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4 - 6
PERSONAL FACTORS INFLUENCING CONSUMER BEHAVIOR TOWARD PURCHASE OF SMART PHONES
7 - 8
SOCIAL FACTORS INFLUENCING CONSUMER BEHAVIOR TOWARD PURCHASE OF SMART PHONES
9 - 10
PSYCHOLOGICAL FACTORS INFLUENCING CONSUMER BEHAVIOR TOWARD PURCHASE OF SMART PHONES
11 - 12
13 - 14
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For Samsung Electronics, 2003 was a watershed year. It successfully positioned itself as one of the world’s best mobile phone manufacturers and its products were featured all over the media. Many were calling its mobile phones as “the best gift for Christmas or the Mercedes of mobile phones. Samsung’s achievements were particularly remarkable considering that its primary focus had previously been in semiconductors and home appliances. Indeed, when it first made the decision to enter the mobile phone business, industry observers viewed the move as foolhardy and reckless. But, much to their surprise, Samsung’s foray into the market turned out to be a great success, contributing significantly to the company’s profit growth and brand reputation.
In 2003, Samsung posted net profits of 6 trillion won ($5 billion) on annual sales of 43.6 trillion won ($37.9 billion). As of April 2004, its market capitalization stood at around 100 trillion won ($87.4 billion). It had also surpassed Sony, which had been a benchmark for Samsung, in terms of revenues and market capitalization. Samsung’s exports currently account for two-thirds (79%) of total sales. In addition, Samsung has built its brand around the world in 2003, the ‘Samsung’ brand was ranked 25th in the annual BusinessWeek or interbrand study of the world’s most valuable brands, having grown from $8.31 billion in 2002 to $10.85 billion in 2003.
Few would deny the claim that Samsung has achieved remarkable success in the global market. As such, it could be worthwhile to take a closer look to find out which factors have contributed most to its success. In particular, we should focus our attention on the company’s emerging mobile phone business, which has achieved some of the most outstanding gains of any of Samsung’s business lines.
Samsung Electronics was established in 1969 in order to provide an engine of future growth for the Samsung Group. Though the electronics industry seemed promising in the 1960s, none of the Korean firms had advanced technology. Samsung began by producing low-end black–and-white televisions in a joint venture with Sanyo, a Japanese electronics company. After three years, it began to produce black-and-white televisions under its own name, “Samsung.” In the 1970s, it began producing other home appliances, including washing machines, refrigerators, color televisions and microwave ovens.
During the 1980s, it expanded its business lines to personal computers (1983), semiconductors, and telecommunication networks and devices (1988). For years, Samsung was regarded as a low-end product manufacturer that made cheaper alternatives to the high-end Japanese products. Its products were not considered to be very reliable, and it did not have a very strong reputation amongst consumers. By the end of 1992, however, the company emerged as a leading semiconductor manufacturer in the DRAM (Dynamic Random Access Memory) market. It was the first case in Korea that Samsung, a domestic latecomer, successfully caught up incumbents and even became better than them in the world market. Behind their success was the management’s strong drive to develop the semiconductor business into a truly world-class business and the company’s future growth engine.
Samsungs system of group-wide coordination and governance enabled Samsung to concentrate its resources in the semiconductor business, which required enormous investment. For technology transfer, Samsung relied on technology licensing, established an R&D center in Silicon Valley and invited Japanese engineers to Korea on weekends to instruct Korean engineers in semiconductors. To secure human resources, Samsung recruited many Korean- American engineers with semiconductors expertise, offering them attractive compensation and benefits.
Despite a major surge in its semiconductor business, Samsung was losing money in its appliance business during the mid-1990s, as it had not managed to improve the quality and image of its products. Moreover, the Asian financial crisis of late 1997 deteriorated the situation further, causing profits to drop from $194 million in 1996 to $87 million in 1997. Types of Sambung Mobile Phone Samsung D840 - GSM, Samsung X820 – GSM, Samsung E500 – GSM, Samsung D830 – GSM, Samsung D870 – GSM, Samsung Z400 – GSM, Samsung Z550 – GSM, Samsung i320 – GSM, Samsung ZV50 – GSM, Samsung P900 – GSM, Samsung D520 – GSM, Galaxy Note, Note ll, Colby, Galaxy S and many more .
PERSONAL FACTORS AS ONE OF THE FACTORS INFLUENCING CONSUMER BEHAVIOR PURCHASE OF SMART PHONES
Mobile phones today have moved beyond their fundamental role of communications and have graduated to become an extension of the personality of the user. In spite of breeding of offers for content-rich mobile data services other than text messaging, the adoption of advanced services such as mobile phone payment, online mobile gaming and mobile email have yet to reach the noteworthy levels of usage in India. There is a discernible preference for mobile phones with color screens over those with black and white displays.
Short Message Service (SMS) is very much popular and its importance is increasing further as the subscribers can now participate in large number of contests and many more, Usually for the baby boomers, they like to have telephone which is flat scrren, and do not have any distratction such as need to install the new application or what not. But, for the generation Y, they more like telephone wide 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. And yet the consumers are expecting much more from their mobile phones.
For many years now, service providers and telecom equipment manufacturers have been debating the convergence of fixed and mobile telecommunications. The debate that was started on cost benefits has turned into a commercially viable option for service providers. Mobile service providers, who were once competing fiercely with fixed-line operators, are now facing stiff competition from alternative technologies. Their revenue stream fuelled by voice minutes is rapidly declining not because consumers are making less calls, but because alternative technologies are providing voice services at very competitive rates. As market is driven by consumers demands for high-quality voice services at lower prices, the service and equipment providers have to work closely to develop new innovations. The growing economy has created large number of employment opportunities and consequently, this has resulted in higher disposable incomes and faster acceptance of new technologies with a willingness to pay for these.
There is a three different consumer types of three generations. Traditional consumers of pre-liberalization phase (1960-70s) were, stable, inward looking and had limited choices. They kept their family needs on the top and their own personal needs were subordinate to their family needs. They avoided risk. In the transient phase (1980-90s), the consumers were more risk taking than their predecessors. They had experienced multi-choices and had a tendency to be better off than their parents. Economically, they had no fears or concerns. The new millennium consumer tends to enjoy life. He has greater self-control, and looks for personal style and pleasure. Exposures to variety of products and enhancement of economic status have changed the attitudes of the upper middle class consumers towards brands. In Malaysia, a brand is a cue to quality because the quality of the unbranded products varies widely Technological innovations such as cellular phones and digital televisions have attracted the attention of marketing researchers as regards to their adoption process. Now consumers are also looking into the compatibility of the new products to their self-image and life style.
The gender moderation on the relationship between different color dimensions and the product choice. For the younger consumers are greater fond of fashionable, stylish products than older ones. Young consumers are normally more willing to try new products and they are interested in asking more information than older ones. It makes them self-confident and that is why they are more likely to be opinion leaders and less hesitant in brand switching. But one should not ignore the older consumers also. The studies have revealed that the older consumers are wealthy, innovative and they also have a tendency to be the part of a typical consumption system . They can be a prime market for the luxury products. However they give more preference to comfort or convenience than any other feature of the product. It also needs to be recognized that most older people.
SOCIAL FACTORS ONE OF THE FACTORS INFLUENCING CONSUMER BEHAVIOR TOWARD PURCHASE OF SMART PHONES
Social value describes choices which associate with one or more than one specific social groups. For instance, these days in society, there are people who would like to be different and they are interested in unique products that create such a distinctive social value group. Men and women purchase and relate products for different reasons. They are subjected to different social pressures. Male and female have a propensity to be right and left hemisphere reliant respectively. Males are generally self-focused while females are responsive to the needs of both self and others , in their empirical study on wide range of products such as clothing, consumer electronics and books many more. The significant differences between men and women with respect to both affective and cognitive process components. The different requirements for clothing and fashion products based upon age and gender. The gender differences in relation to acquisition of in-store information for buying Christmas clothing gifts.
The moderating role of gender in the adoption of a new software system. They revealed that the determinants of adoption vary between genders, perceived usefulness of the technology was the major factor considered by men for the acceptance of new software. In contrast, the perceived ease of use of the software and the normative influence for example is influence of peers and superior perception were found key determinants for women. Ease of use and normative influence had not been found significant for men. Men consider the most prominent sign, they are more likely to focus on task effectiveness of a technology without considering risk. In contrast, women are detailed processors and consider all information available including the ones that are understated and potentially disconfirming. Women are then more likely to incorporate risk and other secondary information in their decisions and behavior investigated the effect of social class, income and gender effects on the buying perceptions, attitudes and behavior.
The products like dress clothing, garden tools, automobiles, wedding gifts, living room furniture, childrens play clothing, kitchen appliances, casual clothing and stereos were selected that varied in durability, necessity, expressiveness and gender orientation. Both men and women rated utilitarian criterion high over the subjective criterion. Women attached importance to all criteria across all products, while men gave importance to only price. However Goldsmith (2002) found consistency for both men and women while examining personal characteristics of frequent clothing buyers.
PSYCHOLOGICAL FACTORS INFLUENCING CONSUMER BEHAVIOR TOWARD PURCHASE OF SMART PHONES
The mobile phone industry is a highly competitive and fast-evolving industry. Although the global mobile market keeps growing, competition among the leading companies keeps increasing as well. To maintain their competitive edge, it is therefore necessary for companies to understand from a customer’s perspective the factors influencing the purchase of their products. Once more computational devices, they have developed into an expression of lifestyles. The motivation is the drive that leads the consumer towards buying a product or service. If the motivation is high, meaning the need or perception of need is high, the individual will actively seek to satisfy that need. This results in the consumer deciding to buy the product or service. For example is, if the motivation if high and she or he have high motivation to buy the expensive smart phone and want the smart phone with is has many applications and can give satisfactory impact on the communication. Every individual will actively seek to satisfy physiological needs first, followed by safety, social, esteem and finally, self-actualization needs. Businesses that successfully leverage these needs will motivate consumers to buy their products. Beliefs and attitudes greatly influence consumer buying behavior. Beliefs are the way people think about a particular subject or product. An attitude is the individual's consistently favorable or unfavorable evaluation, tendency or feeling about a particular subject.
These beliefs and attitudes shape the consumer's perception of the product. These factors may be difficult to change because they stem from the individual's personality and lifestyle. Consumers often block information that conflicts with their beliefs and attitudes. They tend to selectively retain information or even distort the information to make it consistent with their previous perception of the smart phone. The difference has been found the highest for brand closely followed by core technical features. These differences further go on decreasing for factors value added features, price and physical appearance. This is so because that the consumers of 18-30 years age groups have given more importance to brand, core technical features and value added features than consumers of 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. The significance is comparatively less in physical appearance factor. This is so because that even many mature consumers are also style conscious. There are significant differences between two gender groups for core technical features and brand. Male have greater tendencies to prefer handsets with advanced and latest technical features than their female counterparts. The differences between genders are relatively less significant in terms of value added features and physical appearance. No significant differences have been observed between genders for the factors price and post-purchase services.
people now seek entertainment and other features that are compatible to their self-image and lifestyle. The self-image and lifestyle may vary among genders and different age groups. Consumers of different age and gender groups have different understanding and the importance of factors that influence their mobile handset buying. The intense competition between manufacturers has forced them to expand their market base. 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. This may be due to the reason that majority of Malaysia seeks excitement in the products and also they are more exposed to new technological developments than other age groups particularly mature ones. 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. Also they have less knowledge about new technological developments and therefore, consider value added features, brand and core technical features less important. Overall, people have given the least preference to the core technical features.
This is probably due to the high price difference between handsets with highly advanced technical features and other handsets. Also female consumers gave only low to moderate preference to this factor. Consumer 30 years of age and owed family obligations, therefore they have a chance to seek these features in other products also. The consumer does not bother much about the price of handset provided they are satisfied with other features. This may probably be due to the fact that majority of the respondents were of the age less than 50 years and therefore, their sensitivity to price was relatively less as compared to other factors. The gender differences were very conspicuous in core technical features and brand. This is probably due to less familiarity of female consumers with core technical aspects. Though less significant, yet gender differences also emerged in value added features and physical appearance. The female consumers probably due to their overwhelming orientation to physical appearance of handset do not find brand as much important as men do. Moreover, Malaysia remained a man dominated society over a longer period and Malaysia women did not enjoy much freedom in terms of independent communication.
Now with the social change that provides them greater freedom, probably has made women so pleased just with the possession of an independent handset that they are so far less oriented than men to other features such as core technical features and brand. However, in future, these differences may disappear because the attribute-linked satisfaction may change over time. Even though the income levels of an average Malaysia has increased considerably, yet mobile handset is being considered a high value product. Therefore, like other value products, the consumers of all age groups are equally concerned about post purchase services. Physical appearance does matter for all the age groups, though it is of greater importance for 18-30 years age group. This is so because new Malaysia consumer is more style and pleasure seeking than ever before.
People in Malaysia particularly youth have two types of tendencies one to show their possessions to others and second relating their possessions to their own physical looks and style. A handset of reputed brand, smart appearance and with advanced value added features is the choice of 18-30 years age group. However these sets with advanced and moderate core technical features may exclusively be offered to male and female consumers respectively of this age group. Male consumers of 30-50 years age group look for a handset of reputed brand and with all other features moderate, while the female consumers of the same age group prefer to buy a handset of attractive appearance with all other features fair. A handset with moderate appearance, and lowly developed core technical and value added features, is the probable liking of 50 years and above age group but at the low price. However the male consumers of this age group may see brand leverage fairly in selecting the handset but not at the increased price.
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Mobile Phone Market (A), Darden Graduate School of Business Case, UVA-S-0106, 2003. 2.Nam, J., Hamlin, R., Gam, H. J. Kang, J. H., Kim, J., Kumphai, P., Starr, C. and Richards, L. (2007). The fashion-conscious behaviours of mature female consumers. International Journal of Consumer Studies, 31 (1), pp 102-108. 3.Venkatesh, V. and Morris, M. G. (2000), Why don’t men Ever Stop to Ask for Directions? Gender, Social Influence and their role in Technology Acceptance and Usage Behaviour. MIS Quarterly, 24 (1), pp. 115-139.
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