Mobile handset industry


The mobile handset industry in India is very large. The growth rate of this industry is also very high. More and more competitors are emerging looking at the positives of this industry. So, even for a market leader like Nokia, it becomes important to cater to the needs of the customer by considering what matters the most to the customer and what does not. Different customers consider different factors before buying a mobile handset. By conducting a survey among mobile phone users, the factors which they consider before buying a mobile handset and the degree of importance given for each factor can be found out. The objective of this research was to conduct such a survey among a sample of youth and extrapolate the findings about the factors influencing mobile handset purchases among different age groups of young population in India. Among the factors, demographic variables like age, gender can play a major role. Also, it is believed that, in a country like India, building and maintaining brand loyalty plays a very important part. So, the research also focused on finding out the associations between the factors, the demographic variables and the brand loyalty of individuals.


The Indian mobile telecommunication industry has shown tremendous growth over the last few years and at present there are about twenty crore subscribers of the mobile telecom services in the country. The market for the mobile handset is also growing because of the growing demand for mobile telecom services. This sector was given a boost primarily due to liberalization of telecommunication laws and policies. India at present is the second largest market for mobile handsets (Indian Brand Equity Foundation, 2005). In 2005, the share of GSM handsets was 84%, while CDMA handsets accounted for a 16% market share in the country. Nokia was the market leader with a 62.3% market share. Among the other players, the prominent are Sony Ericsson, Samsung, Motorola and LG.

The Indian mobile handset market is fraught with many diversities and complexities such as the types of customers, government regulations, regional/geographical wireless infrastructure, and the purchasing power of the consumers. Further, Indian society is hierarchical in nature and is therefore, status conscious, giving very high value to brands. Further, consumers also make use of handsets for clicking photographs, playing games, downloading icons/screensavers/logo/ring tones, sending camera-phone taken photos, and playing offline games with their mobile phones, adding more dimensions to the research on consumer behaviour. In the current scenario, one can safely say that mobile phones today have moved beyond their fundamental role of communications and have graduated to become an extension of the personality of the user.

Literature Review

In recent years, the adoption of mobile phones has been exceptionally rapid in many parts of the world, especially in India, where cellular phones have become as common as a wrist watch. This paper studies the various factors that an individual looks at while purchasing a mobile handset.

The size of Indian mobile handset market in FY 2004-05 was Rs 8,805 crores. Share of GSM handsets was 84% (Rs. 7,384 crores). The CDMA handsets accounted for 16% market share (Rs 1,421 crores)[1]. The brand-wise share is as shown below:

Others include: Sagem, Alcatel, BenQ, Panasonic, Bird, Siemens, Philips, O2, Blackberry, HP, Palm, Krome, Kejian.

With the increased demand of mobile communication, there has been an increasing research stream in the current literature addressing various issues related to mobile communication (m-communication) and mobile commerce (m-commerce) (Barnes and Corbitt, 2003; Siau and Shen, 2003; Scornavacca and Barnes, 2004; Laukkanen and Lauronen, 2005). Some recent examples include: an overview of the mobile communication industry for its global trend in the 21st Century by addressing all related hot topics such as mobile market, mobile applications and m-commerce (Kumar, 2004). [2]

Closer to this reports research objective, Chan and Chen (2003) focus on the usage pattern of web-based support system for mobile phone purchasing and reveal five important factors for mobile phone purchasing decision. These are the quality of signal transmission, product shape and colour choice, the size and weight, price along with associated service fees, and ease of use. They conclude that a good web-based support system can enhance the quality of phone service to customers and thus become an attractive lure in mobile phone purchasing selection.

Potential consumers can learn about cellular phone from many sources, such as friends and families, through advertisement and from their own experience. Whether a promotion and advertising hurt or help a brand is under-researched (Mela, Gupta & Lehman, 1997). In the long-run, advertisement help brands by making a consumer less price sensitive and more loyal. Exposure of an ad is crucial to be effective in changing consumer knowledge, attitude and behaviour (Evans, Moutinho & Van Raaj, 1996). And for the ad to be seen, it must grab the attention of its target audience.

Mowen & Minor, in their study, bring an important dimension to the mobile handset buying behaviour, that of attributes. Attributes are the characteristic or features that an object may or may not have and includes both intrinsic and extrinsic features (Mowen & Minor, 1998). Benefits are the positive outcomes that come from the attributes. People seek products that have attributes that will solve their problems and fulfill their needs (Mowen & Minor, 1998). Understanding why a consumer chooses a product based upon its attributes helps marketers to understand why some consumers have preferences for certain brands (Gwin & Gwin, 2003).

The brand name of the product itself is an important attribute. Brands have both functional (product-related) and symbolic dimensions (del Rio, Vasquez & Iglesiaz, 2001). On the product related benefit side, consumers evaluate product performance based on its capabilities, usage effectiveness, value for money and reliability. The purchase and consumption of products is increasing regarded by consumers as an indirect way of communication to improve their self image and deliver certain impressions to other people in their environment (del Rio,Vasquez & Iglesiaz, 2001). Therefore, the brand name benefits perceived by consumers are highly interrelated to the product-based benefits. Big brand means a better image and a better product (del Rio,Vasquez & Iglesiaz, 2001).

Price is another form of attribute used by consumers to evaluate a product. Price can sometimes be an indicator of quality; with a higher price indicating higher quality (Mowen & Minor, 1998; Siu & Wong, 2002). Consumers perceive that a higher price can be attributed to the higher cost of quality control (Siu & Wong, 2002).

There are many published reports in the current literature on the consumer behaviour from the perspective of reference group influence. These studies state that in addition to traditional marketing claim that a consumers purchasing motivation will be influenced directly by the phone and service related factors including: new technology, phone design and appearance, the relative price, and the associated calling plan, mobile phone consumers final purchasing decision is also influenced by reference groups (such as friends, family, work associates and etc.) on whether to buy a specific product and which brand or model to choose among competing alternatives (Moschis, 1976).[3]

It is also very important for the marketers to understand the preferences of the users belonging to different age and gender groups. Different customers value a product or a firm differently (Ganesh et al, 2000). Therefore, the companies must translate preferences of their target segments into the diverse models meant for different segments. Moreover, the companies may design their communication messages according to the factors considered the most important by a definite age and gender group.

Research Objective

  1. To find out which factors are given similar consideration by consumers while making purchasing decisions for mobile handsets.
  2. To find out whether factors like age group, gender, occupation have any significant impact on the factors affecting purchasing behaviour.
  3. To test whether there is any association of brand loyalty with factors like age group, gender, occupation, place of purchase, age at which first phone was bought.


One Factor ANOVA Tests

Null Hypothesis (H0): Factors influencing purchasing behaviour are not affected by demographic variables (age, gender, occupation). In other words, all means are same.

Alternate Hypothesis (H1): Factors influencing purchasing behaviour are affected by demographic variables (age, gender, occupation). In other words, not all the means are same.

Chi-square Tests

Null Hypothesis (H0): There is no significant association between brand loyalty and the following factors:

  • Age group
  • Gender
  • Occupation
  • Age of first purchase
  • Purchasing outlet

Alternate Hypothesis (H1): There is a significant association between brand loyalty and some of the above mentioned factors.

Research Methodology

Research Design

The research undertaken was a descriptive research delving into the various factors which affect the mobile purchasing behaviour, and to find if there exist any influences of demographical variables on these factors.

Descriptive design was suitable for our analysis as the factors chosen have been shown to influence purchasing behaviour in research studies that have been referred to.

Data Collection Methods

Primary data collection was collected using a survey by questionnaire. The questionnaire is attached in the annexure.

Sample Design

The survey was administered to respondents from all over India, with a healthy mix of both working and student populations. A total of 101 responses were received. The sample frame was all students of PGDM batch and through contacts on Social Networks of each group member. This method of sample selection is based on Convenience and Simple Random sampling.


Internet was used for the purpose of circulating the questionnaires to the respondents. The responses collected were entered in to a form which was eventually used for the rest of the analysis.


SPSS tools, namely Factor Analysis, One-Factor ANOVA and Chi-Square tests were used for the statistical analysis. The tasks accomplished were identifying groups of similar factors that existed within our broad set of initial factors affecting purchasing behaviour, assessing any possible impact of age group, gender and occupation on these factors, and also finding out certain factors that are associated with brand loyalty.

Data Analysis

We considered 12 factors determining consumer behaviour in our questionnaire, which the respondents were asked to rate on a scale of 1 to 5 based on the importance that they give to those factors while making a decision to purchase mobile handsets.

Part 1

In the first part of the analysis, we tried to find out which factors are given similar importance by the respondents. Shown below is the Rotated Component Matrix which shows that the 12 factors can be broadly grouped into 5 categories.

Rotated Component Matrix (a)


As we can see, the Pearson chi-square coefficient of 0.012 is less than the alpha value of 0.1 (90% confidence interval). Therefore, we can reject the Null Hypothesis and infer that buying outlet has a strong association with brand loyalty.


Out of the 12 factors considered at the beginning of the research, it was found that two factors were not given much importance by the respondents. Out of the other factors, some groups of factors were considered together by the respondents and it was observed that their purchasing behaviour depends on how well the mobile handset meets the expectation on each one of the factors in these groups.

The factors grouped together after carrying out factor analysis and the conclusion on each group were as follows:

  1. Functionality, External Features, Features Quality and Brand:
  2. This behaviour is explained by the consumers who buy mobile phones for specific functions and thus are very concerned about the functionality of the phone, the features offered by the phone and their quality, and the brand of the phone.

  3. Novelty and Unique Features:
  4. This behaviour is explained by the consumers who have mobile phones as a status symbol or who always look for some features in the phone, which is not provided by other phones.

  5. Ease of Use:
  6. This behaviour is explained by the consumers who do not expect anything more than basic features from a phone. This behaviour can also be exhibited by the consumers who might be technically challenged and so they want a phone which is easy to use.

  7. Recommendations and Reviews:
  8. This behaviour is explained by the consumers who go by the words of experts, family and friends, and/or other people who have already used the phone.

  9. Battery Backup:

This behaviour is explained by the consumers who are always on the move or use the phone very extensively. So, they will go for the phone for the phone which provides them with maximum battery life.

To study more in depth about the factors and their inter-dependencies, One Factor ANOVA analysis was carried out between each combination of the factors and the demographic variables. Out of all the combinations, only two combinations showed significant inter-dependencies.

  1. Gender and Uniqueness
  2. Gender and Brand Features

Using the information about the impact of gender on the importance given to Uniqueness and Features, further research can be carried out to find out ways to make use of this result and devise gender-specific Brand features and unique features to cater to their varying needs.

Next part of the research focused on Brand Loyalty and its association with age-group, gender, occupation, first purchase age, or the buying outlet.

By employing Chi-square analysis, it was found that there is a strong association between Brand Loyalty and Buying Outlet.

Inference that can be drawn from the above research is that consumers buying mobile phones from specific brand outlets (like Nokia Priority Store) are much more loyal to a brand than the consumers who buy phones from multi-brand outlets. This could be because the consumers buying from multi-brand outlets are more likely to be enticed by another brand and hence might not exhibit brand loyalty.


Our basic objective was to study the factors affecting the mobile purchasing behaviour and the relationship between these factors, demographic variables and brand loyalty. We carried out the research by getting a questionnaire filled by a group of people of age group 16-20 years using Convenience sampling. The results showed that, out of the 12 factors considered, 10 factors affect the mobile purchasing behaviour and these factors can be grouped together into 5 main factors Brand features, Uniqueness, Ease of use, Reviews & Recommendations, and Battery backup. This was done using Factor analysis. The inter-dependencies between demographic variables and these factors were found out using One Factor ANOVA. This showed that gender explains the behaviour of consumers going for Uniqueness and Features in mobile phones. After Chi-square test, it was found that brand loyalty has a high degree of association with the buying outlet. In all, these factors and their inter-relationships give a good idea about what young consumers of India consider before buying a mobile phone

Scope / Limitations

Telecommunications market in India is among the fastest growing in the world, with Tele-density increasing exponentially. Almost every mobile phone manufacturer rates India among the most important markets in the world. In view of this, it becomes very important to study the purchasing behaviour of consumers. The scope of the project is limited to the study of buying behaviour of customers mainly from the age group of below 30.

The scope of the project is

  • To study how demographic variables affect purchasing behaviour of mobile phones
  • To study the association between various influencing variables and the features of mobile phones
  • To identify which features are most sought after when consumers purchase mobile phones

We need to recognize the limitations of the current study as well. Since we have considered a small sample, the problem of external validity creeps in. The inference which we drew for the sample may not be true for the entire youth population in India. The sample we have considered consists of all educated respondents, mostly people who are at least graduates. So when the results are extrapolated for the entire youth population in India which consists of people with different levels of education, the results might not turn out to be accurate.

Further, since only an online version of the survey was circulated, the scope of the research was limited only to those with Internet access. The respondents that answered the questionnaires were highly educated, thus preferences for products can be affected because of this. The results from such a survey might not represent the views of the strata of youth population which does not have access to the Internet. This can introduce a small error in our research.


  • William G. Zikmund, Business Research Methods
  • Donald R Cooper and Pamela S Schindler, Business Research Methods
  • Mobile Handset Buying Behaviour of Different Age and Gender Groups International Journal of Business and Management, May 2009 (
  • Jiaqin Yang, Xihao He and Huei Lee (2007) Social Reference Group Influence on Mobile Phone Purchasing Behaviour: A Cross-Nation Comparative Study
  • Moschis, G.P. (1976) Social Comparison and Informal Group Influence, Journal of Marketing Research, Vol. 13
  • Voice & Data, 2005
  • Mobile Handset Market in India The Great Indian Growth Story
  1. Voice & Data, 2005
  2. Jiaqin Yang, Xihao He and Huei Lee (2007) Social Reference Group Influence on Mobile Phone Purchasing Behaviour: A Cross-Nation Comparative Study
  3. Moschis, G.P. (1976) Social Comparison and Informal Group Influence, Journal of Marketing Research, Vol. 13

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