2011

Submitted By:

ANKIT SINGH

THE BEST COMBINATION OF ATTRIBUTES AND LEVELS OF A SMARTPHONE

Table of Contents

ACKNOWLEDGEMENT ................................................................................................................................... 3

EXECUTIVE SUMMARY .................................................................................................................................. 4

INTRODUCTION ............................................................................................................................................. 5

LITERATURE REVIEW ..................................................................................................................................... 6

DATA AND METHDOLOGY ............................................................................................................................. 7

Data Collection .......................................................................................................................................... 7

Questionnaire ........................................................................................................................................... 8

PLAN CARD LIST ......................................................................................................................................... 8

SAMPLE SIZE ............................................................................................................................................ 10

SYNTAX .................................................................................................................................................... 10

RESULTS AND ANALYSIS .............................................................................................................................. 12

HOLD OUT CASES .................................................................................................................................... 13

SUBFILE SUMMARY ................................................................................................................................. 14

Simulation Summary ............................................................................................................................... 14

CONCLUSION ............................................................................................................................................... 20

ACKNOWLEDGEMENT

The successful completion of the project is attributed to the help and support of the people

directly and indirectly related to the project. I would like to express my gratitude to Mr.

Shubhodip Roy. Also all the group members have been integral to the completion of the

project through their contributions. We would like to thank him for taking extra efforts to teach

us and always guide us.

EXECUTIVE SUMMARY

Study aims to analyse the importance of the individual attributes of Smartphone and their

levels, which direct consumers to purchase their choice of Smartphones.

Firstly, the various attributes and their different possible levels available in a Smartphone are

selected from secondary data sources. The various attributes were operating system, keyboard

style, camera resolution, memory, screen size, battery life, and applications. Each attribute has

its respective levels. Then, a questionnaire is framed comprising of 30 combinations of various

levels of these fixed 7 attributes and respondents are asked to rate their preference level on a

scale of 1-7 where 1 denotes most preferred to 7 denoting least preference. The sample size is

85.

Then, the data collected is used for SPSS CONJOINT ANALYSIS. Conjoint analysis is a popular

marketing research technique that marketers use to determine what features a new product

should have and to forecast what the likely acceptance of a product would be if brought to

market. Rather than directly asking survey respondents what they prefer in a product, conjoint

analysis employs the more realistic context of respondents evaluating potential product

profiles.

From this study, we found that the most important attribute of consideration before buying a

smartphone is OPERATING SYSTEM, in which Android and Black berry are the most preferred

one. In keyboard category, TOUCH and TYPE is preferred the most. The other most preferred

levels of attributes are 5 Mega Pixel camera, 5 inch screen size, 16 Giga byte memory card and

free applications.

Thus, the companies should consider these attributes and levels as consumers stick to the

features which give them their desired utility.

INTRODUCTION

About the Smartphone Industry

One of the fastest changing industries in today’s world is the Smartphone industry which is

growing multiple folds. The ease with which people can do everything in their handsets has

given rise to a totally different new world of Smart Phones. The current market leaders being

the Blackberry, The Apple and The Android based Operating Systems.

A recent report predicts that Android Smartphones will occupy nearly half of the market share

during the next five years, with an additional 20 to 30 percent market share taken up by Apple’s

IPhone.

Research shows that by 2012 Google`s Smartphone would grow to 23.2 % of market share

whereas that of Apple would grow to 17.6 %. The trend has been towards making mobile

devices more user friendly and bring pre packaged applications to the forefront.

Indian mobile handset market is expected to grow at 25% by volume in 2011. Of which,

smartphones will be one of the hottest growth category comprising 6% of the shipments. 2.5

million Smartphones were shipped to India in 2009 and 6 million smartphones were shipped in

2010. Estimates put a possible 12 million smartphone shipments in 2011. That’s a 100% growth

over the year 2010.

With more than 20 million smartphones available in India, it is crucial for various companies to

understand the behaviour of India’s smartphone users.

LITERATURE REVIEW

A lot of study has been already done to study the importance and weights attached to

particular attributes and their level when making a Smartphone purchase. Smartphone are still

largely men dominated market; men make up 58 percent of buyers, 40 percent of whom are

aged 25 to 34, and largely single with no kids. Men purchase those smartphones which give

them delightful features such as gaming experiences, while women were most interested in

issues such as customer support, coverage and ease of use. Secondary research advocates that

the previous purchasing experience of consumers plays a very significant role in the purchase

decision of the buyers. The early adopters are the ones who are the opinion leaders who can

make a product star performer or a failure. The imitators are dependant on the word of mouth

from these adopters who make the first impression about the product.

A study conducted by Google sites that People who want a Smartphone rather than a regular

cell phone place. The higher weightage is on the Operating System of the phone and the

applications available: 72 percent of Smartphone buyers cared about the OS versus 42 percent

for regular cell phone buyers, and 60 percent of Smartphone buyers cared about available

applications versus 29 percent for regular cell phone buyers. Eighty percent of Smartphone

buyers look forward for specific models, versus 50 percent of generic cell phone buyers.

Brand loyalty plays a very important role in the purchase decision of a Smartphone. Blackberry

users are most likely to stick to blackberry where as an I-phone user would stick to apple.

Talking of the operating systems android is the latest hit among the Smartphone users over

windows and Symbian due to the millions of application available with android.

DATA AND METHDOLOGY

Conjoint analysis is a method to understand the importance and utility of the various

features/attributes in a product. The method derives these values on the basis how consumer

perceive the various levels of a feature/attribute and the overall importance of the feature. The

products delve into the Smartphones to know which attributes and its levels do the consumer

prefer the most. A list of attributes has been selected from the secondary sources. Operating

System, type of keyboard, battery life, diagonal measure of the screen size in inches, Camera

resolution, memory and type of applications have been selected in this study.

DATA COLLECTION

The attributes and their corresponding level are given below-

1. Operating system

Black Berry

Windows

Symbian

iOS

Android

2. Keyboard

Full Touch

Touch and Type

Qwerty

3. Camera Resolution

2MP

3.5MP

5MP

4. Memory

8GB

16GB

5. Screen size

2.5inches

3.5inches

5inches

6. Battery Life

5.5 Hrs

9 Hrs

7. Applications

Paid apps

Free and paid apps

Free apps

QUESTIONNAIRE

The above list of attributes was fed into the SPSS Orthogonal Design. The software gave a set of

30 plan cards with 3 hold outs. The plan cards comprised of the all the combinations of

attributes with different level. There are 7 attributes and 21 levels which are being taken in the

study. The plan cards were used to form the questionnaire. The respondents were asked to rate

these 30 plan cards on a scale of 1-7 where 1 is most preferred and 7 is least preferred. The

plan cards are mentioned below.

PLAN CARD LIST

a - Hold out cases

Card ID

Operating System KeyBoard

Camera Resolution Memory

Screen Size

Battery Life Applications

1 BlackBerry Touch And Type 2 MP 8 GB 5 Inches 5.5 Hrs Paid

Applications

2 Windows Qwerty 2 MP 8 GB 2.5 Inches 5.5 Hrs Free

Applications

3 BlackBerry Touch And Type 5 MP 8 GB 5 Inches 5.5 Hrs Free and Paid Applications

4 Windows Touch And Type 3.5 MP 8 GB 3.5 Inches 5.5 Hrs Free and Paid Applications

5 Android Qwerty 5 MP 16 GB 3.5 Inches 5.5 Hrs Free and Paid Applications

6 iOS Qwerty 3.5 MP 8 GB 2.5 Inches 5.5 Hrs Free and Paid Applications

7 Android Qwerty 5 MP 8 GB 5 Inches 5.5 Hrs Free

Applications

8 Symbian Full Touch 3.5 MP 8 GB 3.5 Inches 5.5 Hrs Paid

Applications

9 Windows Full Touch 3.5 MP 16 GB 5 Inches 5.5 Hrs Free and Paid Applications

10 BlackBerry Full Touch 5 MP 8 GB 2.5 Inches 5.5 Hrs Free and Paid Applications

11 Android Full Touch 2 MP 8 GB 2.5 Inches 5.5 Hrs Paid

Applications

12 Windows Touch And Type 5 MP 8 GB 3.5 Inches 9 Hrs Paid

Applications

13 Android Full Touch 2 MP 8 GB 3.5 Inches 9 Hrs Free and Paid Applications

14 BlackBerry Qwerty 2 MP 16 GB 3.5 Inches 5.5 Hrs Paid

Applications

15 Android Touch And Type 3.5 MP 8 GB 5 Inches 9 Hrs Free

Applications

16 BlackBerry Qwerty 3.5 MP 16 GB 3.5 Inches 9 Hrs Free

Applications

17 iOS Touch And Type 2 MP 16 GB 2.5 Inches 9 Hrs Free and Paid Applications

18 iOS Full Touch 5 MP 8 GB 3.5 Inches 5.5 Hrs Free

Applications

19 Symbian Touch And Type 5 MP 16 GB 2.5 Inches 5.5 Hrs Free

Applications

20 BlackBerry Full Touch 3.5 MP 8 GB 2.5 Inches 9 Hrs Free

Applications

21 Symbian Qwerty 2 MP 8 GB 5 Inches 9 Hrs Free and Paid Applications

22 Android Touch And Type 3.5 MP 16 GB 2.5 Inches 5.5 Hrs Paid

Applications

23a iOS Full Touch 3.5 MP 16 GB 5 Inches 5.5 Hrs Paid

Applications

24a BlackBerry Full Touch 5 MP 8 GB 5 Inches 9 Hrs Free and Paid Applications

25 iOS Qwerty 3.5 MP 8 GB 5 Inches 5.5 Hrs Paid

Applications

SAMPLE SIZE

Each group member got 10 questionnaire filled on the basis of already generated plan cards. A

set of 85 subjects were experimented for this study. The subjects are mostly the students of IBS

who are tech-savvy and literate about smartphones.

SYNTAX

All the entries from the respondents were filled in a separate SPSS file named “PLANCARD

DATA”. The details of the Orthogonal design and the data were given in syntax file as given

below.

CONJOINT PLAN ='C:\Documents and Settings\Administrator\Desktop\MR project\FINAL\SmartPhones Plan Cards.sav'

/DATA = 'C:\Documents and Settings\Administrator\Desktop\MR project\FINAL\PLANCARD DATA.sav'

/SCORE=SCORE1 TO SCORE30

/SUBJECT=ID

/FACTORS = OS (DISCRETE)

KEYBOARD (DISCRETE)

CAMERA (DISCRETE)

BATTERY (DISCRETE)

SCREEN (DISCRETE)

MEMORY (DISCRETE)

APPLICATIONS (DISCREET)

/PRINT = SUMMARYONLY

/UTILITY = 'C:\Documents and Settings\Administrator\Desktop\MR project\New Folder\utility2.sav'

/PLOT = ALL

26 iOS Touch And Type 2 MP 8 GB 3.5 Inches 5.5 Hrs Free

Applications

27 Windows Qwerty 5 MP 8 GB 2.5 Inches 9 Hrs Paid

Applications

28a Android Touch And Type 3.5 MP 16 GB 2.5 Inches 9 Hrs Paid

Applications

29 Windows Full Touch 2 MP 16 GB 5 Inches 5.5 Hrs Free

Applications

30 iOS Full Touch 5 MP 16 GB 5 Inches 9 Hrs Paid

Applications

“CONJOINT PLAN” gives the path of the Orthogonal Design and “/DATA” gives the path to the

data file where the responses of the candidates are entered. The method of measuring the

respondents likeliness of the profile given in the questionnaire is rating based. Since rating on a

scale of 1-7 is taken column values in the data file are referred as “SCORE”. “/SCORE” defines

the Column values in the Data file.”/SUBJECT” defines the respondents’ ID.”/FACTORS” defines

the relationship between rating data and the factor/attribute levels. In the above syntax factors

are considered to be “DISCREET” as all the respondents can treat the Levels differently. The

reason which they stated was that the respondents income level, their lifestyle and profession

makes them think differently.”/UTILITY” gives the utility being given by each respondent to

factor level in while rating each profile.”/PLOT” plots all factor levels in a graphical

representation for easier representation of the data.

RESULTS AND ANALYSIS

IMPORTANCE UTILITY LEVELS ATTRIBUTES Level Utility = Importance * Utility

32.77 -0.1098 WINDOWS

OPERATING SYSTEM

-3.598146

0.1275 ANDROID 4.178175

-0.0431 iOS -1.412387

0.2549 BLACKBERRY 8.353073

-0.2294 SYMBIAN -7.517438

13.77 -0.0379 QWERTY

KEYBOARD

-0.521883

0.0092 FULL TOUCH 0.126684

0.0288 TOUCH AND TYPE 0.396576

12.69 -0.0484 2 MP

CAMERA

-0.614196

0.0013 3.5MP 0.016497

0.0471 5 MP 0.597699

6.61 -0.0284 8 GB MEMORY

-0.187724

0.0284 16 GB 0.187724

12.69 -0.1425 2.5 INCHES

SCREEN SIZE

-1.808325

0.0196 3.5 INCHES 0.248724

0.1229 5 INCHES 1.559601

6.48 -0.0314 5.5 HRS BATTERY

-0.203472

0.0314 9 HRS 0.203472

14.99 0.1529

FREE APPLICATIONS

APPLICATIONS

2.291971

-0.0144 FREE AND PAID -0.215856

-0.1386 PAID

APPLICATIONS -2.077614

Combinations of Smartphones Total Utility

BEST COMBINATION OF SMARTPHONE 13.590116

2ND BEST COMBINATION OF SMARTPHONE 3.963028

The above the given table shows the importance of the each factor/ attribute of the smart

phone as per the respondents. It also shows the utility per level in each factor/ attribute as

perceived by the respondents.

Total Utility = Importance of an attribute (for example Operating System) * Utility of 1st level

of an attribute (for example Blackberry which is a level of Operating System) + Importance of

another attribute (Camera Resolution) * Utility of 1st level of the attribute (Camera Resolution)

+ ………

There are two combinations added/included in the orthogonal design as a part of simulation to

predict preferences for the profiles (Best combination of smartphone and 2nd Best combination

of smartphone). These combinations were not rated by the respondents. The total utility is

being calculated to know which the best combination among the two.

It is clearly seen that the CARD31 (BEST COMBINATION OF SMARTPHONE) is the best

combination when compared to the CARD32 (2ND BEST COMBINATION OF SMARTPHONE).

HOLD OUT CASES

Total Utility

23a iOS Full Touch 3.5 MP

16 GB 5 Inches

5.5 Hrs Paid Applications -1.802967

24a BlackBerry Full Touch 5 MP 8 GB 5 Inches 9 Hrs Free and Paid Applications 10.436949

28a Android Touch And Type 3.5 MP

16 GB

2.5 Inches 9 Hrs Paid Applications 1.096505

The above holdouts cases can be checked for the internal validity of the model. Here the total

utility of any of the holdout cases is less than the best combination which we have taken. The

total Utility of the best combination is 13.590116 that is higher than any of the holdout cases.

Thus the model is internally validates the responses taken by the subjects.

Pearson's R = 0.929 Significance = 0.0000

Kendall's tau = 0.822 Significance = 0.0000

Kendall's tau = 0.333 for 3 holdouts Significance = 0.3008

This table displays two statistics, Pearson's R and Kendall's tau, which provide measures of the

correlation between the observed and estimated preferences. The higher the correlation

between observed and estimated validates the conjoint model.

The hold out correlation should be smaller than the Pearson’s R and Kendall’s Tau which gives a

better indication of the fitness of the model. The lower the correlation of the holdouts’

Kendall’s Tau the better the model.

SUBFILE SUMMARY

No reversals occurred in this split file group.

The Subfile Summary gives the count of number of reversals. These reversals denoted the

respondents who have not responeded rationally. The summary shows that there were no

reversals.

SIMULATION SUMMARY (85 subjects/ 85 subjects with non-negative scores)

Card Max Utility* BTL Logit

31 64.71% 52.86% 59.09%

32 35.29 47.14 40.91

This table gives the predicted probabilities of each of the simulation plan card profile which has

been formed based on the above result. The two plan card profiles created have been tested on

the base of the 85 responses by the subjects. The maximum utility determines the probability

as the number of subjects who predicted to choose the plan card profile divided by the total

number of respondents. The BTL model caluclates the probability as the ratio of a plan card

profile's utility to that for all simulation profiles, averaged across all respondents. The logit

model uses the natural log of the utility. Across the 85 subjects in this study, all two models

indicated that simulation profile1 would be preferred by most of the respondents.

The above chart shows that the importance of the various factors/ attributes perceived by the

respondents. The graphs states that the respondents have considered Operating Systems to be

the most important factor. The Memory and the Battery life is considered to be the lowest in

importance.

The above graph shows the utility quotient of the various levels in Operating System

factor/attributes of Smartphones. The graphs states that the Blackberry and Android are most

preferred Operating System in the Smartphones category. While filling the questionnaire some

of the respondents reciprocated that they faced problems with Windows and Symbian

Smartphones and disliked it. Apple iOS is less preferred because of its premium pricing which is

inaccessible to the respondents at IBS. Android on the other hand is a new open source

Operating System which promises a lot in near future. BlackBerry services might be one of the

factors why respondents give the Operating System more preference.

The above graph illustrates that the respondents have given “TOUCH AND TYPE” most

preference. The reasons can be that they were facing problems with the full-touch as it is slow

and respondents are unable to type messages fast. The QWERTY option does not provide an

option to touch and respondents might have felt it less style quotient. To overcome both the

issues the respondents have given “TOUCH AND TYPE” the highest preference.

The respondents have given highest preference to the 5 Mega Pixel camera resolution cameras.

With advent of convergence of technology higher resolution cameras are being most preferred.

The respondents have perceived more utility towards the 5 INCHES screen size. Relating this to

the type of screen i.e “TOUCH AND TYPE” , we can conclude that the respondents have

perceived it the best choice.

Smartphones generally have many applications and converged functionalities such as Camera,

Bluetooth and etc. which require more battery backup. The above graph supports the same.

The graph above shows that the respondents have given more preference to the 16 Giga Byte

memory card for the Smartphones.

The respondents gave more utility to the FREE APPLICATIONS to the PAID APPLICATIONS. The

respondents are clearly price sensitive in this case.

CONCLUSION

From the above it can be concluded that the respondents have preferred Operating System to

be the most important factor while purchasing a Smart phone. Android and Black berry being

the most preferred one. Android being a new open source operating system, promises a lot in

the near future, and thus is in demand. In keyboard category, TOUCH and TYPE both are

preferred the most, reason being full touch slows down the speed of sending messages, and

QWERTY is no more a style quotient among youngsters, so to keep balance between the two

Touch and Type are preferred. Also because of the advent of convergence of technology 5

Mega Pixel camera is the most preferred. Respondents have shown inclination towards 5 inch

screen size. Also 16 Giga byte memory card and free applications are preferred the most.

Conducting such studies in the market can bring companies closer to their consumers thus

increasing their market share and profitability. This also assists companies to make future

strategies for their product categories. Such studies can facilitate companies to measure the

level of convergence of products while leapfrogging into new dimensions of technology and

thus minimize their risk.