CHAPTER 1

CHAPTER 1: RESEARCH OVERVIEW
1.0 Overview

Next chapter provide the background of the survey, the exposure of the problem, the research objectives, the research questions and the importance of the study. This will provide a better understanding on the smartphone in general, local and global view. It will also provide how competitive this sector is and how it influences people’s daily lives, particularly university students, which is our goal of this research.

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In the field of research, we have done our research on the invention of smart phones in general and how it has affected society in general. We also investigate purchasing behavior in general. The declaration of the problem is related to the objectives of the survey and to the research questions. This study can be used as a reference for smart phone developers, as target university students as our respondents and are the future main users of smartphones.

1.1 RESEARCH CONTEXTUAL

Smartphone was born in 1992, invented by IBM, which was nicknamed “Simon”. The features I had were calendar, address book, calculator, e-mail service and a touch screen. At that time it was very expensive, $ 899 USD, but not many can afford it. In 1996, Nokia launched a series of smartphones that were combined between a cell phone and a PDA. The real smartphone that first has an all-in-one device is Ericsson, R380. As shown in the figure, the phone can be opened and closed, inside a touch screen, using the Symbian operating system. Nokia has also started with the first camera phone and the Wi-Fi phone, which is called 9500.

In 2002 alone, the smartphone revolution began when Blackberry entered the industry, providing its users with email services as well as Palm Treo and QWERTY keyboards. In addition to the Blackberry, there is also the Ericsson P800 model. These phones incorporate new features such as MP3, camera and wireless technology, which lead to the popularity of exchange email. More information came in 2005, Sony Ericsson launched the N series for entrepreneurs due to their computer skills. In 2007, Steve Job, Apple’s former CEO, launched the iPhone, which changes the idea of smartphones in people’s minds. Android, which is an open source operating system released by Google, Intel, HTC and a group of other developers in 2008. It is a solid operating system against iOS as it has become one of the largest users operating worldwide. world in 2012.

There are many brands in the industry of smart phones such as Nokia, Samsung, Apple, Sony Ericsson (now known as Sony), HTC, etc. It has the support of different operating systems.

Spokespersons: John Koetsier (2013)

According to John Koetsier (2013) at VentureBeat.com (VB), Android has managed to capture about 70% of the global smartphone market share, while Apple has reached only 20% and the rest are others. In the articles, smartphone sales increased 38% in the final quarter of 2012, reaching 217 million units worldwide, surpassing 700 million, based on a new report from Strategy Analytics. Of that number, 68.3% of smartphones use Android as an operating system. IOS has only about 19.4% as an operating system. Neil Mawston, who is chief executive officer of Wireless Device Strategies (WDS), is a representative for the development of policy, insights and stories for media operators, has seen vendors, computer makers, investment banks, PC service providers , software vendors and media companies around the world. It is a recognized authority in the global trends of mobile telephony. (Anon) issued a statement, “Android is clearly the undisputed leader in the smart phone industry at the moment.” (Koetsier, 2013). For other competitors, it’s a matter of being able to grow more and see Android and IOS as competitors as a learning role.

The best operating systems for smartphones, expected market share and CAGR, 2012-2016

Smartphone OS 2012 Market Share 2016 Market Share CAGR2012-2016
(%)
Android 68.3% 63.8% 16.3%
iOS 18.8% 19.1% 18.8%
BlackBerry OS 4.7% 4.1% 14.6%
Window Phone 2.6% 11.4% 71.3%
Linux 2.0% 1.5% 10.5%
Others 3.6% 0.1% -100.0%
Total 100.0% 100.0% 18.3%

Spokespersons Dan Grazino( 2012)

Based on the article by Dan Grazino (2012), in 2012, in the best smartphone operating system, market share forecast and compound annual growth (CAGR), 2012-2016, Android is expected to grow in CAGR 2012 – 2016 of 16.3%, while IOS, grew by 18.8%. The only competitor that these two operating systems should not ignore is Windows Phone, which is expected to grow by 71.3%, taking control of the smart phone industry, since Windows has left a mark in the Internet industry. smart phones Research conducted with the International Navigation Company (IDC) states that “the smartphone market around the world is based on a constantly evolving mobile operating system environment”. This indicates, although Android is the leader in the smartphone industry, but there is also the expectation that it will be the biggest goal in the industry to gain market share. (DanGrazino, 2012)

The smartphone help to get Anytime, anywhere and almost everything in your hand” seems to be a very common problem for today’s smartphone users. According to Aldridge (2004) in smartphones.

The mobile market has become a highly competitive market, although it is a relatively new industry (Haverila, 2011). Although this sector is young, it has a major impact on our daily lives as it has been integrated into our work and lives. According to Harris Interactive (2009), students spend 12 hours a day on media and devices. This has opened up greater profit and market opportunities for the industry.

With regard to purchasing power is the decision-making process and the actions of the people involved in the purchase and use of products (Brown, 2008). It is also a complex amalgam of needs and desires and is influenced by factors such as the social role of the consumer (parents, spouse, worker, etc.), the social and cultural environment and norms, as well as aspirations and inhibitions (Business Dictionary).

The purchase of smartphones has increased in recent years due to the smartphone revolution in 2002. The trend of today’s smartphone market has led consumers to buy smartphones. Manufacturers are slowly reducing the production of mobile phones in the market, so the number of smartphone purchases has increased. If the consumer wants to buy a new phone, the last cell phone on the market is the smartphone, the phone is considered an outdated product. The market trend has therefore influenced the buying behavior of smartphones.

According to Francesco (2012), there are 50 million people who own a mobile phone in the Italian market, of this number, 40 percent have a smartphone. In addition, increase the visit of the website generated by the smartphone, users spend 79-80 minutes per day in the use of applications. From the research of Ad Mobile Metrics report 2010 (cited in Francesco, 2012), there is a 22 percent in 2009 compared to a 40 percent in May 2010. Sellers have turned the smartphone into a laptop that is not only for voice and text messages. but it is more and more like calculation devices. this meant that the consumer preferred the smartphone more than the phone. Adding new and more features to smartphones is one of the reasons that influence consumer buying behavior. Functions and functions provided by the smartphone that could not be found on the traditional mobile phone. For example, wireless technology and the touch screen work. The frequency of consumers uses the Internet, the email and the GPS function provided on the smartphone, the wireless network that provides everywhere will increase the purchasing behavior for the smartphone.

With regard to Smartphone purchasing power in Malaysia, consumer buying power is determined by the community trend, smartphone consumption software and the cost of the plan. According to the article, the trend of the smartphone in the community is the main factor to influence the consumer in his purchasing behavior. Consumers look to the trend of the community and make the decision to buy a smartphone. Looking for the tendency in the community to make the purchase decision, he set up the buying power. In addition to this, needs are another important factor in determining consumer buying power. According to their personal needs, consumers decide to buy the smartphone. This means that when consumers buy a smartphone, they will watch if they buy it as a need or a desire. As for the behavior of a male buying a smartphone in Malaysia, it has a higher percentage in emphasizing the hardware and software of the smartphone compared to the female. Males pay more attention to the hardware and software provided when they buy a smartphone (Mohd Azam Osman, Abdullah Zawawi Talib, Zainal Abidin Sanusi, Tan, S. Y., Abdullah Sani Alwi).

1.2 PROBLEM STATEMENT:

As mentioned, there are many brands and operating systems available for smartphone users. There are many factors that can influence the power of purchases on smartphones, especially on the generation X. A new report by e-marketer notes that, at the time of the graduate class 2016, almost 90% of university students in the United States will possess a smartphone (Fredricksen, 2012). This indicates that there is a large market for the development of developers and providers of smartphones as more and more university students have smartphones in their hands, being part of their daily use.

The invention of the smartphone has pressed the phone, especially for university students, as a tendency to have a smartphone as a mobile phone. With the current reimbursement that the government is providing to university students aged 21 or older, they are eligible for RM 200 reimbursement for the purchase of smartphones, with the terms and conditions. This will increase the use of smartphones among university students. College students are defined as students at a university or university who have not received a diploma, especially a diploma, according to Dictionary.com. Normally, university students are 19 or 20 years old, from 3 to 5 years old in higher or higher education, based on etawau.com. However, there are cases in which the student is older, due to financial problems or other reasons.

Addiction to smartphones among university students, using the convenience to stay in touch with friends and family, to keep up with social needs and what they use as a guide for buying a smartphone. This could refer to many aspects of college life and the way they see the smartphone as part of their lives.
We intend to use the results and methods of other surveys that we try to determine the main factor that most influences students in the purchase power of smartphones.

We try to discover the participants of public and private universities to see how they respond to our research project.

1.2.1 Cultural Gap:

The developing wholesale ethnicity is described by the widespread consumption of mobile machineries, great connectivity, ubiquitous computing and contactless technologies, which allow consumers to experiment with purchases differently. In fact, innovative mobile technologies provide new tools (applications) that can separate the time of purchase from the moment of actual consumption, allowing consumers to make purchases via mobile phone and collect them at home or in a store (a boutique selection or collection), in addition to the traditional service in the store (buy it at the store and collect / consume in the store). The purpose of this document is to understand to what extent mobile technologies have an impact on consumer, with an emphasis on the factors that motivate consumers to adopt the consumer experience of mobile purchases. To achieve this goal, we used a qualitative approach that involves 29 consumers in the Italian market, where mobile purchases are still at an early stage. The results shed light on the extent to which consumers are moving from electronic channels to mobile channels and take into account the effect of these technological innovations in cognitive retail environments, where studies are limited. The implications for researchers and professionals are then discussed, with particular emphasis on retailers who need to develop new skills in mobile services and integrate and synthesize physical retail environments with mobile opportunities and capabilities.

1.3 Research objectives
.
There is not much research about college students and private universities, especially our own university, Sungai Long Campus, about their smartphone buying power, although there are many smartphone researchers. The aim of this study is therefore to find out which factors influence the purchasing power of students in the smartphone. Quantitative methods are used in this study to examine the relationship between independent variables and the dependent variable. Independent variables include friends and family, social influence, product features, and brand. Regarding the dependent variable is the buying power of the smartphone. Our result shows how strongly the independent variable affects the dependent variable. Discussion and suggestion were given in response to the results.
1.3.1 General Objective
Identify the factors that influence the purchasing power of smartphones among university students.

1.3.2 Specific Objectives
a) Determine if there is a significant connection between friends and family and the purchasing power of the smartphone.

b) Determine if there is a significant connection between social influence and purchase power of smartphones.

c) determine whether there is a significant connection between product features and purchasing power of smartphone.

d) determine whether there is a significant connection between branding and purchasing power of smartphone.

1.4 Research Questions
What are the effects that influence purchasing power of smartphone among Malaysian people?

1.5 Hypotheses of the Study
H1: there are a significant connection between friends and family and the purchasing power of the smartphone.

H2: There are a significant connection between social influence and smartphone buying purchasing power .

H3: there are a significant connection between the characteristics of the product and the purchasing power of the smartphone.

H4: there are a significant connection between the brand and the purchasing power of the smartphone.

1.6 Significance of the Study
This study could be used as a reference for developers of smartphones for companies, since this study would show which variable focus more on the purchasing power of smartphones among university students. There are more factors that have an effect, but this study focuses on the target group of the young adult market.

1.7 Chapter Layout
There are five chapters in this study.

The first chapter is Search Summary, which presents the topic in general, provides an overview of the study context, and explains the research problem. It consists of introduction, research background, problem statement, research objectives, research questions, study hypothesis, importance of the study, arrangement and conclusion of the chapter. The second chapter is the review of the literature, which consists of reviewing the introduction of the main themes of the previous chapter and the general scheme in the second chapter, followed by the literature review that addresses the dependent variable and the independent variables. Next, we review the relevant theoretical models, the proposed theoretical or conceptual framework, and, finally, the development and conclusion of hypotheses. The third chapter is the methodology that consists of how the research is designed, how to collect data, what type of sampling project is used, what type of method and techniques are used in this study and how the collected data is used. The fourth chapter is the analysis of the data, presents the results scheme and the analysis of the result that are relevant to the research questions and hypotheses. Chapter five, which is the last, provides the conclusion of the data collected and the analyzes in chapter four, which relate to the main theme of the study, discussing the main results, indicating the limitation of the study and the future recommendation for future research. .

1.8 Conclusion
In conclusion, this chapter provides an overview of what our study is. We wanted to know how the buying behavior of university students is influenced by several factors. This study adopted the theory of other researchers as a basis for the study and how we consider the future of the smartphone in today’s younger generation.

CHAPTER 2: LITERATURE REVIEW
2.0 Introduction
This next chapter will discuss the details of the literature review on the factors that influence purchasing behavior in relation to the smartphone. These factors include friends and family, social influence, product characteristics and brand. The primary goal of our research is to determine the vital factors that will influence smartphone purchase behavior. It will continue with the revision of the relevant theoretical model, a proposed conceptual framework and the development of hypotheses. This chapter will end with the conclusion that summarizes the main session.

2.1 Literature Review
2.1.1 Friends and Family

The family group is perhaps the most influential influence on the purchasing power of the consumer due to the closeness and interactions between family members (June and Stacy, 2004). The investigation of June et al. (2004) declared that the family is a field rich in consumer purchasing power. The family has a separate influence on parents and siblings. In this case, the survey was conducted by 469 respondents, including students and families. From the result, it was discovered that parents have a stronger influence than their siblings. Compared to siblings, parents often play an important role in the purchasing power of consumers that affects an individual in terms of brand preference and loyalty, search for information, confidence in the media and price sensitivity. Based on the research, parents convey values, attitudes and buy habits for your children when you select a product. Therefore, children learn this power through observation because their parents’ guide them directly in buying a product.

According to Tiana (2011), the study aimed at who and what influenced young people in choosing a cell phone. The result indicated that friends were the highest average (2.15) compared to the family that had influenced young people in their cell phone decision. As for the family, the average score was 2.10, which helped young people buy cell phones. So, friends and relatives have had an average rating that influences the decision of young people to buy a cell phone. When the consumer takes into consideration the purchase of a mobile phone, he asks for advice from friends and relatives and then hears the recommendation for the purchase of the mobile phone.

According to Chow, Chen, Yeow and Wong (2012), the research was done by the students at Multimedia University, Melaka about the factors affective the request of Smartphone among youth adult. The study was conducted by 300 students who aged between 17 to 25 years. The investigators found that peer are the initial influencer affecting youth adult judgement, followed by media and Parents People tend to ask for opinions and advice from their friends based on their smartphone brand and tend to buy the same brand of smartphone that their friends use. For example, people who use the smartphone with the goal of keeping contracts with their friends and colleagues. This shows that people influence their friends when they think of buying a smartphone

2.1.2 Social Influence
Social influence is the group of influences that influence an individual’s beliefs, feelings, and behaviour (Mason, Conrey, and Smith, as quoted in Ting, Lim, Tanusina, Low, and Ker, 2011). An individual can follow social influence through daily observation and the perception of others in the purchase of a smartphone (Suki and Suki, as cited in Ting et al., 2011).

A study by Chi, Yeh and Tsai (2011) indicates the influence of the advertising promoter on the consumer’s purchase intent. There are 420 respondents who responded to this survey and only 408 questionnaires are used to analyze the data. In general, commercial advertisers often use celebrities to promote a product or service. The result of the study indicated that celebrities can link the value of the product with the client by transferring their feelings to a particular product. This is because advocates can make a strong recommendation and influence consumer choice. Therefore, it may increase the consumer’s purchase intention.

A study by Tiana (2011) indicated in this case that advertising was the highest average collection with 2.34 (49%) that will influence young people when choosing a mobile phone. Meanwhile, the second highest average was technology, which is 185 when they think about buying a new phone, while the average rating of 1.95 has been for other technology purchases. Furthermore, the influences of traditional media will also affect consumers when they make decisions about buying smartphones. Including online dairy box (1.21), radio (1.26), newspapers (1.26), YouTube (1.29) and magazines (1.31) were the lowest averages to influence young people to make a decision about the cell phone. Therefore, it was found that the power of propaganda exerts greater influence on the change of feelings, attitudes, thoughts and consumption behaviors of a person.

Yang, He, and Lee (2007) are studying a study on the social reference group on mobile phone buying power among mobile phone users in the US and China. The reference group refers to groups whose opinions are evaluated to influence the buying power of a person such as a celebrity. Compared to users in the United States, Chinese users rely on word-of-mouth communication because they are the strong forces in purchasing decisions. While users in the United States are more focused on their personal needs and do not care about the opinions of others. Then, the result shows that the social reference group has a stronger influence on Chinese users than users in the US.

Yang, He, and Lee (2007) are studying a study on the social reference group on mobile phone buying power among mobile phone users in the US and China. The reference group refers to groups whose opinions are evaluated to influence the buying power of a person such as a celebrity. Compared to users in the United States, Chinese users rely on word-of-mouth communication because they are the strong forces in purchasing decisions. While users in the United States are more focused on their personal needs and do not care about the opinions of others. Then, the result shows that the social reference group has a stronger influence on Chinese users than users in the US.

According to Bansal and Voyer (2000), word of mouth has a strong impact on the market. The consumer always relies on informal sources when making a purchase decision and not on formal sources such as advertising. Investigate WOM information before making a purchase decision to avoid problems of low comparability and quality of service. With WOM information, consumers can better understand a service before consuming it to avoid risk. Therefore, they will likely include and rely on WOM positive opinions on the most important ones in a product. This shows that consumers are easily influenced by the words of others when they make a decision when buying a product.

2.1.3 Product features

The study by Kotler, Philip, Armstrong and Gary (cited in Chow et al., 2012) suggests that a feature is an attribute of a product that satisfies the needs and desires of consumers and satisfies them through product ownership. . , use and use of a product.

According to Chow et al., The study studied the factors that affect the demand for smartphones among young adults. The feature of the product is one of the factors that affect the demand of the smartphone. For the survey, they guided the interviewees who were between 17 and 25 years old. Studies by Puth, G., Mostert, P. and Ewing, M. (quoted in Chow et al., 2012) mentioned that consumers nowadays use “product characteristics to compare a product offered by a different competitive brand and uses (as cited in Chow et al., 2012) suggests that the smartphone uses the operating system, which is the most important feature to evaluate the product.Among the similar brand products, the feature that is most noticeable, is more likely to be chosen. There are many systems, such as Windows Mobile, iPhone OS, Symbian OS, Google Android or Linux. For the traditional mobile phone, it does not have this system, which has increased the value of smartphone This feature allows consumers to switch their traditional mobile phones to smartphones.

According to Chernev (2005), his research has argued that the non-complementary characteristic has a greater influence than the complementary characteristics in the choice to buy a product. The example of your search used the addition of the function, for example, differences in functions and comparison with non-complementary functions such as more colours in the product. Based on the results of the three experimental studies, it was concluded that complementary resources are less likely to acquire a product than non-complementary characteristics. This research has shown that the influence of the characteristics consumer behavior when it comes to a product. Therefore, smartphone features such as colors and features offer more options than the traditional phone.

According to Oulasvirta, Wahlstrom, Ericsson (2010), his researches claimed that previous sources had less connection, presentation and broader capture, a built-in web browser, complete programming, installation of applications, file management system, several gigabytes of storage, location and motion sensors and high resolution screens. These next-generation mobile phones that called smartphone are growing rapidly in the market due to resources. The reason why the unique smartphone is the functionality, since it can be used as a traditional telephone and also as a PC. It provides calls and is able to access the Internet, making smartphone users easier for their work and their lives. For example, the smartphone provided the functions that mobile phones do not have and that attracts consumers to choose a smartphone instead of a traditional cell phone.

2.1.4 Branding
The concept of “brand” there are many definitions, according to Bogan, Stephanie (2007), according to the study, the brand is a perception of its value in the market. Creating a brand is more than images and words, it is creating a clear and convincing message that defines the work you do and the value you provide.

In 2011, Yang, Wang, Son, Chen and Hung conducted a survey of the mobile phone industry survey in Taiwan. This survey was conducted on 500 respondents. The result found that there are two factors related to the recognition of the brand, which are professional maintenance services and brand image. Both professional maintenance services and brand image will influence consumers’ brand recognition. The professional maintenance service that is the industry has trained the professional staff to have a greater professionalism, an excellent service attitude and a good technology of maintenance and ability that the consumers of mobile phones would feel more at ease and the degree of recognition of the brand would have improved positively. In addition, the study found that a successful brand image can enhance the aggregate values of the product, allow consumers to develop a positive attitude and trust in the brand of the product, and thus enhance brand recognition. Therefore, create a brand recognition in consumers “the mind is important, the recognition of the consumer brand allows the product brand to become the consumer’s first choice when wanting to buy the product, which in this case is a smart phone.

A study on Srivastava (2007), which determined brand loyalty among 150 members between the ages of 18 and 24, affirmed that brand loyalty is the main factor for the consumer to buy the product. From the point of view of consumers, a brand provides a visible representation of the difference between the products. The loyalty to the consumer brand has been strongly supported by the quality and reputation of the brand’s product, particularly for the mobile phone. Interviewed more strongly. He accepted the “quality” and “reputation” of the brand as a basis for his purchases of mobile phones. These statements have significantly lower levels of agreement (p

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