Chapter 1

INTRODUCTION
The aim of this study is to investigate the factors that affect the consumer buying
behavior towards mobile phone. With the help of factor analysis seven decision factors of
consumer buying behavior were derived. On these seven factors a multiple regression
analysis was performed with perceived satisfaction of consumers in terms of buying
decision as a dependent variable. The study provided useful insights of the consumer
buying behavior towards mobile phones.

Background and Its Setting

All marketing decisions are based on assumptions about consumer behavior. In

order to create value for consumers and profits for organizations, marketers need to

understand why consumers behave in certain ways to a variety of product and services

offered. In order to determine the factors those influence the preferences of the today’s

consumers, an understanding of how consumers generally think and behave in buying

situations is vital.

Understanding consumer behavior and knowing customers have and never will be

simple. Consumers may say one thing but do another. They may not be in touch with

their deeper motivations. They may respond to influences that change their mind at the

last minute. These issues have lead to theories like that of the black box approach taken

on by Futrell (2000). It refers to how marketers are not able to tap into consumer minds,

thus “keeping them in the dark” (Futrell, 2000, p.3). In other words, marketers can apply

various stimuli and observe the conduct of consumers, but they cannot observe the

consumers' actual thought processes. This hidden information is considered to be the

black box. In an attempt to obtain some understanding, marketers study consumer

behavior. Researchers describe consumer behavior as the study of individuals or groups

and the mental, emotional and physical processes they use to select, obtain, consume and

dispose of products or services, to satisfy needs and wants, and the impact that these

processes have on the consumer and society.

A consumer’s decision to buy a product or service is the result of interplay of

many internal and external forces or stimuli. The starting point is the manufacturers and

marketer’s stimuli in the form of product offering through some promotional methods,

available of the product or services at a reasonable price and to satisfy and retain the

customers through proper customer relationship management method. The marketing and

environmental stimuli enter the buyer’s mind through cultural, social, personal and

psychological factors i.e., the choice of the product/brand/service is totally depends upon

the consideration of many factors.

Peers have more influence amongst teenager’s smart phone buyers compared to

parental influence (Lachance et al., 2003). Bristol and Manglegurg (2005) say “Peer

influence plays a key role in an individual’s decision making towards purchase of

consumer goods.” Consumer behavior in context of mobile phones has been studied

widely throughout the globe, indicating the importance of price, technology and brand as

the major significant factors for decision-making. According to Karjaluoto et al

(2005) study of factors affecting consumer choice for mobile phones in Finland found

that price, brand and size of the phone are the main factors in purchase of any new mobile

phone.

The result of impressions of consumers gained from various sources about the

brand is called brand image. Many factors such as trying out the Camera Speed &

Performance Battery Life Brand & Advertising Price Advantage Reviews and

Recommendations .Brand image is seen as the sum of the emotional and aesthetic

impressions that occur in the consumers about the product. Various characteristics such

as what that the brand reminds, what it evokes in the eyes of the consumer as well as the

buying behavior of the consumer must be dealt with in order to determine the brand

image (Karpat, 2000).

There are seven factors that influenced consumers’ brand loyalty towards certain

brands. The factors are “Camera, Speed & Performance, Battery Life , Brand &

Advertising, Price Advantage, Reviews & Recommendations and Social Factors ”

(Khraim, 2011, p.28).

On the study of Doyle (2002), the important product decisions in any marketing

context are product, variety, product performance, product features, product design,

product presentation, sizes, etc. Attitude of the consumer plays an important role in

decision making in a given situation. A consumer’s attitude and purchase intention

towards a brand is not only a product of their cognitive evaluations of that individual

brand but are also determined by their perception of other competing brands within the

consideration set. (Ronnie, Anne and Karinna, 2006). Product features (Fragrance /
 Texture / Design / Color) is one of the most important factors that affect brand

loyalty (Mahmud and Gope, 2012).

If a product fulfills the customer’s expectations, the customer will be pleased and

consider that the product is of acceptable or even high quality. If his or her expectations

are not fulfilled, the customer will consider that the product is of low quality. This means

that the quality of a product may be defined as the ability to satisfy the customer’s needs

and expectations. Quality needs to be defined firstly in terms of parameters or

characteristics, which vary from product to product.

Garvin (1987) proposed that product quality can be captured in eight dimensions:

performance, features, reliability, conformance, durability, serviceability, aesthetics, and

perceived quality. Quality assessment is very critical and personal that may be viewed

from different dimensions, particularly the product attributes/features and its outlook, its

color and shape/design etc.

Income of the buyer may determine the degree of quality of a product; a particular

brand may be viewed as of good quality by the person having low income and low

buying power, while a higher income person may see it as inferior.

The price of a brand and company and store prestige may be considered as

significant cues for quality. It is encouraging to be able to confirm that such stimuli as

price information and the reputation of a store or company are used as cues to the quality

of a product (Wheatley and Chiu, 1977).

 Actual prices are the discounts or surcharges relative to price expectations,

according to prospect theory (Tversky and Kahneman, 1991); this perception affects the

demands for a firm’s product, and hence its profitability.

Consumers have a variety of prices in their memory against which they evaluate

the current price of a product. The upper price limit is the price above which the

consumer considers the product as expensive or belongs to a different sub-category.

While the lower price limit is the price below which the consumer considers the product

to be of poor quality. The acceptable price range is the difference between the two limits.

In addition to price uncertainty, the width of the acceptable price range is determined by

the “customer’s price consciousness” (Widrick and Sorce, 1991, p.4), “price knowledge”

(Kosenko and Rahtz, 1988, p.16), or “purchase frequency” (Urbany and Dickson, 1991,

p.17). Hence, these studies suggested that occasional buyers (presumably with higher

price uncertainty) have a wider range of acceptable prices as well as a higher midpoint

than regular buyers.

The degree that consumers distinguish and react to price levels and price changes

is price sensitivity (Goldsmith et al, 2005). Price sensitivity can works as an indicator of

how much a consumer willing to pay. Therefore, price has an important effect on

consumers' purchase behavior and as a result on sales and profits of the business (Han et

al, 2001).
 Promotions refer to the entire set of activities which communicate the product,

brand or service to the users. The idea is to make people aware, attract and induce to buy

the product, in preference over others (Johnson and Wilson, 1993).

According to Clow (2010), promotion is an important element of a firm’s

marketing strategy. It is used to strategically communicate with customers with respect to

product offerings, and it is a way to encourage purchase or sales of a product or service.

Sales promotion tools are used by most organizations in support of advertising and public

relations activities, and they are targeted toward consumers as final users.

The objectives of the study is to identify the decision factors that affects the buying

behavior of consumer with respect to Mobile phones and To study the influence of

decision factors on the perceived satisfaction of consumers with respect to Mobile phone

buying decision.

Statement of the Problem

Drawn from the issues, the purpose of this research is to better understand the

current dynamics of student’s demand by assessing the factors influencing consumers’ on

buying behavior of Mobile phone devices among selected students of Wesleyan

University-Phil
Specifically, this study sought to answer the following:

1. What are the demographic characteristics of selected college students of

Wesleyan University-Phil in terms of:

1.1. age

1.2. gender

1.3. monthly family income?

2. To what extent do the following factors manifested in buying behavior of Mobile

phone devices ?

2.1. Camera

2.2. Speed and Performance

2.3. Battery Life

2.4. Brand and Advertising

2.5. Price Advantage

2.6. Reviews and recommendations

2.7. Social factors

3. Is there a significant effect between these factors and their buying behavior?

4. What is the impact of these factors in buying behavior of Mobile phone devices?

Conceptual Framework

This section presents a framework to become theoretical element for

empirical analysis to study. After reviewing the selected article, researchers are

provided analysis framework which is an evolving body of knowledge

concerning consumers’ selection behavior has been emerging in the marketing

literature. The common themes conducted through the research is to identify the

factors affecting consumers’ buying behavior of Mobile phone devices.

Demographic
characteristics of
respondents in terms of:

a. age
b. gender
c. family monthly
income

Consumers’
Buying Behavior
Extent of the following of Mobile Phone
factors manifested in
buying behavior of
devices
Mobile phone devices
a .Camera
b. Speed & Performance
c. Battery Life d.
Brand & Advertising e.
Price Advantage f.
Reviews &
Recommendations
 Research Paradigm

Paradigm of the Study

The paradigm above presents that the demographic characteristics of the

respondents and extent of those factors manifested in the consumers’ on buying

behavior of Mobile phone devices (independent variables) will contribute

significant changes to the consumers’ on buying behavior of Mobile phone

devices (dependent variable).

Significance of the Study

This research paper was expected to come up with very interesting findings

related to the factors affecting consumers’ buying behavior of Mobile phone devices

In view of this, the findings of this study benefit the following:

Brand Companies. This study helps the brand companies as a whole by assisting

in filling the knowledge gap on the understanding consumers’ choice criteria on their

buying behavior and to gain ideas on how brand selection process is being made by

individual consumers.
 Consumers. This study helps consumers to have ideas on what are the factors that

they should considered on selecting brand and to better understand the importance of

considering those factors before making decisions.

Future Researchers. This research serves as a guide to help the future researchers for

the success of their research because of its based facts and knowledge about the topic.

Scope and Limitation

This research concentrates on understanding the current dynamics of students

demand by assessing the factors influencing consumers’ buying behavior of Mobile

phone devices using the distributed rating scale within Bachelor of science in

accountancy students (BSA) of College of Business administration (CBA) of Wesleyan

University-Philippines . This paper only focuses on the data that have been obtained from

200 student respondents that was conducted in February 2020

Definition of Terms

The following terms are defined operationally or conceptually to give clarity on

how they are used in this study:

Age. The term refers to the age bracket of the respondents from 18 to 22.

Brand. The term describes as name, symbol, logo or other item used to

distinguish a product or services and its provider, as well as to differentiate from its

competitors.

Consumers' Brand Selection. The term labels as a process of decision making

made by the consumers as regards on selection of brand that attains their expectation,

loyalty and satisfaction.

 Monthly Family Income. The term categorizes as amount of money earns by

family within a month by working and/or capitalizing on the works of others. Ranging

from low (below 20,000) middle (21,000-50,000) to high (51,000 above) income family.

Gender. The term implies to the classification of one’ sex between female (feminine) and

male (masculine).

Price. The term views as the value or the cost suggested by the brand’s company

to its products to allure the purchasing decision of the customers.

Promotion. The term describes as a process of spreading positive information

subjecting on the brand or its company for the attraction and popularization to the

customers.

Quality. The term identifies as level of excellence of the brand based on the

feature, design and shelf life of its products.