The Mobile Phone Buyer - Case Study Example

Profile of the Mobile Phone Buyer I picked a buyer, who lives in Bangalore India. He purchased a Nokia E 63 in October 2009. Buyers Profession and Personal Preferences The buyer works in the technology industry in the marketing field and is quite savvy with mobile phones and applications. The buyer was not keen on having multiple mobile phones and wanted to keep a single device that would be relevant both at work and home. Nokia E 63 helps the buyer be productive at work along with using the same phone at home. The buyer wanted to have Wireless, USB, Bluetooth connectivity - for easy connectivity to transfer data from his laptop and from other mobile phones. Thus he wanted to ensure that his data residing in other devices would be easily transferrable. Brand loyalty to Nokia The key observation from the buyer’s purchase is that he was brand loyal to Nokia and during the purchase process did everything to avoid post-purchase dissonance. From a service perspective the buyer finds Nokia cell phones to be quite reliable. He has required no service or support for upto 2 years after purchase of his 2 previous Nokia phones. He also feels comfortable with the Interface of Nokia phones and does not wish to re-learn a new interface. Since the interface is known, he is certain that he can trouble shoot the phones easily, if there is a minor problem. Purchase Influences Direct Influences There was no direct involvement of family and friends in influencing the mobile phone purchase. The buyers wife did help finalize the budget for the purchase. Although, the buyers wife participated in finalizing the purchase budget but had no participation in the make and model or feature set of the mobile phone. Indirect Influences There was indirect influence of work colleagues who the buyer had observed using QWERTY phones. That gave him confidence to try a phone with a QWERTY keyboard although he initially felt it looked less appealing than the normal mobile phone with the smaller keyboard. All members of the buyers family have Nokia phones. The buyer feels its simpler for everyone in the family to buy Nokia phones to have multiple phone chargers which is useful during travel and perchance there is a breakage or accidental loss. Relating to mobile devices The buyer does not name his cell phone like his car. That maybe the buyers focus on both his car and the cell phone for the utility they provide him – transport and communication. His brand preference is linked to avoiding post-purchase dissonance, support issues, financial investment in the purchase, fulfilment of need utility and some basic social conformance via the brand. Influence of Advertising on the buyer The buyer’s previous use of Nokia phones, advertisements by Nokia, Sony Ericsson as seen on TV, Internet (Yahoo!) influenced his purchase besides his own old usage of Nokia cell phones. How the buyer relates to a mobile phone For the buyer the cell phone is meant to be Reliable. It is his key communication and contacts device and so it should serve as a no-non-sense device providing the flawless ability to communicate. Profile of the Indian Mobile Market place India is a country where both GSM and CDMA telecom operators participate in the marketplace. The SM market is much larger than CDMA. The United States a primarily CDMA market. How Mobile Phones are bought and sold in India In India, two models are prevalent for selling and buying of mobile phones – the Mobile Service Provider just providing a plan or providing a phone model and a plan. When the Mobile Service Provider just provides a plan, the buyer purchases a SIM card of the Service Provider and install it in the Mobile Phone he purchases from any mobile phone store. Telecom Competition Regulation in India versus US There is no regulatory problem with handsets and plans being bundled together in India. Right now the Indian mobile phone market is fast growing and there are more customers to capture at multiple price points. There are several large Indian Telcos that are competing for the growing market in India namely: Airtel, Tata, Reliance, Aircel and BSNL. Tata and Reliance happen to be large conglomerates in India. According to Live Mint (Wall Street Journal, India) India currently has over 400 million mobile phone subscribers and the country is adding over 10 million new mobile phone subscribers every month. (India’s mobile subscriber base crosses 400 million. June 2, 2009.) The bundling of handsets and plans is a factor that is not considered critical in India. While in the US, as pointed by Wall Street Journal Regulators could explore “whether big wireless carriers are hurting smaller rivals by locking up popular phones through exclusive agreements with handset makers. Lawmakers and regulators have raised questions about deals such as AT&Ts exclusive right to provide service for Apple Inc.s iPhone in the U.S. Big carriers say limiting exclusive deals would hurt innovation.” (Telecoms Face Antitrust Threat. JULY 7, 2009) Mobile Phone Manufacturers active in India Several global Mobile phone makers are popular in India. Some names are: Nokia, Samsung, LG, Sony Ericsson, HTC etc. Nokia by far is the dominating brand in the Indian market place with over 50% market share. Buyers Feelings about the purchase Key Features Desired Buyers core Needs were Price and Product. Important features he wanted prior to purchase were: 1. QuickOffice (Word Processing) 2. Email on the Go 3. Easy Typing of Email and Text Messages. 4. Photography was desired feature but a top end camera wasn’t a requirement 5. Easy connectivity via USB, WiFi, Bluetooth Within Nokia’s Brand he has switched from Multimedia Phones category to Business Phone’s category. In anycase life-time value of a customer to Nokia is high as The buyer has continued to purchase Nokia phones for the last 3 phones he has used. Comparison of Mobile Phones and Personal Computers The buyer felt that the cell phone is a different device from his laptop. He uses his cell phone primarily for voice and text communication and for reading and responding to urgent emails. He doesn’t consider a mobile phone as equivalent to a full featured computer and so did not want to spend an amount that could buy him a Personal Computer. His earlier purchase of mobile was N73 which had cost him US $ 400 and in retrospect he felt that was not the right price to pay for a device thats not having enough computing power. Modelling the Purchase decisions of the buyer According to a study by Karjaluoto et el “Factors Affecting Consumer Choice of Mobile Phones” there are separate reasons for Phone change and Phone Choice Behaviour. The reasons are: Factors Affecting mobile Phone Choice: Price – Strong Influence Interface Familiarity – Strong Influence Size (Match into pocket) – Medium Influence Brand – Medium Influence Properties (new Features) – Some Influence Other Factors (Salesman)—Some Influence Reasons to Change Mobile Phone Technical problems – Strong Influence New Features – Medium Influence Innovators Status —Some Influence (Factors Affecting Consumer Choice of Mobile Phones, Journal of EuroMarketing) According to this study for Factors Affecting Phone change, “Technical Problems” is indicated a “strong Influence”. The buyer did change his mobile phone but he kept it within the Nokia brand to allow for factors like Interface familiarity, Price and Brand. indicated in Figure 1. (http://www.oasis.oulu.fi/publications/jem-05-hk.pdf ) By Brand, it appears that Nokia is the most prevalent brand in Indian market so he assumed that getting some minor problems fixed would be easy as there would be enough support personnel. Besides borrowing mobile phone chargers from his family and friends who also use Nokia phones would be a convenience. Finally, the Interface Familiarity of Nokia phones was a key factor as The buyer did not want to spend too much time learning a new interface by a new manufacturer. Post-Purchase Dissonance Reducing Behavior The buyer compared several phones from HTC, Samsung, Sony Ericcson, and LG while doing his Nokia phone purchase. The comparison process was to “check” if these other phones offered substantially higher value in a similar price range. The buyer’s buying decision indicates that he was brand loyal to Nokia due to using Nokia phone models since 2001 and finding them quite reliable. Other phone models were compared mainly to avoid post-purchase dissonance of finding that he might have bought something of very poor comparative value. According to Kotler, the buyer engages in Dissonance-Reducing Behavior in the following way: “Sometimes the consumer is highly involved in a purchase but sees little difference in brands. The high involvement is based on the fact that the purchase is expensive, infrequent, and risky. In this case, the buyer will shop around to learn what is available but will buy fairly quickly, perhaps responding primarily to a good price or to purchase convenience.” (Kotler, 177) The buying process by the buyer indicates that the 5 key P’s that influenced purchase of his cell phone were: 1. Product 2. Price 3. Presentation 4. Place/Distribution 5. Partners The other 4 Ps in the 9Ps were less applicable in this case. Product: The buyer already had a Nokia N73 and a plan from Airtel, India’s largest Telecom Mobile company. Due to earlier use of a Nokia phone he was positively inclined to buy another Nokia model. Other factors that influenced his purchase were: Problems with Current Phone He had used his current phone for 3 years and wanted to buy a new one due to various crashes he was noticing on his current phone. He wanted to buy a cell phone that wouldn’t give similar problems. Multimedia Phone versus Business Phone Nokia N73 is a multimedia phone with several business-user relevant features. The buyer shifted to a business phone (E 63) because he found that he didn’t often use the photo camera provided by N73. Email and Text Messaging with QWERT keyboard He was using email and text messaging regularly on N73 and felt that the QWERT keyboard of E63 might be handy – that has turned out to be true. Blackberry and iPhone The buyer was not looking for a blackberry. Blackberry’s come with special data plans bundled by a Telecom operator. The pricing of Blackberry with plan can start at US $ 500 which was out of the buyers budget. iPhones with data plans come in the range of US $ 600 and above in India so iPhone was ruled out. Internet Browsing at home, saving on data charges He can browse Internet on a local Wireless LAN --- doesn’t need to use the data plan of his operator – so it helps save on data usage costs on my mobile plan. Opening Word file attachments He wanted QuickOffice and E63 has one. He rejected phones that didn’t have QuickOffice as opening word attachments with emails is a very handy feature. Nokia E 63 has the following attributes: Nokia E63 GSM version comes with the following key features 320 x 240 pixels, 2.36 inches screen Full QWERTY keyboard 1600x1200 pixels camera Wireless, USB, Bluetooth connectivity Several productivity features and software including QuickOffice for viewing and editing Microsoft Office files The full set of features of Nokia E63 are given in Table 1 at the end of this document. Price: The buyer wanted a phone in the price range of $150-200 and E63 fit in that range perfectly. He had earlier bought N73 for US $ 400 and felt that for using a phone for 3 years that was a very steep price to pay. Price and decision making influences The decision maker for Product features was the buyer. The buyers price range was discussed and agreed on by his wife, thus she acted as an influencer for the phone purchase budget. The buyer paid for the phone using his credit card. The purchase decision was careful as there was a high amount of money spend that would be lost if the purchase didn’t make sense to the user in daily life. Eventually the buyer settled for a value priced business productivity phone, though he contemplated and checked multimedia phones. Place: The buyer did very little Internet Search. The purchase was driven by store purchase experience, previous experience with mobile phones and advertisements already seen. He felt it was more valuable to go touch, feel and see the various models and do a live comparison in the Mobile Store. 3 stores were visited. Retail environments had displays of various models and sales persons to help understand features. All information was searched during store visits. Specially prices and how non-Nokia phones compared, for the same price tag. He felt that since his price range was decided the main point was to feel comfortable with the actual handset that he would carry for the next several years. Thus the Mobile Phone Stores close to his home proved to be very valuable for him – to learn about current offerings and decide upon his final choice. The phone was bought in a Mobile Chain Store. The decision to buy a Nokia was almost fixed along with a price range of Rs 8000-10,000 (US $ 150-200). Where to buy was dependent on checking store locations closer to home for easy access. Presentation: In India, Nokia and Sony Ericcson have specialized retail stores primarily selling their own brand handsets. This allows the Brand to be presented uniquely to the buyer, with in store colors and mood subtly highlighting the main brand the store represents. It also makes the buyer go through multiple versions of the same mobile phone brand instead of comparing across brands. Partners: The Buyer spent 4 hours spending this time visiting 4 different Mobile Phone Stores to get a sense of what all is available in the market place close to his house. He was confident that these stores would adequately cover the set of mobile phones he wanted to purchase. At each store he was not aware if the Sales Reps were on commission. Sales reps in each store tried to draw the Attention and interest of the buyer to various phone models in the price range he was interested in. But since the buyers desire had a bias toward Nokia, he predominantly used other brands to cross-check if there was anything lacking in similarly priced Nokia phones. Most sales reps took the buyer through A,I and the final A stages of AIDA. Desire – the buyer had fixed parameters and clarity of what he wanted but drawing attention to this model Nokia E63, evincing interest in it by discussing its features. Finally when the buyer did the purchase, the sales rep did walk through the Aciton stage of purchase by quickly processing the billing part. Staff was helpful after the buyer completed the purchase. They helped to transfer data from old phone to the new phone – text messages, contacts, images. The buyer was happy with the friendly and helpful behaviour of the staff in the retail store. It can be tiring to show a discerning customer several models without knowing whether the customer would eventually buy. But the buyer was satisfied that the sales representatives maintained a pleasant demeanour. The price was fixed at the mobile store. There were no special incentives. The buyer did do the final purchase at the store where he found a marginally better price for Nokia E 63. Post Purchase Behavior According to Kotler “Satisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations. As this definition makes clear, satisfaction is a function of perceived performance and expectations. If the performance falls short of expectations, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted.” (Kotler, 36) The buyer seems highly satisfied with the purchase. Some reasons for high satisfaction are mentioned below. Reasons for Satisfaction : Surfing web from Home Wireless LAN The discovery that he was able to surf the internet on his wireless home LAN instead of using his data connection meant that he didn’t have to open his laptop but could simply check email on his cell phone. This was not possible on his previous phone model Nokia N73. Reasons for Satisfaction : Quick Access to Actions on various entries in Address Book He is also very happy with some other nifty features in Nokia E 63, for example while browsing the address book, just pressing on each name gives a menu of options like text message, call etc. This is done without shifting fingers to other buttons. This feature also was not available on Nokia N 73. Reasons for Satisfaction : Printing documents from Mobile Phone The buyer is delighted to find that he can print documents directly from his mobile phone if the need arises because Nokia E63 comes with printing capability. He feels that in an emergency this could be a very nifty feature where he wont have to lug his laptop. He could download a document by accessing his email via Nokia 63, open it using QuickOffice software and easily print in a remote location. Reasons for Satisfaction : Exceeded delight of ease using QWERTY Keyboard Overall the buyer is very satisfied due to Easy access to email on his phone, even at home. Earlier he had to open his laptop each time he needed to check email. He is also very happy about the surprising ease in typing text messages with a QWERTY keyboard. He also takes personal notes on his cell phone and the ease of typing has improved his personal productivity. The customer is satisfied enough to recommend this model of phone to other colleagues and friends who need a business plus home phone in a single model. Advertising and Marketing Messages on Cell Phones In India the buyer receives Advertising messages on SMS and he finds it very irritating. He feels its an outcome of database marketing strategies applied by several companies who collect his personal details and sell it for gaining money. The buyer does feel that the cell phone intrudes into leisure time but given the increasing pace of life, the phone is also a useful device as it helps resolve communication gaps very quickly. It is very simple to coordinate a simple thing as a pickup of a relative from a market place or a purchase of a grocery “forgotten” to be put on the “to-do” list. Observations about Nokia’s Successful Product & Brand Marketing in India According to Kotler “Customer loyalty is the purchases from the company by its customers expressed as a percentage of their total purchase from all suppliers of the same product” (Kotler, 698) What we can see clearly from the buyer behaviour is that Nokia has been very successful in capturing a customer and gaining valuable loyalty leading to life-time value for itself. From amongst several possible manufacturers of mobile phones: Sony Ericcson, LG, Samsung, HTC – the customer several times is buying mobile phones from Nokia! Benefits from Investments in Building Market Share Nokia has invested in great products and its market share enables it to gain more customers, who believe that its useful for them to stay with Nokia mobile phones due resultant easier access to customer support and other individuals who can pass them useful tips. Benefits from Retail Network for Mass distribution Nokia’s success is increased by building a chain of brand retail outlets. Thus customers can climb the ladder of Nokia’s various offerings at multiple price points and feature sets. The in-store help provided by sales representatives to transfer customer data from an old phone to a new phone is a convenience that a is much appreciated by the buyer. It reduces the worry and hassel of trying to figure out such migration details by the buyer itself. Benefits from Marketing Investments in TV Advertising Nokia’s successful investment in TV advertising ensures that prospective customers who have even once used a Nokia phone tend to gravitate toward their retail outlets to discuss their mobile purchase needs, rather than do extensive comparative shopping on the Internet. Benefits from Marketing Investments in Online Advertising Nokia has also ensured that its ads appear on various popular websites like Yahoo! Where the customer experiences a continuity of the Brand presence of Nokia. Besides appearing on websites as Yahoo! -- Nokia gives detailed product information and multimedia views of its phone models on its website www.nokia.com. The Nokia website allows any interested customer to explore all possible models available from Nokia in a Nokia branded site just bypassing comparative views across other competing mobile phone brands. This ability to circumvent online comparative shopping and reach out to customers via advertising and retail outlets improves Nokia’s brand and sales. It is thus able to bypass the problem of being a commodity brand subject to pure comparative shopping. Making High Involvement Purchase – Easier on Customers Mobile phone purchases are time enduring and are a one-time expense. Mobile phones also end up becoming address books and data stores for their owners. Thus they are high involvement purchases and Nokia’s retail investment is very valuable to provide a high-touch buying experience to customers. Nokia Ovi – accessing mobile data and address book from Internet Nokia has invested in innovative online product called Ovi which allows a user to sync his/her address book and contacts online from the Mobile Phone. In case the mobile phone crashes or is forgotten – the user can still log on to Ovi and access his / her last updated Address Book. This gives a customer the confidence that his/her data is not locked inside a phone but is accessible thereby helping customer to further buy Nokia mobile phones. Nokia’s approach to Marketing Strategy and Building Competitive Advantages According to Ruskin-Brown “Advantages can be developed by either competitor-based thinking and by customer-based thinking The competitor-based strategy is geared to superior quality, innovative technology, broader distribution, wider product ranges, superior technical service, better reputation and image. A customer-based strategy is geared to customer problem solving which may include improved reliability, lower operating costs, faster response, one-stop shopping or quality assurance.” (Ruskin-Brown, 62) As can be seen Nokia is succeeding by using both competitor and customer based approaches. It has invested in a wide product range – multiple mobile phones at diverse price points, broad distribution via retail outlets, and excellent brand reputation – thus ensuring that a customer can buy both a multimedia phone and a business phone from it. A business phone could otherwise be bought from Blackberry, but Nokia is able to hold onto its customer. Similarly, due to high reliability and one-stop shopping of multiple mobile phone models Nokia is succeeding in a customer centric strategy. Works Cited Live Mint (Wall Street Journal, India). India’s mobile subscriber base crosses 400 million. June 2, 2009. www.livemint.com Wall Street Journal. Telecoms Face Antitrust Threat. JULY 7, 2009. www.wsj.com Kotler, Philip. Marketing Management, 10th Edition. New Delhi: Prentice-Hall of India Pvt Ltd., 2001. Print. Karjaluoto et el. Factors Affecting Consumer Choice of Mobile Phones. Journal of Euromarketing, Vol. 14(3) 2005 Ruskin-Brown, Ian. Mastering Marketing, 2nd Edition. New Delhi: Viva Books Pvt Ltd., 2008. Print. Table 1: Features of Nokia E63 Source: http://www.gsmarena.com/nokia_e63-2599.php GENERAL 2G Network GSM 850 / 900 / 1800 / 1900 3G Network UMTS 900 / 2100   UMTS 850 / 1900 - American version Announced 2008, November Status Available. Released 2008, December SIZE Dimensions 113 x 59 x 13 mm, 87 cc Weight 126 g DISPLAY Type TFT, 16M colors Size 320 x 240 pixels, 2.36 inches   - Full QWERTY keyboard SOUND Alert types Vibration; Downloadable polyphonic, MP3 ringtones Speakerphone Yes   - 3.5 mm audio jack MEMORY Phonebook Practically unlimited entries and fields, Photocall Call records Detailed, max 30 days Internal 120 MB Card slot microSD (TransFlash), up to 16GB (verified), hotswap, buy memory DATA GPRS Class 32, 100 kbps HSCSD Yes EDGE Class 32, 296 kbps 3G Yes, 384 kbps WLAN Wi-Fi 802.11 b/g Bluetooth Yes, v2.0 with A2DP Infrared port No USB Yes, v2.0 microUSB CAMERA Primary 2 MP, 1600x1200 pixels, LED flash Features Videocalling Video Yes, QVGA@15fps Secondary No FEATURES OS Symbian OS 9.2, Series 60 v3.1 UI CPU ARM 11 369 MHz processor Messaging SMS, MMS, Email, Instant Messaging Browser WAP 2.0/xHTML, HTML Radio FM radio; Visual radio Games Downloadable Colors Ultramarine Blue, Ruby Red, Black GPS No Java Yes, MIDP 2.0   - WMV/RV/MP4/3GP video player - MP3/WMA/WAV/RA/AAC/M4A music player - Document editor (Word, Excel, PowerPoint, PDF) incl. MS Office 2007 support via free update - Push to talk - Voice command/dial - Organizer - Printing BATTERY   Standard battery, Li-Po 1500 mAh (BP-4L) Stand-by Up to 432 h (2G) / 480 h (3G) Talk time Up to 11 h (2G) / 4 h 40 min (3G) Music play Up to 18 h Read More