Concepts Of Consumer Behaviour And Mobile Phones Marketing Essay

Concepts Of Consumer Behaviour And Mobile Phones Marketing Essay Mobile phone occupies a fundamental place in peoples daily life. It has become one of the most important tools for personal communication across the globe during the past fifteen years. Consumer behavior is the study of when, why, how and where people do or do not buy products (Sandhusen; Richard, 2000). One of the things that can be categorized as both needs and desires is mobile phone. This chapter introduces the concept of Consumer Behaviour and shows the various components applicable to the mobile phones purchase in Mauritius. This will include the key factors influencing the Mauritians buying behaviour for mobile phones. The different criteria consumers consider in their buying behaviour will also be exemplified. Concepts of Consumer Behaviour and Mobile Phones In todays world consumer behaviour is one of the most fascinating topics. Consumer is the ultimate user of every product, without any consumer there is no market as such (Baker, 2004). Consumers are considered the king therefore it is very essential to study the behaviour of consumers. Blackwell et al. (2001) described consumer behaviour as the activities, in which people acquire, consume and dispose products and services. In the same view, Kundi et al (2008) stated that consumer behavior refers to the mental and emotional process and the observable behavior of consumers during searching, purchasing and post consumption of a product or services. McGraw-Hill (2005) defined consumer buying behaviour as the behaviour in the quest to satisfy needs which products and services were acquired to satisfy these personal consumption needs. Customers make purchases in order to satisfy needs. According to Christ (2009) some of these needs are basic and must be filled by everyone on the planet whi le others are not required for basic survival and vary depending on the person. It probably makes more sense to classify needs that are not a necessity as wants or desires. On the other hand, Peter and Olson, (1993) mentioned that interactions between the peoples emotions, moods, affection and specific feelings is called consumer behavior, in other words in environmental events which they exchange ideas and benefits each is called consumer behavior . Figure 1: Influential factors of consumer behaviour Source: Kotler Armstrong, 2008 By understanding consumer behaviour deeply, different authors have given different information about the consumer behaviour and how consumer buys the products. Consumer behavior involves the psychological process that consumers go through in recognizing needs, findings ways to solve these needs, making purchase decisions, interpret information, make plans and implement these plans (Perner, 2008). Consumer behaviour towards mobile phones The emerging technologies, one that promises greater variety in applications, highly improved usability, and speedier networking (Robert Godwin-Jones, 2008). Mobile phone is a constant companion to many people. Mobile phone which is fundamentally a communication device has undergone several transformations making its functionalities transcending the traditional voice communication between two individuals (Kushchu, 2007). Mobile technology is a daily communication device that allows people to communicate worldwide within seconds. Different researchers have diverse view about mobile phones. Xiaowei Huang (2011) identified mobile phone as one of the cultural commodities in todays world. According to Bassett (2006), today, the functions of mobile phones are not only for making and receiving calls, but also for providing other functions such as mailboxes, digital cameras, video recorders, personal radios, personal organizers, and even MP3 players. It is sometimes assuming that the mobile becomes each of these objects rather than simulating them, or re-mediating them; that it takes on the most advanced characteristics of each media stream it subsumes, and also assumes the development trajectory, or even the nature, or ontology, of these media (Bassett 2006). Nowadays mobile phone users are more adaptive, definitive, and subjective to how they use the communication device (Murni Mahmud et al, 2010). Mobile phone is not only a medium for communication but an entertainment device, an educative tool. Consumers used the technology as designed by the designers to satisfy different purposes beyond the conception of the designer (Carroll et al., 2002; Bar et al., 2007). Mobile technology were used and interpreted by users of mobile phones in their distinctive ways rather than how the designer had conceptualised the use of the mobile phones. Likewise mobile phone usage became more meaningfully through how the technology is used, the purposes it serves, and the context of its use through choice of functions and features (Okabe, 2004; Lindqvist and Svensson, 2007; Wirth et al., 2008). Overview of the Mauritian Mobile Phone market The Republic of Mauritius, a small island state with a population of 1.3 million inhabitants, is nestled in the middle of the Indian Ocean. Mauritius was the first country to launch cellular operations in the Southern Hemisphere on 29 May 1989 (Minges, Gray Tayob, 2004). Mauritius has been the first with the many telecommunication innovations in the African continent, who aims to be known as a cyber island. Telecommunication had an early beginning in Mauritius, the first telephone line was installed in 1883, seven after the invention of the telephone. The privatisation of telecommunication industries since the mid-1990s, most mobile phone markets have been characterised by competitive industries due to the presence of more than one operator (Bailard, 2009; ITU, 2011). The result is more affordable and reliable mobile services. People also do not have to wait for long periods of time to have a mobile phone installed. The Mauritian telecommunications sector was fully liberalized in Ja nuary 2003 pursuant to the General Agreement on Trade in Services (GATS) commitment made by Mauritius in 1998 (WTO, 2012). Currently there are 3 main mobile phone operators in Mauritius namely Orange, Emtel and MTML. Orange is the market leader, while Emtel and MTML are the challengers. Emtel first launched the 4G Mobile in Mauritius, Tassarajen Chedumbrum Pillay, Minister of Information Technology and Communication (ICT), which officially launched the 4G mobile phone service on May 29, 2012 (Lexpress.mu, 2012). Mobile penetration rates have exploded from a mere 1.05 percent in 1995 to a staggering 92.79 percent by the end of 2010. Mobile cellular subscribers rose by 9.6% to reach 1,190,900 in 2010 from 1,086,700 in 2009. Prepaid subscribers increased by 8.5% from 1,013,000 in 2009 to 1,099,200 in 2010. Mobidensity or the number of mobile cellular phones per 100 inhabitants increased by 9.2% from 85.0 in 2009 to 92.8 in 2010 (Central Statistics Office, 2011). Figure 2: Mobile cellular subscriptions in Mauritius C:UsersRachnaDesktopchart.png Source: World Bank, 2011 Consumers purchase preferences and satisfaction level for mobile phones For perspective of globalization we cannot change the system of tastes and preferences of Consumers. Another instance demonstrating the ignorance of local tastes in the wake of globalization features the multinational mobile phone makers, Nokia had tasted success with its soap-bar designed phones and ceased producing the flip phones that consumers found irritating to use (Zaccai, 2005). Every consumer has their own tastes and preferences. So, every consumers opinions and preferences are different from one another. It has also been pointed that many decision strategies used by consumers can change due to person-, context-, and task-specific factors (Dhar, Nowlis and Sherman, 2000; Swait and Adamowicz, 2001). Consumers tend to utilize different approaches to make choices. Mobile phone choice and use has also been found to be related to prior consumption styles. According to a survey of Finnish young people aged 16-20, it was found that mobile phone choice and especially usage is consis tent with respondents general consumption styles (Wilska, 2003). Customer value perceptions are found to significantly impact and drive consumers intentions in terms of repurchase intent, word-of-mouth referrals, customer commitment and loyalty (e.g. Brady and Cronin, 2001; Cronin et al., 2000; Duman and Mattila, 2005; Christou, 2003). In general, a common distinction to be made is that while the utilitarian goods usually are primary instrumental and functional, hedonic goods provide fun, pleasure and excitement. It has been noted that many choices have both utilitarian and hedonic features (Batra and Ahtola, 1990), and thus it can also be proposed that the choice between mobile phones has both utilitarian (e.g., communication, time planning) and hedonic (e.g., games, camera) features. Quite similarly, consumer choice can also be approached from the perspective of conscious and non conscious choice (e.g., Fitzsimons et al., 2002). On the other hand, direct marketing activities have big impact on every consumer, every company knows about the behavior of every consumer in the market. This theory helps for the organization and sub-organizations to know the consumer behavior in different market environments, taste and preferences of the consumer behavior (Thomas, 2004). Kalpana and Chinnadurai (2006) found that adverti sement play a dominant role in influencing the customers but most of the customers are of opinion that promotional strategies of cellular companies are more sale oriented rather than customer oriented. Nandhini (2001) examined that attitude of the respondents using cell phones was not influenced by either education or occupation and income Usage functions and features as a key driver of consumer acceptance of mobile phones Another important aspect that has risen from different studies is that consumers purchase new phones due to the fact that their existing ones capacity is not appropriate referring to the idea that new technology features such as built-in cameras, better memory, radio, more developed messaging services, and color displays are influencing consumer decisions to acquire new models (In-Stat/MDR, 2002; Liu, 2002; OKeefe, 2004; Karjaluoto et al., 2005). Thus it can be expected that new features will influence the intention to acquire new mobile phones. The consumer will respond according to the product quality and reliability, the fundamental understanding of products is necessary to understand the product features, products reliability and product benefits (Baker, 2004). For example, researchers like Chang and OSullivan (2005) showed that concrete feedback provided when keys are pressed offers a good satisfaction experience among the mobile phone users whilst Lesher et al. (1998) and Nesba t (2003) re-designed the keypads to expedite text entry. Moreover, studies involving elderly users found them to prefer large, clear and bright screens (Kurniawan et al., 2006; Nizam et al, 2008). Mobile phones are often criticized as being too small to be held and handled (Balakrishnan and Yeow, 2007). In a recent paper, V. Balakrishnan (2011) investigated mobile phone messaging satisfaction among Malaysian youths. It was found that mobile phone users have mixed feelings towards text entry speed, keypad design and health-lower extremity and thus, they are unsure about their overall SMS satisfaction. Hence this indicates that consumers lay more emphasis on the design of the mobile phone while choosing which cell phone to buy. The younger the consumer the more hedonistic features consumers tend to value in mobile phones (Wilska, 2003). Though, in Africa, the use of SMS and chat services has been widely accepted, but people are still reluctant to engage in other mobile data services, such as MMS, mobile banking and web browsing amongst others (Brown, Gordon, Janik Meyer, 2005). The major portion of the population uses SMS, chat services and some leisure based services such as ring tones and games but they are still reluctant to engage in other more advanced data services (Goldstuck, 2005; Bouwman et al., 2006). Mobile value-added services are digital services added to mobile phone networks other than voice services, including short message service, games, entertainments, web surfing, software applications and functions for achieving specific purposes (e.g. performing electronic transactions (Kuo et al., 2009). Among all m-commerce applications, mobile value-added services have been recognized as having a remarkably promising future in the telecom service market because customer values, such as time-critical needs and arrangements, spontaneous needs and decisions, entertainment needs, and efficiency needs and ambitions, can be met by using these services (Anckar and DIncau, 2002). Consequently, mobile phone technological advances allow customers to participate in the mobile services development, design, production and delivery process, mobile phone users increasingly demand for affordable and reliable services that correspond exactly to their specific individual needs, lifestyle and preferen ces (Sigala, 2002). Generally speaking, a positive attitude with regard to new information technologies can be found among the younger, male and high-income categories (Brown and Vemnkatesh, 2005; Gefen and Straub, 1997; Ilie et al., 2005; Rice and Katz, 2003; Wei and Lo, 2006). Not all types of mobile phone are successful in entering the market because some types of the mobile phone have a negative perception of user (Jaya Suteja and Stephany Tedjohartoko, 2011). While some people find using mobile devices to conduct transactions relatively easy, others experience difficulty with the small screen size and small keypad. Data input becomes a problem, and this can lead to wasted time, errors and frustration experienced by users, hence making usability less attractive (Chen Frolick, 2004).However, the mobility of mobile devices also increases the risk of losing them (Tarasewich, 2003). Mobile users are worried about the safety of their devices as these can easily be lost or stolen. Branding as a major factor affecting purchase of mobile phones Brand image is perceptions about a brand as reflected by the brand associations held in consumer memory (Keller, 2003). Brand is considered as a warranty not only of the quality and performance but also of the difference and emotional relationship with the product (Bahmanziari et al., 2003; Jiang, 2004). Moreover, the technological advancement lead to product features becoming more and more similar, as such consumers are often incapable or reluctant to distinguish between brands on rational attributes alone (Temporal and Lee, 2001). Likewise Riquelme (2001) examined how much self knowledge consumers have when making choice between different mobile phone brands based upon six key attributes (telephone features, connection fee, access cost, mobile-to-mobile phone rates, call rates and free calls). The research showed that consumers with prior experience about a product can predict their choices relatively well, although respondents tended to overestimate the importance of features, call rates and free calls and underestimate the importance of a monthly access fee, mobile-to-mobile phones rates and the connection fee. Brand image acts as information prompt (Bhat and Reddy, 1998). Moreover, brands can accelerate consumers information transmission (Kotler, 1999). Brand image helps to create positive attitudes and feelings. Brand effects for mobiles have been investigated by various authors. Luca Petruzzellis (2010) studied the hedonic and utilitarian value dimensions to better understand the brand effect. Previous research has shown that consumer brand image would affect consumers opinions on brand equity, leading to brand loyalty. Brand equity significantly affected purchase intention (Chen, 2010). Brand equity is referred to the marketing results that accrue to a product with its brand name as compared to those that would ensue if the same product did not have the brand name (Aaker, 1991; Ailawadi et al., 2003; Keller, 2003). The brand equity influences consumer-level constructs such as attitudes, awareness, image, and knowledge and company related outcomes like market share, prices, revenues and cash flow (Ailawadi et al., 2003). Accordingly brand equity drives to brand loyalty. Likewise, Chaudhuri and Holbrook (2001) added that affective responses to brands are of utmost importance as brand effect is a strong driver of brand loyalty. Additionally, in the context of the mobile communications industry, Baker et al. (2010) examine the importance of brand equity in generating greater consumer demand for mobile communications products/services. In a similar vein, Jurisic and Azevedo (2011) address the need to increase brand equity by building and maintaining customer-brand relationships, which can be done by valuing the issues that customers value the most in order to increase their emotional attachments to the brand. Personality influences on mobile phones Mobile phones have been recognised as a form of self-expressive identity (Mannetti, Pierro, Livi, 2002; Walsh White, 2007) with many mobile phone users personalizing their phones to express their identity by decorating their phones and having unique ring-tones (Goggin, 2006; Katz Sugiyama, 2005). Self-identity has also been found to predict level of mobile use, with use increasing as self-identification as a mobile phone user increases (Walsh White, 2007). These findings suggest it may be worthwhile to assess whether self-identity is related to the level of involvement that people have with their mobile phone to improve our understanding of the connection between material objects and behaviour. As the mobile phone supports interpersonal interaction, mobile phone use might be a function of personality (Sarah Butt James G. Phillips, 2008). Historically, a mobile phone has been pricy with the market dominated by business users (Kendall, 1997). It has been considered a status symbol for the rich and famous during the early 1990s all over the world. The mobile phone is, however, more than a communication tool or piece of furniture: it is an extension of their person, and expresses their identity and selfhood in a variety of ways, including both how it is used and how it is worn (Helen Haste, 2005). It has been argued that a young persons mobile phone is a central expression of their identity (Brown et al. 2002). Young people are increasingly using and adapting mobile phones not only to interact with their own worlds, but to create and structure their worlds (Spero Stone, 2004 Referral influences for mobile phone buyers behaviour Consumer behaviour research on consumers social and interpersonal environment has indicated that the mobile phone consumers final purchasing decision will also be influenced by reference groups (such as friends, family, work associates and etc.) on whether to buy a specific product and which brand or model to choose among competing alternatives (Moschis, 1976). Wooten and Reed (2004) suggested that consumers with high susceptibility to normative influence tend to use protective self-presentation to avoid undesirable disapproval. In the studies of Jiaqin Yang et al. (2007), reference groups have a significant influence on US mobile phone consumers in their purchasing behavior. The target population for the survey was Chinese people, they consume similar brands or products that their peers consuming. In comparison, individualism is a popular trait among US consumers, so most American consumers focus more on their personal needs and less concerning about the opinion of others. It can be further supported by a recent research (Mourali et al., 2005). The research of Tiana Tucker (2011) illustrate that friends were the most influential people for young adults when looking to purchase a new mobile phone. Sernovitz (2009) described word of mouth marketing as all about consumers sharing their experiences of products by ways other than direct marketing to consumers. When an idea is transferred to the consumers and they send it to fellow customers, that is, a form of real word of mouth communication. Word of mouth seems desirable to achieve positive perception and thus preference for a brand in the customers mind (Sweeney et al., 2008). One way that offers a distinct point of advantage is positive word of mouth (WOM). Early studies suggested that WOM is nine times as effective as traditional advertising in converting unfavorable or neutral predispositions into positive attitudes (e.g., Day, 1971). More recently, Hogan et al. (2004) showed that WOM can triple the effectiveness of advertising. Table 1: Types of Reference Groups Type of Reference Group Definition Example Formal Clearly defined structure and membership Soccer club Informal Has no formal rules Families, friends and peer groups Primary Has face-to-face interaction Students in a class Membership Members of a certain group and model behaviour on others in the group Members of a church or a social club Non-membership Do not have membership but may still model their behaviour on members of this group Non-member of church may still be influenced by members behaviour: helping those in need Aspirational Groups that people aspire to belong Movie stars and famous personalities (Ryk Neethling) Dissociative Groups that you avoid or reject Gangs Source: Cant et al. (2006); Strydom, et al. (2000) Mobile technology within the social and occupational spheres influence buying patterns Social needs are the needs for social interaction of an individual that represent the need for communicating with friends, family and affiliation such as group membership, clubs, churches and work affiliations (Tikkanen, 2009). Social need is one of the determinants of consumers dependency on mobile phones (smartphones) because the mobile phones have become much more versatile, allowing consumers increased usage for communication and maintaining relationships between and among individuals (Lippincott, 2010). This is supported by the Mafe and Blas (2006) study which found that consumers high dependency on smartphones is positively correlated with consumers future purchase behaviour. Currently, TV-individual interaction through text messages includes participation in programmes in order to vote, downloading a variety of content, expressing opinions and appearing on screen, taking part in draws or competitions and even TV screen chats (Beyer et al., 2007). Mobile phones have in the firs t place been enhancing friendships and family interaction and have resulted in the tightening of social cohesion among close friends and family members (Ling Horst, 2011). In Wei and Los (2006) research, it was found that consumers were highly engaged with smartphones when there was a positive correlation between social needs and dependency. Consumers with a high need to socialize and be connected were found to increase their usage rate on mobile phones because Bodker et al. (2009) claimed that interaction or social networking has been embedded and conveyed through the mobile phones itself. Consequently, consumers with a lower level of social needs are expected to have a lower usage rate of smartphone (Morgan, 2010). According to Hundley and Shyles (2010), consumers fulfils their social need by engaging with mobile phones and have concerns about being socially disconnected, uninformed and excluded from friends and their social activities. Research has consistently shown that many young people believe mobile phone use enhances social inclusion by allowing them to remain in contact with friends and peers at all times (see, e.g., Ling, 2004; Peters ben A llouch, 2005; Wei Lo, 2006). Additionally, some mobile phone users report feeling loved and valued when they receive contact on their mobile phone (Walsh, White, Young, 2009) and that positive messages are stored on mobile phones so they can be re-read when the user is feeling low (Srivastava, 2005). Young people are heavy users of mobile phones; they are the majority of the population who users mobile phone the most (Dickinger, et al., 2004). As such the younger generation is keener to have high technology devices, for example latest technology mobile phones than the older population. Mobile phones are more as a fashion accessory to the young generation than a communication device (Robins, 2003). Mobile devices are more likely to be used in the presence of other people and may even be seen as a fashion accessory (Lu et al., 2005, 2008). More public use of these portable systems may mean that users are more open to circumstances of social judgement, criticism and censure. Young people are using and adapting mobile phones more and more not only to interact with their own worlds, but to create and structure their worlds (Spero Stone, 2004). Mobile phone is now a common part of youngsters lifestyle. Research showed that mobile phones enable young people to be associated to their fa mily and to their peers and allows them even more freedom to connect and explore. The impact of culture on mobile phone purchase Culture is identified as the collective mental programming of individuals in an environment (Hofstede, 1980). This means that culture is not genetically inherited, and it cannot exist on its own but acquired from the society. An individuals behavior is a result of that individuals cultural value system for a particular context which are changed and developed over time (Luna and Gupta, 2001). According to various authors, culture is believed to have a great influence on consumer behaviour. Culture has a profound influence on how and why consumers purchase range products and services, (Blackwell et al., 2001). Cultural groups influence the consumption patterns. Moreover, ethnic background and geographical locations play a large part in culture and establishing culturally acceptable and unacceptable consumer behavior. Subcultures exist with culture groups. According to researchers obtaining a mobile phone is a milestone that indicates success, not only financially but also culturally in term of the integration within society, (Castells et al. 2007). On the other hand, Marquardt (1999) has claimed that mobile phones affect social relationships and this is a disintegration of communities. Mobile phone usage has resulted in greater electronic interactions between friends and family at the expense of face to face interaction which have been dramatically reduced. Consequently, it could be proposed that mobile phones are changing individual cultural norms and values (Rauch, 2005). Conversely, HUANG Xiaowei (2011) argued that the mobile phone, with its dramatic development and peerless functions, is not a myth but a consequence of social development. The study from Choi and Geistfeld (2004) showed that functionality design, feature images and brand images are highly positive correlated with cultural characteristics of the users. Research showed that in some of Shanzhai mobile companies develop special models of mobiles for sub-cultural group consumers, for example, for Buddhists they have gold plated mobile with Buddha picture as inter face and sutra (Jun Li, 2010). Subcultures comprise of nationalities, religions, racial groups, and geographic regions. Further, Lee and Kacen (2008) discovered that subjective cultures tend to influence the buying intention of consumers. Gay et al. (1997) defined culture as the what-everybody-knows about the world without consciously knowing where or when they first learned it. The research work by Monthathip Srikes et al (2009) demonstrated that differences in national culture impact on the buyer behaviour of the Thai and British consumers when purchasing a mobile phone. For example, for Thai consumers, it is important to note that social acceptance acts as the main buying decision factor alongside their cultural attributes. In contrast, a strong correlation occurred between buying Intention self- direction and price -hedonism with British consumers (Monthathip Srikes, Panos Louvieris, Catherine Collins, 2009). Mobile phone choice as a learning device Mobile technology is dominating the world rapidly. In the educational system, Ling (2003) argues that communication systems between students have always existed. Students have always communicated to each other by passing notes, whispering, using hand signals, and the like (Ling 2003). Furthermore, the use of the mobile phone to send SMS eliminates the physical note, thus allowing for discretion-the message cannot be seen or read by others (Ling, 2003). Mobile learning devices such as mobile phones now have the emerging potential to achieve a large scale impact because of their portability, versatile features, and low cost (Roschelle, 2003). Many researchers have analysed the effectiveness of mobile phones. Taher Bahrani (2011) believes that mobile phones offer promising opportunities for learning in informal setting outside the classroom borders. Moreover, the increase in processing power, storage memory, and connectivity through the internet or the Bluetooth technology have resulted in an extensive growth in media richness that can provide access to highly personalized learning environment for everyone in informal setting (Pea Maldonado, 2006). As the matter of fact, the conventional mobile phone is more than just a device to make a call. In recent years, there have been many studies and projects using the relevant mobile technologies such as mobile phones or ipods for both formal and informal language learning (Chinnery, 2006; Kadyte, 2003; Kiernan Aizawa, 2004; Levy Kennedy, 2005; Norbrook Scott, 2003; Paredes et al., 2005; Thornton House, 2005; Ogata Yano, 2004).Mobile phones can provide the learner with frequent engagement opportunities to language problems all the time increasing the learning chances by allowing the learner to use many sources of authentic audio/visual and print materials once motivated (Beaudin et al. 2006). Nevertheless, there is no formal theory of mobile language learning developed to date (Joseph Uther, 2006), but still emerging mobile technologies increasingly suggest potential language learning solutions and environments that will be highly interactive, ubiquitous, and convenient. On the other hand, in countries such as India, cell phone ownership is growing fast. As a result, many educational projects are taking advantage of that development to create applications that run on mobile phones (Robert Godwin-Jones, 2008). However, research carried out by Ozhan (2004) reports that as educational level increases, the level of negative attitude toward mobile phones increases also. In the same vein, Pressley (2002), reading is about constructing meaning from a text so that the goal of reading goes beyond decoding and recognizing words. Also, reading is purposeful only when a learner can build meaning from a text and connect it to his or her everyday life. A lack of comprehension leads to negative attitudes and a loss of motivation (Graves et al., 2003). Additionally, Murphy (2006) also emphasizes the need to consider cultural and social factors when designing mobile learning activities. Similarly, Cobcroft et al. (2006) suggested to be well aware of the limitations a nd challenge, bearing in mind the potential impact on transforming current cultures and practices. Price as an influential factor in the purchase on Mobile Phones Besides new technological advances price was the most influential factor affecting the choice of a new mobile phone model. Price of the phone has b