Table of contents Chapter 1 •Abstract i. Problem ii. Approach to problem iii. Analysis technique iv. Benefits of Research Chapter 2 •Introduction i. Problem ii. Problem background iii. Research question iv. Significance of the study Chapter 3 Literature review Chapter 4 Research objective Chapter 5 Methodology and data Chapter 6 Analysis Chapter 7 Project management Chapter 8 Conclusion Appendices Abstract: Mobile phones have become the necessity of today’s life that’s why the industry of mobile is the one with the toughest competition.
Various researches have been done in seeing that how consumers chose among various brands of mobile phones. The purpose of our research is to see that why consumer’s preference shifted towards Samsung over Nokia as Samsung has gained the number one position in the world. This research will help to fill the gaps that why consumers choose Samsung, what were the reasons that made Nokia lose their first position. We have applied various research techniques to get the most accurate results as we can get. We have used the Quantitative technique in our research.
This research will help us determine user perception towards specific phone brand Samsung and what people look for while purchasing a mobile phone. It will answer the question why consumers choose Samsung. Introduction: Our research is based on the consumer preference towards Samsung, why they choose it over other brands. Samsung has overtaken Nokia’s number one position as the World’s biggest vendor of mobile phones for the first time. Nokia has been the biggest vendor of mobile phones since 1988, when the ESPO, Finland based company took over from Motorola.
But now Samsung is the number one with 93. 5 million handsets in the first quarter compared with 82. 7 million for second ranked Nokia. So, our research question is “Why Samsung is dominating the mobile industry? ” or “Why consumers prefer Samsung over Nokia? ” Literature review: Samsung Electronics Co. , Ltd. is a global leader in telecommunication, digital media and digital convergence technologies with consolidated sales of US$143. 1 billion in 2011. With head offices in 72 countries and approximately 206,000 people employed all over the world.
The company operates two separate organizations to coordinate its nine independent business units: Digital Media & Communications, comprising Visual Display, Mobile Communications, Telecommunication Systems, Digital Appliances, IT Solutions, and Digital Imaging; and Device Solutions, consisting of Memory, System LSI and LED. Samsung is recognized for its industry-leading performance across a range of economic, environmental and social criteria; Samsung was named the world’s most sustainable technology company in the 2011 Dow Jones Sustainability Index.
Samsung’s telecommunication network supplies mobile phones and telecommunications infrastructure systems worldwide. It is the world’s largest CDMA provider of handsets and the world’s 3rd largest mobile phone manufacturer. Samsung is changing the trends in phone market by providing series of unique innovative products that contributed in improving the way things were done in technological world. Samsung introduced world’s first commercially available CDMA technology and the world’s first dual-LCD folder phone and the world’s first 8-megapixel camera phone.
This shows how Samsung technology is shaping the multimedia world, creating enormous brand wealth and steadily rising to the top of mobile industry. Samsung has developed a strong positioning for its brands. It has managed to gain a major portion of consumer’s mind share. Samsung Electronics strives to generate economic Profits and simultaneously tries to tackle global issues such as the polarization of society, poverty and famine in order to pass on our positive values to the society in which we operate.
In this way Samsung has not only created huge value for its brands but has also won a place in consumer’s heart as People appreciate ECO friendly products. Samsung was ranked number 17th among the world’s top 100 brands by Inter brand, in 2011. In 2012, Samsung’s brand value was worth USD 23. 43 billion, a 20% increase from the previous year. In 2011, Samsung was named no. 1 in the global “Super sector leader” in Technology. Moreover Samsung Electronics has been included in the list of the Global 100 Most Sustainable Corporations in the World at the World Economic Forum in Davos for three consecutive years, ranking 73rd in February 2012.
According to Samsung’s company reports: 2011 Financial Overview (WON/DOLLARS/EUROS) AMOUNTS IN BILLIONSWONDOLLARSEUROS Net Sales*254,561. 5220. 1165. 9 Total Assets391,391. 9343. 7258. 7 Total Liabilities230,688. 5202. 6152. 5 Total Stockholder’s Equity160,693. 5141. 1106. 2 Net Income*24,497. 921. 216. 0 [Amounts in billions] * Won/U. S. Dollar yearly average exchange rate: 1,156. 60/1$. USD/Euro: 1. 3269/1€. Won/U. S. Dollar as of the end of December 31, 2010: 1,138. 90/1$. USD/Euro: 1. 3290/1€.
According to Samsung annual sustainability report 2012, as part of our contribution to the societies we live in, we engage in a variety of activities for local communities such as support programs for children, teen education, medical benefits for low-income families and our global social contribution initiative, the Samsung Hope for Children. Samsung has enriched the mobile market with several phone brands such as Samsung Star, Samsung Galaxy S, Samsung Galaxy S2, in past three years which have helped the company achieve maximum profit. Samsung has significantly taken over the world’s largest mobile brand Nokia in 2011-12.
According to Yoo-Rim Lee an PR Specialist, in 2005 the global mobile market grew 19%, fueled by replacement demand from people seeking multimedia functionality camera, camcorder, and VOD phones as well as demand for low-end mobile phones in fast-growing emerging markets. With a strong position in multimedia functionality and a broad product line-up, we posted record sales of 102. 9 million units, a 19% increase over the previous year, perfectly tracking the overall growth rate of the worldwide market. He further said that Samsung’s Mobile Communication Division is the world’s third largest manufacturer of mobile phones, with a 12. % market share in 2005. The reason behind Samsung’s unbelievable success lies in the introduction of new products with cutting-edge technology, innovative designs, and continued strategic focus on the high-end mobile consumers. He further elaborated that “Last year, Samsung set new standards in three major product trends. In 3G, it leads the way with handsets that support W-CDMA, a technology that transmits data 50 times faster than traditional GSM networks. Then with SGH-Z500 W-CDMA handset, that offers a leading-edge megapixel camera with 2 Mbps broadband”
According to company reports, Samsung shipped 93. 5 million handsets in the first quarter, 36 percent more than a year earlier, compared with 82. 7 million for second-ranked Nokia. Demand for Galaxy smart phones helped Suwon, South Korea-based Samsung post first-quarter net income today of 5. 05 trillion won ($4. 5 billion), beating specialists estimates. Below are the stats for year 2004 and 2005. 20042005 Net sales20. 73 trillion20. 91 trillion Operating profit3. 09 trillion2. 48 trillion Mobile phones sold86. 5 million102. 9 million These stats show how Samsung was ascending the success ladder.
Nokia had been the biggest mobile-phone maker by shipments since 1998, when it took over the spot from Motorola Inc. (MMI) Nokia reported a 1. 34 billion-euro ($1. 8 billion) first-quarter operating loss after handset sales slumped. Both smart phones and low-end handsets declined as Nokia’s aging portfolio was outpaced by handsets running Google Inc. (GOOG)’s Android. Its handset shipments in China fell 62 percent. Tom Kang, a Seoul-based research analyst at Strategy Analytics, said in a phone interview “Last year Samsung became No. 1 in Europe while Nokia retained the No. 1 position in most emerging markets. He further said, “In the first quarter, we expect Samsung took a lot of market share from Nokia in Asia. China and India were the two biggest markets where Samsung gained. ” According to an industry study, Samsung Electronics Co. (005930) overtook Nokia Oyj (NOK1V) as the world’s biggest vendor of mobile phones for the first time, ending the Finnish company’s 14-year run as the global leader. According to research analyst, Nokia dropped as much as 2. 5 percent to 2. 69 euros, the lowest price in more than 15 years based on closing prices, and was trading down 0. 6 percent as of 11:31 a. m. in Helsinki.
Samsung gained 2. 5 percent to a record 1,374,000 won at the close in Seoul. Apple Inc. (AAPL) is the world’s third-biggest maker of mobile- phones after shipments rose 89 percent to 35. 1 million last quarter, according to Strategy Analytics. Tom Kang said, “Samsung will probably still be No. 1 in the second quarter, but the full year will be a close call because the third and fourth quarters are traditionally Nokia’s best”. According to Nokia’s 2011 annual report, its new Smartphone line using Microsoft Corp. (MSFT)’s Windows Phone platform sold more than 2 million units in the first quarter out of 11. million smart phones that the company shipped. While Samsung accounted for about 25 percent of the global handset market by shipments, while Nokia’s market share was almost 23 percent. According to industry reports, Samsung also regained the lead from Apple as the world’s biggest vendor of smart phones in the first quarter. Smartphone shipments surged 41 percent in the quarter. The reports further said, The South Korean electronics maker shipped 44. 5 million smart phones in the first three months of the year, giving it about 31 percent of the market, Strategy Analytics said.
Apple shipped 35. 1 million units, accounting for about 24 percent of the market, it said. Nokia ranked third in the segment. In Seoul, South Korea (AP) Strong sales of Galaxy phones propelled Samsung’s quarterly profit to a record high, but its shares dropped Friday on the prospect its growth will slow in an increasingly crowded Smartphone market. According to Samsung’s Oh-Hyun Kwon, July-September net profit nearly doubled to 6. 56 trillion won ($5. 97 billion) from 3. 44 trillion won a year earlier. Revenue for the third quarter climbed 26 percent to 52. 2 trillion won.
He further elaborated that the company’s shares fell 2 percent in Seoul after the earnings announcement. According to industry analysts, investors are worried that the widespread adoption of smart phones in developed markets and heightened competition from rivals could squeeze profit from the lucrative Smartphone business. The South Korean company, which raked in more than half of its profit and revenue from its mobile communications business, said its Galaxy S III and Galaxy Note II Smart phones will help sustain its earnings momentum in the final quarter of the year.
Samsung plans to act more aggressively to advance its share of the tablet PC market next year. According to Samsung’s vice presidents Kim Hyun-joon and Robert Yi “The tablet market is going through a very significant change,” Yi, Samsung’s head of investor relations, said at a conference call. The release of mini tablets that are between the size of Smartphone and standard tablets could open up a new growth area next year. Samsung launched tablet and laptop computers based on Windows 8, as Microsoft introduced a major update to its operating system, allowing it to work on tablets and desktop computers.
However, Samsung’s head of investor relations said it was not clear if these new products will spur a huge increase in demand. In return, Operating profit surged 91 percent to an all-time high of 8. 12 trillion won ($7. 4 billion) in the third quarter, in line with the company’s preliminary results released earlier this month. In the latest quarter, Samsung benefited from robust sales of its Galaxy smart phones as well as demand for high-end components for mobile devices, which offset weak global PC demand and a thin profit from its memory chip business.
Its mobile communications division that sells the Galaxy series of Smartphone and tablet computers generated revenue of 26. 3 trillion won. According to an industry report, Sales of the Galaxy S III Smartphone topped 20 million handsets in little more than three months after its May 29 launch. Samsung said the Galaxy Note II, the latest iteration of the Note series, is expected to exceed the 10 million sales of its predecessor. Research firm IDC said Samsung further widened its gap with runner-up Apple in the Smartphone market. IDC said Samsung sold 56. million Smartphone versus Apple’s 26. 9 million iPhone sales, capturing 31. 3 percent of the global Smartphone market in the third quarter. Kim, Samsung’s vice president, said the company’s Smartphone sales saw “a substantial shipment growth” in China. Samsung, which is the largest Smartphone seller in China according to IDC, did not disclose figures. High-end display panels called OLED, or organic light-emitting diode, which are used in mobile devices including Samsung’s own Smartphone, also shored up its bottom line, Samsung said.
With the latest result, Samsung set a record-high quarterly operating profit for a fourth quarter in a row. But some analysts are skeptical whether Samsung will post another increase in profit in the final quarter of this year due to higher marketing costs. Samsung is trying to increase profit, In addition to its Android-powered Galaxy series, Samsung plans to release ATIV series Smartphone based on Windows 8, the latest version of Microsoft’s Windows operating system, before the end of this year. As the research shows, a lot of consumers are switching from Nokia to Samsung.
Empirical researches have identified a lot of parameters that influence the consumer decision making process. Bitta (2002) observes the term customer as typically used to refer to someone who regularly purchase from a particular store or company. The term, consumer, more generally refers to any one engaging, acquiring, using or disposing or goods and services. The ultimate ‘winner’ in the battle for the customers’ pocketbook is the firm that delivers the ‘best value’ from the customer’s perspective.
In the study by Gladwin (2003), the Lancaster model of consumer demand is referred as the product attributes model to evaluate brand positioning. This model assumes that consumer choice is based on the characteristics of a brand. According to Mason & Bequette (1998) perception of product performance are more important than actual performance. Hofstede (2001) how people think, perceive, and what motivates them—how the aspects of “me” process into behavior—are viewed as processes. Babinet G. , Despres J. C. , Gastaldi F. 2003) today, individuals maintain a hyper – personnel and interactive relationship with their cellular phone. Aaker J. L. , Benet- Martinez V. and Garolera J. (2001) Mobile Marketing enhances consumer-brand relationship, the interaction between consumers and their mobile phones, together with the ability afforded by mobile advertising to control the viewing environment provides advertisers with an opportunity to build more meaningful brand relationships than at anytime in advertising history Manrai and Manrai (1996) studied the influence of culture that is relevant to international marketing.
They discussed various areas of research following the components of human behavior and structured them in a framework called Cross-Cultural Consumer Behavior Framework. Barutcu, S( 2007)Mobile phones have the potential to be ideal personalized tools for providing an opportunity for marketers to send an offer at the right time to the right consumer According to a study about consumer behavior, it has been inferred that 37% of the respondents buy cell phone once in three years on an average while 31% of the respondents buy once in two years. 21% prefer to change their cell phones once in a year.
According to the research around 30% of the mobile users are ready to buy costly phones occasionally, while only 16% go for it frequently and a negligible 4% do not mind purchasing costly phone very frequently. This shows that most of the consumer’s decision is influenced by price. Buyers look for different parameters before purchasing a cell phone. As the following chart depicts that majority of the buyers see ease of use as the most important factor, about 40% of the buyers see price as important factor while 16% go for unique eye catching styles.
The mobile industry has viewed significant growth in the last few decades. Once there were few people having mobiles now it is really hard to find anyone without one. In fact mobile phones are the largest electronic consumer industry today. To begin with Hashim Zameer, Rashid saeed, Rahil Abbas, (2012), the purpose of their study was to see the consumer behavior of people of different areas that is urban and rural areas and the factors that affect their decision of buying the mobile phones. Style of mobile phone and brand of mobile phone is most important factor for the urban consumers in purchasing a mobile.
Price and functionality of mobile phones are important factors for the rural consumers. Dr. Debadutta Das (2012), the purpose was to study the consumer behavior in buying the mobile phones and it depends on its usability and the key factors are Ease of use, Easy to read text, Navigating Menu, Problem Fixing, Recovery from Mistake, Easy to read labels on buttons, Easy to understand User Manuals and Easy to replace Battery. The major factor that influences the decision making in buying the mobile phone is the ease of use. The mobile phone easy to use is mostly bought by the consumers.
With regard to the Usability, the analysis shows that due to the mobile phones which are not users’ friendly 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.
Jagwinder Singh (Corresponding author) (2009), studied the buying behavior of people of different age and gender groups and the factors that influence their behavior in mobile phone purchase. The study concludes that the users of age group of 18-30 years are less price sensitive than consumers of other groups; rather they consider ‘physical appearance’, ‘brand’, ‘value added features ‘and ‘core technical features’ more important than users of any other age groups. The mature consumers on the other hand may have priorities for other products due to other obligations. That is why they are more price-sensitive.
Overall people gave less preference to the core technical features. The concept of convergence influences digital economy since its introduction. It was originated from convergence of industry, information and entertainment. It was defined and interpreted differently and become confusing for public. Rosenberg while defining industrial evolution towards convergence said it to be the process in which different industries share common technological bases from networking aspect European commission defined it as ability of network platform to carry similar kind of services.
Greenstein described it in terms of coming together of previously separate technology in new product and services. This research is all about empirical model that gives insight to the technological convergence and consumer perception and behavior while using mobile phone. It is still unknown how consumer will respond to different functions and services of converged device i. e. mobile phone. T. A. M is theoretical framework to understand consumer behavior towards new technology but problem with this model has two problems first is low variance on verifying constructs when more variables are incorporated in T.
A. M ,second is lack parsimony for further exploration. To sort out problems empirical research model is needed. It demonstrates the purpose, factors that influence decision and theoretical model that can be used to understand consumer behavior while using mobile. Development in digital industry and internet has change people interaction both individual and organization level. Consumer products are becoming complex and multifunctional. In recent years its use has been increased people take them along at energy place and use it at anytime.
It was previously used for just voice communication but now there is increase in its functionality based on studies, use of mobile phone is divided into four main categories: Communication oriented, entertainment oriented ,personal information oriented, commercial transaction oriented. Researches have verified the components that affect the decision making of individuals and change their behavior. Theory of reasoned action and theory of planned behavior. Both of these have purpose to identify the psychological trait and social context that affect the decision making. The use of T. A. M to determine individual.
Its acceptance is not only economical but also implemented of varied context. It drawbacks are as it linear structure so it leads to low variance and consistency of behavior. PECU (perceived ease of use)and perceived usefulness (PU) are two constructs of T. A. M and identify actual behavior. Empirical study verified why people want to adopt certain technology, relation between product integration and consumer use variety to understand the consumer behavior exploratory study is done to determine their buying interaction and experience and perception of consumer towards use of mobile phone.
So qualitative study is done in which personal interviews are conducted. Such segment is composed of 50 individuals above 18 and 32 are male and 18 are female use mobile phones in Australia. Quantitative software NVIVO will be used and data is collected and descriptively analyzed using SPSSI. The individual’s perception of enjoyment and risk are often referred as potential indicator in this regard. A list of combinable factors such as high price, constable connection and perceived on transaction can be the reason while interviews do not think it to be secured to us mobile phone for this purpose.
Switching costs are used by buyers to terminate transaction relation for new relation. Porter defined it to be cost confronted by buyer that wants to switch from one service to another. Jackson defined it to be cost faced by customers in changing supplier. There are number of costs in telecommunication that are observed while switching. Switching cost is more prominent in mobile telecom sector because companies spread high fixed costs over customer base. Departing customers decrease future revenue and it acquire new customers.
We study the relation between switching cost and customer loyalty and effect of switching barriers on relation between customer satisfaction and retention. According to Mahaian switching cost is classified as procedural switching cost, financial switching cost, and relational switching cost. Klemperer classified artificial switching cost, learning cost and transactional cost. Service provider must examine the reasons of switching and reduce them in order to compete. As switching reduce revenue and service continuity.
Reduce customer defection increase profitability. Factors of switching cost include price, poor service, and customer dissatisfaction. Brand trust increase customer commitment. Switching cost is influenced by seeking variety, impulse and situational context. Customers with high satisfaction tend to remain loyal to brand. There are many benefits for long term relation between company and customers. Customer satisfaction is important for customer retention. This survey design is for Nigerian market. Customers of 3 companies are sampled.
A convenient sample size of 1000 was chosen out of which 263 were used for study and 26. 3% response rate. Instrument used was questionnaire. Study uses 5 points likert scale. Questionnaire was divided into two sections first deal with switching barriers other with retention strategies. Switching barriers are used by telecom companies’ i. e. service quality and price. Switching barriers affect the retention and customer satisfaction relation and switching cost can be used to predict the customer behavior in mobile telecom sector.
Number of mobile phone users has been increasing in both economical and age sector and undergraduate students are the special target markets. Mobile phone user preferences and perception are determined on basis of IS and marketing domain. Conjoint analysis is used to demonstrate undergraduate students attitude how they value different mobile phone applications and tools. Cluster analysis is done on the basis of output from conjoint analysis to determine similar preference for mobile phone functions. SE (structural equation modeling) is used in IS.
An adoption model is based on theory of reasoned action and technology acceptance models. Several precursors to attitude towards use mediate the relationship to intention to use. Nysreen model study illustrates the investigation in which perception of university students groups using mobile phones is observed. So as they are already using mobile phone their intention to use is endogenous variable. Nysreen identified antecedents to attitude as perceived expressiveness, perceived enjoyment, perceived usefulness, and perceived ease of use. Conjoint analysis technique is used to understand consumer preference.
Respondent’s value behind choices is discovered. Conjoint analysis is used to understand preference in different markets like grocery stores, apparel, transportation and telecommunication as well as mobile industry. Based on applications and tools hypothetical mobile phone with distinct features as per rating by students is developed to know part worth. A positive part worth add value while negative decrease value. Sawtooth software SSI was used to generate survey result in which various questions are asked and demographic information was gathered for each participant.
Pilot study including 20 Canadian university students was conducted and questions were asked that are clearly understandable survey was distributed to university students. By looking at the research studies and studying phone markets of Samsung and Nokia we can see that why consumers are switching over to Samsung and why Nokia is loosing its share in the mobile market. Samsung is constantly evolving, with the changing consumer needs, and although Nokia has reined over the mobile market for a long time, has now failed to cater according to consumer need.
We have also seen that how consumer preferences have changed over time, mobile phone has become more than just a link to communicate, and it has taken the shape of an accessory that is becoming a need. Samsung has responded to this change effectively by introducing range of phones that fulfill the needs of different demographics around the world. Research Objective: The objectives of the study is to find out about changing Consumer preferences towards different mobile phones such as why Samsung is preferred more over Nokia in today’s mobile phone industries. This study will answer the following questions. Why Samsung is dominating the mobile industry? ” or “Why consumers are switching from Samsung to Nokia? ” Methodology and data: The methodology for this study is Qualitative and explanatory. This methodology would be feasible for this kind of research because we are trying to explain the changes in consumer behavior. We are using both primary and secondary data for our study Analysis: Project management: PhaseTime Late Oct – early Nov5 Nov- 15 Nov15 Nov – 25 Nov Research paradigm? Research objective? Data gathering? Data analysis? Revisit literature review ? Findings/discussion? Explanation?
Report review/proof reading? Final report completion? No monetary costs are likely t to incur. Conclusion: References: IJRFM Volume 2, Issue 4 (April 2012) (ISSN 2231-5985) International Journal of Research in Finance & Marketing 52 Samsung Ends Nokia’s 14-Year Run as Biggest Handset Maker By Jun Yang and Mark Lee – Apr 27, 2012 1:33 AM PT Samsung Sustainability report 2012 Nokia Company reports 2009, 2010 and 2012. Samsung financial report 2004 -2005 Samsung financial report 2011 IJRFM Volume 2, Issue 4 (April 2012) (ISSN 2231-5985) International Journal of Research in Finance & Marketing 47 http://www. airec. org A STUDY ON CONSUMERS’ PERCEPTION ON NOKIA PHONES IN KANYAKUMARI DISTRICT Gladwin* Dr. J. Robert E. Chester** KrishnaGanesh*** Annales Universitatis Apulensis Series Oeconomica, 12(2), 2010 731 ROMANIAN CONSUMER PERCEPTION TOWARDS MOBILE MARKETING CAMPAIGNS Journal of International Consumer Marketing, 23:181–192, 2011 Copyright _c 2011 Marieke de Mooij and Geert Hofstede BV ISSN: 0896-1530 print / 1528-7068 online DOI: 10. 1080/08961530. 2011. 578057 Cross-Cultural Consumer Behavior: A Review of Research Findings Marieke de Mooij