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Executive Summary

Consumer behavior study focuses on the way the consumer behaves and reacts to a product and service in the market. Given that different consumers have different tastes and preferences, it is important to endear our self-unto what exactly the consumers look for when deciding on what brand option they settle down for given different alternatives that are available in the market. Study of the consumer behavior enables the marketing manager to understand the dynamics about the consumers and what factors are critical in choosing the product of their choices. In microeconomics, the consumers are considered to be rational meaning that they understand the products in the market fully and the value they will derive from each product; moreover, they thus base their purchase of product on this knowledge and they opt to buy the product that gives them the value for their money. Given the existence of different goods and/or services in the market the consumer has to device a criterion for determining which one of the varieties of these products, services is the best and this becomes the subject of our essay. The paper seeks to analyze the criterion used by the consumers of six different categories of mobile handsets in the Australian market today (Catalano, Grattan & Gordon 2005).

Introduction

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This essay seeks to analyze six different categories of the mobile phone. These are Samsung, Nokia, Motorola, Sony Ericson and Apple. There has been intense competition in the mobile phone market of late. Owing to the development in technology, there has been a drastic change in the features of the phones. Such technological platforms such as iPods have also posed a lot of competition to the mobile phones. In order to stay in the market, the producers have to diversify their products in order to win customers and sustain their market share. This essay looks at the patterns of demand of these phones in the Australian market and it focuses on the criterion that is used by most customers when making their decision on what type of the phone to settle down on. 

Phone/options

Samsung

Nokia

Motorola

LG

Sony

Apple

Talk/MMS

$600 value

$600 value

$800 value

$900 value

$600 value

$600 value

Text

Unlimited

Unlimited

Unlimited

Unlimited

Unlimited

Unlimited

Data

1GB

1GB

1.5GB

2GB

1GB

1GB

We have another plan know as, Extra Large plan includes,

Talk/MMS

TEXT

DATA

Unlimited

Unlimited

3GB

The table above shows the list of 6 mobile types and plan options .This mobile phones include Samsung, Nokia, Motorola, Lg Sony and Apple. The 6 mobile phones have three major plan options which include Talk/MMS, Text and data.

Mobile phone and plan option

Motorola

Motorola has three plan options such as Talk/MMS which is $800 value, unlimited test and then a data of 2GB. When comparing the Talk /MMS over other mobile phone, Motorola is superior in terms Talk/MMS because it has higher value of $800 compared that of Samsung of $600. Data also differ across the mobile types and Motorola enjoys relative higher data compared to Samsung and other mobile phones. In terms of Texts, Motorola has unlimited text plan like other mobile phones, hence this plan options makes Motorola phones highly demanded in the market.

Decision Matrix

As indicated above, we seek to analyze the trends in demand of the six types of mobile phones namely Nokia, Motorola, Samsung, Sony Ericson and Apple. We note that deciding on exactly what type of the phone to settle for can be a difficult decision to make and thus this calls for establishment of criteria that a consumer comes up with in order to arrive at the best brand. This process, however, involves a kind of a rank where the consumer rates the different criteria by assigning them some number and then settling for a brand with the favorable rating. In our case, the following criterion will be used as they are the most popular factors put into consideration by most of the consumers. These include, but not limited to: price, operating system, color, simplicity in use, storage capacity, qualities of camera, shape and battery life. The study shall be focused on three different types of buyers who will act as the respondent and thus the evaluation will be built on their tastes and preferences. For the purpose of simplicity, we shall use the alphabetical letters x, y and z to denote the identity of our three consumers. We shall subject them to the six evaluative criteria mentioned above and allow them to give each a rating from one to ten. The table below examines the criteria for three respondents Z, Y and X. 

Respondent Z

Evaluating Criteria

Samsung

Nokia

Motorola

LG

Sony Ericson

Apple

Price

3

6

6

5

2

2

Color

6

4

5

6

5

7

Shape

7

5

4

5

6

8

Camera Quality

8

6

5

6

7

9

Operating System

9

7

5

6

6

9

Simplicity

1

9

3

2

3

2

Storage Capacity

7

8

5

5

6

9

Battery Life

5

7

6

3

5

7

 

 

 

The rating above shows increasing trend from 1to 10 with 1 being poor and 10 being the best. 

Respondent Y 

Evaluating Criteria

Samsung

Nokia

Motorola

LG

Sony Ericson

Apple

Price

3

6

4

4

5

3

Color

4

4

4

3

4

6

Shape

3

3

3

3

5

5

Camera Quality

6

5

5

6           

7

8

Operating System

6

5

6

7

7

9

Simplicity

5

8

5

4

4

3

Storage Capacity

6

7

6

7

7

8

Battery Life

5

7

4

6

6

6

Respondent X

Evaluation Criteria

Samsung

Nokia

Motorola

LG

Sony Ericson

Apple

Price

3

5

3

4

3

3

Color

4

5

5

5

5

3

Shape

5

4

3

4

4

4

Camera Quality

7

7

6

6

8

8

Operating System

8

6

6

6

7

9

Simplicity

6

8

4

5

5

3

Storage Capacity

8

7

6

7

7

8

Battery Life

5

8

5

5

6

6

 

 

 

 

 

 

 

 

The table below represents the opinions of the buyers unto the importance of evaluative criteria

 

X

Y

Z

Price

4

3

7

Color

8

4

6

Shape

8

5

5

Camera Quality

7

7

8

Operating System

8

8

6

Simplicity

5

5

7

Storage Capacity

7

8

6

Batter Life

6

6

7

The numbers above reflects an increasing trend from 1to 10 with 1 being poor and 10 being the best. A consumer who is able and willing to purchase a phone will look at the score and tally them. The brand with the highest value of the tally becomes the best brand since it shows that the brand has the best features and the consumer will derive the greatest value of his money by purchasing such a brand. This information is contained in the table above. The latter table shows the evaluative criteria of interest to each of the buyers X, Y and Z.

Decision Rules

There are two distinctive categories of decision rules that inform the buyers when making their decision on what type of the mobile handset to purchase. These are namely the compensatory and the non-compensatory decision rules. In compensatory rules, the consumer choses the phone that has the highest score when the total value of each criteria are summed up meaning that it is the phone with the best features almost in all the categories in the evaluative criteria. Under non-compensatory decision rule, the consumer will consider the individual criteria. In this case, apparently, the buyer has few features of interest and that is why he/she focuses on the individual criteria. It is named non-compensatory, because the best quality in one criterion does not shield the bad quality. For instance, if a phone has the best camera quality, this will not auger well if its price is high.

Application of Compensatory Decision Rule

Under compensatory decision rule, the consumer uses mathematical techniques in order to establish the brand that has the highest value. The consumer gets the average of each evaluative criterion and multiplies with the individual value of each criteria/parameter. The non-compensatory decision rule does not have compensating effects, as it focuses on the superior qualities of a product only and neglects those that scores poorly. The table below shows the average score of each item of the criteria in the eight sections (Khosla 2010). 

Evaluation Criteria

Scores X

Scores Y

Scores Z

Price

25

20

16

Color

12

7

14

Shape

9

14

12

Camera Quality

8

13

9

Operating System

20

15

10

Simplicity

10

10

8

Storage Capacity

11

16

25

Battery Life

5

5

8

Total

100

100

100

 

  Given the above information, in order to obtain the superior brand among all of them, we take the score and multiply by the individual evaluative criteria of each brand. In our case, the Apple brand is superior to all since it has the highest score calculated as shown below

Total score for z = 25[2]+12[7]+9[8]+9[8]+20[9]+2[10]+9[11]+7[5]=612.

Total score for y = 20[5]+7[5]+14[4]+13[7]+15[6]+8[10]+16[7]+8[5]=604

Total score for x = 16[3]+14[3]+12[4]+9[8]+10[9]+8[3]+25[8]+8[6]=572

The above calculations shows that three mobile phone, the respondent have different test and preference on the type of features they want in their mobile. For example respondents of z indicated the highest score because of the quality features the mobile has. For example price is the main issue is x, followed by y and then z. Operating system also has the same sequence with x having the highest score and z having the lowest score. In terms of storage capacity, z was superior followed by y and then x was last. X also dominated in other field such as shape and camera quality. Indeed from the above calculation, z emerges as the best.

Analysis of Choices

The analysis of choices starts by looking and considering our three respondents x, y and z. Respondent x is a college lady in the youth’s bracket. Respondent y is a male in the youth bracket and who is not in a college; lastly, the third respondent z was a man way over and above the youth bracket.

Apparently, the ranks by the three individuals vary significantly. This can be described by the fact that consumers normally have different tastes and preferences. However, those factors, which produce differences in taste and preferences, are what are of utmost importance for the essay. We seek to explain the factor that makes these consumers to have a differing preference in their different brands of the phones that they settle on. The following factors are some of the suggested premises that influence the choices of phones in the Australian market today (Bingemann & Hewett 2010).

Demography

Demography is field where many firms have to study well to ensure proper planning is done to ensure success of the business in mobile industry. Demography includes the potential customer who can buy the product at any time and their place of residence. This include, includes age, family situation, income, ethnicity. Age plays a very important role here in terms of Respondent x is a college lady in the youth’s bracket. Respondent y is a male in the youth bracket and who is not in a college hence enable the company to plan for these age groups. Family situation has form the basic structure of demand of goods and services in terms of the composition of the family. Lastly ethnicity although does not play vital role in demand of mobile form but also can act as region where the demand for specific mobile is higher than another.

i. Gender

This is a very critical factor of demand not only in the phone market but also when considering general demand for all the products. The female gender is known to like items that have nice shapes and are very sensitive to colors. Thus phones that look nice with colors that attract female buyers are likely to be purchased by lady consumers. This would create a difference in choice when male and female buyers are involved in the purchase of such handset. Men, on the other hand, are not likely to be concerned about the color or physical material characteristics of the phone. The respondent x has a big taste in beautifully colored and well-shaped phones that are aesthetically outstanding as compared to the respondent y who is a male. The male respondent is mainly concerned with features as opposed to the aesthetic properties.

ii. Population Characteristics

Population characteristics serve as a function of various factors such as age and income of the people. People, in the higher social class, prefer to buy goods, which are premium priced to symbolize their material wealth and hence they are likely to buy the expensive brands such as Apple. People who earn lower incomes mostly purchase phones for their basic functions of calling and receiving text messages thus they would not purchase phones with classic features such as android operating systems, which make them very expensive, thus they seek cheaper phones (Barker 2007).

In regard to age, it is also an important component of demand during socio-cultural and technology changes. Young populations are technological savvy and to them such features as internet enabled phones and a phone with android operating system are very variable. The emergence of such social media - from Facebook to Twitter - makes them more addicted to the phones with internet facilities. The older generation is not highly hypnotized by these features and to them it is not as important as to the youth. The respondents x and y are young and hence they are more inclined to the phones that have modern features, especially internet facilities and the android system as compared to the respondent z.

Another category of people in a population structure is the educated versus uneducated people. Most educated and hence exposed groups prefer and have taste for internet enabled phones with good operating system, mostly the android operating system. Since the access to the information is very vital and they have to constantly be informed on what is going on around them. These people rely on internet for the information and hence they have to acquire internet enabled phones. People who are less educated are not likely to have a huge craving for the types of phones associated with the educated fellows who are consuming phones for entertainment purposes and interaction in the social sites. Given that respondent x is more educated than respondent y, then their choices of phones are likely to vary on this basis with the former being informed by the desire to access information when making her decision of the preferred phone. The latter is likely to be more inclined on the entertainment value in a phone and this will portray a difference in the priorities of their evaluation criteria (Lee 2011).

iii. Personality

The individual personality is also a critical factor when it comes to the choice of a phone. There exist two groups of people as far as personality is concerned. There are those people who like simple things. These are people who do not like being noticed in the society owing to what they possess and such people would go for the Nokia phones since they are perceived to be simple to operate and use and they possess very basic functions and applications. The other category of people is those who like flashy lifestyles and thus they prefer the state of the art phones that are deemed complex, stylish and fashionable. For this group of people, a phone of their choice and standard must at least have an android operating system. Respondent x by the virtue of being educated and exposed, she apparently appears modern and stylish and thus in the evaluation criteria such factors as operating system, size of storage and the quality of camera are given more emphasis as compared to the others, with z opting for simplicity and other less vital factors. This kind of personality is indicated in terms of age, where by youths are more likely to possess phones of complex features as compared with old aged group with needs simple phones, which are easier to operate.

Conclusion

In conclusion, it is very apparent that different people use different criteria when selecting what type of the phone to purchase. When buying a phone myriad of the factors have to be put into place but it becomes complicated, because the various factors that many consumers consider play a vital role and this calls for the buyer to device or use a certain decision rule in order to establish and settle on the best brand. The non-compensatory decision rule looks at specific evaluation criteria whereas the compensatory decision rule considers at weighted score for each evaluating criteria and multiplying by the individual score in the evaluating criteria to get the brand with the highest score. It is also critical for the marketing managers to understand exactly the most determining factors of demand, especially when considering the population structures in Australia and any other major markets for the phones.

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