A SUMMER TRAINING PROJECT REPORT ON Market Research on MOBILE HANDSET BUYING BEHAVIOR SUBMITTED TOWARDS PARTIAL FULFILMENT OF POST

GRADUATE DIPLOMA IN MANAGEMENT AT SUBMITTED BY: Aditi PGDM(2009-11) FACULTY GUIDE Miss.Sheena Manchanda INDUSTRY G UIDE Mrs. Kamini Sharma 1

STUDENTS UNDERTAKING I hereby declare that the Summer Training Project entitled Market Research on Mob ile Handset Buying Behavior submitted by me to Spice Mobiles Ltd., for Post Gradu ate Diploma in Business Management 2009-2011 is absolutely general and consist o f original work. Project Guides: COMPANY Mrs.Kamini Sharma Spice Mobiles Ltd. Noida FACULTY Miss. Sheena Manchanda Jagan Institute of Management Studies (JIMS) Delhi ACKNOWLEDGEMENT 2

The pleasure that follows the successful completion of an assignment would remain incomplete without a word of gratitude for the people, without whose cooperatio n the achievement would have remained a distant dream. It is not a mere formalit y to place on record the tireless efforts, ceaseless cooperation, constant guida nce and encouragement of the people closely associated with the assignment but a distinct necessity for the authenticity and credibility of the project. I am tha nkful to Spice Mobiles Ltd. for having given me the platform to do my summer int ernship with them. The management theories learnt in a year are brought to pract ice. I tried to make best use of this opportunity. The work bears the imprint of many persons under whom I did my training. First of all I present my sincere th anks to Mrs.Kamini Sharma(Assistant Sales Manager) who guide and encouraged me t hroughout our summer internship program in the project Market Research on Mobile Handset Buying Behavior. Secondly I am thankful to Miss.Sheena Manchanda (Lectur er JIMS), for providing necessary facilities to carry out the dissertation in pr escribed period. I am very thankful to Mrs.Yukti, who taught me Business Research Methods which helped me a lot in analysis done during my project.Finally I am in debted to Jagan Institute of Management Studies, my family, friends & all those people, academic & authors whose work has been quoted & used extensively in this project. Aditi PGDM(Marketing) PREFACE 3

In todays competitive world, every company is striving hard to increase their mar ket share and for that they should make customers their loyal customers and attr act new customers. To accomplish these goals, first and foremost need is to unde rstand what customers want and this can be done through Understanding Consumer B uying Behavior regarding that product. Consumer behavior is the dynamic interacti on of affect and cognition, behavior and environmental events by which human bei ngs conduct the exchange aspects of their lives. Companies are interested in cons umer behavior because they can develop marketing strategies to influence consume rs to purchase their products based on consumer analysis. The success of a compa nys marketing strategy will depend on how buyers react to it. To find out what cu stomers want, marketers must examine the main influences on what, where, when an d how customers buy goods and services. By understanding these factors better, m arketers are better able to predict how consumers will respond to marketing stra tegies. Ultimately, this information helps companies compete more effectively in the marketplace and leads to more satisfied customers. The emphasis in the proj ect is providing the study and an insight into Indian MOBILE market. The Summer Project is designed to provide participation of PGDM program as on the job exper ience. This has given a chance to try and apply the academic knowledge and gain insight into consumer behavior while purchasing Mobile Handsets. This helps in d eveloping decision-making abilities and emphasizes on active participation by th e student. I gained valuable experience & knowledge during the survey. The Proje ct consists of my findings from the survey & then conclusions were drawn and fin ally recommendations were put forward for adopting new Marketing Strategies to t arget various kinds of consumers. CONTENTS Students Undertaking...2 4

Acknowledgement..3 Preface.4 Executive Summary 1) Introduction.. ...10 Introduction to Mobile Industry..11 About the group ..11 2) Review of literature..25

3) Research28 Research Definition 28 Research Metho 4) Data analysis and Findings with Conclusion41 Market share.41 Details of the respondents....43 5

Behavior of the customer.47 Descriptive analysis..53 Co 5) Limitations...69 6) Appendices..70 Questionnaire................................................................... ..........................71 References.75 EXECUTIVE SUMMARY Mobile handset industry is growing in India at a very fast rate. According to a recent survey, the mobile handset market grew 4.2 per cent by revenue during FY 2009-10 compared to 7.9 per cent in 2008-09. 6

Around 108 million mobile phones were sold in the country during 2009-10, adding up to Rs 27,000 crore sales, up from Rs 25,910 crore the previous year. Indian brands grab 14 % share of the handset market. Spice mobiles Ltd. had 3.9% which is one of the Indian brands. As students of management one always needs to keep track of all the developments occurring in the various sectors of economy and be well versed with all the new initiatives being taken up by the organizations. H aving got the opportunity to do my summer internship at SPICE MOBILES LTD.,I got exposure to the market of Mobile Phones and behavior of customers while purchas ing Mobile Phones. Marketing being my area of interest for the summer project, I had chosen Market Research on Mobile Handset Buying Behavior as the topic of proj ect with the advice of my industry guide. As company is increasing its market sh are, so it is adopting new marketing strategies and for that need is to understa nd customers behavior while purchasing the product and their thinking about the p roduct to make the brand successful. OBJECTIVES : To understand Mobile handset market. To ascertain the attributes wh ich influenced the customers in selecting a particular mobile phone. 7

To study the consumers satisfaction towards different mobile phone brands. To get information regarding new features consumers want in their handsets. To know the feeling of consumers towards their mobiles. RESEARCH DESIGN Descriptive researc h design was used to understand the mobile handset buying behavior of customers. 8

INTRODUCTION TO MOBILE INDUSTRY Definition of Cellular/Mobile phone The Cellular telephone (commonly "mobile phone" or "cell phone" or "handphone") is a long-range, portable electronic device used for mobile communication. In ad dition to the standard voice function of a telephone, current mobile phones can support many additional services such as SMS for text messaging, email, packet s witching for access to the Internet, and MMS for sending and receiving photos an d video. Most current mobile phones 9

connect to a cellular network of base stations (cell sites), which is in turn in terconnected to the public switched telephone network (PSTN) (the exception is s atellite phones. Cellular telephone is also defined as a type of short-wave anal og or digital telecommunication in which a subscriber has a wireless connection from a mobile telephone to a relatively nearby transmitter. The transmitters sp an of coverage is called a cell. Generally, cellular telephone service is availa ble in urban areas and along major highways. As the cellular telephone user move s from one cell or area of coverage to another, the telephone is effectively pas sed on to the local cell transmitter. A cellular telephone is not to be confused with a cordless telephone (which is simply a phone with a very short wireless c onnection to a local phone outlet). A newer service similar to cellular is perso nal communications services (PCS). The Global Cellular Mobile Industry: The global mobile phone industry is based on many different manufacturers and op erators. The industry is based on advanced technology and many of the manufactur ers are operating in different industries, where they use their technological sk ills, distribution network, market knowledge and brand name. Four large manufact urers of mobile phones are today dominating the global mobile phone industry; No kia, Sony Ericson, Samsung and Motorola. In addition to these companies there ar e many manufacturers that operate globally and locally. SPICE GROUP Spice Mobiles Spice Retails 10

Spice Labs Spice Digital Spice Televenture s Spice BPO Spice Infrastructu re Spice Global Spice Entertainmen t Spice World Spice Films Spice Cinemas Spice Finance Finance ABOUT THE COMPANY With rapid consumerism sweeping the country, India has emerged as the second lar gest mobile handset market, poised for explosive growth. Industry observers were of the view that the market within the first quarter of 2006 could well become a global hub for mobile handset 11

manufacturers. In another report by Gartner, India has been hailed as the next b ig mobile handset market by 2009. It is forecasted that China and India alone wo uld account for nearly 200 million units in 2007, with the Indian market surpass ing China in 2009 to reach 139 million units. Spice Mobiles Ltd. is a part of Sp ice Group, a multi-faceted group with an exclusive telecom eco-system in India. With "Innovation" as the companys mantra, Spice began the process of revolutioniz ing the Communication & Entertainment sector, with its new age technologically a dvanced state of the art mobile phones. Debuting with handsets targeted at the entry-level segment, today, the brand is growing rapidly and has a bouquet of offerings targeting entry, mid & premium se gments. Spice Mobiles Ltd has heralded a new chapter in the history of Indian mo bile telephony by launching the first ever DUAL MODE PHONES. Continuing with the same trend of delivering breakthrough products, Spice Mobiles launched the new Spice D-1100, Indias first Dual SIM PDA (GSM/GSM). Spice Mobiles is the proud winner of the Golden Peacock Award for innovative pro duct / service for the year 2007. Spice Mobiles added more firsts to its credit by announcing the Global premier of the Worlds First Movie Phone and Peoples phone at the World Mobile Congress, Barcelona in February 2008. Riding on the success of its venture, Spice Mobiles Ltd. has strengthened its fo otprint, built a strong value proposition with the customers and established its elf as a competitive brand amongst the host of International players. Moving for ward, the company aims to achieve further brand acceptability among all target s egments through a broader offering of cutting12

edge handsets that combine mobile phone functionality with enriched content and smart device capabilities for greater high-speed voice and data capacity. India is an emerging market and as a recent entrant Spice Mobiles Ltd. is looking forw ard to capitalize on the existing opportunity. As the first truly Made for India m obile phone brand, growth plans in India were based on the understanding of the market and consumer needs and first step was taken targeting the entry-level seg ment. In an effort to distinguish from the clutter, phones were based on the val ue for money proposition, offering consumers phones, power packed with features u nheard of in the entry-level segment till then. Today, Spice Mobile has built a reputation for itself and has established its brand identity across the country. In tune with communication theme Style International dil Phir Bhi Indian, Spice i s all set to introduce its high-end phone range Enhanced Bluetooth enabled phone s, Smart Phones, and PDA. We value our customers and channel partners who have h elped establish Spice Mobile Phones as a truly Made by India mobile phone brand. L atest tagline of spice mobiles is Spice hai to Life hai The booming mobile phone m arket is also witnessing a rise in consumer demand for cutting edge phone access ories. The strategic partnership with Plantronics is in keeping with this demand . Under this partnership Plantronics mobile headsets Bluetooth and wired will be s old through Spice Mobile Phones retail channel along with options of bundling th ese high-end accessories with wide range of mobile handsets and selling as a pac kage to the customer. Strong nation-wide sales & distribution network is the bac kbone on which they are spreading their footprints across the country. The estab lishment of after spice, an effective after sales service network ensuring world-c lass support to the channel and the customer was key to building brand and accep tance among the consumers. 13

The future of India market shows lots of promise and Spice Mobiles Ltd. are conf ident of making considerable inroads in the mobile handset pie. Brand Vision To stay one step ahead of the dreams of the mobile society Brand Promise We deliver outstanding value by combining deep market knowledge with unconventio nal thinking. Knowledge guides us but imagination drives us. Mission To be the most preferred choice for energetic young minds and be amongst the top 5 mobile phone brands in India. Achievements It pushes all boundaries to think beyond the conventional and stay one step ahea d of the dreams of the mobile community. Its many firsts include... First Indian company to set up a state-of-the-art copier manufacturing plant Est ablishment of Indias first facsimile manufacturing company First Indian company t o market high-end laser printing systems Indias first company to manufacture 3.5" floppy 14

 First Indian company to set up a private telecom plant The first company to laun ch cellular telephone services in India First Indian company to export digital s witching systems First to manufacture eco-friendly paper products Pioneers of co mplete Environment, Health and Safety Management Systems in India Establishment of Indias first 4D theatre First Indian company to launch a Dual Mode phone in In dia Indias first GSM operator to launch a handset bundled offer for less than Rs. 1000/Awards Spice Mobiles is the proud winner of the Golden Peacock Award for innovative pro duct / service for the year 2007. Spice Mobiles added more firsts to its credit by announcing the Global premier of the Worlds First Movie Phone and Peoples phone at the World Mobile Congress, Barcelona in February,2008 Brand Ambassador With aggressive plans to sell one million handsets a month, Spice Mobiles named actor Sonam Kapoor as it new brand ambassador. 15

ORGANISTIONAL STRUCTURE BOARD OF DIRECTORS OF SPICE MOBILES LTD. Name Bhupender Modi Kunal Ahooja Preeti Malhotra Dilip Modi Krishan Singh Kashi Memani Suborto Chattopadhyay, Current P osition Chairman of the Board Chief Executive Officer Compliance Officer, Compan y Secretary, Executive Director Managing Director, Director Independent Director Independent Director Independent Director 16

Sales and Marketing Department Sales and marketing department controls all the a ctivities relating to marketing and sales. All the orders of supplying mobile ph ones are received by this department. It maintains the adequate supply to its di stributors. Sales force has the direct link with retailers. It collects the mark eting information and tries to acquaint with higher management. The sales forces comprises following staff: Managing Director General Manager Re gional Manager Area Manager Territory Manager Senior Sales Executive Sales Execu tive Sales and Marketing Manager control the entire sales forces. Sales Supervisors p erform the following tasks: Sales supervisors find and cultivate new retailers. 17

Sales supervisors skillfully communicate information about the companys product and services and various new schemes. They also keep the retailers aware of any fall in the prices of mobiles. Sales supervisors know the art of salesmanship ap proaching presenting answering objections and closing sales. Sales supervisors provide various services to the customers consulting of their problems rendering technical assistance, arranging financing and expanding deliv ery. Sales supervisors carryout market research and intelligence work and fill in call report. HISTORY OF THE COMPANY The Company was incorporated on 23rd December,1986 and the Certificate of Commen cement of Business was obtained on 25th March 1988. It was promoted jointly by M odi Rubber, Ltd. Indian Reprographic Systems Pvt. Ltd. and others. The Company w as licensed to manufacture mini computer/micro processor based system. The Compa ny entered into a technical and financial Collaboration with Ing. C. Olivetti & C., S.P.A. (Olivetti) and Olivetti International, a wholly owned subsidiary of O livetti. As per The agreement, Olivetti were to provide training in Italy to tec hnical personnel of the Company regarding manufacturing, testing and repairing o f licensed products and the use of tooling and equipments supplied by Olivetti. The Company undertook to set up a Rs.25 crore project for the manufacture of the state-ofthe-art computers which comprise the Olivettis M-250 and M-380 series. 18

In 2002,a communication issued to, Modi Olivetti Ltd has informed that Mr Raghu Murti, Mr.Deepak Mohla and Mr R S Desikan resigned as Directors of the Company a nd in their place Mr Dilip Modi, Mr Ravinder Lal Ahuja and Mr Vinod Sawhny are a ppointed as Directors in the Board Meeting held on February 11, 2002. Modi Olive tti Ltd has informed that Mr M V Rama Kath has resigned as the Company Secretary of the Company and Ms Preeti Malhotra, presently director has also been appoint ed as the Secretary of the Company. The company acquired the shares of Graphtech India Ltd., (GIL), an unlisted company on March 24, 2003. The company was delis ted from Uttar Pradesh Stock Exchange (UPSE) with effect from August 27, 2004 In 2005,Spice Net appoint Mr. Kunal Ahooja as CEO In 2007,Spice Ltd has informed t hat the Board of Directors of the Company wide resolution passed by circulation on March 09, 2007, has accorded their consent for the change in name of the Comp any from SPICE LTD to SPICE MOBILES LTD or such other name as may be approved by the Registrar of Companies, U.P. Spice Mobiles Ltd informed the Board of Direct ors of the Company at its meeting held on October 27, 2007, appointed Mr.Krishan Lal Chugh as Non-Executive Independent Director on the Board of the Company. Si nce the last Report, Ms. Divya Modi, Mr. AVK Mohan, Mr. Rajiv Kumar Sharma, Mr. Vivek Bali and Mr. Parikshit Bhasin were appointed as Director by the Board of D irectors on 31st July 2008. Further, Mr.Hanif Mohamed Dahya and Mr. Kunal Ahooja were appointed as Director by the Board of Directors on 30th September 2008. 19

Ms. Divya Modi, Mr. Suresh Kumar Jain, Mr. A V K Mohan and Mr. Rajiv Kumar Sharm a, resigned from the Board of Directors. In 2010,Spice Mobiles is emerging as a successful brand providing handsets with innovative features at reasonable price . Recent Updates Spice Mobiles will start manufacturing mobile phones in the count ry by the end of this year In Baddi, Himachal Pradesh. Spice Mobiles Ltd.,has decided to spend Rs.120 Crore for Marketing and Promotion s this fiscal and advertising contract has been given to Oligvy. As part of their new marketing strategy the company has decided to focus more on Metros and tier I cities. Now, hotspot will be called Spice retail or Spice Hot Spot. Spice Mobiles has announced the launch of its latest device, the S 7000. The com pany has also partnered with Disney for this product. Under the partnership, S 7000 w ill be pre loaded with exclusive content of new Disney movie Prince of Persia Sands of Time. Spice Mobiles said that the name of the company has been changed to Spice Mobility with effect from June 07, 2010. Spice mobile chose Bangladesh for global debut. 20

SWOT ANALYSIS STRENGTHS: Company has innovation as its strength. It introduced DUAL SIM mobile phone. Modi group is known in India. Spice Mobiles are comparatively cheaper. WEAKNESS: It is at its initial stage. Advertising is not so impressive. tion channel is quite small. After sales service is not so good. OPPORTUNITY 21 Distribu

Being available at lower prices, it can target lower middle class.

With the opportunity like Telecom penetration in India being at the peak time, Spi ce has an opportunity to increase its sales as well as the market share. As the standard of living in India has increased the purchasing power of the people as increased as well, so Nokia has to target right customer at right time to gain the most out of the situation. THREATS Spice has biggest threat of a large number of established brands like No kia, Samsung, LG etc. The range of products provided by other brands. Best after sales service provided by Nokia. 22

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LITERATURE REVIEW A brief literature would be of immense help to the researcher in gaining insight into selected problem. The researcher would gain good background knowledge of t he problem by reviewing certain studies. A reference to these entire studies wil l be related in the context of the shaping the present study. 1. Factors Affecti ng Consumer Choice of Mobile Phones Two Studies from Finland By: Heikki Karjaluo to, Jari Karvonen, Manne Kesti, Timo Koivumki, Marjukka Manninen, Jukka Pakola, A nnu Ristola, Jari Salo Published in Journal of Euromarketing, Vol. 14(3) 2005 Al l the factors that affect the choice are Demographical factors, Psychological fa ctors and various factors affecting mobile phone choice and what are the sources of information before purchasing mobile phones 2. Mobile Handset Buying Behavio r of Different Age and Gender Groups By: Jagwinder Singh Dept. of Management, Am bedkar National Institute of Technology, Deemed University B B Goyal 24

University Business School, Panjab University Published in International Journal of Business and Management The study concludes that the mobile handset users of age group of 18-30 years are less price sensitive than consumers of other group s; rather they consider physical appearance, brand, value added features, and core tec nical features more important than users of any other age groups. On the contrary , the consumers of age group 50 years and above have given greater importance to price than consumers of other age groups. There were significant differences betw een different age groups as regards to the importance given to all the factors e xcept post - purchase services. The difference was highest for the brand closely fol lowed by core technical features of the handset. 3. The Mobile Phone Market By: Peter W. Turnbull; Sheena Leek; Grace Ying Publis hed in Journal of Marketing Management, Volume 16, Issue 1 - 3 February 2000 The findings reveal that although consumer confusion exists in the mobile phone mar ket, it does not have a detrimental effect on the market. In addition, the findi ngs also suggest that suppliers should buildup a strong brand image and be aware of the importance of word of mouth sources since both of these are considered t o be very significant reference points for consumers. Finally, customer care is essential for customer retention. A Report for 25

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DEFINITION OF RESEARCH The word research is derived from the Latin word meaning to know. It is a system atic and a replicable process, which identifies and defines problems, within spe cified boundaries. It employs well-designed method to collect the data and analy ses the results. It disseminates the findings to contribute to generalize able k nowledge. For the proper analysis of data simple statistical techniques such as percentage were use. It helps in making more generalization from the data availa ble. The data which will be collected from a sample of population was assumed to be representing entire population was interest. Demographic factors like gender , age, income and occupation was used for the classification purpose. RESEARCH METHODOLOGY RESEARCH DESIGN The study conducted is a conclusive descriptive statistical stud y; I come to the decision which is precise and rational. The study is conclusive because after doing the study, I come to a conclusion regarding the position of the brand and factors responsible for purchase of handset in the minds of respo ndents of different groups. The study is statistical because throughout the stud y all the similar samples are selected and grouped together. All the QUANTITATI MALL VE INTERCEPT 59 28 SURVEY QUALITATIV METHOD IN-HOME PERSONAL 917 E

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QUESTIONNAIRE SURVEY ON MOBILE HANDSET BUYING BEHAVIOR 1) Do you have a Mobile Phone? Yes ( ) 2) Which brand of Mobile Phone do you have? Spice ( ) Motorola ( ) Nokia ( ) TAT A ( ) Samsung ( ) Micromax ( ) LG ( ) Sony ( ) Reliance ( ) No ( ) Blackberry ( ) Others ( ) 30

3) How frequently do you buy a Mobile Phone? Every 3 months( ) Every 2 years( ) Every 6 months( ) Hard to say( ) Every 1 year( ) 4) Rate the following Mobile Phone purchase motivators Extremely Important PRICE BRAND SIZE WEIGHT TOUCH SCREEN KEYPAD MMS CAMERA BLUETOOTH WEBPHONE VOICE CLARI TY MP3 PLAYER RADIO BATTERY BACKUP AFTER SALES SERVICE WARRANTY Important Somewh at Important Unimportant Extremely Unimportant 5) What new features would you like to have in your Mobile Phone? . 6) Which typ e of Mobile do you prefer? 31

Bar( ) Flap( ) Slider( ) 7) Which color of Mobile do you prefer? Black( ) White( ) Silver( ) Gray( ) . Ot hers( ) Specify if Others 8) What is the source of information while purchasing Mobile Phones? Friends ( ) Internet ( ) T.V. ( ) Newspaper ( ) Radio ( ) Others ( ) . Magazine ( ) Mobile Phone Retailers ( ) If others, Please specify 9) How do you take Purchase Decision of your Mobile ph one? Self Decision ( ) Mobile Phone Retailer ( ) Friends ( ) Family ( ) Others ( ) 10) Would you recommend your Mobile Phone Brand to your Friends? Yes ( ) 11) Age Below 20 years ( ) 40 to 50years ( ) 20 to 30 years ( ) Over 50years ( ) 32 No ( ) 30 to 40 years ( )

12) Sex Male ( ) 13) Occupation Service ( ) Student ( ) 14) Family Income Upto 2 0,000( ) 40,000 to 60,000( ) 15) Please complete the sentence My Mobile is My id eal mobile is one 16) Female ( ) Business ( ) Homemaker ( ) Profession ( ) Others ( ) 20,000 to 40,000( ) Above 60,000( ) . . How will you feel if you lose your mobile? . THANK YOU FOR GIVING YOUR PRECIOUS TIME 33

REFERENCES Books: Philip Kotler, Marketing Management, 11th Ed, Princeton-Hall India 2003 Magazines : 4 Ps of Marketing Web Resources: http://www.spiceglobal.com 34

http://www.indiamart.com http://www.economictimes.com http://www.moneycontrol.co m http://www.wikipedia.com http://core.ecu.edu/psyc/wuenschk/spss/spss-lessons.h tm 35