BUSINESS RESEARCH

Term paper
On

MOBILE PHONES HANDSET BUYING

PREFERENCE- AMONG STUDENTS AND
EXECUTIVE SEGMENT USING FACTOR ANALYSIS

Submitted To
Mr. Sadhu Durga Prasad

Submitted By
ANUSHREE SALIKE (10104)
KEERTHY NAYAK (10122)
KALYANI PUROHIT (10118)
KALLURI LAKSHMI (10218)
SHILPA VIJAYWARGI (10243)
Y. AVINASH (10205)
A. SUDHARSHAN REDDY (10354)

Vignana Jyothi Institute of Management

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Contents
INTRODUCTION:......................................................................................................................................2
NOKIA:.......................................................................................................................................................3
Scope of the study:......................................................................................................................................5
Limitation of the study:...............................................................................................................................5
Objective:....................................................................................................................................................5
Hypothesis:..................................................................................................................................................5
Research design:..........................................................................................................................................6
Descriptive research design.....................................................................................................................6
Sampling design..........................................................................................................................................6
Data analysis:..............................................................................................................................................7
Factor Analysis:.......................................................................................................................................7
Factors Influencing the Students:............................................................................................................7
Factors Influencing the Executives:.........................................................................................................8
How Factor Analysis is used here............................................................................................................8
Chi-Square Test.......................................................................................................................................9
Types of Chi-Square Analysis:............................................................................................................9
When to apply a Chi-Squared Test:.....................................................................................................9
What the Chi-Squared Test does:........................................................................................................9
Chi-Square Requirements:.................................................................................................................10
Chi-Square Hypotheses:....................................................................................................................10
CONCLUSION.........................................................................................................................................10
ANNEXURE:............................................................................................................................................11
BIBLIOGRAPHY:....................................................................................................................................15

INTRODUCTION:

At 110.01 million connections ' Indian Telecom Industry' is the fifth largest and fastest
growing in the world. The subscriber base has grown by 40% in 2005 and is expected to reach
250 million in 2007.
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 Over the last 3 years, two out of every three new telephone connections were wireless.
Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as
compared to only 40% in 2003. Wireless subscriber growth is expected to grow at 2.5 million
new subscribers every month in 2007. The wireless subscriber base skyrocketed from 33.69
million in 2004 to 62.57 million in FY 2004 -2005. The wireless technologies currently in use
' Indian Telecom Industry ' are Global System for Mobile Communications (GSM) and Code
Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators
providing mobile services in 19 telecommunication circles and 4 metro cities, covering more
than 2000 towns across the country. And the numbers are still growing for 'Indian Telecom
industry. Telecom Industry in India ' is regulated by 'Telecom Regulatory Authority of India'
(TRAI). It has earned good reputation for transparency and competence.

Three types of players exists in ' Telecom Industry India ' community -

 State owned companies like - BSNL and MTNL.

 Private Indian owned companies like - Reliance Infocomm and Tata Teleservices.
 Foreign invested companies like - Hutchison-Essar, Bharti Tele-Ventures, Escotel,
Idea Cellular, BPL Mobile, Spice Communications etc.

The ' Indian Telecom Industry ' services is not confined to basic telephone but it also extends to
internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The
bottlenecks for ' Indian Telecom Industry ' are:

 Slow reform process.

 Low penetration. Service providers bears huge initial cost to make inroads and
achieving break-even is difficult.
 Huge initial investments.
 Limited spectrum availability and interconnection charges between the private and
state operators.

The Government Broadband Policy 2004, aims at 9 million broadband connections and 18
million internet connections in 2007. ' Indian Telecom Industry ' is currently expected to

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contribute nearly 1% to India's GDP which is heartening and estimated to grow further and
brighten the ' Scenario of Indian Telecom Industry.

NOKIA:
Nokia Corporation is a Finnish multinational communications corporation that is headquartered
in Keilaniemi, Espoo, a city neighboring Finland's capital Helsinki. Nokia is engaged in the
manufacturing of mobile devices and in converging Internet and communications industries, with
over 132,000 employees in 120 countries, sales in more than 150 countries and global annual
revenue of over €42 billion and operating profit of €2 billion as of 2010 It is the world's largest
manufacturer of mobile telephones: its global device market share was 31% in the fourth quarter
2010, up from an estimated 30% in third quarter of 2010 but down from an estimated 35% in the
fourth quarter of 2009. Nokia's estimated share of the converged mobile device market was 31%
in the fourth quarter, compared with 38% in the third quarter 2010. Nokia produces mobile
devices for every major market segment and protocol, including GSM, CDMA, and W-
CDMA (UMTS).

Nokia offers Internet services: applications, games, music, maps, media and messaging through

its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produce stele communications
network equipment, solutions and services. Nokia is also engaged in providing free digital map
information and navigation services through its wholly-owned subsidiary Navteq Nokia also has
greater dependency on England based company duo namely Symbian Corporation for its mobile
operating systems and OVI for its mobile based application software’s development and
distribution. Which have made nokia as highest selling mobile phone vendor within the last few
years.

Nokia has sites for research and development, manufacture and sales in many countries

throughout the world. As of December 2010, Nokia had R&D presence in 16 countries and
employed 35,870 people in research and development, representing approximately 27% of the
group's total workforce. The Nokia Research Center, founded in 1986, is Nokia's industrial
research unit consisting of about 500 researchers, engineers and scientists.  It has sites in seven
countries: Finland, China, India, Kenya, Switzerland, the United Kingdom and the United
States Besides its research centers, in 2001 Nokia founded (and owns) INdT – Nokia Institute of

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Technology, a R&D institute located in Brazil Nokia operates a total of 4 key manufacturing
area located at Salo, Finland; Beijing and Dongguan , China; and Masan, South Korea  Nokia's
industrial design department is headquartered in Soho in London, UK with significant satellite
offices in Helsinki, Finland and Calabasas, California in the USA.

Nokia is a public limited liability company listed on the Helsinki, Frankfurt, and New York stock

exchanges. Nokia plays a very large role in the economy of Finland; it is by far the
largest Finnish company, accounting for about a third of the market capitalization of the Helsinki
Stock Exchange (OMX Helsinki) as of 2007, a unique situation for an industrialized country. It
is an important employer in Finland and several small companies have grown into large ones as
its partners and subcontractors. Nokia increased Finland's GDP by more than 1.5% in 1999
alone. In 2004 Nokia's share of the Finnish GDP was 3.5% and accounted for almost a quarter of
Finland's exports in 2003.

In recent years, Finns have consistently ranked Nokia as one of the best Finnish brands. In 2008,
it was the 27th most respected brand among Finns, down from sixth place in 2007. The
Nokia brand, valued at $29.5 billion, is listed as the eight most valuable global brand in the Inter
brand/Business Week Best Global Brands list of 2010 (first non-US company). It is the number
one brand in Asia (as of 2007 and Europe (as of 2009), the 41st most admirable company
worldwide in Fortune's World's Most Admired Companies list of 2010 (third in Network and
Other Communications Equipment, seventh non-US company), and the world's 120th largest
company as measured by revenue in Fortune Global 500 list of 2010. As of 2010, AMR
Research ranks Nokia's global supply chain number nineteen in the world. In July 2010, Nokia
announced that their profits had dropped 40% in the global smart phone rivalry; Nokia dominates
the worldwide mobile markets, but remains fragile in the United States.

On 11 February 2011, Nokia announced a partnership with Microsoft , which will mean most
future Nokia smart phones will be powered by the Windows Phone 7 operating system.

Scope of the study:

This study focus on how and why consumers make decision to purchase mobile.

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The study enables us to understanding the perception of the market segment in a better way .So,
this study help NOKIA dealers to recognize the factor influencing the consumers to buy the
NOKIA Mobile and also identify various features influencing the buying process.

Limitation of the study:

 The study is restricted only to Hyderabad and secunderabad.
 There can be errors in sampling.
 Time constraints were present.
 Results may be biased.

Objective:
 To study the satisfaction level of students and executives towards the NOKIA Mobile.
 To Know the Brand loyalty of the respondents towards NOKIA Mobile.
 To identify the factors that influence on the purchasing decision of the mobile phone
among the students and executives.

Hypothesis:
 The students and executives perceives mobile brand NOKIA as the best brand when
compared to other brands.
 The respondents are loyal towards the mobile brand NOKIA.
 The technology provided by NOKIA, when compare to other factors, is the main reason
for consumers to opt for it

Research design:

Descriptive research design

Descriptive research is used to obtain information concerning the current status of the
phenomena to describe "what exists" with respect to variables or conditions in a situation i.e. to
study the consumer preferences of the mobile brand NOKIA. The methods involved range from
the survey which describes the status quo, the correlation study which investigates the

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relationship between variables, to developmental studies which seek to determine changes over
time.

The design includes the following steps:

 Statement of the problem i.e. the objective of the research

 Identification of information needed to solve the problem i.e. need for survey
 Selection or development of instruments for gathering the information i.e. identifying the
segments and places where the respondents can be found.
 Identification of target population and determination of sampling procedure
 Design of procedure for information collection
 Collection of information
 Analysis of information
 Generalizations and/or predictions

Sampling design
Sample units: students and executives

Sample size: 200. 100-students, 100-executives

The sampling design used here is the random sampling. The data will be collected from the
students by visiting schools, colleges and tutorial centers and from the executives by visiting
offices and some clubs within Hyderabad.

Data analysis:

Factor Analysis:
It is very useful method of reducing data complexity by reducing the number variables being
studied. It is a set of techniques which by analyzing correlation between variables, reduces their
number into less fewer factors which explain much original data.

Procedure: there are two stages in factor analysis.

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Stage 1: It is called as the factor extracting process.

Stage 2: It is called rotation process. The most popular method for stage 1 is principle
component analysis. In stage I our objective is to identify how many factors will be extracted
from the data. This can be done by the computation of Eigen Values. The concept of Eigen
Value translates to the variance explained. The higher the Eigen value of a factor, the higher is
the amount of variance explained by the factor. We extract least number of factors possible
which will maximize the explained variance. The first we assume Eigen value = 1 for each
factor.

In rotation stage the task is to interpret and name the factors. This is done by the process of
identifying which factor associated with which variable.

Factors Influencing the Students:

1. Design/Style
2. Colour
3. Price
4. Features
5. Plan
6. Camera
7. Media player
8. Fm
9. Touch screen

Factors Influencing the Executives:

1. Design/style
2. Price
3. Service
4. Quality
5. Calendar
6. Accessories
7. Camera
8. Media player

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 9. Video Player
10. Popularity
11. Plan

How Factor Analysis is used here

Factor 1: Top End Features

Factor 2: Basic features

Factor 3: Brand Image

Factor 4: Economy

Factor 5: Additional Features

Factor 6: Versatility

Factor 7: Physical Features.

Chi-Square Test

 The probability density curve of a chi-square distribution is asymmetric curve stretching

over the positive side of the line and having a long right tail.
 The form of the curve depends on the value of the degrees of freedom.

Types of Chi-Square Analysis:

 Chi-square Test for Association is a (non-parametric, therefore can be used for nominal
data) test of statistical significance widely used bivariate tabular association analysis.
 Typically, the hypothesis is whether or not two different populations are different enough
in some characteristic or aspect of their behavior based on two random samples.
 This test procedure is also known as the Pearson chi-square test.

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  Chi-square Goodness-of-fit Test is used to test if an observed distribution conforms to
any particular distribution. Calculation of this goodness of fit test is by comparison of
observed data with data expected based on the particular distribution.

When to apply a Chi-Squared Test:

 Chi-Squared test is used to determine if there is a statistically significant difference in the

proportions for different groups. To accomplish this, it breaks all outcomes into groups.

What the Chi-Squared Test does:

 It starts by determining how many defects, for example, would be “expected” in each
group involved.
 It does this by assuming that all groups have the same defect rate (which Minitab
approximates from the data provided).
 Minitab then compares the expected counts with what was actually observed.
 If the numbers are different by a large enough amount, Chi-Square determines that the
groups do not have the same proportion.

Chi-Square Requirements:

 Data is typically attribute (discrete). At the very least, all data must be able to be
categorized as being in some category or another).
 Expected cell counts should not be low (definitely not less than 1 and preferable not less
than 5) as this could lead to a false positive indication that there is a difference when, in
fact, none exists.

Chi-Square Hypotheses:

 Ho: The null hypotheses (P-Value > 0.05) means the populations have the same
proportions.
 Ha: The alternate hypotheses (P-Value <= 0.05) means the populations do NOT have the
same proportions.

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CONCLUSION
The conclusion of the study shows that there are seven major factors which influence the
mobile purchase decision of youth. These factors are Top end Features, Basic Features,
Brand Image, Economy, Additional Features, Versatility and Physical Characteristics.
These seven factors include all the factors that were aimed to study the mobile purchase
decision. The present study is based on sample of 100 students and 100 executives from the total
population in the Hyderabad and Secunderabad region and has shown the relationship between
the factors and the buying decision of the customer through factor analysis. The study suggests
that the marketer should be considering the above mentioned factors to equate the opportunity.
The study may show some deviation due to complexity in consumer taste & preferences in
different region.

ANNEXURE:

Questionnaire regarding mobile phone usage

1. Name or initials:
2. Gender:
3. Age:
4. Education:
5. Profession:

6. Do you have a mobile handset?

a) Yes b) No

7. How many Mobile handsets do you have?

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 a) 1 b) 2 c) More than 2
8. Do you own a Nokia mobile phone?
a) Yes b) No
9. Which model/make do you use?
------------------------------
10.When did you acquire your first mobile phone?
-------------------------------
11.How often do you change your mobile?
a) Frequently b) Monthly c) once in six months d) once in a year

12.On a scale 1-5 (1-low 5- high) rate how much are you satisfied with
the following factors provided by NOKIA handset
 Durability
 Performance
 Looks
 Cost
 Technology
 Availability
 Variety in applications

13. On a scale of 1-5(1-low 5- high) rate the below features

 Services Design/Style

 Color

 Price

 Weight

 Features

 Quality

 Service

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  Accessories

 Reception

 Bluetooth

 Calendar

 Camera

 Media Player

 Video Capture

 Speaker Phone

 FM

 Touch Screen

14.Would you like to switch to other brands than Nokia?

a) Yes b) No

15. Would you recommend this brand to your friends or colleagues [rate
on 1-5(1-low 5- high)]?

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BIBLIOGRAPHY:
WEBSITES

 http://www.news.bbc.co.uk/1/hi/sci/tech/1723738.stm

 http://www.amanet.org/books/catalog/081440636x_history.htm

 http://www.nokia.com

 http://reinholm.com/strategic%20management.htm

MAGAZINES

 Network Magazine

 SDA Asia Magazine

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