Advertising Influence Customers - Specific Brand of Mobile Phone Handsets in London - Research Proposal Example

Name: xxxxxxxxxxx Course: Institution: Title: Research Proposal Date: xxxxxxxxxxx Research Proposal Proposed Research Title How does advertising influence customers in their purchasing behaviour of a specific brand of mobile phone handsets in London? Introduction Advertising can be referred to as “the soul of marketing” in the highly competitive global market. The American Advertising Association defines advertising as any form of non-personal presentation and promotion of ideas, goods and services by an identified sponsor. Therefore, advertising is an essential component and an integral part of the marketing strategy of any business. Advertising is even more important in ultra competitive markets such as the mobile phone handset or cell phone market. The rapid emergence and growth of mobile phone brands such as Nokia, Siemens, Samsung, Sony Ericsson and Blackberry has intensified competition in the market by presenting an ever widening variety of handsets to consumers. Advertising plays a key role in the sales of mobile handsets by educating customers on the various features and competitive strengths of each handset and guiding their initial and replacement purchase behaviour. The purpose of this research study is to establish the influence of advertising on customers in their purchase of a specific brand of mobile handset in London. This research proposal will highlight the objectives of the proposed research study. It will discuss the methodologies that will be used in this study. In addition, this proposal will provide a brief review of the literature that will be used for this study. Research Background Many studies have been conducted into the behaviour of consumers in the mobile phone handsets market. Mintel (2004) established that the most prominent market for mobile phones was the youth segment (16 to 24 years). In this market, many respondents indicated that their purchasing behaviour, primarily their choice of mobile phone handsets, was often influenced by brand image and the pursuit of new particular features offered by new models. Advertising is the primary vehicle through which mobile phone manufacturers announce new competitive features to their target audiences and build brand image. This is accomplished through various advertising media such as print, radio, TV, internet and most recently; even mobile marketing which uses the very platform it is trying to sell. The mobile phone handset market in London has experienced exponential growth over the last two decades characterized by aggressive competition between major multinational mobile phone brands. Established brands such as Nokia, Motorola and Samsung are coming under increased competition from brands with sophisticated and specialized smart phones such as Apple (with the iPhone),and Blackberry. This competition has been characterized by increasing advertising expenditures by both mobile phone manufacturers and mobile service providers with global advertising expenditures for major mobile handset manufacturers increasing by 47.9 % in the one year period between 2001 and 2002. Research Objectives To determine whether advertising affects consumer perceptions of a particular brand of handsets and their decision to purchase the brand in London. To determine which form of advertising is the most effective in influencing consumer purchasing behaviour in London To establish which aspects of advertising influence the consumer decision. Research questions How does advertising influence customer perception and the decision to purchase Apple’s iPhone handsets? Which is the most effective advertising platform for the Apple iPhone handset? Which aspect of advertising influences the decision to purchase the Apple iPhone? Literature Review Mathur (2005) provides empirical evidence on the impact of advertising on the sales of Siemens, a German based handset manufacturer. Through an ad campaign that focused on the clarity of its networks, Siemens was able to achieve increased sales and market penetration in New Delhi. Likewise, Gillett et al (2011) highlight the influence of advertising on consumer behaviour in the mobile phone handset industry. Mobile handset manufacturers use advertising as a platform to urge customers to replace their current handsets by purchasing newer and updated versions by primarily advertising the benefits of new features found in newer handsets. Therefore, mobile handset manufacturers use advertising as the primary tool to draw the attention of customers to the new features available in their mobile phone handsets. With rapid advancements in mobile telephone technology- most significantly third generation (3G) phones and smart phones, handset manufacturers have grown increasingly aggressive in marketing their products by highlighting new features on offer. A report by Market Publishers Ltd (2011) reinforces these findings. According to the report, the growth of the UK handset market will be driven by smart phones. This is based on projections from smart phone sales which indicated that they contributed to more than 78% of the industry’s profits. Contextualized within the increased advertising expenditures of handset manufacturers and mobile service providers, this would imply that advertising plays a key role in persuading consumers to not only purchase new but also replace existing handsets with upgraded versions. According to Sugai (2007), a majority of purchases in developed mobile handset markets is in upgrades which are advertised to consumers. These advertising campaigns primarily highlight the increased capabilities of new handsets such as enhanced media and graphics capabilities, increased performance speeds and more recently the possibility of running multiple mobile applications. With the advancements in technology, handset manufacturers have increasingly adopted newer platforms to advertise their products. In cities such as London, there has been a discernible shift from radio and print advertising to TV and internet advertising. However, rich and colorful billboards have been retained due to their effectiveness as a powerful advertising medium. Advertising has enabled newer market entrants such as Apple to register record sales of its flagship iPhone brand. According to BBC (2007) this would account for the long queues witnessed at major outlets in London when the iPhone was launched in 2007. The demand for the iPhone was generated by the hype surrounding its superior features and it instantly became a hit with the youth segment of the market. Apple has subsequently risen to occupy the largest share of the mobile handset market in major European cities such as London. According to Nielsen (2004), mobile handset advertisers target the youthful segment of the market that is attracted and responsive to advertising concepts that center on fashion, image and culture such as celebrity endorsements. According to Angus (2008), celebrity endorsements have a powerful marketing effect, often inducing customers to buy a product and identify with the lifestyle or status that the celebrity represents. This indicates the power of the modern mobile handset not just as a communication device but as a fashion statement and a cultural symbol (Katz and Sugiyama 2005). According to Pringle et al (2003), trends and fads have played an increasingly important part in determining the receptiveness of mobile handsets and subsequent sales. Advertising also aims to influence consumer behaviour by creating a sense of brand loyalty. According to Pasquale and Ai Lin Lim (2003), brand loyalty is an important determinant of consumer choices in any product market. Mobile handset manufacturers have dedicated advertising campaigns aimed at locking in their market by inspiring brand loyalty. In support of this argument, a study conducted by Petruzellis (2010) shows that customer attitudes are of equal importance as technologies or capabilities in influencing selection of handsets. The implication is that a customer may purchase a handset not just for the features and capabilities it offers but out of a sense of loyalty to the brand. In support of Petruzellius’ view, Emilio et al (2010) found that customers were not just acting on a utilitarian basis in purchasing the iPhone but were also influenced by social and hedonistic factors. In conclusion, the literature available suggests that advertising is an important determinant in influencing selection and purchase of handsets by consumers. Research Methodology This study will employ positivism as the research methodology. The positivist approach to business and social sciences is based on the premise that reality or natural phenomena is stable and can be predicted. Positivists argue that nature is stable, governed by a set of extractable laws and that phenomena or behaviour can be predicted through the means of natural sciences (Newman and Benz 1998). By changing one variable and manipulating another, the positivist approach uses experimentation to generate a possible set of outcomes. In predicting the effect of advertising on consumer behaviour, relevant primary and secondary data will be collected, synthesized and analyzed to arrive at conclusions. Research Methods This study will use both primary and secondary data. Primary data is data that is observed or collected directly from firsthand experience or direct contact with the data source. These include data from observations, interviews, recordings and online surveys (Newman and Benz 1998). Primary data for this study shall be collected through questionnaires and online surveys which will be administered to university students currently studying in London who are currently in possession of an iPhone. The questionnaires and online surveys will collect information from respondents relating to their consumer behaviour such as whether the decision to purchase their current mobile phone handsets was influenced by advertising, what particular platform and features of advertising influenced the decision to purchase the mobile phone and their perceptions of particular mobile brand before and after coming into contact with the advertisement. The sample selected is expected to provide sufficient primary data. Secondary data refers to data that has already been collected and documented in other sources. This may include quantitative data such as statistics and sales figures or qualitative data which such as business reports and studies (Newman and Benz 1998). The secondary data sources for the study will be obtained primarily from online business reports and newsprint articles. The secondary data collected will be both quantitative and descriptive in nature. The business reports will be purchased online and will provide quantitative data regarding the current, past and projected sales figures and advertising expenditures of mobile handset manufacturers. Further descriptive data shall be collected from previous studies which have explored the impact of advertising on mobile handset selection and purchase among customers. Anticipated Method of Analysis and Findings Data analysis refers the process through which the raw data collected will be ordered and organized to extract useful meaning from it. In this study, most of the data collected will be quantitative in nature. Quantitative data is usually collected in numerical and statistical form, usually represented in numbers. Quantitative data can be discrete or continuous. In this study, the quantitative data collected through questionnaires will be discrete in nature such as the number of first time and secondary purchase iPhone users in a particular campus which can only be expressed as a whole number (Newman and Benz 1998). The data collected will be analysed to extract useful meaning and conclusion using various data analysis techniques. Primarily, this study will use grounded theory as a data analysis technique. In grounded theory, the data collected will be analysed without any preconceived theory to deductively obtain a theory of the influence of advertising on consumer behaviour in selecting and purchasing mobile handsets. It is expected that the data will show that increased advertising in multiple formats and platforms has a positive effect on customer attitudes towards mobile handsets and the decision to select and purchase a particular brand. In particular, it is expected that advertising campaigns by Apple contributed to customers’ decisions to select and purchase the iPhone and the subsequent penetration of the brand in the market. The results of the data analysis will be quantitative which will enable them to be presented in forms of graphs and charts. These graphs and charts will provide a basis for interpretation of the data. Ethical Considerations A majority of the data collected while conducting this research will be quantitative data. The questionnaires will only be administered to respondents on a voluntary basis and any information collected shall be treated as confidential. The respondents will be made fully aware of the purpose and intent of the research and they will be duly informed in writing and otherwise of the risks involved in participating in the research. No respondent will be coerced to participate in the study and their anonymity will be protected and respected with no respondent required to disclose their identity with the exception of approval by the same participant. The participants in the online survey will also not be subjected to any form of coercion or exposed to risks such as identity theft or hacking. The secondary data collected for this research is publicly available for access or purchase in online and print libraries. The information collected will in no way constitute a breach of privacy, copyright or distribution laws and shall not be reproduced or shared without the consent of the publishers. Timescale References Angus, D., 2008, Theory and Measurement of Consumer Behaviour, Cambridge University Press. UK. BBC News, 2007, Apple iPhone debuts in UK stores. November 10, 2007 Retrieved on June 18, 2010 from Colleen, T., 2007, Apple iPhone tops in consumer perception poll. Electronic Design Strategy News. Retrieved on June 18, 2010 from Emilio, A, Julianne, C. & Nikhilesh, D. ,2010, Social behavior and brand devotion among iPhone innovator, International Journal of Information Management, Vol 30, Issue 6, pp.475-480. Ferris, M., 2007,Insights on Mobile Advertising, Promotion, and Research, Journal of Advertising Research, Vol 47, Issue 1, pp 28-37. Gillett, A. Ajasafe, F. Lovell, H. & Holmes, S., 2011, Integrated communication plan for the UK Mobile phone Market. New York: Grin Verlag. Goggin, G.,2009, Adapting the mobile phone: The iPhone and its consumption Continuum, Journal of Media & Cultural Studies, Vol 23, Issue 2, pp. 231-244. Katz, E., & Sugiyama, S., 2005, Mobile phones as fashion statements: The co-creation of mobile communication’s public meaning. In Mobile communications: Re-negotiation of the social sphere, R. Ling & Pedersen (Eds.):63-81, Springer ,Surrey, UK: Lam, S., Ahearne. M., Hu, Y. & Schillwaert N., 2010, Resistance to Brand switching when a radically new brand is introduced: A Social Identity Theory Perspective, Journal of Marketing Vol. 74, pp. 128–146. Mathur, U., 2005, Advertising management text and cases, New Age International, New York. Newman, I. & Benz, C., 1998, Qualitative-Quantitative research methodology: exploring the interactive continuum, Illinois, SIU Press. Olson, P. & Laurent, L., 2007, "iPhones Land in London”, Retrieved on June 15, 2011 from Forbes.com. Pascale, Q. & Ai Lin Lim, 2003, Product involvement/brand loyalty: is there a link? Journal of Product & Brand Management, Vol. 12 Issue 1, pp.22 – 38. Petruzzellis, L., 2010, Mobile phone choice: technology versus marketing: The brand effect in the Italian market. European Journal of Marketing, Vol. 44 Iss: 5, pp.610 – 634 Philip, S., 2007, The impact of handset upgrades on mobile content and service usage International Journal of Mobile Communications, Vol. 5 Issue 3, pp. 281-299. Pringle, D. Jesse, D. &Ramstad, E., 2003, Cellphone Makers a Pay Heavy Toll For Missing Fads Wall Street Journal, Vol. 242 Issue 86, pA1-A10. Reuters, 2007, 'O2 UK digs deep for iPhone", Retrieved on June 17, 2011 from < http://www.reuters.com/article/technologyNews/idUSl038246020071003> Research and Markets, 2010, Global Mobile Handset Market. Retrieved on June 18, 2010 from Read More