Smartphone - Lab Report Example

?Letter of Transmittal Receiver’s Please find the smartphone market research report based on the survey. The study is focused on the reasons of selecting smartphones. The report represents the questionnaire analysis results, as well as the study and interpretation of the collected data. While questionnaire results were used as the primary source for studying the market of smartphones, the global statistics, other researches and theories were used as secondary data sources for supporting the outlined patterns and theories. Executive Summary It is stated that the global phone market growth has decreased over the last two years. This is explained by the fact that the markets are highly penetrated, and the growth for the account of new customers can not compensate the growth decrease. Nevertheless, the smartphone segment of mobile gadgets tends to grow, and the aim of the current research is to evaluate and analyze the customers’ demands and needs in smartphones. Therefore, the current research is focused on the matters of studying the smartphone segment, and the key research effort is associated with studying the preferences of the audience. The data collection process involved filling out the questionnaire only, while data analysis required using additional sources for the proper interpretation of the primary data analysis. Proper analysis required marketing, economic, and industry data as a basis of the questionnaire analysis. Hence, the research was based on the actual researches, theories and patterns, and the outcomes of the qualitative research analysis will not be randomized as in case of pure studies (without considering the secondary sources). Considering the necessity to analyze the mass of statistical data, the research involved quantitative approaches as well. These are based on the SSPS data analysis, however, the number of respondents is not sufficient for proper statistic evaluation. Introduction Smartphone industry may be regarded as a specific one. This statement can be explained by the fact that smartphone is not a single function instrument, and the target audience is often divided into several groups that value different features in smartphones. Therefore, most marketing researches that are oriented at smartphone owners (or potential owners) are aimed at tracing the constantly varying preferences of the audience, and make corresponding changes in the construction, electronic stuffing, as well as applications. While leaders of the smartphone market set the tendency, the others have to trim the sales to the wind; nevertheless, everyone has to study the needs and preferences of the potential customers. Marketing Details. Problem Definition In accordance with the research by Bojei and Hoo (2012), the smartphone audience has increased essentially for the recent several years. The 2012 surveys show that almost half of the mobile consumers in the USA, Western Europe, and Australia own smartphones, and this amount is expected to reach 70% level in 2014. From the viewpoint of the profit share, the smartphone segment is essentially more profitable. Therefore, Apple Inc. holds up to 52% of the smartphone segment operating income. Samsung is featured with 29%. The key questions that the research is focused on are as follows: 1. What are the smartphone segment leaders 2. What are the key factors of the gadget popularity 3. What parameters are used for evaluating gadgets The key problem of the research is mainly based on defining the image of the audience. Since the growth of the smartphone segment is quite exceptional, it should be stated that the overall marketing study should not touch upon the communication aspect. This can be explained by the fact that smartphones are also used for shopping, leisure, navigation, sport activities, etc. For at least 20% of smartphone users, this gadget has become the primary way of internet access. In fact, the mobile phone segment study is not a novelty in marketing, since the surveys are arranged from the moment smartphones have become a mass production. Moreover, the companies have an opportunity to arrange web surveys instead of phone interviews, and some data can be collected even without users’ awareness (i.e. smartphone model, OS, location, hobbies, and preferences by analyzing search and browsing history, etc.). In fact, this opportunity of web surveys may be regarded as the key advantage of smartphone segment research, as the study may be held anonymously, at any time and at any place. Nevertheless, the opportunities of smartphones are not limited to these. Smartphone industry offers an opportunity to perform marketing researches through applications. In the light of this fact, the actual importance of the surveys can be explained by the opportunity to cover the widest audience possible. There is an opportunity to gather any data required, except the communicational aspect within the audience. In accordance with the latest economic and marketing researches, the overall smartphone shipment will be at least 30% higher in Q2 2012 in comparison with Q1. However, it will experience 20% decrease in 2013. This is explained by the fact that the market demand is 87% satisfied, and people tend to purchase smartphones within the circumstances listed below: 1. New version is released (14%) 2. A new function is required (43%) 3. The gadget is not functioning (broken), and requires replacement (24%) 4. The expectations are not justified (7%) 5. The gadget is lost or stolen (12%) In accordance with analysts’ forecasts, the smartphone segment growth will be stimulated by the emerging markets growth mainly. Even if economic tendencies turn for the worse, the prices will be kept stable by low-cost devices, and the segment will continue growing. As for the popular models (including Apple, Samsung Galaxy S models, or HTC) they will have a reasonable pricing insulation due to mass production and popularity. It is stated that approximately 35% of the cell phones sold in 2013 will be smartphones, and about 23% of people already have one. Therefore, the penetration rate ranges from 49 to 56% in the USA, Australia, and Western Europe. (IDC, Worldwide Quarterly Mobile Phone Tracker) Top smartphone vendors market share is as follows: Vendor 2Q 2012 unit shipments 2 Q 2012 Market Share 2Q 2011 unit shipments 2 Q 2011 Market Share Changes Samsung 50.2 32.6 % 18.4 17.0 % 172.8 % Apple 26.0 16.9 % 20.4 18.8 % 27.5 % Nokia 10.2 6.6 % 16.7 15.4 % -38.9 % HTC 8.8 5.7 % 11.6 10.7 % -24.1 % ZTE 8.0 5.2 % 2.0 1.8 % 300.0 % Others 50.7 32.9 % 39.2 36.2 % 29.3 % Total 153.9 100.0 % 108.3 100.0 % 42.1 % (IDC, Worldwide Quarterly Mobile Phone Tracker) In accordance with market researches, the overall phone (including cell phones and stationary phones) market is featured with 1% growth in 2012, while two leaders of the segment share half of the global smartphone shipments. Samsung and Apple have 100% increased their common market share over the last four quarters. These two companies have become serious heavyweights on the market, and, since they have utilized different marketing principles and approaches, this has enlarged the gap between them. The difference is explained by the fact that Samsung offers “shotgun” strategy. This involves creating various models, oriented at different segments of the audience, while Apple is focused on essentially smaller amount of models. Therefore, the aim of the research is to define the key competitive advantages of different models from the customers’ point of view, as well as define the actual values of the audience. Methodology The key methods of the research are: 1. Live questionnaire. This part involves interviewing people with filling in the questionnaire forms. The forms involve 48 questions concerning the smartphone model, functions and applications that people use most, key parameters that are considered while choosing a gadget, as well as general plans as for the further use of smartphones. 2. Primary data analysis. This stage involves studying and evaluating the survey data. The questionnaires need to be separated in accordance with the smartphone models, and analyzed in groups. SPSS software will be helpful for evaluating the quantitative aspect of the qualitative research. Therefore, this stage will be focused on the general aspects of the market studies: customer behavior, and competitive advantages of the devices. 3. Secondary data analysis. The primary data involves subjective evaluations, and preferences of the target audience only. The raw data is of low scientific importance, therefore, it should be supported by additional external data and information. Secondary data analysis will be focused on studying previously made marketing researches, statistics, hypotheses and customer behavior patterns. These will be able to support the primary data, and create the analysis framework for the raw primary data. Analysis and interpretation of the collected data will also involve: 1. Market Coverage 2. Market regional forecasts 3. Market drivers, or marketing constraints, as well as their correlations that influence market growth 4. SWOT matrix, representing key features of the market players. 5. SRCE analysis (Stresses, Responses, Competencies, Enablers) 6. Economic parameters and indicators As for the ethical issues of the questionnaire based qualitative research, it should be stated that the key problem is in the indirect approach of the survey. As a rule, any research that involves human participation raises sufficient ethical considerations, as people are often reluctant to leave any personal information. The indirect nature of the survey (without disclosing the objectives of the performed research, as well as the name of the organization) is not intended for setting up strong communication channel with the audience. In general the survey is arranged considering the necessity to protect the confidentiality of the respondents, as well as avoiding using disguised research methods. Therefore, collecting mainly technical data will not violate the ethical principles of the market research. The key methodological aim is to define the target audience of the research, as well as outline its needs and requirements. Demographic, geographic data, as well as information about the respondents’ lifestyle will be of an essential assistance for data analysis. The data analysis requires up to three weeks, since, there is a need to review the collected data, outline basic theories and key questions, as well as define themes, patters and key ideas of the audience’s replies. The qualitative research results may include hidden ideas and patterns as collective intelligence is often neglected when the questionnaire is composed. Questionnaire The questionnaire, designed for the research, is based on the necessity to outline the loyalty of the audience towards the entire segment of smartphones. Therefore, the demographic part of the survey is minimal (that is needed for defining the age and occupation segmentation of the audience), while the technical part involves questions associated with various aspects of smartphone using. Hence, the key accent is made on such issues as: which brands do the people prefer, what functions and applications do they use, what are the key features that overweight in smartphone selection, what is the loyalty level towards the gadget owned. In fact, the questionnaire is not of the experimental nature, as this approach is not suitable in similar researches. Therefore, psychometric or econometric indicators would not add up to the research, since these are not valuable. There is a need to rely on previous researches and research analysis for making proper conclusions and analyses out of the collected data. Therefore, the research methodology will involve statistic data, consumer behavior data, economic data, and social research data, as well. Considering the nature of qualitative researches, it should be stated that respondents, as a rule, do not have a stimulus to respond questions, and the survey results often appear to be distorted. Nevertheless, the questionnaire created for the current research does not touch upon any personal information, and, even if respondents will not give sincere and honest answers, these answers will be based on their preferences, which is even more useful and relevant for the study. Moreover, the questionnaire is aimed at defining the general features and aspects of using smartphones; hence, it should be stated that the actual importance of the qualitative methods, applied in the survey, is explained by the opportunity to check previously formed theories and hypotheses. Hence, the questionnaire can be used as the primary data source for studying customer behavior, marketing tendencies, approximate market share in a particular region, or even city district, and sales forecast within a restricted audience. However, in accordance with the statement by Brian (2011), reaching the given aims requires considering several factors listed below: 1. There is a need to know all the interpretations of the questions and possible answers, as well as ensure that respondents give full responds. 2. The actual purpose of the questionnaire is needed for finding the necessary interpretations of the answers, as well as making sure that the respondents are sincere enough. 3. Results of the similar researches will be helpful for correlating the possible mistakes. As a rule, questions with the requirement to rank several variants involve the largest amount of mistakes, therefore, the qualitative material requires proper sampling. Since there is a need to collect exploratory information, the design of a questionnaire presupposes including questions for better understanding of the audience’s needs. These are the questions that require defining the functions and features people got used to value. Analysis The general analysis of the collected data is performed in accordance with the key research principles. Therefore, it should be stated that the overall competitive factors of the smartphone segment involve: 1. Price of the gadget. The mainstream of the audience prefers middle price category, as the optimal variant in price / quality / performance aspect. 2. Product features. Smartphones are not selected as “messaging and calling only” devices. Therefore, consumers are looking for maximum functionality for the price they pay. 3. Design innovations. Smartphone is often purchased as an accessory, therefore, at least 15% of consumers emphasize the importance of innovative and / or attractive design. 4. Strong third-party software technical support. This involves opportunity to extend gadget functionality by installing additional software. Nevertheless, 80% of customers emphasize the importance of steady technical support and timely version updates. These aspects of the research analysis are essential for analyzing the three key questions defined in the Problem Definition chapter of the study. Hence, the survey showed that people prefer functionality and quality in their gadgets, and the market leaders are featured with the highest parameters. The market leaders tend to study behavioral patterns and preferences of their target audience, and the survey results support this hypotheses: people tend to purchase something that fits a hand (design and usability), is featured with convenient and customizable functions (applications and OS), can be relied on (durability and service). The market leaders tend to follow these preferences, and hit larger target audience. The gadget popularity factor involves several key aspects. From the marketing viewpoint, the marketing opportunities of the smartphone market sector are closely associated with the communication and mass media functions. Luttenegger (2011) emphasizes that smartphone sales are 25% higher if social network integration software is installed. Nevertheless, the market is essentially competitive; therefore, the overall sales increase is divided proportionally to the general market share. In the light of this consideration, it should be emphasized that at least 65% of commercial success is stimulated by the general usability of the devices. However, in order to make a full-fledged analysis, there is a need to study the market tendencies, including smartphone market, as well as services. The latest tendency shows that the growth of smartphone sales changed the service market as well. Since smartphones require essentially more web-traffic (in comparison with cell phones) for utilizing most of functions and opportunities, people tend to replace text messaging (SMS) with web messaging, therefore, operators have to either stimulate people send more SMS, or adapt their plans for the increasing web applications popularity. Therefore, considering the fact that people spend at least $80-100 monthly for mobile services, Metro PCS (US cell phone operator) introduced an aggressive price lowering plan: users are offered $55 monthly for unlimited 4G, including unlimited voice communication, and messaging as well. Other operators follow PCS example, and offer unlimited plans, ranging $55-70 monthly. However, it is not just a marketing turn to attract new customers. This is a strategy, which is aimed at stimulating people purchase smartphones instead of simple devices, and most service providers offer essential discounts if users agree to sign up a long-term contract. This strategy may be an essential stimulator of the smartphone sales increase. In accordance with the latest statistical data, more than 100 million subscribers in the USA own smartphones. Considering the importance of the overall market research for performing a small-scale analysis, it should be emphasized that the importance of the gathered data can be explicated by the opportunity of comparing global and local marketing tendencies. The market coverage of the smartphone segment (including forecasts) is represented with the data below. The global sales of smartphones include 153.9 million gadgets in Q2 2012. Estimated sales for the same period of the previous year are 153.8 million. This is one third of the total communication devices sold in the world. Analysts reach an agreement that about 660 million smartphones will be sold for the year 2012, and the sales will grow up to 980 million yearly in 2015. In 2016, 1 billion sales will represent half of the mobile communication devices market. Smartphone shipment rates. (From the OS perspective) The operating system is one of the key factors that are considered when people select a smartphone. The survey shows that people tend to choose the most available and featured OS. Therefore, the most customizable systems are the most popular, while the development model, as well as the openness of the source codes is relevant for 5-7% of users only. At least 70% of respondents emphasize the importance of this factor, however, similarly to the applications factor, the statistics change radically and rapidly on the global market (Sutterfield and McKinley-Floyd, 2012). The comparative table of the operating systems is given below OS Development Model Available on models Applications Service Providers Special features Android Open source extendable Multiple models Android Market All The openness of the OS helps it grow rapidly iOS Closed. Proprietary Apple only The App Store All Integration with the iTunes. Restricted and highly protected OS BlackBerry Closed. Proprietary RIM only AppWorld All End-to-end encryption Windows mobile Closed. licensable Multiple models Windows Mobile Marketplace All Enterprise support Symbian Open source Nokia only OVI All Proper social network and navigation integration Windows phone 7 Closed. licensable Multiple models Windows Mobile Marketplace All Highly potential OS Linux Open source extendable Multiple models Certified, and open repositories All Market share (Manufacturers) (IDC, Worldwide Quarterly Mobile Phone Tracker, 2012) Considering the market share data, additionally with the survey data analysis, it should be emphasized that regardless of the primary purpose of the gadget, people tend to adapt it to particular tasks and assignments. These tasks become the key parameter when selecting a device. As a rule, it is impossible to define a leader taking into account a restricted number of parameters and factors. On the other hand, a bunch of features, parameters, and functions helps to formulate an integrated image of the smartphone market + customer behavior patterns. As for the tasks, they are defined in accordance with the key audience groups. Market drivers that were revealed with the assistance of the data analysis are common for the global market of smartphones. The driving and constraining forces are closely associated with the latest tendencies of the smartphone industry. Therefore, the two leaders of the segment – Apple and Samsung – set up the rules and laws of the market. Therefore, while technical aspect of selecting gadgets are no longer important (the survey showed that people do not pay attention to the electronic staffing of their gadgets, while functions and software features are more significant), the manufacturers lead their marketing battles on the frontlines of operational systems. The shipment rates of the smartphones from the perspective of the OS installed have shown that Android and iOS are the two leaders of the industry, and Android managed to conquer larger audience due to the fact that Android phones cover more price segments. In accordance with the global tendencies outlined by Ting and Chairman (2012), innovation is the key market driver. While the top five manufacturers are featured with the latest innovations and even revolutionary modernizations of the gadgets, they may leave the top five list, if they do not support the tendency. Additionally, the research shows that while the market share values may be regarded as a reliable indicator of the market success, the strong correspondence with the profitability of the company can not be confirmed. The same can be stated about customers’ expectations and preferences. The driving forces created by the audience are based on the decisions that customers make when selecting a device. The key selection tendency is explained by the statement that people are looking for a universal device that can replace several other electronic gadgets. Therefore, the number of functions is often regarded as the key decisive factor. The survey shows that the most important factors are as follows: 1. Aesthetics. This involves the stylish look of the device, its weight and size, as well as the prestige level. 2. Hardware functionality. Hence, a device must have camera, prolonged battery life, high screen resolution for multimedia functions. At least 43% of the respondents pay attention to the keyboard type. The quality of microphone and speakers is the following point of the functionality rating. 3. Software functionality. A device must be easy to use. Then, people pay attention to the type of the operating system, as well as the availability of various applications. Then, people need high browser compatibility, and availability of synchronization functions. In the light of these outcomes, it should be emphasized that features, functionality of the gadgets are represented as the key drivers of the smartphone market. The key part of the target audience is paying attention to the availability of camera, the price level, device design (mainly its weight and size). At the moment, applications are not regarded as the essential driving force, however, as it is stated by Green and Haddon (2011), the situation is changing rapidly, as approximately 65% of the smartphone owners use applications actively. Though, the survey was mainly based on the technical aspects of selecting a smartphone, at least 50% of the respondents acknowledged that they use their devices in personal and business purposes. This means that in some cases the business nature and working environment can be the key decisive force while selecting a smartphone. Additionally, large employees may have agreements with the service providers; therefore, the smartphone selection will be limited to the range of the models, available for the particular tariff plan. Considering the necessity of effective business exploitation, the gadget has to be compatible with the business network, therefore, the data safety, as well as communication security is regarded a top priority feature. The theoretical approach towards the data analysis requires proper understanding of the customers’ motives when purchasing a smartphone. There is no need to consider employer provided gadgets. Therefore, the common image of the potential smartphone customer can be divided into three main categories Technical geek Professional / expert Stylish person Other This category is admired by the technical features of their gadgets, and adores changing firmware, testing and creating applications, finding undocumented features of their devices. They regard smartphone as a technical toy mainly. These need to have particular functions that will help them to stay available. Some use it as a communication tool only; the others need special instruments available for a given OS (for testing and developing apps, collecting live data etc). In distinction with the previous group they need smartphones for earning their living, or improving technical qualification which is needed for their primary occupation From the marketing point of view this is the most potential category of smartphone owners. They tend to purchase a new model shortly after its release, and regard devices as a stylish accessory mainly. Smartphones are required for staying in touch with friends, and staying online in social networks integrated web applications. This is the smallest category of smartphone owners. It is hard to define the key features of this group. At least 40% of the audience does not know why they need a smartphone. From the perspective of such a categorization, it should be emphasized that this pattern is supported directly or indirectly by other researchers (Ginovsky, 2012), since it is hard to find additional competition sphere for manufacturers. Nevertheless, it should be emphasized that this tendency is relevant only for those who do not own an employer provided device. Therefore, the key theory that can be derived out of the survey is the availability of four categories of the target audience, while the distinctions within these categories are minimal, and can be neglected in such small-scale researches. Anyway, such a categorization is helpful for defining the key group of tasks that are entrusted to the devices, which is essential for studying the target audience behavior, as well as getting feedbacks. Limitations The key characteristics of the research are based on the quality of the questionnaire, as well as the interpretation of the results achieved. As a rule, the interpretation patterns lie on the adequate understanding of the research purposes. Therefore, changing the aim of the research changes the focus for interpreting the achieved results. In fact, this may be regarded as the largest limitation for the qualitative marketing research. The context of the research is not contrived, and any result can not be taken for granted. However, it can be clarified by the fact that qualitative research are mainly of exploratory nature, and there is no need to confirm or disprove a previously stated hypothesis. Another type of limitations of the qualitative research is the nature of replies. As a rule, people do not give fully sincere and trustful replies, as they often pass the desirable for reality. Hence, the range of answers concerning the importance of particular factors while selecting a gadget is full of errors. This is explained by the fact that people choose factors that are essential for them, however, simple observations showed that they do not satisfy their preferences selecting a gadget (in 20% of cases people own a totally opposite gadget, in comparison with the requirements they point out in the questionnaire). Another problem is explained by the adequacy factor. The qualitative data is mainly subjective, and, as a rule, it is quite hard to apply standard interpretation strategies for achieving the reasonable reliability and adequacy level. As for the strengths of the research and the approaches applied, it should be stated that these are mainly based on the scientific nature of the qualitative research. In fact, the researcher involvement is quite close; therefore, the interviewers had an opportunity to collect additional observatory information. Such information appears to be very helpful in finding and researching different complexities associated with the insincerity of the responses. The qualitative approach towards the interpretation descriptions is essential for defining the possible relations among theories and patterns, as well as stating varying effects and impacts of the dynamic processes. Since the customer behavior is highly dynamic, most quantitative researches and descriptions become irrelevant within the shortest periods, while qualitative approaches help to define key tendencies and principles that are changed only by huge market shifts. Since statistical data is mainly irrelevant for the primary research, the descriptive nature of the study is featured with mainly practical advantages. Additionally, the research can utilize statistical analysis as a secondary research source. This can help to apply quantitative principles and hypothesis for the qualitative research. Concerning the current study, the statistical marketing data helped to outline the general hypotheses of customer behavior. Recommendations. Conclusion The research involves the key aspects of studying smartphone segment target audience. The need to focus on different aspects and features of contemporary gadgets has been fulfilled; however, the study is featured with large potential. Therefore, despite of outlining and studying key parameters and patterns of customer behavior for defining the most important marketing drivers and constraints, the inability to interview at least 300 respondents makes all the other conclusions and theories approximate. This study requires sufficient theoretic basis that was used for supporting the key statements. As for continuing the study of the target audience, there is a need to consider the division of the target audience into the stated four categories, and develop four different questionnaire forms that will be focused on the key needs of every category: technical features, professional tools, style and design, expectations. This will help to study the audience in details, and elaborate specific promo campaigns, advertising strategies, and marketing principles for each group. Another recommendation is associated with the expansion of the survey audience. While all the questionnaires for the research were filled in during live communication with the respondents, there is a need to cover larger audience on the internet. The survey has shown that the smartphone market is the subject of constant and rapid changes. People tend to change their preferences and values in gadgets corresponding to the introducing of new standards. The evolving technologies change the overall image of the mobile devices audience, making manufacturers study their customers, and adapt their strategies. The global smartphone market involves all the possible software and hardware solutions, however, the audience does not require 100% of these solutions. Most are focused on particular features and functions of the gadgets they use, as well as the opportunity to customize a device by installing applications. The individuality of the customers is not considered in the research, however, some information was collected through personal communication. In fact, it is not included into the key research part; however, it helped to support some presumptions and theories, as well as global tendencies. These tendencies and effects dictate the overall situation on the global market, since the device selection depends on the key life style of the audience, as well as the occupation sphere (the latter is relevant for owners of employer provided devices). Reference List Bojei, J., & Hoo, W. C. (2012). Brand Equity and Current Use as the New Horizon for Repurchase Intention of Smartphone. International Journal of Business and Society,13(1), 33 Brian R. H. (2011) Report: Consumers Will Be Gaga for Mobile Apps by 2012, E-Commerce Times, Mar. 18, 2011 Ginovsky, J. (2012). Cyber Attacks Are Soaring. How to Thwart Them: Lack of Customer Care with Mobile Devices Is a Big Problem. ABA Banking Journal, 104(6), 22 IDC, Worldwide Quarterly Mobile Phone Tracker, Oct. 4, 2012. Green, N., & Haddon, L. (2011). Mobile Communications: An Introduction to New Media. New York: Berg. Luttenegger, J. M. (2011). Smartphones: Increasing Productivity, Creating Overtime Liability. Journal of Corporation Law, 36(1), 259 Sutterfield, J. S., & McKinley-Floyd, L. A. (2012). Using Taguchi Methods in a Marketing Study to Determine Features for a Smartphone. Academy of Marketing Studies Journal, 16(1), 53 Read More