a particular store or company but he
may not be the actual
consumer of a product. A customer can also be a wise searcher
of the product or service
that is going to be sold in spite of deciding to buy or not to buy
them. Customers will
buy a product only if consumer has demand for that product.
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A consumer is an individual who pays to consume the goods or
services produced by a
seller. The consumer engages in any of the following activities;

Evaluating of goods and services

Acquisition of goods and services

Using of goods and services

Disposing of goods and services

A consumer firstly determines his wants then buys a product

and uses it further for
personal use or organizational use. Consumer can be
categorized into two categories:
Figure 1.1: Categorization of consumers
Personal consumer purchases goods for the personal use.
Organizational consumer
buys product and services in order to run their own business.
(Hippel 2005) observed that the role of consumer has not been
remained restricted to
passive recipient of product but also has emerged as an active
participant in production.
1.2 Consumer Behavior and Buyer Behavior
Consumer behavior reflects the totality of consumer’s decision
for acquiring,
consuming and disposing of goods, services, time and ideas.
Consumer behavior is a
decision making process as well as mental and physical activity
in which an individual
engages in evaluating, acquiring, using or disposing of goods
and services. Consumer
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behavior is “the study of individuals, groups or organizations
and the processes they
use to select, secure, use and dispose of products, services or
ideas to satisfy needs and
the impacts that these processes have on the consumer and
society".
Consumer Behavior is a branch which deals with the various
stages a consumer goes
through before purchasing products or services for his end use.
Buyer Behavior is the
study of decision making units as they buy goods for
themselves or others. Thus,
buying behavior particularly involves collective response of
buyers for selecting,
evaluating, deciding purchasing and post purchasing behavior.
Buyer behavior is the
study of human response to services and marketing of products
and services. Buyer
behavior is broadly defined by various scholars and researchers
as:

It is the behavior displayed by the consumers during the

acquisition,
use and disposition of products, services, time and ideas by
decision making
units.

It is the body of knowledge which studies various aspects of

purchase and
consumption of products and services by individuals with
various social and
psychological variables.
 The process and activities people engages in when searching
for, selecting,
purchasing, using, evaluating and disposing of products and
services so as to
satisfy their needs and desires.
Consumer behavior has been defined by various psychologists
are:
The study of consumer behavior deals with the decision making
process and
physical activity an individuals engages in when evaluating,
acquiring, using or
disposing of goods and services (Loudon and Bitta, 2002). It is
concerned to
understand an individual’s buying and consuming activities. It
involves the study of
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organizing acquired information and its application in making
buying decision. But it
becomes difficult to understand the selection criteria of various
products in case of rural
consumers. Consumer behavior is affected by perceptions,
cultural forces and social
factors. (Sternthal and Craig, 1982). Consumer behavior is
concerned about the
processes that are involved when people select, decide to
purchase and use products,
services or experiences in order to satisfy needs and wants.
Consumer behavior has two
aspects: the final purchase activity which is visible to us and the
decision process which
may involve the interplay of a number of complex variables not
visible to us. In fact
purchase behavior is the end result of a long process of
consumer decision-making. The
study involves what consumer buy, why they buy it, how they
buy it, when they buy it,
where they buy it, how frequently they buy it and how they
dispose of the product after
its use (Solomon, et al. 2002). Consumer behavior deals with
the study of behavior that
consumers display in searching for, purchasing, using,
evaluating, and disposing of
products and services that they expect will satisfy their needs
(Schiffman and Kanuk,
2007). Consumer behavior is the field of study of actions a
person takes in purchasing
and using product and services including the mental and social
process that precede and
follow these actions. It involves the study of what people
consume, where, how often
and under what condition these goods and services are
consumed (Berkowitz et al.
1990). Consumer behavior is concerned with the mental and
emotional processes and
the observable behavior of consumers during searching for,
purchasing and post
consumption of a product or service (Engel, et al. 1990). Buying
Behavior is the
decision processes and acts of people involved in buying and
using products. Consumer
behavior is all about purchase related activities, thought and
influences that occur
before, during and after the purchase itself as performed by
buyers and consumers of
products and services and those who influence the purchase.
According to the
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American Marketing Association, Consumer behavior is “the
dynamic interaction of
affect and cognition, behavior and environmental events by
which human beings
conduct the exchange aspects of their lives.” Consumer
behavior covers all the grounds
that are related to the selection of a product or service, buying
and then consumption of
the goods or services (Kotler, 2002). Consumer behavior is
perceived as the study of
the individuals or the groups of the individuals when they think
about the selection of
the product or service. Then it is the purchase and finally
consumes in order to satisfy
the needs and wishes (Perner, 2001). Consumers play a vital
role at various levels of
economy-local, national and international. The individual buys
good and services for
his own and household use both for family members and for
others. What consumers
buy? What consumers think about product and services? How
consumers make
decision? How and how much consumers spend? What
consumers do in leisure time?
Marketing professionals want to know the answers to these
questions. They know that
once they do have those answers, they will have a much better
chance of creating and
communicating about products that a consumer likes to buy.
Marketers need to
understand the group and personal influences that affects
consumer buying decisions on
overall society and how these decisions are made. Marketers
not only need to know the
choices of consumers but also at the same time they need to
know the voice of their
target audiences.
Consumer behavior is defined as “the process and activities
that people engage in when
searching for, selecting, purchasing, using, evaluating, and
disposing of products and
services so as to satisfy their needs and desires” (Belch and
Belch, 1993). It is the only
consumer who consumes goods and services in the market. The
attraction point for
every marketer is consumer. To study consumer marketers are
always ready to
understand various aspects of marketing in order to satisfy
them. Consumer behavior is
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elaborated as the dynamic interaction of affect and cognition,
behavior, and
environmental events by which human beings conduct the
exchange aspects of their
lives (Anon, 2004). The study of consumer behavior deals with
individuals, groups or
organizations and the processes they use to select, secure, use,
and dispose of products,
services, experience (Hawkins, Best and Coney, 2004).
1.3 Consumer Behavior: An Emerging Field of Study
Consumer behavior is a branch which deals with various stages
a consumer goes
through before purchasing products for his end uses. Consumer
behavior has become
an integral part of strategic market planning. Consumer
behavior should be the main
focus of every stage of the firm’s marketing activities.
(Blackwell et al, 2007).
Consumer plays a very crucial role as they are the ones who
finally buy goods and
services of the firm and the firm always makes influential
efforts to attract them
towards its goods and services to earn revenue and enhance
profitability. It has different
point of views:
 Product Mix - Products of an extreme range of attributes

Price Mix - Wide range of cost and payment choices

Place Mix – Place of order (door step or anywhere else)

Promotion Mix – Various sources of advertising and

promotion
1.3.1 Consumer Behavior from Marketers point of view
Today’s customer is more educated, informed, knowledgeable
and highly demanding.
The marketer’s main aim is to convince them to buy their
products. The global
marketplace is a study of diversity among consumers,
producers, marketers, retailers,
advertising media, cultures and customs and of course the
individual or psychological
behavior. The study of consumer behavior is also very
important to the marketers
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because it enables them to understand and predict buying
behavior of consumers in the
marketplace.
Consumer research is the methodology used to study consumer
behavior; it takes place
at every phase of the buying process. It starts before the
purchase of a product
continues during the purchase and even after the purchase.
Researchers viewed two
different buyers buying the same product for different reasons,
paid different prices,
used in different ways and have different emotional
attachments towards the things.
The market strategies are framed and reframed again and again
to achieve
organizational objectives by knowing and influencing their
consumers. Therefore, the
knowledge and information about consumers is critical for
making successful
marketing strategies. The relationship between consumer
buying behavior and
marketing strategy must be consistent to attain organizational
objectives.
Consumer behavior is interdisciplinary approach based on
concepts and theories about
people that have developed by behavioral scientists,
philosophers and researchers in
diverse disciplines of psychology, sociology, social psychology,
cultural anthropology
and economics. The study of consumer behavior also helps
management to understand
consumer needs to recognize the potential of consumer in lieu
of new technology and to
articulate new things in term of the consumers needs so that
products will be
universally accepted in the market well.
1.4 Consumer Decision Making
In today’s competitive business scenario companies are not
only curious to explore the
change in tastes and preferences of consumers but they also try
to decode the influential
sources of information of consumers. Source of information
plays an influential role in
deciding consumer’s decision. The consumer decision making
process involves number
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of related and correlated stages of activities. The decision
making process begins with
the identification and recognition of an unsatisfied need or
want. It then transforms into
drive. Consumer enhances his product knowledge from various
sources of information.
This search converts into total information about various
alternatives and finally
choosing the best one among all. Then buyer evaluates the post
purchase behavior to
know the level of satisfaction. A consumer generally passes
through various stages in
decision making process.
These are presenting in a flow-chart format.
Figure 1.2: Consumer Decision Making Process
(Source: Nicosia, 1966; Engel et al., in 1995)
 Problem Recognition - Problem recognition stage is the first
stage of
consumer decision making process. Consumer recognizes need
for the product.
The need recognition is the first and most important step in the
buying
process. If there is no need, there is no purchase. This
recognition happens when
there is a lag between the consumer’s actual situation and the
ideal and desired
one.
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Information Search - Once the need is identified then the

consumer seeks
information about possible solutions to the problem. Consumer
will search more
or less information depending on the complexity of the choices
to be made.

Evaluation of Alternatives - After recognizing need and

searching information
about the desired product consumers become crystal clear
about various
requirements they want in their products. The consumer will
then use the
information previously collected to establish a set of evaluation
criteria,
desirable or wanted features, classify the different products
available and
evaluate which alternative has the most chance to satisfy him.
In order to do so,
he will evaluate their attributes. Consumers search for various
available
alternatives in the product range is evaluated the alternatives
on various criteria.

Purchase Decision – Purchasing a particular product or not

also depends upon
the information collected in this stage. A consumer makes up
his mind on the
products, store and payment options. The consumer has
evaluated the different
solutions and products available for respond to his need, a
consumer is now able
to choose the product or brand that seems most appropriate to
his needs. Then
actual purchase can be taken.

Post-Purchase Evaluation – The satisfaction level of

consumers from the
performance of product is evaluated in this stage. The
consumer determines
their satisfaction level with the purchasing outcome. Once the
product is purchased and
used, the consumer will evaluate the adequacy with his original
needs and whether the
right choice has been made in buying this product or not. A
consumer is able to feel a
sense of satisfaction or dissatisfaction for the product in this
stage.
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1.5 Consumer Behavior in the Marketing Context
A market is, “An aggregate of people who as an individuals or
organizations, have
needs for products in a product class and who have the ability,
willingness and
authority to purchase such products”. The aim of marketing is
to meet and satisfy target
customer needs and wants. Studying consumer behavior
provides knowledge to
marketers in the introduction stage of product and further
improving products or
services, fixing their prices, making messages and developing
other marketing
activities. Marketers are always looking for emerging trends in
marketing field. In the
introduction stage of consumer behavior, it is indispensable to
understand the consumer
behavior in all in relation to marketing.
The main concern was to improve the production capabilities in
the firms. In this era,
consumers are satisfied to get a generic form of a product; they
had least interest in the
variety of the products. So, neither the consumer nor the
manufacturer concentrates on
the product differentiation. The focus in this time duration is to
sell what is produced.
The main concern was to sell the additional products being
produced. In this phase
supply exceeded demand in the production so motive is to sell
the products produced in
the manufacturing concerns.
In the marketing orientation time, the focus was to know more
about the consumer’s
needs and preferences. Due to growing interest of the
consumers in the products and
services, companies shifted from the sales orientation to
marketing orientation.
Consumer’s preferences were taken as first priority by the
manufacturers rather than
focusing more on the production or selling of products. Once a
marketer identifies an
unfulfilled need, or partially fulfilled one, he has an opportunity
to exploit. To this end
he has to determine the appropriate marketing mix. The
marketer has to judge the
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consumer behavior constantly so as to market their products at
the right time. In a broad
sense all the markets can be divided into two categories:
seller’s market and buyer’s
market. In a number of consumer product categories,
advertising or other
communication strategies are given a lot of importance in the
formulation of brand
strategy.
The basic belief of marketing-oriented company is that the
customer is the attraction
point around whom the business revolves. Therefore,
understanding about people in
general and what makes a customer happy is a vital part of
business success. Market in
today’s world itself means – meeting customer needs and
delighting customers. It is the
only customer around whom all the marketing strategies are
formulated and
implemented. In order to meet competition at the market
place, the marketing managers
are using various methods to add value to the final product
which will reach in the
hands of the consumers. Marketing as an ever changing
environment and due to the
growing concern or awareness among marketers to go for a
careful study of the
consumer behavior around which all marketing activities are
made.
1.5.1 Different Types of Consumer Buying Roles
Consumer buying behavior refers to the buying behavior of
final consumers.
Consumers make various decisions regarding purchases that
depend on the direct
communication with the marketers. Consumers of different
products coming from
different age-groups, different social - cultural backgrounds and
from different
geographical locations behave differently while making
selection. Consumer behavior
has termed as nomenclature for the pattern of actions for
decision-making that the
consumers employ while making a purchase.
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The five main buying roles are as follows:
Figure 1.3: Buying role of consumers

Initiator – The person who decides to start the buying

process.

Influencer – The person who tries to convince others to

purchase the product.

Decider – The person who makes the final decision of

purchase.

Buyer – The person who is going to buy the product directly

from the shop.

User – The person who uses a product.

1.6 Factors Influencing Consumer Behavior

Consumer buying characteristics affect buying behavior as
consumer purchases are
influenced strongly by cultural, social, personal, psychological
characteristics.
Whenever a consumer buys anything from the market, final
decision is affected by
various factors like:

Cultural

Social

Personal

Psychological

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The first stage of understanding buyer behavior is to focus on
the factors that determine
the “buyer characteristics” in the “black box”. The marketer
must be aware of these
factors to develop an appropriate marketing mix and strategies
for its target market.
Figure 1.4: Factors Influencing Consumer Behavior
1. Cultural Factors
Consumer behavior is deeply influenced by cultural factors such
as buyer’s culture,
subculture and social class.

Culture – It is the part of every society and is the important

cause of person
wants and behavior. The influence of culture on buying
behavior varies from
region to region.

Subculture - Each culture contains different subcultures such

as religions,
nationalities, geographic regions, racial groups etc. Marketers
can use these
groups by segmenting the market into various small portions.

Social Class - People from different social classes tend to have

different desires
and consumption patterns. Disparities resulting from the
difference in their
purchasing power. According to some researchers, behavior
and buying habits
would also be a way of identification and belonging to its social
class.In this
way marketing activities could be tailored according to
different social classes.
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2. Social Factors
Social factors impact the buying behavior of consumers. The
important social factors
are: reference groups, family, role and status.

Reference Groups - Reference groups have potential in

forming a person
attitude or behavior. The impact of reference groups varies
across products and
brands.

Family - Buyer behavior is strongly influenced by the

members of a family.
Therefore marketers are trying to find the roles and influence
of the husband,
wife and children. If the buying decision of a particular product
is influenced by
wife then the marketers will try to target the women in their
advertisement.

Roles and Status - Each person possesses different roles and

status in the society
depending upon the groups, clubs, family, organization etc. to
which he
belongs. For example a woman is working in an organization as
a finance
manager. At the same time, she is playing two roles
simultaneously: role of a
finance manager as well as role of a mother.
3. Personal Factors
Personal factors can also affect the consumer behavior. Some
of the important personal
factors that influence the buying behavior are: lifestyle,
economic situation, occupation,
age, personality and self concept.

Age - Age and life-cycle have potential impact on the

consumer buying
behavior. It is obvious that the consumer’s taste and
preferences about goods
and services changes with the passage of time. Family life-cycle
consists of
different stages such young singles, married couples, unmarried
couples etc.
which help marketers to develop appropriate products for each
stage.
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Occupation - The occupation of a person has significant

impact on the buying
behavior of consumer. For example a marketing manager of an
organization
will try to purchase business suits, whereas a low level worker
in the same
organization will purchase rugged work clothes.

Economic Situation - Consumer’s economic situation has

great influence on his
buying behavior. If the income of a customer is high then
choice of more
expensive products will be there and a person with low income
will purchase
inexpensive products.

Lifestyle - Lifestyle of customers is another import factor

affecting the
consumer buying behavior. Lifestyle refers to the way a person
lives in a society
and purchases the things according to his surroundings.

Personality - Personality changes from person to person, time

to time and place
to place. It also has a great influence on the buying behavior of
customers.
Personality is the totality of characteristics of a man.
4. Psychological Factors
There are four important psychological factors affecting the
consumer buying behavior.
These are perception, motivation, learning, beliefs and
attitudes.

Motivation - The level of motivation affects the buying

behavior of customers.
Every person has different needs such as physiological needs,
biological needs,
social needs etc.

Perception - Selecting, organizing and interpreting

information in a way to
produce a meaningful experience of the world is called
perception. There are
three different perceptual processes which are selective
attention, selective
distortion and selective retention.
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Beliefs and Attitudes - Customer possesses specific beliefs

and attitudes toward
various products. Since such beliefs and attitudes make up
brand image and
affect consumer buying behavior therefore marketers are
interested in them. All
these factors combine to perform a comprehensive model of
consumer behavior
that reflects consumer decision making process. The major
factors and the
process of decision-making shape the behavior and preferences
of consumer
behavior.
1.7 Consumer Behavior in Mobile Phones
India is the second largest consumer market in the world. The
Indian consumer profile
has been changed in terms of education, income, age, gender,
occupation and reference
groups. There is a shift in consumer brand preferences for daily
need products to high
end technologies with the explosion of technology. The
consumer buying preferences
are rapidly changing and this result to change in the consumer
behavior for a product.
Products that were previously considered luxury items have
become a necessity
because of the changing lifestyle and rising income levels. In
today’s era of
communication, the traditional ways of conveying messages
through post and mails
have replaced by e-mails and mobile phones. Use of mobile
phone does not remain
restricted to higher class but it has become an integral part of
lower and below poverty
line class. Study of consumer behavior in mobile phone industry
has emerged as an
interested area for researchers. The growth of mobile phone
sector in India has become
so stupendous that it has surpassed most of the other
industries. The reason behind its
rapid growth is the change in life style of consumers and in
technology and innovation.
Today every human being wants to remain in touch with others
all the time and at any
cost. Mobile phones have emerged as the most effective
communication source as a
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result of this, penetration of mobiles in the segment has
overshadowed all other means
of communication. Frequent changes and challenges in the
mobile phone industry have
been made on regular basis. The penetration of mobile phone
handsets and the diffusion
of mobile technologies have dramatically increasing in recent
years. Although a mobile
phone was initially designed for voice communication, its
functionalities have
increasingly expanded to perform various tasks and fulfill
different purposes such as
listening to mp3 music, playing WAP games, watching video.
Mobile phones can be
used for a list of m - commerce services (Anckar and D'Incau,
2002). Based on
previous studies the use of a mobile phone can be categorized
into four main
categories: communication-oriented (sending or receiving e-
mail etc.), entertainmentoriented
(listening to music, playing a game, and watching a movie clip
etc.) personal
information-oriented (using personal organizer, alarm clock,
and office applications
etc.) and commercial transaction-oriented (checking bank
account, doing shopping, and
paying bills etc.) (Sheng and Nah, 2004). The mobile phone
market has become
broader within the last three to five years due to more
affordable mobile phones along
with lower service costs. This market is very competitive as it
offers the same products
and services with different features and different costs in the
phones which buyers have
choices to choose from. Effective marketing strategies always
start with “a thorough
understanding of how and why consumers behave as they do”
(Merenski, 1998).
Specifically, in order to find out solutions to customer needs
and desires, the marketer
requires a thorough knowledge of buyer motivations and
decision-making processes
along with all the environmental and other factors that also
have an influence upon
them.
To tailor various strategies that suit the consumer, marketers
must find out the solutions
to the following questions:
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Why does the customer want to buy a particular product or

service?

How will he or she decide which option to purchase?

What factors influence his decision?

Consumer behavior is all about purchase related activities,

thought and influences that
occur before, during and after the purchase itself as performed
by buyers and
consumers of products and services and those who influence
the purchase. Consumer is
he who really consumes or uses the product. Consumer
behavior refers to the mental
and emotional process and the observable behavior of the
consumers during searching,
purchasing and post consumption of a product or service.
Mobile industry has become
very competitive by introducing innovative products at lower
cost.
It radically changes the standard of living of people. It is well
perceived fact that
consumer behavior has become the important factor of
business success. However
many conclusions have drawn with regard to marketing
strategy. But there are very few
studies related with marketing strategy in mobile sector with
special reference to India.
In Indian mobile sector mobile telephony is called as “sun-rise
industry’’.
The main factors of more competition are:

Customers want better services and products at a lower cost.

A number of functions in just one mobile phone: E-mail, text

messaging,
internet surfing, 3D, wifi, gaming, Mp3, Mp4.

New technology improvement in mobile phones as 4D

technology in smart
phones.

Better network services

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According to ibef.org report; Mobile phone services have
recognized the world over as
an important tool for socio-economic development of a nation.
India is currently the
world’s second-largest telecommunications market and has
registered exceptional
growth in the past few years. The reasons for growth of the
telecom sector in India are
reform measures by the Government of India, active
participation of the private sector
and wireless technology. With the intense competition
operators need to work closely
with mobile handset makers and software developers to match
their handset portfolios
according to consumer’s desires and needs. The increasing
availability and rapid take
up of sophisticated connected devices is changing the way of
our lives and
communication. The convergence of mobile phones broadcast
and internet markets has
created a burden of choice for consumers – the choice to
consume more than ever
before, anywhere, anytime and anyhow. This study of
consumer behavior deals with
deeper understanding of consumption patterns and behavior of
consumer for mobiles.
The scope of consumer behavior includes not only the actual
buyer but also the various
roles played by different individuals. In recent year, adoption of
mobile phone has
exceptionally rapid in many parts of the world and especially in
India. The Indian
telecommunications market is characterized by a large number
of national and
international mobile players. The mobile industry has become
more competitive. It is
necessary to identify the consumer attitude and behavior
towards product. Exchange of
information becomes the necessity of life to a common man.
Consumer purchase
behavior for mobile phone and its influence in the decision –
making of its purchase is
more complex. For this, there is a need to do a comprehensive
detailed study to
understand consumer behavior towards mobile phone.
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1.8 Mobile Sector
Mobile phones have become as common as televisions.
Phenomenal adoption of
mobiles across the globe has increased due to rise in digital
mobility and connectivity.
The market size of mobiles has exponentially increased globally.
Indian market does
not remain untouched from this phenomenon. With
independence all foreign
telecommunication companies were nationalized to form Post,
Telephone and
Telegraph, a monopoly run by the Government of India. The
Indian mobile sector like
most other infrastructure sectors has controlled by the state.
The Department of
Telecommunications (DoT) is the key body for policy issues and
regulations apart from
being a basic service provider to rest of country. Fully
automatic mobile networks
were first introduced in the early to mid-1980s (the 1G
generations). Until the early
1990s, most mobile phones were too large to be carried in a
pocket so they were
usually permanently installed in vehicles as car phones. With
the advance of
miniaturization and smaller digital components, mobile phones
got smaller and lighter.
In current scenario, daily activities have been revolutionized by
the mobiles. It has
become central part of everyday life.
1.8.1 Leading Mobile Service Providers
The first mobile service operator in India was the state-owned
incumbent BSNL.
Subsequently after the telecommunication policies were
revised to allow private
operators, companies such as Vodafone, Bharti Airtel, Tata
Indicom, Reliance, Idea
Mobile and Aircel have entered the space in India. Every
individual mobile service
provider has its own plans, policies, packages and
corresponding rates. Although these
facilities have offered by various companies but every company
is committed to serve
only one common purpose of facilitate better connectivity to its
consumers so that they
can maintain good conversations for both personal as well as
business motives. It is
22
consumer’s duty to acknowledge the value and usefulness of
best services of various
brands in mobiles. Consumer demands that service provider
who offers the widest
choice criteria of features and excellent customer service and
avoids hidden charges.
India has emerged fastest growing mobile phone market in the
world. The booming
mobile industry has attracting large amount of investments in
the country.
1.8.2 TRAI Reports (2013-2014)
According to TRAI data, Airtel Bharti continues to lead the
mobile service provider
market in India with 20.67 percent share in July 2012.
Graph 1.1: Service Providers Market Share’ July 12
The number of telephone subscribers in India decreased to
944.81 million in July 2012
from 965.52 million in June 2012, down 2.14 percent.
Substantial dip in mobile users of
Reliance Communications has contributed to the decline in
growth of overall mobile user
base of the country. TRAI said the decline is due to large scale
disconnections by some of
the service providers.
Meanwhile the share of urban subscribers has declined to
63.83 percent from 64.40
percent.
23
Graph1.2: Subscription detail during July 2012
Share of rural subscribers has increased to 36.17 percent in July
2012. The overall
teledensity in India reached 77.79 in July from 79.58 in June
2012, mobile subscription
in urban areas decreased to 603.03 million in July 2012 from
621.76 million in June.
Subscription in rural areas decreased to 341.79 million from
343.76 million. The
overall urban teledensity has decreased from 169.03 to 163.66
and rural teledensity
decreased from 40.66 to 40.40.Wireless subscription in urban
areas decreased from
597.59 million in June 2012 to 578.90 million in July 2012. The
wireless subscription
in rural areas decreased from 336.51 million to 334.58 million.
The urban wireless Teledensity has decreased from 162.46 to
157.11 and rural
Teledensity has decreased from 39.80 to 39.54.
24
Table 1.1: Growth/ Decline in Subscribers
Service provider Subscriber
base (million)
Sep, 13
Subscriber
base (million)
Dec, 13
Subscriber
base (million)
Net additions
Rate of
growth
(percen
t)
Market
share
(percent)
Sep, 13
Market
share
(percent)
Dec, 13
Bharti 196.73 201.76 5.04 2.56 21.86 22.05
Vodafone 155.59 160.46 4.87 3.13 17.29 17.53
Idea 127.23 128.69 1.46 1.15 14.14 14.06
Rel Communic. 117.50 118.48 0.98 0.82 13.06 12.95
Tata 65.40 64.78 -0.26 -0.40 7.23 7.08
Aircel 63.25 66.91 3.67 5.80 7.03 7.31
Loop Mobile 2.89 2.98 0.09 3.21 0.32 0.33
Quadrant 1.93 2.16 0.24 12.23 0.21 0.24
Sistema 9.61 9.86 0.25 2.62 1.07 1.08
Telewings 32.36 32.78 0.42 1.31 3.60 3.58
Videocon 3.24 3.97 0.72 22.35 0.36 0.43
BSNL 117.23 115.23 -2.00 -1.70 13.03 12.59
MTNL 7.28 7.13 -0.15 -2.09 0.81 0.78
Total 899.86 915.19 15.33 1.70
Source: www.trai.gov.in
Bharti is the leading operator in Access segment in terms of
number of subscribers and
net addition. During the quarter, Bharti recorded the highest
net addition of 5.04
million, followed by Vodafone (4.87 million) and Aircel (3.67
million). BSNL
recorded the highest net decline of 2.00 million subscribers
during this quarter.
25
Table 1.2: Growth in Wireless Subscriber base
Service
provider
No. of total
Subscribers
(million)
Subscriber
base
(million)
Subscriber
base (million)
Net additions
Rate of
growth
(percent)
Market
share
(percent)
Sep, 13
Market
share
(percent)
Dec, 13
Bharti 193.39 198.14 5.02 2.60 22.21 22.39
Vodafone 155.54 160.41 4.86 3.13 17.87 18.10
Idea 127.23 128.69 1.46 1.15 14.61 14.52
Rel Communic. 116.26 117.24 0.98 0.84 13.35 13.23
BSNL 97.86 96.29 -1.57 -1.60 11.24 10.86
Aircel 63.25 66.91 3.67 5.80 7.26 7.55
Tata 63.55 63.27 -0.28 -0.44 7.30 7.14
Telewings 32.36 32.78 0.42 1.31 3.72 3.70
Sistema 9.56 9.81 0.25 2.62 1.10 1.11
Videocon 3.24 3.97 0.72 22.35 0.37 0.45
MTNL 3.74 3.59 -0.15 -4.00 0.43 0.41
Loop 2.89 2.98 0.09 3.21 0.33 0.34
Quadrant 1.73 1.96 0.23 13.33 0.20 0.22
Total 870.58 886.30 15.72 1.81
Source: www.trai.gov.in
Bharti remains the leading operator with 198.41 million
subscribers at the end of Dec-
13, followed by Vodafone (160.41 million) and Idea (128.69
million). In terms of net
additions during the quarter Bharti (5.02 million) has added the
highest number of
subscribers followed by Vodafone (4.86 million). BSNL has the
maximum net loss of
1.57 million wireless subscribers during this quarter.
26
GSM Services
The GSM subscribers were 824.06 million at the end of Dec-13
as against 807.68
million at the quarter ending Sep-13 showing a growth of
2.03percent. Bharti with
198.41 million subscribers continues to be the largest GSM
mobile operator, followed
by Vodafone (160.41 million).
Table 1.3: Group-wise Market Share (in terms of subscription)
within GSM service
Service provider No. of total
Subscribers
(million)
Sep, 13
Market
Share Sep,
13
No. of total
Subscribers
(million)
Dec, 13
Market
share
(percent)
Dec, 13
Net Additions
(in Millions)
Bharti 193.39 23.94 198.41 24.08 5.02
Vodafone 155.54 19.26 160.41 19.47 4.86
Idea 127.23 15.75 128.69 15.62 1.46
BSNL 95.47 11.82 93.99 11.41 -1.48
Rel Communic. 83.85 10.38 84.88 10.30 1.03
Aircel 63.25 7.83 66.91 8.21 3.67
Tata 45.13 5.59 45.64 5.54 0.51
Telewings 32.36 4.01 32.78 3.98 0.42
MTNL 3.61 0.45 3.46 0.42 -0.15
Videocon 3.24 0.40 3.97 0.48 0.72
Loop 2.89 0.36 2.98 0.36 0.09
Quadrant 1.72 0.21 1.95 0.24 0.23
Total 807.68 100 824.06 100 16.39
Source: www.trai.gov.in
There has a net increase of 16.39 million GSM subscribers
during the quarter ending
Dec-13.
27
CDMA Services
The CDMA subscriber base has declined from 62.91 million at
the end of Sep-13 to
62.24 million at the end of Dec-13; hence a negative growth
rate of 1.07percent has
recorded. Reliance Communications Group with 32.37 million
subscribers continues to
be the largest CDMA mobile operator. In terms of net additions
during the quarter, all
the service providers except Systema Shyam recorded decline
in their subscriber base.
Table 1.4: Market Share (in terms of subscription) within
CDMA Service
Service provider No. of total
Subscribers
(million)
Sep, 13
Market Share
Sep, 13
No. of total
Subscribers
(million)
Dec, 13
Market
share
(percent)
Dec, 13
Net
Additions
(in Millions)
Rel Communic. 32.42 51.53 32.37 52.01 -0.05
Tata 18.41 29.27 17.63 28.32 -0.78
Sistema 9.56 15.19 9.81 15.76 0.25
BSNL 2.396 3.79 2.30 3.70 -0.08
MTNL 0.13 0.21 0.13 0.21 -0.002
Quadrant 0.01 0.01 0.003 0.004 -0.004
Total 62.91 100 62.24 100 -0.67
Source: www.trai.gov.in
There has a net decline of 0.67 million CDMA subscribers during
the quarter ending
Dec-13.
28
1.8.3 Problems and Challenges in Mobile Sector
(Srivastava 2006) asserts that increasing competition, emerging
markets, retaining
customers, government regulations and maintaining cost are
the basic problems faced
by mobile sector. Increase of rivalry between various service
providers leads to price
war. In the growing market the subscribers have a vast range of
choices from various
service providers. The challenge for the companies is to give
the customers a good low
cost plan. Due to growing competition, the existing customers
might switch over to
other connections which are highly beneficial as compared to
the existing ones.
Telecom Regularity Authority of India (TRAI) norms is stringent
and the service
providers find it difficult to meet the norms as per government
regulations. The service
providers feel that the maintaining cost for hotline centers and
the staff is high. The
mobile subscriber base in India has expanded to 670.6 million
in August 2010 with the
addition of 18.2 million new users during the month. Indian
mobile industry has been
emerged as the second fastest growing industry next only to IT
industry. It has
demonstrating strong growth rate due to the government
support in the form of many
regulatory and policy changes during the last 15 years.
The key regulatory and policy changes which created positive
impact on the industry
are:

Switching over from fixed license fee to revenue sharing

Introduction of third and fourth operator

Introduction of calling party pays regime

Introduction of universal access license

Changes in access deficit charges

Issue of license to new operators

 Transparent 3G spectrum auction policy

29
1.9 Mobile Phones Market Growth in India
The mobile phone market has expanded by over 5percent to
about 1.91 billion units in
2014. The opportunity for smart phones in the premium
category is now fading, global
research firm Gartner has said. The mobile phone market will
continue to experience
steady growth, but the opportunity for high average selling
price (ASP) smart phones
are now ending. The market is being driven by a shift to lower-
priced devices in nearly
all device categories. Overall mobile phone market is growing
faster day by day. Both
Nokia and Samsung have managed to hang on to their top slots
in the overall mobile
and smart phones segments respectively, according to CMR's
India mobile handsets
market review 3Q 2013 . India registered 62.9 million mobile
handset shipments for the
period July-September (3Q) 2013, of which 11.1 million units
were smart phones. The
smart phone segment has witnessed a growth rate of 152 per
cent year-over-year in
comparison to a -0.8 per cent growth for feature phones. Even
though local handset
brands cover 47 per cent of the market apple cart, analyst
Tarun Pathak said the
competition for these companies will get tougher when their
China-based ODM
partners directly enter the Indian market early next year. One
such ODM, Gionee has
already started making an impact in the market. "Going
forward 3G smart phone
shipments will continue to rise and it is expected to see a few
smart phone vendors
introduce 4G-enabled devices by the end of 2013”.
1.10 Mobile Phone Market Strategies
A SWOT analysis of a mobile company entails to find out the
strengths, weaknesses,
opportunities and threats involves in the operation of the
company. The analysis also
identifies external opportunities and threats that may help or
hurt the company in the
future. Mobile communications refers to how data and
information are sent and
30
received globally, and although that has remained constant
over time, specifically how
information is transmitted has changed due to technological
advances.
1.10.1 SWOT Analysis of Mobiles
Strengths
SWOT analysis identifies the internal structures within the
industry and company that
are performing well or better than expected. The internal
structures could highlight
human resources, physical capital or elements within the
company’s control. There has
a substantial decline in tariffs over the years.
Local call tariff for mobile at the rate of Rs. 15.00 is now
declined to less than Re 1.00.
One minute STD call between Delhi and Mumbai at the rate of
Rs.37.00 now cost Re
1.00 for local call. The adoption of new technology has a major
factor that has helped
service providers to reduce the tariffs considerably. India is the
fastest growing free
market democracy in the world. India’s emergence as a leading
destination for foreign
investment is a result of stable economic outlook, large market
potential, large talent
pool, low labor cost.
A mobile phone comes to a great help in urgency while driving
by the freeways, in the
vehicle jams, it is the only object that acts as a rescue device.
Sticking in an alone
place, calling somebody for help and asking for directions are
some of the urgent acts
that a mobile phone can do. Although mobile phone usage can
be dangerous while
driving but sometimes it can be a time saver on some urgent
matters. Companies find it
another medium to advertise their products to reach to the
consumers. Nowadays,
mobile phone is not used just for phone calls but also for other
functions like
messaging, watching videos, songs, games, alarm clocks, notes,
calendar and
reminders. It is like so many things in one box. From the
industry and economy point of
31
view, mobile phone companies have flourishing Indian capital
market in billions. This
is a positive wave for the strengthening of economy.
Weaknesses
Weaknesses are internal structures of the company that are
performing poorly or worse
than expected. The internal structures could highlight human
resources, physical capital
within the company’s control. Huge initial fixed cost for service
providers and digital
technology has widened the scope of applications and created
new areas of service
provision. Mobile telephony and wireless internet are some of
the examples of such
services. Despite technological changes that reduce the
demand for spectrum,
availability of spectrum continues to be a constraint.
Besides huge costs for advanced technologies like mobile
number portability (MNP).
Indian companies do not have the expertise in running multi-
country operations. A
mobile phone user can receive calls when mobile user is in the
middle of something. In
case consumer of mobile takes the call it can be rather
disrupting. Some people get so
much addicted to mobile phone for talking, listening and
watching videos that they
forget the real purpose of the phone and waste large part of
their time in unnecessary
interaction over their mobile phones. The mobile phone
advertisements through
messages are becoming a pain for the mobile phone users. A
mobile phone can be
helpful while driving and talking in case of urgent matters but
increasingly it is
becoming cause of accidents because it crashes the attention of
a driver.
Opportunities
The boom in mobile phone usage expands around the globe
covering all income
spectrums. A mobile phone remains no longer an expensive
business luxury or a status
symbol but has become a vital necessity for every user.
Although the mobile sector in
32
India has growing strongly as compared to other sectors.
Among worldwide perspective
India seems to be the largest untapped mobile market. In
today’s scenario, consumers
engage more into text based services than the web based
applications. Fueling the
growth of the mobile phone market is the starting of standard
mobile phones to smart
phones capable of more than a simple phone call. Smartphone
allow users to browse
the web, get GPS directions, listen to music, share photos and
other forms of social
networking, use email and run applications such as games and
more.
Threats
The threats of mobile phone market would involve the external
structures outside the
industries or the company’s control that could potentially hurt
the company or cause
harm in the short or long run conflict between DoT and TRAI.
The absence of clear
separations in DoT’s responsibilities for policy, regulation and
operations led to several
delays and lowered the credibility of the government. TRAI had
earlier told DoT that
3G auction should be restricted to existing operators on the
grounds that new players
would find it difficult to roll out services quickly. Integration
during mergers is
challenging.
Other threats
Lost or Stolen Threat is one of the most prevalent mobile
threats. The mobile device
is valuable because this device stores personal and
organizational information that can
be used in a serious act.
Network exploits other software that operates on local or
mobile networks. Once
connected, they can install malware on phone without ones
knowledge. This can harm
mobile phone device fully.
33
Spyware is a threat that enters into the mobile device without
ones knowledge or
approval. Data commonly targeted by spyware includes phone
call history, text
messages, user location, browser history, contact list, email and
private photos. This
stolen information could be used for identity theft or financial
fraud.
Malware is software that performs malicious actions on phone.
Without consumer’s
knowledge, malware can make charges to phone bill, send
unsolicited messages to
contact list.
1.10.2 Marketing Mix Strategies for Mobiles
Marketing mix contains following four Ps:
Figure 1.5: 4Ps of Marketing
Product
Creating the right product is an essential step in a successful
marketing mix. Most
familiar products nowadays are the mobile phones. Mobile
companies must produce
mobile handsets that are attractive, well designed, easy to use
and have the additional
features that customer’s want. These include music players,
video and picture features
and Internet access.
34
First among the 4P in the mobile marketing mix strategies is
product mix. Product
stands for both goods and service combination offered to the
consumer to satisfy their
needs. In the highly regulated mobile industry, all service
providers offer almost the
same type of services. The drawback is that no brand can be
marketed with Unique
Selling Proposition (USP) for long because it can be imitated
immediately. Thus it is
better to focus on some selected ideas as mobile service
offerings which have
immediate used by the consumer in mobile sector market.
Mobile companies like Nokia, Samsung, LG, Sony Ericsson
comes up with the creative
and innovative phones almost after every 6 months. Nokia
launched its first GSM
mobile phones in its model 1011 in 1992 along with its few
versions and with lesser
demand. Then it launched another handset Nokia 2100 with
Nokia ring tone and
continuing coming up with new models with different
innovations like sending,
receiving messages.
Mobile phones allow its users to attain plenty of benefits:

To share and listen music.

Connecting with friends, family members anytime, anywhere.

Broadband Internet services include wifi, Net surfing, Google

play services and
video phones.

Networking equipment allowing various technologies to

interlink wirelessly.

Communications and information solutions to business and

government.
35
Price
It is important for every marketer to set prices of the product at
the level in which
customers will eager to buy. Prices are linked to the product life
cycle. In the initial
phase prices are high to cover development costs and some
marketers follow price
skimming strategy in the introduction stage. Later on, when
sales are increased costs
are reduced and prices came down. Products that are
technologically advanced can be
sold at premium prices to reflect the initial research and
development that has gone into
them. Price is itself a key factor in the selling of any product.
Pricing strategies of
companies must be different, competitor based, penetrating,
skimming. The factors
affecting the amount charged for a product or services are the
cost of production,
customer demand and competition. As Indian mobile industry
started in 1995, its main
concentration is on manufacturing mobile handsets with GSM
technology. In Initial
stages focus was on launching mobile phones with low cost in
rural areas. Competition
was very tough at that time so companies like Sony, Samsung,
and Motorola started
offering low cost handsets to stay in the mobile market.
Place
Place is from where customers got the product actually.
Distribution is the process of
moving goods from manufacturer to retailer and retailer to
customer. Mobile companies
distribute its products through independent retailers.
Sometimes 'place' is closely linked
to product. 3G phones are mainly sold through 3G network
providers. A place where a
product is to be sold should be easily accessible to its customer.
36
Promotion
Promotion refers to the ways that a business communicates the
existence and nature of
its products to its market. It includes paid for 'above-the-line'
promotion such as media
advertising and 'below-the-line' promotion such as special
offers and discounts. The
type of promotion is linked to product life cycle. For the
promotion of a new product, it
is important to highlight its features to their target customers
inform customers of its
features.
1.10.3 Product Life Cycle of Mobiles
Mobile phone is still in the growth stage, but it’s getting to the
end of the growth stage
and turning into maturity stage. Apple Inc. basically changes the
mobile phone industry
since they introduced the first I phone in 2007. Apple Inc.
essentially shifted the
mobile phone industry from the maturity stage back to the
growth stage in 2007.
Mobile phone industry is growing so fast that it has become a
necessity. Mobile phones
used to be viewed as a luxury or just for working professional.
Nowadays, even a
teenager has a mobile phone. Parents are getting mobile
phones for their children
because they want to communicate them whenever they are
far off. For a lot of people,
mobile phone is already part of their lives. Customers are very
familiar with the mobile
phone products and they prefer to decide themselves about
the purchase of mobile
phones. Customers before buying mobile phones compare their
features according to
their needs. The mobile phone industry’s growth and
profitability depends entirely on
its ability to attract new customers. By increasing and
improving the mobile phones and
its services it will attract more potential buyers, because
technology alone will not
attract buyers instead companies want value-added services for
mobile-phone
securities.
37
Product Life Cycle
The product life cycle of mobile phones have drawn in following
diagram:
Figure 1.6: Product Life Cycle of Mobiles
Introduction Phase
From the year 1985 to 1997, when mobile phones firstly
introduced they were
considered as a low quality technology in terms of poor
reliability, shorter battery life,
high call rates and moreover high priced too even for a basic
model as compared to
pagers. In this stage mobile phones were heavy and tough to
use as its design and
development are the key factors in its success. During
introduction mobiles were not as
popular as in today’s life and not more companies were there in
the mobile market.
Nokia, Panasonic were few mobile companies in this line in
introduction stage and they
were charging higher prices.
Growth Phase
In the years 1998 to 2000, there is suddenly an explosion as the
rate of mobile phone
subscription increases from 25percent to 74percent. Mobile
phones went from being a
minority user group to an essential of life. In this stage mobiles
with no antenna was
launched, with better features like games, alarms etc.
38
Saturation / Maturity
In year 2000, mobile phones reached to even the most social
and technological element
of society. By 2009, it looks like mobile phone market has
reached the peak and
saturation level. In this stage, many touch screen models came
up in the market. Lot of
competition within the mobile companies. Dropping of mobile
phone prices is taken as
a strategy in this stage. Mobile Phone companies attract buyers
in two ways during the
maturity Stage:
 Service: Making mobile phone more affordable will attract
buyers to buy more
mobile phones and increase competition between companies
to lower service
fee.

Innovative Phone Style: The new designs and improvement in

the physical
appearance of the mobile phones and more add-on features
attracts customers to
buy it at a higher rate.
Decline Phase
In this stage old traditional bulky mobile phones have replaced
by the new smart
phones. The smart phone started to decline the sale of digital
cameras to get
photographs.
1.11 Future of Mobile Phones
From the year 1991 to till now a lot of changes have taken
place in mobile phones.
Previously, mobile phones have a statuesque of a person and a
costly mean of
communication but now it becomes the main stay in the
telecommunication market.
Presently it is the 3G and 4G arena. Mobile phone markets are
one of the most turbulent
market environments today due to increased competition and
change. Thus, it is of growing
39
concern to look at consumer buying behavior and showering
light on the factors that finally
determine consumer choices among different mobile phones.
Although mobile phones have become a fundamental part of
personal communication
across the globe during the past ten years, consumer research
has devoted little specific
attention to motives and choice underlying the mobile phone
buying decision process.
Moreover, it is important to distinguish between buying
behavior of customers in their
choice of mobile phones and brands and the buying behavior in
their changing of mobile
phones and brands. As the mobile phone market is a typical
technology push driven market
where products are created ahead of the recognition of existing
recognized consumer needs
(Gerstheimer and Lupp, 2004), mobile phone development is
based on consumers‟

possible future needs and thus companies that best hunch the
technologies and services of
future will be the leaders in the discipline (Brown, 1991; Hamel
and Prahalad, 1991;
Kumar, 1997; Nagel, 2003)
1.11.1 Mobile Industry in India - Forecast, Trends and
Opportunities
(2001-2017)
The Indian mobile communications network is the third largest
in the world and the
second largest amongst the emerging economies of Asia.
Today, it is one of the fastest
growing markets in the world. The mobile communication
sector continued to register
significant success during the years and has emerged as one of
the key sectors
responsible for India’s resurgent economic growth. However,
the market for mobile in
India expanded at the rate of 2percent in 2011 which
represents the slowest growth rate
in the past five years. By the year 2016, the market is expected
to have a penetration
rate of over 80percent. The market has undergone a substantial
change in terms of
mobile versus fixed line mobile and public versus private
participation. The preference
for the use of mobile phones has been predominant in the
sector. Participation of the
40
private entities in the mobile sector is at increasing rate there
by presenting the
enormous growth opportunities. There is a clear distinction
between the Global Satellite
Mobile Communication (GSM) and Code Division Multiple
Access (CDMA)
technologies used. The dominance of the mobile sector
continues to be the detriment of
the traditional fixed-line industry. Rising demand for a wide
range of mobile equipment
has provided excellent opportunities to domestic and foreign
investors in the
manufacturing sector. The last two years have witnessed many
renowned mobile
companies setting up their manufacturing base in India.
Ericsson has set up GSM Radio
Base Station manufacturing facility in Jaipur. Elcotel has set up
handset manufacturing
facilities in Bangalore. Nokia set up its manufacturing plant in
Chennai. LG Electronics
set up plant of manufacturing GSM mobile phones near Pune. A
large number of
companies like Alcatel and Cisco have also shown interest in
setting up their research
and development centers in India. With the above initiatives,
India is expected to be a
manufacturing hub for the mobile equipment industry in the
coming years.
Bharti Airtel, BSNL, MTNL, Reliance Communications and Idea
Mobile are the top
players in the industry. The mobile sector is a very capital
intensive sector and involves
high value investments. Each player is analyzed through a
company overview, analysis
of their businesses, a financial analysis and a SWOT analysis. In
the analysis of the
mobile industry in India it is analyzed that the industry starting
with an overview of the
business conditions in India and the Asia Pacific region for the
mobile sector. An
analysis of the mobile sector in India is carried out through the
analysis of industry
statistics, the growth in the market, ARPU analysis of this
sector, the expansion and
development of the mobile network in the country, the
development of 3G and 4G
services in the country, the growing role of mobile content and
VAS facilities in the
market and the statistics of the major players in the mobile
services sector in India. An
41
outlook for the sector is also included. Major industry vendors
and players such as
MTNL, BSNL and Bharti Airtel are analyzed through a company
overview, analysis of
their mobile services, analysis of their network, company
strategy, company financials
and a SWOT analysis.
Mobile sales in India reached 251 million units in 2013, 13.5
percent rise over 2012
sales of 221 million units. The mobile handset market is
expected to show steady
growth through 2016 when end-user sales will surpass 326
million units, according to a
study by Gartner. According to a study conducted by the
reputed International Agency
Ovum (Jan 2005) on “The Economic Benefits of Mobile Service
in India” the Indian
mobile industry is a major contributor to the socio- economic
growth of the country in
terms of employment generation, revenues to the government,
GDP growth and rural
development. The Indian mobile phone market is competitive
with more than 150
device manufacturers selling devices to consumers. Most of
these manufacturers
remain focused on the low-cost feature phone market which
still constitutes over 91 per
cent of overall mobile phone sales offering a huge market to
compete in. “The increase
in share of smart phone device sales declining sales to first-time
buyers and the
continuous focus of global manufacturers on the low-cost
feature phone market. Some
of the local and Chinese mobile manufacturers are building
capabilities, distribution
and brands as they prepare to compete with the big global
players at a larger level
covering broader consumer segments. Manufacturers such as
ZTE, Micromax, Karbonn
mobile, Huawei stand at sixth, seventh and twelfth in the Indian
smart phone market in
1H12 and are constantly expanding their smart phone portfolio
to compete at a larger
level with big global manufacturers Samsung and Nokia, which
held the first and
second position respectively.
42
1.12 Scope of Study
The primary aim of study is to examine the comparative buying
behavior of consumers
of Ludhiana and Sangrur district towards the purchase of
mobile phone. Similarities
and dissimilarities between buying behavior of urban and semi
urban areas towards the
purchase of mobile phone have assessed in the research study.
Suggestions have made
to the mobile manufacturing companies about innovative
marketing strategies as per
the change in tastes and preferences of consumers and their
implementation in urban as
well as semi urban markets. On the basis of review of different
studies by the experts
various studies has taken on buying behavior of consumers in
mobiles and comparative
analysis have performed on the factors (Price, Quality, Style,
Look and Brand) for the
purchase of mobile phones. The research is beneficial in finding
the various sources of
information used by the consumers. Various factors have been
identified and the extent
to which these factors affects the decision making of
consumers has analyzed in this
research. This study is beneficial in formulating the marketing
strategies to grab market
share by perceiving the consumer’s attitudes towards mobile
phones. The findings of
the present research can be used by managers for periodic
monitoring of service quality
as perceived by customers. The study area is confined to
Sangrur and Ludhiana district
of Punjab.
Concluding Remarks
The motive behind conducting the study on consumer behavior
is to demystify the
approach of consumers while making buying decisions.
Marketers always show their
keen interest to know the likings and preferences of consumers
while visiting shopping
stores and formulate strategies to make products accordingly.
In order to cope with
intense competition, marketers can utilize the current
information about behavior of
43
their target customers in order to launch a new product or to
reposition their existing
product. If companies become successful in understanding the
mindset of consumers
and make them buy their products then there would be
immense chances for
exponential growth for companies. Consumer behavior field in
terms of their needs
and wants as well their perception, attitude and personality
including motivation
and their rate of involvement is also vital not only for the
marketers but also for the
government and society as a whole. The study of consumer
behavior remains a corner
stone to successful marketing strategy.
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Website
1. http://www.ibef.org