Branded vs. Non-Branded Mobiles - Marketing Research

8/3/2019 Branded vs. Non-Branded Mobiles - Marketing Research

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Contents

Introduction ............................................................................................................................ 2

Methodology .......................................................................................................................... 2

Discussion with decision makers ........................................................................................ 2

Scope and Limitations ............................................................................................................ 2

Definition of Established vs. Non-established brands ........................................................... 2

Need for ResearchMarket Scenario for Mobile Handsets in India .................................... 2

Research Problem ................................................................................................................... 4

Problem Definition: ............................................................................................................ 4

Managerial Implications ......................................................................................................... 4

Approach to the Problem........................................................................................................ 5Objective:............................................................................................................................ 5

Analytical Model: ............................................................................................................... 5

Research Questions............................................................................................................. 5

Specific Information Needed .............................................................................................. 6

Research Design ..................................................................................................................... 7

Exploratory Research ............................................................................................................. 7

Factors affecting Purchase Decision ................................................................................... 7

Descriptive Research .............................................................................................................. 8Sampling ............................................................................................................................. 8

Measurement .......................................................................................................................... 9

Data:.................................................................................................................................... 9

Scales ................................................................................................................................ 10

Scaling techniques ............................................................................................................ 10

Questionnaire Design ........................................................................................................... 10

Questionnaire .................................................................................................................... 10

Data Analysis Plan ............................................................................................................... 17Statistic to be used ............................................................................................................ 17

Conclusion ............................................................................................................................ 17

References ............................................................................................................................ 17


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Introduction

In the past few years there has been a rapid emergence and growth of low priced generic

Indian mobile handsets as well as their Chinese counterparts in the Indian mobile handset

market. Consumer demand has been undoubtedly one of the strong reasons for this growth. In

this context, identifying the reasons why a person choses to buy a handset of a relatively

unknown brand instead of products of established brands is a question which this research

aims to address. Through this project, we intend to help the retailer dealing in mobile

handsets, to assess whether it makes sense to store these new comers in the mobile handset

industry alongside established players in his store.

Methodology

Secondary research has been used to identify the factors affecting the purchase of mobile

phones of non-established brands. Their relative importance in making the purchase decision

is to be studied using the tools of survey & observation methods.

Discussion with decision makers

Our approach also seeks to involve retailers in the problem definition as well as problem

solving. In this regard we will be talking to a few retailers in the mobile phone industry.

Scope and Limitations

Our problem statement entitles customer survey & research. The problem statement does not

comment about the possible solutions to the problem. Instead the focus is on identifying the

underlying causes, hence no hypotheses has been used here.

Definition of Established vs. Non-established brands

In this research we have demarcated the established and non-established brands as follows:

Established brands: Firms with more than 1% market share in the last two years namely

Nokia, Samsung , LG, Motorola , Sony Ericsson, ZTE , Huawei & Spice mobile.

Non-established brands: Rest all will be non-established brands

Need for Research Market Scenario for Mobile Handsets in India

With the rapid growth in the Indian Telecom subscriber base, the industry has also seen a

rapid growth in the mobile handset sales. India, contributing approximately 10% of

worldwide sales, is an important market for manufacturers with aspirations to grow their

global market share. Due to its sheer size and open market (mobile devices being sold

independently of a cellular connection), it has attracted many global mobile device

manufacturers. The market is also supported by many local manufacturers. This has led to


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over 50 brands vying for consumer attention, besides the many brands in the grey market

(selling without invoices). The entry of Indian mobile handset players focusing on low-end,

value conscious consumers has intensified competition in the Indian mobile device market. A

large volume of mobile device sales in India come from the low-end device segment.

As per a research report by Gartner, Nokia and other established handset makers are quickly

losing global market share to a push by Chinese no-brand vendors into emerging markets.

Surging growth of no-brand manufacturers coupled with growing smart-phone sales boosted

third-quarter mobile phone sales 35%. However market share of top-selling Nokia's third-

quarter FY2011 shrank to 28.2 percent from 36.7 percent a year ago, its lowest level since

1999. No. 2 and No. 3, Samsung Electronics and LG Electronics, also saw their market share

slip.

Figure 1 Percentage Share of Mobile Handset Market in India

Market

Share %

20080

9

20091

0

%

Change

Nokia 64.00 52.20 (11.80)

Samsung 10.00 17.40 7.40

LG 4.50 5.90 1.40

Micromax -- 4.10 4.10

Spice

Mobile 2.00 3.90 1.90

Karbonn -- 3.00 3.00

ZTE 5.60 1.90 (3.70)

Huawei 1.30 1.70 0.40

Motorola 3.50 1.00 (2.50)

Sony

Ericsson 6.00 3.00 (3.00)

Others 3.10 5.90 2.80

No-brand manufacturers -- mostly small Chinese firms using chipsets from Mediatek or

Spectrum etc. have this year quickly expanded their reach outside China into India, Latin

America and Russia. Nokia said last month sales of its non-smartphones dropped 9 percent in

the past quarter.


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As per another research report by Ghalla Bhansali group, Indian mobile phone makers have

taken a giantsized bite of the local market in the span of about two years at the expense of

established global manufacturers such as Nokia and LG Electronics Inc. Home-grown firms,

which entered the market in early 2008, captured around 14% share of the 100 million

handset market at the end of 2009, from a meagre 0.9% at the end of March 2008. There are

over 240 different companies selling mobile handsets in India.

Indian handset brands have rung in new market tunes. After grabbing an instant following in

rural India, generic mobile handset brandsnames unheard of elsewhereare seeking to

capture a slice of the lucrative urban and semiurban markets of Indias evergrowing telecom

pie. The big global players have reason to be worried: this is one MNC onslaught that is

being matched (at unbelievable price points and with unique, if not quirky, features) by

Indian wannabes.

In the past 18 months, over 10 new home-grown brandsmost of them led by

firstgeneration entrepreneurshave garnered a market share of about 14 per cent, up from

just 4 per cent in 200809. Micromax, the leader among Indian brands, claims sales of over

10 lakh handsets every month. Another player, Spice, from the B.K. Modi stable, sells about

57 lakh handsets a month. Karbonn, Lava, Lemon, Zen...the list is growing rather rapidly.

Hence the need to assess the significance of storing them alongside mobile handsets of

established brands in retail stores.

Research Problem

Problem Definition:

To assess the business opportunity of storing non branded mobile instruments- Would it

make business sense to store mobile instruments of non-established brands alongside

established brands in retail stores?

Managerial Implications

From the retail store managers perspective this research problem intends to provide him

solutions with respect to:

Shelf Management: storing non-established brands alongside established brands Understanding Consumer Psyche: helping the retailer to assess the factors driving the

customer to purchase non-established brands

Competitive value vis--vis next door retailer: use the above mentioned points to gaincompetitive advantage over rivals.


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Reposition the store: through varying the product offeringApproach to the Problem

Objective:

The incremental growth rate of almost 200% by others (from 3.1 to 5.9) in the market shareshown earlier indicates that others are a growing presence in the mobile phone market in

India. Others mainly include generic Indian mobile handset manufacturers and small Chinese

firms. Thus the major objective of this study is to identify the reasons underlying customer

demand for the same.

Analytical Model:

The analytical model chosen to break down the primary research problem is graphical in

nature. A business opportunity becomes meaningful only when it is profitable. Hence the

question of whether it makes business sense to store mobile phones of non-established brands

alongside established brands in retail stores, depends upon how much of sales can such a

move garner. The sales in turn depend upon the customers intention to buy such phones.

Thus the factors that influence the customers intention to purchase mobile phones of non-

established brands vis--vis an established brand provides the answer to this problem.

Figure 2 Graphical Analytical Model

Research Questions

The factors governing purchase of mobile phones of non-established brands could broadly be

classified as product attributes/factors and personal attributes/factors of the customer. Thus

the research questions are:

Price Product attributes/factors:


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1. Which are the product attributes that motivate the customer to purchase a mobilephone?

Personal attributes/factors:2. Which are the Behavioral variables that affect the intention to purchase and to what

extent?

3. Which are the Demographic variables that affect the intention to purchase and to whatextent?

Specific Information Needed

The specific information needed regarding the factors impacting purchase intention is as

follows:

Information Needed Source/Type of Research Needed

Identification of Key Product Attributes

(Product Features, Overall experience with the product

etc.)

Secondary Research

Customer Preference for product attributes The order of priority attached to them by

customers and

Preferred workable combinations (e.g.: low inprice and high in features)

Primary Research (Customer survey

through questionnaire)

Identification of Personal Attributes

Preference of customer with respect to mobileinstrument-non-established brand vs. established

brand



Customer Perception of a store stocking both mobile

phones of non-established as well as established

brands



Retail outlets patronized by the customer -Would acustomer buying non-branded mobile prefer to buy

it at a shop in a shopping complex or at a retail

store near his place?

Influence of the sales person

Repeat buying behaviour: Do customers stick tothe same product or given an option do they

experiment

Product usage habits and the purchase/use ofrelated product categories



Demographic Attributes

Impact of the age group Impact of income Impact of educational qualification




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Research Design

Figure 3 Research Design

A combination of exploratory and descriptive research has been used in this study.

Exploratory research has been used to

1. Gain an overview of the mobile phone market scenario in India2. Further refine the problem statement and identify the information required.3. Identify the factors which influence or cause an intention in the customer to buy

phones of the non-established brands.

Subsequently descriptive research has been used to gather the relevant information through

customer surveys.

Exploratory Research

Factors affecting Purchase Decision

As per the secondary research the attributes that are considered important in the consumer

decision making process are given below:

a. Priceb. Brandc. Looks (Design)d. Standard Features

i. Torchii. Music Player

iii. FMiv. Speakersv. Camera

vi. Voice clarity


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vii. Otherse. Accessories

i. Bluetooth headsetii. Earphones

iii. Battery (Battery life)iv. Charger

f. Additional featuresi. QWERTY keypad

ii. Touch Screen Displayiii. Sliding Keypad

g. Serviceh. Quality

Descriptive Research

Sampling

Typically for such research, the sample size need not be very large and a sample size of about

200 is considered adequate. But as the number of variables increases, the size should

increase. Hence a sample size of about 300 should be good considering the number of

variables involved in this research.Also, these figures are obtained assuming the randomness of the sample, but such

randomness is difficult to ensure and the sampling will mostly be convenient sampling.

Hence it is ideal to increase the sample size to about 600 which should give a good picture of

the concerned population.

The sample size is sought to be drawn from across the cross section of mobile buyers with

special emphasis on customers of small retail stores. For this purpose the customers have

been classified as those purchasing from:

High end shopping mall(Sahara mall) Exclusive company outlets (one of Nokia & other of Sony) Well known mobile outlet (the mobile store) Small retail outlets

The above four covers possibly all the shopping option available for a mobile shopper in a

city like Lucknow.

The sample has been chosen as follows.


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Description Area/Location No of shops Sample size per

shop

Exclusive shopsGomtinagar (Nokia) 1 25

Rajajipuram (Sony) 1 25

Retail storesAliganj 2 75Hazaratganj 2 75

Kapurthala 2 75

Speciality mobile

store

Daliganj (The mobile

store)

1 50

Shopping complex Sahara complex 1 50

Total 10 600

Measurement

Data:The data to be captured through each question and the measure to be used is given below.

Sl.

No

Question

No.

Description Data Captured Measure

1. 1. Brand Awareness Product Attribute Frequency Distribution2. 2. Top Three Most important Features Product Attribute Frequency Distribution3. 3. Features Product Attribute Frequency Distribution4. 4. Mostly Used Features Product Attribute Frequency Distribution5. 5. Price Price Frequency Distribution6.

6.

Duration Behavioural Frequency Distribution

7. 7. Frequency of Purchase Behavioural Frequency Distribution8. 8. Brand Awareness Product Attribute Frequency Distribution9. 9. Store Preference Behavioural Frequency Distribution10. 10. Brand/Store loyalty (Repeat

Purchase)

Behavioural Frequency Distribution

11. 11. Social Status Psychographic Frequency Distribution12. 12. Personal Experience Perception Frequency Distribution13. 13. Aesthetic Appeal Behavioural Frequency Distribution14. 14. After Sales Service Behavioural Frequency Distribution15. 15. Willingness to pay Behavioural Frequency Distribution16. 16. Quality Perception Frequency Distribution17. 17. Price Sensitivity Behavioural Frequency Distribution18. 18. Retailers Influence Psychographic Frequency Distribution19. 19. Gender Demographic Frequency Distribution20. 20. Age Demographic Frequency Distribution21. 21. Education Qualification Demographic Frequency Distribution22. 22. Income Demographic Frequency Distribution


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Scales

The types of scales used to gather specific data are as follows:

Nominal Interval

Brand Name Preference rating offeatures

Features

Place of Purchase

Reference Group

Gender

Educational Qualification

Price paid

Duration of Use

Age

Monthly Income

Scaling techniques

Non-comparative scaling techniques such as Likert scales have been used in the

questionnaire. Likert Scale has been used in the questions pertaining to buyer behaviour,

since it is easy to construct and administer. Further respondents can readily understand how

to use the scale.

Comparative scaling techniques viz. Paired comparison scaling has been used to assess the

customers sense of brand loyalty vs. store loyalty.

Questionnaire DesignThe questions have been divided into three parts. The first part deals with basic information

about the mobiles currently possessed by the customer. The second part aims to gain insights

on buyer behaviour and the last part deals with classification information such as age, gender

etc. The reason for asking each question is provided below the question wherever applicable.

Questionnaire

A. Basic Information:1. Which brand of mobile are you currently using? (Nominal scale : just brand names are

given to customer)


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o Nokiao Sonyo Samsungo LGo Micromaxo Others (please specify)

Reason for this question: To co-relate the ownership with the other behavioural questions

2. According to you which are the top three features that a mobile should possess? (Unaidedrecall)

3. What features does your mobile have? (Nominal scale : just features option is given tocustomer) (Select more than one if applicable)

o FM/Music Playero Torch Lighto Camerao Speaker phoneo Dual simo Bluetootho WiFio Gameso Touch screeno QWERTY keypado Slider keypad

Reason for the question: To help the retailer in selling/pushing non-established brand

mobiles by identifying key features which are currently known to customers


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4. Which are the features that you use most frequently in your mobile? (Nominal scale :just features option is given to customer) (select more than one if applicable)

o FM/Music Playero Torch Lighto Camera

Speaker phone

o Bluetootho WiFio Games

Reason for this question: To understand feature usage

5. How much did you pay for it? (Ratio scale : has absolute zero and difference between2 successive prices is constant)

o < Rs.2000o Rs. 2000Rs.5000o Rs. 5000Rs. 10000o Rs. 10000Rs. 15000o > Rs. 15000

Needs to be viewed in relation with question 2

6. For how long have you been using it? (Ratio scale : has absolute zero and differencebetween 2 successive duration is constant)

o < 6 monthso 6 months1 yearo 1 year2 yearso > 2 years


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Reason for this question: To identify usage pattern

7. How many mobiles you have possessed in last 2 yearso 1o 2o 3o >3

Reason for this question: Frequency of purchase

8. Are you aware of the following mobile phone brands on offer? (Nominal scale : justbrand names are given to customer)

o Flyo ZTEo Lemono LAVAo Movilo G5

Reason for this question: To check Awareness of non-established brands

9. Where do you prefer to buy your mobile phone from? (Nominal scale : just names ofdifferent options is given to customer)

o Exclusive branded retail outleto Hypermarkets in Shopping Malls (Big Bazaar etc.)o Electronic showrooms (Mobile world etc.)o Retail outlet selling mobile phones of multiple brands in cityo Local markets (Chowk, Hazratganj etc.)


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Reason for this question: To identify whether any Store preference exists

10.Given an option would you (Nominal scale : just names of different options is given tocustomer)

a. Buy the same brand of phone from the same place (Prefer both brand and store)b. Buy the same brand of phone from a different place (Prefer brand over store)c. Buy a different brand of phone from the same place (Prefer store over brand)d. Buy a different brand of phone from a different place (Prefer to experiment)

Reason for this question: To assess brand vs. store loyalty

B. Buyer Behaviour11.Possession of an established brand phone enhances my social status

1 2 3 4 5

Strongly Agree Strongly Disagree

Reason for this question: To assess the impact on self-perception of the customer

12.Phones of established brands provide me a better experience as compared with non-established brand cell phones

1 2 3 4 5


Reason for this question: To assess customer perception of brands

13.Will you prefer a non-established brand mobile over an established brand mobile if it hasbetter looks

1 2 3 4 5


Reason for this question: To assess impact of looks on customer preference

14.Will you prefer a non-established brand mobile over an established brand mobile if itprovides better after sales service

1 2 3 4 5


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Reason for this question: To assess the impact of after sales service on customer preference

15.I would pay a premium to buy established brand mobiles even if they offer same featuresas a non-established brand mobile

1 2 3 4 5


Reason for this question: To assess the impact of an established brand image on customer

choice

16.Quality of mobiles of non-established brands is poor in general1 2 3 4 5


Reason for this question: To assess the customer perception of quality of non-established

brand phones

17.I will buy a non-established brand mobile just for the price advantage1 2 3 4 5


Reason for this question: To assess the importance of price in purchase decision

18.How important is retailers influence for your buying decision1 2 3 4 5


Reason for this question: To assess the importance of retailers suggestions and influence on

the customers purchase decision

C. Classification Information19. Gender (Nominal)

a. Female


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b. MaleReason for this question: To assess whether gender has any relation to the purchase decisions

made

20.Which age group do you fall into? (Ratio scale : has absolute zero and differencebetween 2 successive duration is constant)

o 50 years

Reason for this question: To assess whether age has any relation to the purchase decisions

made

21.Educational qualification? (Nominal scale : just names of different options is given tocustomer)

o Up to Xth standardo Undergraduateo Graduateo Postgraduate

Reason for this question: To assess whether educational qualification has any relation to the

purchase decisions made

22.Monthly income? (Ratio scale : has absolute zero and difference between 2 successiveincome level is constant)

o 35,000


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Reason for this question: To assess whether income has any relation to the purchase decisions

madeData Analysis Plan

All the data collected are to be represented as frequency distributions. This would be useful in

deriving the percentage share of the total sample exhibiting a specific characteristic.

Statistic to be used

Questions 1-9 and 18-21 have nominal data. Hence the statistic characterizing the data forthese questions would be Mode (the option which occurs with highest frequency)

Questions 10-17 have interval data. Hence the statistic characterizing the data for thesequestions would be Median. (the responses would be sorted in increasing/decreasing

order uniformly before calculating the statistic)

Conclusion

Based on the response to this questionnaire, it is possible to gain a fair idea of the customer

perceptions regarding non-established brand mobiles vis--vis established brand mobiles.

Accordingly the reasons for customers preferring non-established brand mobiles can be

derived from the result. This would help the retailer in understanding his/her customers better

and tailor his/her product offerings in a manner that is best suited to the customers

frequenting the store.

References

Documents

Branded vs. Non-Branded Mobiles - Marketing Research