Consumer Behaviour towards Mobile Handsets in India:

An Empirical Study

1. Introduction

The mobile industry has experienced significant growth during the past two decades. As practically nobody
owned a mobile phone in the 80s, today it is difficult to find a person without one. The penetration of mobile
subscriptions commonly exceeds 100% in the developed world, and the number of subscriptions in
developing countries is already outnumbering the number of subscriptions in developed countries. In fact,
mobile phones are the largest consumer electronics industry today, and the new growth mainly originates
from the developing economies. Incremental growth takes place also in developed countries as more
advanced handsets (smart-phones) are increasing in penetration. Mobile phones bring mobility, flexibility,
connectivity and efficiency to both consumers and business users alike. Mobile communication has made
such an impact on the ways people interact and conduct business, that a mobile phone is already considered
as a daily necessity in most of the developed countries of the world. The mobile industry has spawned new
revenue sources from communications to contextual advertising and from mobile content to ubiquitous
payment methods. Mobile devices have become platforms for an increasing number of services. Business
interests, therefore, are tied to the evolution of the industry. Empirical research that studies the buying
behaviour consumers towards mobile handsets is of particular value.

Moreover, mobile handsets constitute a rapidly converging industry. Legacy mobile services include
voice and SMS (short messaging service) that have been in the market since the launch of the first modern
digital mobile communications networks. The development of both mobile handsets and network
infrastructure drive the emergence of new services. Consumers are increasingly recognizing that the mobile
handsets of today support many kinds of new services ranging from business solutions to entertainment
content, in addition to the standard communications services. The ongoing convergence of mobile services
drives the new wave of advanced handheld devices, i.e. smart phones. Smart phones are advanced mobile
phones with multimedia and Internet functionalities embedded, and applications can be in installed and run
on these devices. These devices and emerging mobile services are penetrating to the developed markets.
Operators promote new services to supplement conventional mobile services, and at the same time new
kinds of business models are evaluated in co-operation with other actors such as handset vendors and
content providers. In addition, the possible emergence of Internet actors in the mobile domain brings fresh
competition to the mobile services market. Both of these trends are taking mobile services closer to
consumers, meaning that the empirical research methods of the future should be technically located closer
to the consumer.

No doubt, consumers determine the sales and profit of a firm by their purchasing decisions. As
such, their behaviour determines the economic viability of the firm. But understanding the consumer
behaviour is never simple. Customers may say one thing but do another. The purchase decision of products
such as mobile phone, which are used publicly, is strongly influenced by the consumer’s behaviour. They

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may not be in touch with their deeper motivations. They may respond to influences that change their mind
at the last minute. The process by which, consumer makes purchasing decisions must be understood by
companies in order to develop relevant strategies.

Orissa has just recently been targeted by mobile handset manufacturers and it is a constantly
changing market, especially over the last few years. Perhaps due to this reason, consumers’ buying
behaviour in Orissa towards mobile handsets has hardly been investigated by previous researchers. The
present study is an attempt in this regard. More specifically, the present work attempts to study the
behaviour of consumers towards mobile handsets in Orissa.

2. Research Questions

Considering the research background, this study attempts to address the following question:

“How consumers’ buying behaviour differs with respect to different demographic variables and
different functions of mobile handsets?”

3. Research Strategy

Keeping research objective in mind, a theoretical-empirical study was carried out. We first studied relevant
literature in the area of consumer behaviour and also functions and uses of mobile phones. Based on the
examined literature we did a qualitative and a quantitative study where we got empirical data based on
interviews with the experts, and surveys.

4. Research Setting

Geographical Area of the Study

The study was conducted in 11 districts of Orissa; viz. Balasore, Bhadrakh, Jajpur, Cuttack, Kendrapara,
Jagatsinghpur, Puri, Khurdha, Ganjam, Angul and Dhenkanal. To make the data the more scientific, efforts
are made to collect the information from various consumer-groups basing upon their age, gender,
qualification, occupation, area and income. For detailed analysis of the collected data, the mentioned
parameters are further classified into various sub-groups; such as Age in to three subgroups: Below 20,
20–30 and Above 30 years; Gender in to two subgroups: Male and Female; Educational Level in to five
categories: Under Matriculation, Matriculation, Under Graduation, Graduation and Post-Graduation;
Occupation in to four subgroups: Businessmen, Service-holders, Professionals and Students; Inhabited Area
of the respondents in to three subgroups: Urban, Sub-urban and Rural; and finally the Family income in to
four categories: less than Rs. 1 lakh, 1 – 3 lakh, 3– 5 lakhs and Above 5 lakhs.

Data Analysis Techniques

After the data was collected, it was organised and analysed. The results from the questionnaires were
initially entered into a Microsoft Excel spreadsheet to allow for the easy generation of graphs and tables. For
analysis, a computer programme called Statistical Package for Social Sciences (SPSS) was used. The
important statistical techniques that we used in our study include:

• Analysis of Variance (ANOVA)

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 • Duncan’s Multiple Range Test (DMRT)

• Pearson Correlation Coefficient

• The Paired T-test

5. Major Findings

5.1 Demographic Analysis of Consumers’ Buying Behaviour

Age and Consumer Behaviour: ANOVA indicates that there is a significant difference of consumer behaviour
for in Reasons for mobile phone acquisition, Value added features, Usability, Usefulness, Pleasurability,
Functions desired and GAP at 5 percent level. On the other hand, no significant difference are marked in
Learning methods about mobile phone use and Factors influencing buying decision in all categories of the
respondents across all age-groups. The cross-correlation among different variables supports the above views
in all segments of age.

Gender and Consumer Behaviour: By applying Paired t-test, it is found that behaviour of males and females
vary significantly over Reasons for mobile phone acquisition, Learning methods about mobile phone use,
Value added features, Factors influencing buying decision and GAP at 5 percent level (P<0.05) of
significance. In contrast, the behaviour of respondents was found consistent for the features like; Usability,
Usefulness, Pleasurability, and Functions desired as their computed t-values are insignificant. The inter-
correlation among different variables also holds up the same views in all gender segments.

Level of Education and Consumer Behaviour: By investigating the buying behaviour of consumers on mobile
handset on the basis of their Level of education, we found significant differences (p<0.05) across all the
levels and on all the aspects. The cross-correlation analysis also supports the above views in all levels of
education.

Occupation and Consumer Behaviour: By applying one-way ANOVA and Duncan’s Multiple Range Test
(DMRT), it is observed that the opinion of the respondents from all occupational groups differs significantly
(P<0.05) on Reasons for Mobile Phone Acquisition and Learning methods about mobile phone use. On the
contrary, for Value added features the highest average response of 4.72 arrived for Students is found to be
similar with Businessmen and Service-holders, but varies significantly from Professionals. Nevertheless the
cross-correlation analysis supports the above views in all occupational levels.

Geographical Area and Consumer Behaviour: By applying ANOVA, it is found that, except the Reasons for
Mobile Phone Acquisition and Learning methods about mobile phone use, the variations in consumer
behaviour in all other aspects are significant at 5 percent level. This implies that the behaviour of the
consumers towards the different aspects of mobile phone vary amid the geographical areas. By applying the
Duncan’s Multiple Range Test (DMRT), it is observed that the respondents from different Area share the
common belief towards Reasons for Mobile Phone Acquisition and Learning methods about mobile phone
use. Moreover, the cross-correlation analysis supports the above views in all geographical-area segments.

Annual Family Income and Consumer Behaviour: For Reasons for Mobile Phone Acquisition the highest
average response (3.81), coming from <Rs.1 lakh group, is similar to that of 1-3 lakhs and 3-5 lakhs.
However, these three similar groups vary significantly (P<0.05) from >5lakh group. Over again, the

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maximum average response (4.31) towards Usability coming from 3-5 lakh group is similar to >5 lakh
group, but both of them vary significantly (P<0.05) from other two. The relationship between family-income
and consumer behaviour towards different aspects of mobile handset found by cross-correlation also
supports the views mentioned above.

5.2 Functional Analysis of Consumers’ Buying Behaviour

Mobile Handset as a Means of Communication: Consumers in Orissa use mobile phones both for Personal
and Business communication. While 67.8 percent consumers use mobile handset for personal
communication, only 34.8 percent use the same for business purposes. This may be due to lack of national
or international trade centers in Orissa.

Mobile Handset as a Means of Processing Information: On an average, it is observed that 35.3 percent of the
respondents use mobile handsets for Seeking Information and 49.8 percent for Saving Information though
most of them are not skilled enough in proper processing information.

Mobile Handset as a Means of Entertainment and Safety: The high-end mobile phones are used not only for
the making phone calls but also for the entertainment purposes. On an average, it is observed that about
49.8 percent of the respondents use mobile handsets for entertainment and 38.8 percent for safety.

Learning How to Use a Mobile Handset: Though, there are various sources of learning the operation of a
mobile handset, on the whole, it was noticed that most of the customers try themselves (50.1 percent) first,
followed by consulting manuals with 49.5 percent, family and friends with 42.2 percent and consulting
customer care with 32.3 percent.

Usefulness of Mobile Handset: it is observed that 59.4 percent of respondents are of opinion that mobile
handset is Useful in their life, 49.7 percent believe that they got all the expected Functions and capabilities,
45.9 percent are of view that handsets are useful for Effective use of time and 43.7 percent feels that
handsets had made their Life easier.

Usability of Mobile Handset: It is evidenced that 46.3 percent respondents are of strong opinion that use of
handset is ease for them, 48 percent agree that it is easy to read the text on the screen, 40.8 percent
strongly agree that navigating through menu is an wonderful experience, 28.1 percent agree that they know
how to fix problems in a handset, when their handset gives error message, 41.3 people agree that their
handset recover easily and quickly, if they commit any mistake, 52.8 percent opine that labels on buttons
are easy to read, 43.8 percent agree that buttons are extremely flexible to operate, 51.1 percent agree that
it is easy to get input text in the mobile handsets, 44.8 percent find it easy to understand user manuals and
finally 41.8 percent agreed that it is convenient for them to replace the battery of the handsets.

Pleasurability of Mobile Handset: On an average, it observed that 50 percent consumers are attracted
towards mobile handset for its overall attractive design, 47.6 percent for its pleasant screen, 33.8 percent
for entertainment and 36.2 percent for appealing sound.

Factors Influencing the Purchase Decision of Mobile Handset: It is evidenced that 48 percent respondents
are of strong opinion that ‘Advertisement’ plays a vital role in purchasing decision of mobile handsets,
around 60 percent agree that ‘Wide variety of usage’ pulls them more while making a buying decision on
mobile handset, 62 percent strongly consider that ‘Low maintenance cost’ is a very important factor in

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purchase decision, 54.9 percent agree that ‘Price discount’ is a very important criterion for a decision about
purchasing and 46.3 percent agree that ‘free accessories’ is a vital factor for deciding to purchase a
particular brand of mobile handset.

6. Conclusion

A handset of reputed brand, smart appearance, and with advanced value added features, pleasurability and
usability; is the choice of consumers in 20-30 years in age-group, females in gender-group, graduates/post-
graduates in level of education-group, students/service-holders in occupational-group, urban residents in
geographical-area group and having annual family income between Rs.1-3 lakhs. Moreover advertisement
plays a prominent role in influencing decision of a mobile handset in the state of Orissa.

7. Suggestions

On the basis of analysis of the study, following suggestions are made both for the manufacturers as well as
consumers of mobile handset:

For Manufacturers

• The study reveals that higher proportion of consumers in Orissa use mobile handsets for the purpose of
their personal communication, but by the by they can utilize their handsets for business purposes,
provided the manufacturing companies make such provisions and facilities in handsets. Keeping this in
view, I would like to suggest the manufacturing companies for introduction of up-to-date sensex
report, market price of essential commodities, gold and silver prices, etc. so that the consumers may
be interested to do any such profiteering business fitting to their circumstances.

• As found in my survey, majority of the consumers (49.5 percent) follow Users’ Manual for learning the
use of mobile handset followed by trying out themselves. However, availing customer service
percentage is found very negligent in this regard. In this respect, I would like to suggest the handset
manufacturers to make the manual intelligible to common consumers and also it should be prepared in
regional languages. Moreover, manufacturers should generously provide a toll free number so that the
consumers can inquiry about what they want at free of cost as when they require.

• So far as my study on the Usefulness is concerned, majority of consumers find the mobile phones quite
useful in their life, which could be enhanced by new provisions. For case in point, by improving WAP
connectivity facility in handsets, consumers can save a lot of their time in sending messages.

• With regard to the Usability, the analysis shows that the mobile phones are not users’ friendly and
consequently the consumers are facing a lot of problems, like; navigating the menu as well as delivery
of the error message through handsets, etc. I, therefore, suggest manufacturing companies to build
users’ friendly handsets.

• Apart from those mentioned above, the battery backup is the most essential feature of mobile phones.
Higher the battery back-up, more customers are satisfied. So manufacturers should consider it
immediately.

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 • With regard to Pleasurability, the survey divulges that handsets are not entertaining due to their non-
appealing sound and few other features. As consumers in this day and age expect more pleasure from
handsets, the manufacturers should provide new attributes like; voice memo, games, voice activation,
and MP4 facilities to tap potential customers and to satisfy the existing ones.

• Again the study reveals that advertisement through different media really influences the customers’
buying decision for a mobile handset. Nevertheless other factors like; new added features and low
maintenance cost should not be ignored as there is cut-throat competition in mobile phones market. I
therefore, would like to suggest the manufacturing companies to keenly look to equip the handsets
with better accessories in order to avoid consumers’ grumbling for frequent breakdown due to faulty
mechanism and weak parts. If the breakdowns are more frequent, it will surely affect the demand of
handsets miserably. Hence I would like to suggest that the company should be careful in this aspect.

• Now most of the manufacture companies provide mobile handsets at a low price, but the materials
used in those mobile handsets are of low quality. I therefore like to suggest the manufacturers to
supply standard quality mobile sets at lower price which can be bought even by the poorer people.

For Consumers

• Before purchasing a mobile phone the consumers should have to gain their knowledge about the
product.

• They should follow the consumer buying decision process before buying the mobile phone.

• They should take suggestion from their friends, family members and others who can help in decision
making.

• Most of the people buy mobile phone to show their style but this is not the right procedure to buy
mobile phone.

• Before buying a mobile phone the consumers should have to study the quality, features, operations of
handset and service provided by the manufacturers.

8. Limitations of the Study

Sincere efforts have been made to collect authentic and reliable information from respondents, still the
report is subject to following limitations:

• The study has been carried out with six variables: age, gender, qualification, occupation, area and
family income. However consumer buying is a complex process in which number of factors like; social
status, economic factors and psychographic factors influence the buying of the consumer.

• Some respondents were reluctant to give the information, so their responses may be biased.

• Time and resource could be a major limitation as it may have affected the inferences drawn in the
study. Only 1200 respondents have been contacted due to time and resource constraint.

• Sample may not be the true representative of the universe.

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 • Study was conducted in only eight districts of Orissa. So the results of the study may not be applicable
in other areas.

9. Structure of the Thesis

The study comprises of six Chapters. This first Chapter entitled as ‘Introduction and Methodology’, contains
the Background, Need for the study, Review of literature, Nature and Importance of the study, Objectives,
hypotheses, Area of the study and study period, the scope and the limitations of the study. In addition to
these, the methodology adopted for the study is also presented in this chapter. The second Chapter outlines
the conceptualization of Consumer Behaviour, Factors Affecting Consumer Buying Behaviour, and Consumer
Buying Decision Process. The third Chapter deals with the basics of mobile phone, categorization of handsets
and its features, Literature with reference to different functions in mobile phone, and literature review on
consumer behaviour towards Mobile Handset. The fourth and fifth chapters are analysis; here the empirical
findings are connected with the theoretical framework that is provided in chapter three and four. The main
goal of these chapters is to answer the research questions of the thesis. While the cross-analysis of
Demography and Consumers’ Behaviour was empirically tested in the chapter four, the same for
demography and functional attributes of mobile handsets influencing consumers’ behaviour was analysed in
chapter five. The sixth chapter entitled as ‘summary and conclusions’ is the concluding chapter which
portrays the brief summary of the broad findings of the study, concluding remarks with suggestive measures
and identifies certain related areas of further research in future.

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