Professional Documents
Culture Documents
Submitted by
Manu Sankar Das
PGPCM, 2010-12
ACKNOWLEDGEMENTS
I would like to take this opportunity to thank Dr. Pradeep Krishnatray, my guide, without
whose patience, understanding and able guidance I would have been unable to complete this
identifying my area of interest and, thus, has played a vital role in shaping this study. Without his
timely counsel, I would not have found it possible to bring this study to a meaningful conclusion.
I would also like to extend my heartfelt thanks to my parents who have given me absolute
and complete support in all my endeavors so far. Their love and care has brought about all the
difference whenever I have faced any roadblocks. Thanks, Acha and Amma.
And most of all, I would like to thank my family and friends who provided me constant support
and positivity to go ahead and explore my area of interest and for always being there whenever I
I would also like to thank all my respondents who were gracious enough to spare their
time and provide me with valuable inputs. Without them, this study wouldn’t have seen the light
of the day.
I also thank everyone else who helped me out during the course of my dissertation in
Last but not the least, to my conscience which did not let me rest until I had finished the
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Understanding the Indian Smartphone User
EXECUTIVE SUMMARY
PURPOSE OF RESEARCH:
A smartphone is an electronic device that is replacing the mobile phone and though it was
consumers across the globe at a rapid pace. It has already made great inroads in terms of seeping
into the lives of the people in the developed countries like United States, UK, Singapore etc. and
with a thin blurring line separating a mobile phone and smartphone, it has become imperative to
know more about this multi-functionality portable device in the Indian context. Hence, the
purpose of this research is to try to define what a smartphone is to the Indian consumer on the
basis of the essential features that form a smartphone and then try to understand the various
parameters that govern the purchase intention of usage patterns of smartphones users across the
country. The research also attempts to segment the smartphone consumers in India on the basis
of various demographic variables like Age, Occupation, Gender, Average Family Monthly
The Literature Review throws light into the proliferation of smartphones across the globe
and identifies the various parameters that constitute the meaning of value to a smartphone
consumer. It also identifies the usage pattern of smartphones consumers across the globe and
covers details about various studies that have been done to understand consumer behavior when
it comes to smartphones; the kind of value that is perceived by a smartphone consumer while
purchasing and repurchasing a smartphone. No study was found that actually found the
parameters that completely govern smartphone usage and purchase intention and hence this study
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aims to find the underlying factors that govern them. Also, a proper segmentation of smartphone
customers has not been done in the Indian context. This has great roots in consumer behavior and
The present study is undertaken to understand the smartphone consumer the Indian
context. It is a detailed quantitative analysis that makes use of factor analysis to understand the
factors that govern the usage patterns amongst smartphone users and the purchase intention of
smartphone consumers. In addition to the factor analysis, cluster analysis has been done to
segment the Indian smartphone consumers on the basis of various demographic variables.
The first stage involved is the Secondary Research, which included extracting the various
patterns, trends etc. amongst smartphone users from across the globe. This was followed by the
administration of an online Survey Questionnaire to selected respondents who then were exposed
to previously selected stimulus ad responses. This was followed by doing a quantitative analysis,
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IMPLICATION OF FINDINGS:
consumer, the way they make use of their smartphone and the various parameters that govern
their choices when it comes to purchasing a smartphone. The marketers will find this study really
useful to understand these customers and also learn to reach out to them in a better and more
focused manner.
KEY WORDS:
RESEARCH MATRIX
Collecting responses from Online Respondents who are Indian and have Online
smartphone users across the access to a valid Internet connection and has a Questionnaire
country smartphone
To derive the factors that govern Marketers can reach out to these customers in a Factor Analysis
To derive the factors that govern Better means for marketers to influence their Factor Analysis
To segment the smartphone An extensive database for smartphone consumers Cluster Analysis
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Table of Contents
ACKNOWLEDGEMENTS ......................................................................................................... 2
INTRODUCTION....................................................................................................................... 10
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COMMUNALITY .................................................................................................................................................. 49
COMMUNALITY .................................................................................................................................................. 57
FINDINGS ................................................................................................................................... 59
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IMPLICATIONS ........................................................................................................................ 68
CONCLUSION ........................................................................................................................... 73
LIMITATIONS ........................................................................................................................... 74
BIBLIOGRAPHY ....................................................................................................................... 75
APPENDIX .................................................................................................................................. 78
QUESTIONNAIRE ................................................................................................................................................... 78
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INTRODUCTION
Mobile phones have become a fundamental part of our day to day lives and with the
advent of smartphones; our lives have become a lot simpler. Smart phones bridge the gap
between mobile phones and PDAs and make the life of a consumer easy by letting him/her
perform various activities on the move. The proliferation of smartphones in the market is a true
indication of the fact that these are here to stay. Smartphone sales are growing at a rate of 74.4%
each year and comprise of 21.8% of the overall mobile phone sales globally (IDC Worldwide
Quarterly Mobile Phone Tracker, 2011). This is a trend currently predominant in the US and
other developed nations but is catching up with the developing nations like China and India.
The expected growth of the smart phone industry is phenomenal and little study has been
conducted to understand the smart phone consumer across the world and especially in India. If
mobile phones were invented to cater to one of the most fundamental need of humans to
communicate, the smart phones take it forward to another level by letting the consumer perform
a host of functions, like a personal computer or laptop, with the advantage of being able to
perform all these functions, on the move. It provides a richer experience compared to feature
phones. Smart phones can have a great impact in shaping consumer behavior and thereby affect
the consumer experience. For ages, the techies have been hyping about various changes that
would happen in the mobile world and through smartphones they have become a reality. As per
the Deloitte 2011 Consumer Food and Products Insights study, released in July, 40 % of the US
consumers makes use of their smartphones for shopping lists and recipe management. This is a
recent trend that is pervading across sectors and hence the smartphone consumers become a
target audience for almost every marketer. Even though a lot of marketers are making use of
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apps and technologies to target the smartphone consumer, not many have been able to bring
In the Indian context, very little study has been done on trying to understand the mind of
a smartphone consumer. With a latent demand of about $1,273.1 million in 2010 for
smartphones, India provides a fertile ground for conducting such a research (Professor Philip M.
Parker, 2010). The figures for the year 2011, as per the IDC Press Release on Dec 2011, the
smartphones shipment for the India market showed an impressive growth of 21.4% over the previous
quarter and 51.5% year-on-year with Samsung and Nokia being the leaders. Last year, the Indian
smartphone market value reached INR 50 billion (about USD 948 million), with smartphone sales
expected to reach close to 30 million units by 2016(Research, January, 2012 ). As the demand for
smartphones are so huge, this study has the potential to help the marketers better understand the
smartphone consumer and channelize their energies in the right direction while marketing to
these consumers. A similar cross cultural study has been conducted to understand the mind of a
smartphone consumer in United Kingdom (UK) and Germany in the context of mobile location
According to the NRF, it is estimated that by 2015, around $120 billion worth of goods
and services would be purchased through smartphones and this figure is likely to increase with
the smartphones getting smarter, faster and more powerful and more omnipresent as customers
get accustomed to shopping with them. It is imperative for the marketers to understand the
smartphone consumers because they will form an integral part of their target audience.
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At the same time, the current penetration of smartphones in a country like India, which
stands second in the number of mobile handsets, is very low and stands at an abysmal 3%, much
lower than a smaller and less populous country like Singapore. In fact the figures are even more
appalling as only 10% of the youth are using smartphones currently. The number of females
using smartphones are just 20% compared to 80% ownership by males for smartphones in India.
The reality is far from what is being projected but there is a great potential for the growth of
smartphones in the current years and hence the hype around the multipurpose device.
This research primarily aims at understanding how smartphones are used by the
consumers in India and how it has been integrated into the lives of the consumer. Based on the
how smartphones shape the consumer behavior and aim to recommend ways to the marketers to
reach out to the Indian smartphone consumer who is a potential prospect for them.
This study will help segment the smartphone consumers on various parameters and help
throw light on the usage patterns and purchase intentions of smartphone consumers. In addition
to these, the study will also determine how smartphone consumers view mobile advertising, i.e,
whether they consider it to be intrusive or not. I believe that this study will help me come up with
insights that will help the marketers communicate and reach out to these consumers in a manner
that will appeal to them on a more personal level and, hence, will help the mobile marketing
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There is a clear lack of research in understanding the Indian smartphone user, especially
in terms of exploring the usage patterns and purchase intentions. The research quantitatively
explores the underlying factors that govern the usage pattern and purchase intention of an Indian
smartphone consumer and also segments them on the basis of various demographic variables. It
also attempts to define what a smartphone means to its user in terms of its features. This study
would help marketers, advertisers, brands, mobile application developers devise successful
campaigns and reach out to their target smartphone consumer in a better and more effective
manner.
LITERATURE REVIEW
What is a smartphone and how is it different from a mobile phone? This is a difficult
question to answer as the definition of smart phone is a moving target that has evolved over time.
In simple words, it is a mobile phone that offers advanced capabilities, often with PC-like
purpose device used for both communication and computing functions which, in contrast to
ordinary mobile phones, give users the option to choose the applications that they want to install
and use allowing them to personalize the range of applications in their smartphones to suit their
own lifestyle and their job making it highly customizable and personal. For example, with
smartphones, users get the freedom to choose their own notepads, clock, calendar, themes,
organizer, phonebook, etc. As per this definition, there is a very thin line separating a PDA
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(Personal Digital Assistant) and a smartphone. A smartphone can be perceived to be a cell phone
with all the features of a PDA or a PDA with communication capabilities. At the base, like any
“phone”, it is a mobile phone with the most basic and primary functionalities like making and
receiving calls and sending & receiving text messages. In order to make it “smart”, we add the
PDA functionality on top of that. The very purpose of a PDA existence is to act as a “personal
information manager”—that is, a device to manage your every activity from address books,
organizers, notes, calendars, tasks, to-do lists, RSS feeds etc. —then finally, give it the ability to
connect to the internet. In a nutshell, a smartphone can be compared to a computer small enough
to fit in your pocket with the ability to manage a multitude of tasks- from managing all your
contacts(personal and business), your to-do lists, keeping track of events and meetings and
reminding you of important dates along with browsing the web. Similar to all the things in
nature, smartphones have evolved and, they also perform the functionalities of portable media
players, cameras, GPS navigation systems, instant messengers, and devices to connect to the
social network(Facebook, Twitter, Myspace) of your choice, among all of the other tasks that we
The definition given by Frost and Sullivan in their report defines smartphone as a phone
with an OS that can host applications, which can be deployed on the mobile OS
(Android/IOS/Windows Mobile 7 etc) of a smartphone and this OS provides a framework for the
development of applications and has a host of features like advanced user interfaces such as
touch screens and mobile computing features, including QWERTY keypads and the smartphone
application capability needs to be advanced to support higher end applications and ability to host
complex/integrated applications (Sullivan, May 2011). As more and more functionalities are
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integrated into smartphones, one tends to wonder whether more is better when it comes to
smartphones.
As already mentioned, smartphone sales are growing at a rate of 74.4% each year and
comprise of 21.8% of the overall mobile phone sales globally (IDC Worldwide Quarterly Mobile
Phone Tracker, 2011). The craze associated with smartphones globally has led to a proliferation
in mobile Internet use, welcoming a new mobile era. The major mobile phone manufacturers like
Apple, Samsung, Blackberry and Nokia are the ones benefiting the most from this boom as they
race to introduce their high-performance smartphones every now and then. Other manufacturers
have also joined the race and as per the statistics, one out of every five people in the world was
projected to have a smartphone by 2011. Within a span of five years, the rate of smartphone
users has grown from 5 out of every 100 to 20 out of every 100 whereas it took fixed-line phones
thirty-one years to reach that level, the Internet eight years and cellular phones six years to
achieve similar figures. NRF reports suggest that smartphones have evolved eight times faster
than the web (and internet) initially did for the PC (personal computer) and now one among
every two mobile phone users in the US is a smartphone (android/apple) user. As per the Frost
and Sullivan Report on India, there is going to be an explosive growth in the smartphone
segment, the future growth engine of the mobile ecosystem, with a CAGR of 39.2%, driven by
The mobile traffic, which currently enjoys an annual average growth of 108 percent, will
also see an exponential increase with the global explosion in mobile devices (including
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smartphones). By 2014, the figure for mobile traffic is projected to reach 3.6 million terabytes
The smartphone market is seen by some as a tech geek or early adopter phenomenon that
is currently spilling over to the middle class mainstream users. For a good many users who find
the smartphones expensive and the data plans costly are also looking to switch to smartphones as
it serves to be a primary link to the Internet. Hence, the minority groups form the hubs of
smartphones and these groups associate a lot of value to these multi-functionality devices that is
bridging the digital divide and helping them move ahead in life. Manufacturers are also looking
at cheaper pricing and telecom companies are coming up with more affordable data plans to
smartphones, research has shown that only 10% of the world population (in the mobile segment)
currently owns a smartphone. The figure below gives a better and realistic understanding about
the number of smartphone users across 42 countries (Singh, 2011). Though this figure shows that
the number of smartphone users globally are very small, it is a highly growing segment and the
smartphone manufacturers are producing a lot of smartphones to meet the demand. The benefits
and the penetration seen in the developed markets like Singapore, HongKong, Japan, USA etc.
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2) TYPES OF SMARTPHONES
Smartphones can be classified into different types on the basis of brands, features,
network, connectivity etc. However, globally, smartphones are mainly classified on the basis of
their operating systems. Each manufacturer of a smartphone makes use of one of the following
operating systems for their smartphone. The various kinds of operating systems that are present
1) Google Android Smartphones – As the name suggests this is an operating system that is
developed and owned by Google. It is one of the fastest growing smartphone operating
systems around the world and the android business model differs from its main
competitor Apple in the sense that other phone manufacturers can use it as the system for their
own phones. Hence, there are a larger number of phones running on Android than on Apple IOS
or the Blackberry OS. The Google android is based on Java and has a large number of
developers around the world developing various apps for this operating system. It is an
open source project and the advantage is that cost of developing android apps is
miniscule.
2) Apple Iphones Smartphones – Apple IOS (formerly Iphone OS) is a major operating
system that is very polished and is one of the main reasons behind the major sales behind
Apple Iphones. It is a very solid and stable operating system and each release of this
operating system is treated with a lot of frenzy and excitement in the market and amongst
smartphone enthusiasts alike. It is used as an operating system only for Apple Iphones
3) Windows Smartphones- They are smartphones that are based on the Microsoft Windows
operating system. They are relatively new in the market and are yet to prove themselves
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and account for not more than 10% of the total smartphone market. Like the Google
Android Smartphone, various manufacturers are tying up with Microsoft for their
Windows OS and there is a lot of buzz about their latest operating system called Mango
which has been developed to compete head-on with the market leaders Android and
Apple. As it is a product from Microsoft, it seamlessly integrates with the other Microsoft
one of the first real operating systems. Even today, it is one of the most widely used
operating system in the world. The last release of Symbian was a great disappointment as
it couldn’t match up to the likes of Apple IOS and Android. The latest Nokia Lumia
phones have replaced their Symbian OS with a Windows Mango OS. In India, most of
the Nokia mobile handsets (in addition to the smartphones) run on Symbian OS.
Motion) operating system which was initially designed for targeting the business sector.
everyone and now they are equally competent in the business and home segment. They
were initially considered strong because of their superior email applications but the other
operating systems have caught up with them on this front and like the Apple IOS, they
6) Others (Palm/Linux) Smartphones- Other operating systems include Garnet OS, also
called Palm OS, which is an operating system developed for PDAs by Palm Inc. It is
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As already mentioned, smartphones can also be classified on the basis of various features.
Some of the features that the current smartphone manufacturers boast of are:
1) 3G support- Most of the current smartphones support the 3G connectivity. The cost for
accessing 3G on your smartphone depends on the telecom provider and is much more
expensive than 2G. However, the speed of accessing internet on the 3G is a lot better than
2G.
2) Touchscreen- In contrast to the mobile handsets that were common until a few years ago,
majority of smartphones have started using touchscreens which enable the user to touch
and select the various icons and buttons on the screen itself. This has reduced the weight
3) QWERTY Keyboard- Almost all the latest smartphones have a QWERTY keyboard with
it. The QWERTY keyboard has the various alphabets and alpha-numeric characters in the
same sequence as found on personal computers and laptops. This brings about
standardization and users can quickly adapt to different smartphones with ease.
4) Multiple SIM- Some of the latest smartphones boast of the “multiple-sim” capability. As
the name suggests, this means that a single smartphone can have more than one telecom
connection allowing the user to switch between multiple networks without changing the
SIM cards.
5) Apps- As per the operating system, there are a multitude of apps (short for ‘applications’)
that a smartphone user can download for free or at a premium. These apps vary in
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6) Camera quality- Camera is an integral part of any smartphone or mobile phone and
depending upon the quality of the camera (measured in megapixels), smartphones can be
classified into various kinds to meet your requirement. The camera quality has improved
so much these days that smartphones are soon replacing the digital cameras.
7) Battery Life- Battery is another important feature that most smartphone consumers pay
importance to. Like any other portable device, good battery life is a pre-requisite for any
smartphone and users try to gauge the battery backup while purchasing smartphones.
Apple Iphones have a better battery compared to other smartphones in the same category.
8) Screen size- The screen-size varies from each smartphone model. Larger screen sizes are
preferred to smaller ones, especially for smartphones with touch screen features, but it’s a
personal choice and plays an important role in deciding the aesthetics of a smartphone.
Other features like video quality, sound clarity, weight, size etc. are common to all
smartphones and mobile phones and are less important compared to the ones mentioned above.
However, price plays an important role in the purchase of a smartphone and is one of the main
introducing low-cost smartphones starting at a price tag of INR 5500 to remedy this. As a part of
this study, the purchase intentions and usage patterns have been analyzed on the basis of some of
these features. More light would be thrown on these features in the analysis section of this study.
Various studies have been done to understand how mobile phones have been used by
consumers (Liu, 2010) and in this age of convergence, researchers have not yet recognized that
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the adoption of different technologies and services would necessarily facilitate the multiple uses
of a single and converged technology, such as a mobile phone. The diversification of technology,
features, applications, and services are connected with the adoption of multi-media (Pagani,
2004), the mobile internet (Kim, 2007); (Shin, 2007), and m-commerce (Bigne, 2007);
(Vrechopoulos, 2003); (Wu, 2005), but, however, they are not specified in the ways that clarify
how consumers deal with the versatile purposes beyond the device and adoption of services.
The mobile phone can help people to fulfill many different needs (Martensen, 2007). To
understand the dynamics of users’ adoption, many multi-disciplinary studies, including work
motivation theory, action theory, theory of reasoned action and task-contingent decision-making
have added to Technology Acceptance Model (TAM) (Davis, 1989); (Hart, 2004). Regarding the
value of mobile technology usage, (Nysveen, 2005b) proposed four factors which influence the
usage intention: motivational factors, attitudinal factors, normative pressure, and perceived
control. (Laukkanen, 2005) explored consumer value creation in various mobile banking
mobile advertisements by four factors: role of mobile medium in marketing mix, development of
It is essential to understand how smartphones add value to the customers and the study
conducted on customer value is quite fragmented and diverse (Wang, 2004). Multiple studies
have attempted to do the same. For example, (Park, 1986) proposed three basic consumer needs
to reflect value dimensions: functional needs, symbolic needs, and experiential needs.
(Zeithamml, 1988) referred value to the customer’s overall assessment of the utility of a product
based on the perception of what is received and what is given. (Sheth, 1991) classified five
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consumption values- functional, social, emotional, epistemic, and conditional – which could
influence consumer purchase and choice behavior. Functional value is the economic utility
associated with possessing the products. Social value refers to the utility derived from customers
associated with social groups. Emotional value is the capacity of products to arouse affective
states. Epistemic value describes customers’ association products with novel, curious,
complicated or unique factors. (Butz, 1996) defined that customer value as an emotional bond
established between a customer and a producer after the customer has adopted a product or
service produced by that supplier. (Woodruff, 1997) proposed customer value as a customer
perceived preference for and evaluation of those product attributes, attribute performances, and
consequences arising from usage that facilitate achieving the customer’s goals in use situations.
Furthermore, (Gassenheimer, 1998) divided customer value into the economic value (fulfilling
economic needs at minimum transaction cost) and the social value (satisfaction with the
value is the set of situations faced by customers when making a decision (Chen, 2005). (Sigala,
2006) proposed that users of customized mobile phone services perceive both give and get
customer dimensions. Although a large number of studies have been made on customer value,
little is known about the value of mobile phone usage. (Joo, 2007) explored the relationship
between customer values and re-purchase intention. The customer value of mobile phone usage
amongst employees has been in the limelight of late. To sum up, it is necessary to measure and
prioritize the value of mobile phone usage. The purpose of this study is to explore value
components of mobile phone usage that contribute to customer value and to prioritize these
components.
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A study by (Liu C.-C. , 2010) shows that ‘convenient value’ is the main driver for mobile
phone usage. A smartphone has great ‘convenient value’ as its functionalities provide the user
with relevant information that helps to manage everyday life and strengthen the user’s
relationships. Thus, studying smartphone usage in more detail will advance research in the field.
To understand the multiple uses of mobile phones, (Chang, 2010) investigated the causal
relationships of constructs identified by previous research dealing with the adoption of mobile
technology and behavioral constructs. While his study focuses on individual mobile phone use, it
looks at the issue through a solely technical lens. The findings indicate that the drivers for usage
differ from the main drivers of technology adoption. Thus, Chang emphasizes the need for
further consumer research to understand an individual’s perspective of mobile phone use as well
as the need for expanding the research context of technology usage beyond the discipline of
(Sugai, 2005) conducted a study to explore the mind of the mobile consumer with regards
to their perception of the mobile Internet. The Zaltman Metaphor Elicitation Technique (ZMET)
was used to develop consumer mind maps for Indonesia and Japan, thus comparing two
countries with very different infrastructures for the mobile Internet. The study concluded that
inefficient infrastructure was the main barrier for using the mobile Internet. While the author
advanced the research in taking the perspective of the mobile consumer, the study is very much
focused on the perception of mobile access to the Internet. What is missing, however, is a more
holistic view of how consumers make use of their mobiles, especially smartphones that bear
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As noted, the recent convergence of industry, market, and technology has also led to the
development of versatile mobile devices, applications, and services in the consumer market
(Fransman, 2000). Therefore, it is imperative that we clarify the main purpose of using mobile
phones, before trying to identify the critical factors that determine the use of mobile phones for
varying tasks and activities. As per the proposed segmentation and functionality of a mobile
“The individual capabilities that afford individuals to use mobile phones for multiple purposes,
Smartphone purchase and repurchase intentions have been covered to an extent in the
academic paper by Jamil Bojei and Wong Chee Hoo (Hoo) where the authors came to the
conclusion that marketers need to strike a balance between acceptance and repurchase intention.
innovation characteristics which is the most important parameter for purchasing a smartphone
and to focus on both brand equity and innovation characteristics to maintain their market share
through repurchases.
As it is been seen over time, mobile phones have transformed itself from being a mere
Therefore, understanding the customer value of mobile phone usage becomes very crucial for
marketers and researchers alike (Nysveen H. P., 2005a). The first step to be taken in this front to
understand the usage of mobile phones is to measure and prioritize the value of mobile phone
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usage and forms the basis of this study. Research in the field of smartphones, mobile marketing
and mobile advertising is rather fragmented. The very nature of the field being interdisciplinary,
much of the literature comes from different disciplines, in particular from technology,
communication and innovation. This section will review the relevant literature with respect to
smartphones, using mobile phones as a marketing channel, as well as literature concerning the
A very similar study, though qualitative in nature, was done to understand the smartphone
consumer and how these consumers relate themselves to their smartphones in the UK and
German cultures (Wagner, 2011). This study proposes to look at the Indian smartphone
consumer taking a quantitative approach and is an attempt to pioneer research regarding the
behavior of smartphone consumers. The field of marketing would benefit from a focused
analysis of consumer behavior with regards to specific applications. Mobile marketing research
still lacks in thoroughly exploring the consumer’s perspective, and thus this study presents itself
as a first glance at how powerful smartphones impact consumer behavior in the Indian context.
Overall, the researcher is flexible in carrying out the research as little equipment is needed which
to understand the behavior of smartphone users in India. The number of smartphones in India, as
per 2011, is more than 20 million and some of the consumer behavior trends that have been
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In comparison to the traditional voice calls and SMS’s, the Indian smartphone consumer
The Indian smartphone users have been found to spend around 2 hours and 30 minutes on
The study reveals when segmented on age, the different segments make use of their
smartphones differently. The younger Indians perform activities like spending time
browsing the internet on their smartphones (with little time spent for SMS) where as the
older people spend more time on contact search and alarms. In my study I plan to
segment the smartphone consumers on the basis of phone usage and hope to arrive at a
It shows an interesting statistic in terms of data usage that data usage of 3G users are 44%
Android users, on an average, install more apps compared to Symbian users per
month(19:10)
The panel found that smartphone users in India spend more than 40 percent of total active
time on their smartphones on data-centric activities. A full 25 percent of users’ time with
apps is spent on those developed by Google, with the Android Market, YouTube and
As per the studies conducted by Pew Internet & American Life Project in US, for one-
quarter of smartphone users, their handset is the primary way they access the Internet which
clearly the growing independence on smartphones. This also implies that for a good section of
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the population, smartphones are becoming a necessity as they don’t have a broadband connection
at home and this is the sole access to the internet (Kim R. , 2011).
This is true in India as well as per the survey carried out by Ericsson ConsumerLab which
revealed that nearly 52% of the internet users in India had no personal computer or fixed
broadband connection. Out of this 52%, about half of them, makes use of their smartphones to
connect to the Internet making it the only source of accessing the internet for them. Out of the
rest, nearly 29% makes use of desktop PCs and the remaining 22% makes use of laptops to
connect to their internet. This is a very important statistic as a good chunk of the population
accesses the internet through the smartphone. The internet access patterns have changed and
many are many smartphone users are constantly online thanks to the reasonable 2G charges. This
proves the fact that with the increase of smartphone penetration, the internet usage is also
increasing and helps the marketer target the consumer in a better manner. If their statistics are to
be believed, Indian smartphone users would rival their American counterparts in terms of data
usage. Indian users, currently, use about 270 MB of data/month where as the average data usage
for the Americans is about 350 MB of data/month. In addition to this, the study also reveals that
Indian smartphone users make use of social networking (nearly one third of the time spent on
social media websites) and text messaging a lot and this is reducing the need to use email. More
and more people are connecting to the internet through Wi-fi connections in addition to GPRS
As per IMRB International and the Internet and Mobile Association of India, there are
12.1 million mobile internet users in India in 2010 and this number expected to touch 30 million
by end of 2011. However, the study conducted by Boston Consulting Group (BCG) predicts this
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number to be an astonishing 237 million opening up the opportunity to tap into a lot of new
customers. This level of internet penetration will be made possible with the help of smartphones
and for many of these consumers, who are present in cities and rural areas alike, smartphones
will be their equivalent to a personal computer. It would open up their world to online commerce
sites and a richer digital experience. The fact that the various e-commerce websites have not
been made compatible for mobile devices provide an opportunity for the smaller businesses to
serve this new need and compete with the various global players. This will also remove the
geographical limitations that make it difficult for the customer to buy a product from the retailer
and also the ones that limit the retailer to reach out to a customer located in remote parts of the
country.
Smartphone consumers will have access to a variety of mobile apps and smartphone
consumers who download and use these apps have been found to show more loyalty towards the
With a large chunk of users switching from mobile phones to smartphones, there is a
huge opportunity for marketers (Kim R. , 2011). Some of the important implications for
marketers are:
1) A lot of websites are still designed for desktop and laptop users and make assumptions
that all consumers accessing internet have larger screens and technologies like Flash to
navigate through the content and are not optimized for the smartphone and mobile phone
consumers. This could cause potential losses, through customers and possible
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Understanding the Indian Smartphone User
transactions, to the companies trying to market through the internet. The marketers have
to take into account the limited screen size of the smartphone consumer.
2) Google realized this and have started offering free mobile Google sites templates to help
businesses improve their mobile footprint. This initiative by Google is called ‘GoMo’
(abbreviation for go mobile). As per the Google statistic, 61% of users who had trouble
accessing a mobile site through their phone are unlikely to return to the same site. This is
a sizable chunk of users and those companies that make use of Internet as an integral part
of their marketing mix will have to make to get-up-to-speed as keeping presence on the
3) Marketers should couple the forecasts that pertain to predicting 2 billion people having a
smartphone in 2017 with the amount of time they spent on mobile apps to be 10 percent
more than on the internet. This paves way for a significant opportunity to formulate
strategies to leverage the mobile channel for customer service (Press Release, 2012).
4) In today’s world, consumers wish to easily move from one mobile device to other
Release, 2012).
5) The world is on its way towards a smartphone majority who is looking for ‘convenience’
and the way its unfolding will provide some new opportunities to marketers who are
paying attention to the trends. These consumers look up to companies that keep them
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Understanding the Indian Smartphone User
better informed and are easier to do business with and by proving them such a powerful
As smartphone ‘apps’ are one of the main features while purchasing a smartphone,
various studies have been done on determining the logic behind purchasing a smartphone app.
The study done on the determinants behind purchasing smartphone apps, classifies the app into
1) Productivity apps – apps that have practicality and add to the business efficiency like file
viewer apps, scanner apps, scheduler and time-table managing apps etc.
2) Entertainment apps- apps that are interesting and contribute to having fun like games,
3) Information apps- apps that disseminate information to the smartphone user constitute
this category and the types of apps include news, weather, travel, books, education,
4) Networking apps- This category mainly constitute of the social networking apps (that
help the smartphone consumer make use of the social networking websites like facebook,
youtube etc), chat applications & instant messengers like whatsapp, twitbird pre.
The study showed that apps belonging to the productivity category was purchased the
most by smartphones users, followed by entertainment and the two most important parameter
that determined the purchase intention for a smartphone app was found to be word of mouth (that
includes recommendations from acquaintance, reviews on the internet, grade and information in
app store) and usefulness of the apps. The implication of this study is for marketers who want to
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Understanding the Indian Smartphone User
target smartphone consumers who will get a better idea on what kind of apps to place their
advertisements in and also understand the usage pattern of smartphone users in general in case
they decide to create an app to better connect to the consumer. For example: PVR Cinemas, Just
Dial and even the IRCTC have their own apps to reach out to their customers.
This is a good way to increase loyalty to your brand as proved in a digital media
influence study done in the US market by Adology, a research firm that focuses on various
market segments - demographic, psychographic, geographical and vertical. The research shows
that consumer’s purchase decisions are influenced by mobile advertising and branded
smartphone applications. It proved the same showcasing data in case of home furnishings where
nearly 49.2% consumers confirmed that mobile applications and advertisements influence their
decision corroborating the fact that retailers should look into the space of mobile advertising and
application area as a part of their marketing mix. In addition to home furnishing, apparel(46.6%),
insurance(45.4%) and electronics(44%) also confirmed that their customers were influence by
mobile applications and advertising and 53.7% of this consumers make use of a smartphone and
98% of these consumers reported using the internet for checking the news, weather, conducting
online banking and shopping and additional internet activities using their smartphone include
downloading applications, watching mobile videos and visiting mobile websites. Hence a good
strategy for marketers would be to combine social network profiles and mobile apps through
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Understanding the Indian Smartphone User
Overall, very little research has been done to gain consumer insights on how smartphones
and their multi-faceted functionalities are integrated into the user’s everyday life. Research has
dealt with factors driving mobile phone adoption, but what is missing is a holistic approach to
growing market and the lack of academic research demonstrate the need to understand the use of
smartphones. The following study seeks to analyze smartphone users with regards to how they
integrate mobile phones into their daily lives. Having established an overall understanding of
smartphone usage, the study will then take a closer look at how marketers can use this
RESEARCH PROBLEM
To understand the Indian smartphone consumer and to identify the factors that affect their
RESEARCH OBJECTIVE
• To identify what are the essential features in a smartphone according to the Indian
smartphone consumer
intentions)
• To segment the smartphone users in India on the basis of their demographic variables
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Finding the answer to these questions will help understand the current smartphone
consumer in India. It will also attempt to identify any gaps that exist in the market so as to prove
beneficial to both the industry people and also to the consumers of smartphones. These
objectives when met will help me recommend strategies to the marketers on how to target these
RESEARCH METHODOLOGY
The objective of this study was to understand the consumption behavior of the
smartphone users. Further, the study also explored if the parameters on the basis on which the
purchase of a smartphone was done translates to benefits at a later point of time. It will explore
the usage patterns of the smartphone consumer to arrive at that conclusion and will segment the
enabling the marketers to target them in a more effective and efficient manner.
This study was conducted in three phases. The three phases are as follows:
This phase comprised mainly of secondary research. Internet, journals, articles, research
papers and industry reports were studied to have a better understanding of the current
smartphone market. Through this exercise, I went through past studies that have been conducted
in the mobile phone segment in general and the smartphone segment in particular. This phase
also included gaining information and building up on the understanding of the smartphone
market in India, the current consumer psychology and usage patterns to explain how it is
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Understanding the Indian Smartphone User
perceived and used by the consumer. A bit of research was also done so as to understand the
Databases like EBSCO, JSTOR, Emerging Markets, India Stats, Google Scholar, and
Google.com was used to source the reading material for this study. Another source for the papers
was the study reports that are available on the KEIC Website. Further, articles available online
were also be useful in providing leads to other studies that have been conducted by the
This phase was both a learning period as well as a case formulation period. The topic
scope was defined and conceptualized in this phase. This phase basically dealt with
understanding the universe in which the study was to be conducted. The definition of the target
segments and the structure of the sample that was to be studied also emerged in this stage.
Structure of the sample refers to the mean the sample sizes, the sample compositions (ratio of
male to female) etc. This knowledge helped me in the following phases as well. At the end of
this phase, I was able to arrive at a streamlined idea that was further strengthened by the next two
phases.
The following phase mainly comprised of primary research, where it was required to
reach out to the respondents of this study and collect responses to validate the further the
findings of the phase I. This was done with the help of a quantitative questionnaire.
respondents for this quantitative survey. The questionnaire was formulated and floated on the
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Understanding the Indian Smartphone User
internet to get a uniform sample from across the country to have a better understanding of the
smartphone consumer. It helped in collecting the data required for deriving the usage and
purchase intention factors and profiling of the consumers on the basis of the various
The next phase consisted of collating the result from the previous phases and giving it a
logical structure for analysis. Once the data was collected, it was transferred to SPSS for
performing the analysis of the data. Once the data was coded and ready for analysis, factor
analysis was performed on the data collected to determine the various factors that determine the
usage patterns and purchase intentions of smartphone consumers. This phase also checked the
consistency between the two phases in terms of the data collected in the primary as well as the
secondary research. Along with the consistency, it also ensured that the data collected lead me to
find an answer the research problem that led to the institution of this study. After factor analysis
was done, cluster analysis was performed on the data collected (along with the factors) from the
respondents to segment the smartphone users. After completion of the cluster analysis, cross-
tabulation was done on the clustered data to get a better understanding of the segment on the
As the data was mostly in quantitative form, it was studied in a way to identify trends and
patterns that would formulate the solution set for the given research problem. These trends and
patterns were confirmed by both the phases and are presented at the end of the study to give a
logical conclusion to this study. The question of reaching out to the smartphone consumers in a
better manner was also clarified with the output of the analysis.
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As mention earlier, the study did give out suggestions that helped plug the holes which
were present in the initial phases. The aim was to derive benefit from this exercise for both the
consumers as well as the industry people. I was able to arrive at various implications that, I
believe, will help improve the business practices as well as the consumer offerings consumer
service and experience will be enhanced. The idea will help provide mutual benefits for both the
parties.
a) PILOT SURVEY TEST: This was administered to test the working and suitability of the
b) THE QUESTIONNAIRE - The questionnaire for the Quantitative stage was administered
online. The targeted size was 150 and the number of responses collected is 181.
UNIVERSE SELECTION
Quantitative Analysis Stage- In this stage we are looking to seek responses and assessing
the parameters that we have defined for understanding the smartphone consumer in a better
• Male or Female
SAMPLE SIZE
A total of 181 responses were obtained of which 100% were complete responses. The Sample
summary is as given:
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Understanding the Indian Smartphone User
Cumulative
As shown in the table above, the sample size is 181 and consists of 131 males and 50
females. This is concurrence with the statistics from the literature review which pointed out that
QUANTITATIVE ANALYSIS
We start off our quantitative analysis performing a descriptive analysis on the various
parameters mentioned below. After the descriptive analysis, factor analysis is done on the usage
variables and on the purchase intention variables. The obtained factors are used to perform
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Understanding the Indian Smartphone User
DESCRIPTIVE ANALYSIS
1) ESSENTIAL FEATURES
All the respondents were asked to choose the features that they considered to be essential
for a smartphone in the form of a multiple response question. The frequency table
obtained is shown below and it makes for an interesting analysis. The responses have
3g 103
Touch screen 87
Powerful Camera 64
QWERTY Keyboard 56
This clearly shows that most of the respondents believe that the essential features
required for a smartphone are access to email, facebook , twitter and social networking, 24.7
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Understanding the Indian Smartphone User
connectivity to the internet, long battery life, 3g capability and provision to edit documents.
Features like QWERTY keyboard, powerful camera etc can be avoided. So, in order to define
2) SMARTPHONE MANUFACTURERS
This gives a quick-view about the kind of smartphones the respondents have. It is more skewed
Smartphone Manufactures
3, 1% 2, 1%
10, 5% Others
14, 7%
Nokia
3) ADVERTISEMENTS VIEWED
The below frequency table gives a clear statistic about the type of advertisements
that are noticed and viewed by smartphone users. This is an important parameter for
marketers which will help them in choosing the kind of advertisements to be used to
target smartphone users. As can be seen from the table, advertisements that are integrated
into apps are viewed or noticed the most (nearly 56%) whereas Bluetooth message
advertising based on entering a location are the least noticed kind of advertisements
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Understanding the Indian Smartphone User
The first table gives an idea about the kind of smartphones the respondents prefer.
Google Android is the favourite by a large margin, almost double the size of its next
competitor Apple.
Blackberry 18 9.94475138
Others 8 4.4198895
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Understanding the Indian Smartphone User
8, 4%
12, 7%
smartphone, the respondents gave a lot of priority to apps, their availability and usefulness
Apps 69 38.121547
User-friendly 28 15.4696133
Others 22 12.1546961
Trendy 5 2.76243094
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Understanding the Indian Smartphone User
5, 3% 4, 2%
9, 5% Apps
11, 6%
Ease of use
In order to find out about the number of smartphone users who actually
participate in m-commerce/mobile banking and buy paid contents, a few questions were
asked in the administered questionnaire. The following frequency table gives us an idea
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Understanding the Indian Smartphone User
FACTOR ANALYSIS
The collected data was analyzed with the aid of Factor Analysis. To identify the
underlying factors that govern the usage of smartphones by a consumer and to identify the
purchase intentions, the respondents were asked to fill an online survey which is shown in the
appendix. The main reasons why people purchase smartphones and how they use their
smartphone were obtained in a grouped manner. These questions were rating questions in ordinal
variables that enabled the smartphones to rate the various parameters following under each
category on a scale from 1-5 with 1 being the least important and 5 being the most important.
The technique that was used to carry out the analysis on the data to obtain the groups of variables
and thus obtain the reasons was Exploratory Factor Analysis (EFA). However, it was imperative
to first obtain the groups of variables which would act as factors. For this purpose, the technique
used was Principal Component Analysis (PCA). The output of the factor analysis was run
The number of respondents who took part in this survey is 181 compared to initial target
of 150. The data sheet was then entered into SPSS for identifying the factors that govern the
purchase of smartphones and throw better light on the usage of smartphones by its users.
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Understanding the Indian Smartphone User
The smartphone usage drivers were divided into 15 variables – talk, text, games, music,
pics, email, internet, video, data, socialnw, chat, apps, news, weather and geo, each representing
various usage patterns like talking on the phone, texting or messaging, listening to music, taking
pictures using the smartphone camera, personal emails, browsing the internet, download and data
transfer, social networking, instant messengers, making use of various apps, keeping up-to-date
through news, checking information on the weather and finding information about streets
RELIABILITY TESTS
Sphericity Df 105
Sig. .000
On performing the KMO and Bartlett’s Test on the set of 15 variables listed for
smartphone usage, we find that the KMO value, which is the measure of sampling adequacy, is
0.731. As per research standards, the KMO value needs to be greater than 0.5 to indicate that the
variables taken are reliable and this test proves the reliability of the sample. Factors close to one
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Understanding the Indian Smartphone User
indicate that factor analysis should give reliable and distinct factors and hence we may proceed
to do factor analysis. The significance value of 0.000 for the Bartlett’s test of sphericity confirms
the same.
In order to test the reliability of the data collected, we perform the Cronbach’s Alpha
Reliability Test which measures the internal consistency to understand how closely are the set of
items related in a group. The figure below shows that the alpha coefficient for the 15 items is
.791, suggesting that the items have relatively high internal consistency and 0.70 or higher values
for the alpha reliability coefficient are considered to be acceptable in most research situations.
Reliability Statistics
Cronbach's
Alpha N of Items
.791 15
The descriptive statistics of the 15 variables under consideration are as shown in the table below.
Descriptive Statistics
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Understanding the Indian Smartphone User
Socialnw
181 1 5 3.56 1.301 1.692
The standard deviation and variance re-confirm the reliability of the data.
Now, on performing factor analysis, using Varimax rotation, we can determine the
1) ON THE BASIS OF EIGEN VALUE - The four factors have been chosen on the basis of
eigen values. All the four factors have an eigen value greater than one. This is clearly
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Understanding the Indian Smartphone User
Scree Plot
4
Eigenvalue
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Component Number
2) ON THE BASIS OF SCREE PLOT - The scree plot, shown above, also confirms the number
of factors as 4. After the fourth factor is obtained, there is a steep slope in the scree plot
4) ON THE BASIS OF ROTATION- The following rotated component matrix is obtained from
the factor analysis in which the variables have been divided into four factors on the basis
of their factor loadings. The variables have been colour coded as per their loadings to
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Understanding the Indian Smartphone User
Component
Variables 1 2 3 4
COMMUNALITY
Communalities gives relevant information after the desired number of factors has been
extracted and the table below has extraction values greater than 0.45 indicating that the four
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Understanding the Indian Smartphone User
Communalities
Initial Extraction
Also the anti-image correlation matrix was seen to see if any of the diagonal values were
having a value less than 0.5.All the variables have much higher values justifying the correlation
Purchase intention of smartphones were divided into 20 variables – brand, design, price,
multiplesim, screensize, touchscreen, qwerty, multitasking, camera, voice, sound, video, games,
apps, 3g, internet, battery, ease, reviews and status, each representing various purchase intentions
like importance of the brand, design of the smartphone, price and whether it gives enough value
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Understanding the Indian Smartphone User
for money, feature like provision for usage of multiple SIMs, size of the screen, touch screen
capability, presence of QWERTY keyboard, ability to enable multitasking, camera quality, voice
clarity, sound quality, video quality, ability to play games, number of apps available, 3g
capability, battery-life, ease of use, online reviews and status that the smartphone provides in the
society respectively.
RELIABILITY TESTS
smartphone consumer. These variables will be reduced to a lower number of factors in order to
understand the underlying dimensions and before we perform factor analysis, we test the data for
reliability through the KMO and Bartlett’s Test and Cronbach’s Alpha Reliability Test.
Sphericity Df 190
Sig. .000
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Sphericity Df 136
Sig. .000
On performing the KMO and Bartlett’s Test on the set of 20 variables we get a KMO
value of .710 which is acceptable. However, further analysis reveals that it will hamper the
analysis if we make use of all the 20 variables and have been forced to continue the analysis with
18 variables(qwerty[0.481] and status-[0.475] are the 2 variables that have been removed on the
basis of having a value less than 0.5 in the anti-image correlation matrix). The review variable
has been removed because it has very low communality value (0.234 which is much lesser than
the industry standard of 0.4). The KMO and Bartlett’s Test performed on the 17 variables yield a
better value of 0.739 showing improvement in reliability. Bartlett’s test of sphericity yields a
For all the further analysis on determining the purchase intention we would be dealing
with 17 variables instead of 20 and the variables that are not being considered are status
smartphones on the basis of the qwerty keyboard feature) and reviews(purchasing smartphones
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Understanding the Indian Smartphone User
As already mentioned in the previous reliability test (KMO and Bartlett’s test) we carry
out the analysis only for 17 variables. While performing the Cronbach’s alpha reliability test, to
test the reliability of the data collected, we find that the alpha coefficient for the 17 items is .721,
suggesting that the items have relatively high internal consistency and is acceptable for further
analysis.
Reliability Statistics
Cronbach's
Alpha N of Items
.721 17
The descriptive statistics of the 20 variables are as shown in the figure below:
Descriptive Statistics
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Understanding the Indian Smartphone User
The standard deviation and variance re-confirm the reliability of the data.
1) ON THE BASIS OF EIGEN VALUE - As per the number of eigen values having a value
greater than 1, we should have 5 factors. The 6th component has a eigen value of
0.988 and hence has been discarded, confirming the presence of 5 factors.
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Understanding the Indian Smartphone User
Scree Plot
3
Eigenvalue
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Component Number
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Understanding the Indian Smartphone User
2) ON THE BASIS OF SCREE PLOT - The scree plot, shown above, gives more logic to
taking 5 factors than 6. After the fifth factor is obtained, there is a steep slope in the
from the factor analysis in which the variables have been divided into five factors on
the basis of their factor loadings. The variables have been colour coded as per their
loadings to give more clarity to the factors that have been obtained.
Component
Variables 1 2 3 4 5
Multitasking
.390 .602 .216 .036 .028
Touchscreen
-.307 .196 .582 .074 -.081
Multiplesim
.125 -.294 .077 -.171 .633
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 7 iterations.
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COMMUNALITY
Communalities gives relevant information after the desired number of factors has been
extracted and the table below has extraction values greater than 0.4 indicating that the five
factors are reasonably strong and justify the decision to perform factor analysis.
Communalities
Initial Extraction
3g 1.000 .589
Also the anti-image correlation matrix was seen to see if any of the diagonal values were
having a value less than 0.5. Based on this result, 2 variables were removed, qwerty and status,
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Understanding the Indian Smartphone User
as their values were less than 0.5. The variable, review, showed a very low value in the
communality table and was removed. All the other 17 variables have values greater than 0.5
CLUSTER ANALYSIS
After doing factor analysis to identify both the usage factors and the purchase intention
factors, I have chosen to perform a cluster analysis on the data to segment and profile the Indian
smartphone consumers.
Hierarchical cluster analysis is performed on the data using the both the usage factors and
the purchase intention factors along with other nominal variables like type of smartphone, price
of smartphone, average monthly usage bill and number of hours of usage per day. Agglomerative
Hierarchical clustering method making use of Ward procedure, a commonly used variance
method which minimizes the within-cluster variance, was performed to arrive at a 3 cluster
solution. The clusters were measured using squared Euclidean distance and the 3 clusters
comprise of 88, 57 and 36 members, as shown in the table below. As per the standard, the
Clusters Former
Count Column N %
Ward 1 88 48.6%
Method 2 57 31.5%
3 36 19.9%
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FINDINGS
This section of the study contains the interpretation of the quantitative analysis. The
interpretation of factors obtained from the usage pattern variables and purchase intention
variables along with the clusters and segmentation has been explained in detail here.
a) USAGE PATTERNS
The first factor F1 represents 7 variables, color coded in orange, that constitute
internet(for Internet Browsing), email(for personal emails), chat(for instant messaging), socialnw
(for social networking), data( for data transfer and downloads), video (for watching videos
online) and apps. All these variables are related to the internet and hence this factor can be
The second factor F2 represents 3 variables, color coded in blue, and constitutes variables
like weather (for finding weather –information), geo( for GPS and finding information through
street maps and geo-location and tagging) and news. The inherent theme in this factor is
information and hence this factor can be labeled “search for information”
The third factor F3 again represents 3 variables, color coded in magenta, and constitutes
variables like music, games and pics (taking pictures with your smartphone) and the underlying
theme in this factor is “entertainment” and hence can be labeled by the same name.
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The last factor F4 represents two variables, talk and text, color coded in green. These
variables represent the basic functionality of a mobile phone or a smartphone and hence this
Factors Variables
Factor 1(F1) = Internet Internet browsing, personal emails, instant messaging, social
Usage networking, data transfer and downloads, watching videos online and
Factor 1(F2) = Search Viewing information about news, weather and street details, gps and
Entertainment
functionality
b) PURCHASE INTENTION
The first factor F1 represents 3 variables; color coded in blue, and constitutes variables
like sound quality, voice clarity and battery backup. These are relatively basic features everyone
looks for in any mobile phone or smartphone and hence this factor can be labeled “basic
features”
The second factor F2 represents 5 variables; color coded in violet, that constitute 3g(for
smartphones with 3G capability), internet(for accessing the internet through their smartphones),
apps(for using various apps through their smartphones), multitasking(for performing a variety of
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Understanding the Indian Smartphone User
functions through their smartphones) and ease( representing user-friendliness and the ease of
using a smartphone). All these variables are related to the internet and hence this factor can be
The third factor F3 again represents 4 variables; color coded in green, and constitutes
variables like camera (for taking pictures using your smartphone, video (for viewing videos on
your smartphone), touch screen (which is a relatively new feature that is considered trendy and
cool) and games (the kind of games that you get to play on your smartphone). The underlying
The last factor F4 represents two variables, brand and design; color coded in yellow. The
variable names are more than self satisfactory and the underlying theme can be labeled “brand”.
The last factor F5 represent three variables; color coded in orange, and constitutes price
of the smartphone and features like multiple-SIM(the capability to have more than a single SIM
in a single smartphone) and screen size(the size of the smartphone front screen). This factor
Factors Variables
Factor 1(F1) = Basic features like voice clarity, sound quality and extended battery backup
Basic Features
Factor 2(F2) = Features that facilitate internet usage or/and are related to internet like
Internet Related support of 3g, capability to support internet, promoting the usage of apps,
multi-tasking functionalities and ease of use that comes along with these
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Factor 3(F3) = The variables that form this factor and predominantly the ones that
Entertainment facilitate entertainment. These variables are camera for taking picutres,
that is a feature most people associate with fun and being trendy and
Brand
Factor 5(F5) = Price of the smartphone and features like multiple SIMs and screen-size
Features
As already mentioned, cluster analysis has been performed to segment the Indian
smartphone consumer and profile them in a better manner on the basis of various parameters.
The various segments have been depicted graphically in the form of tables and/or bar charts to
make the profiling of smartphone consumers within each segment easier. Hence, the
get the following results. The demographic variables used here are age, gender, occupation,
educational qualification and average monthly household income. Based on each variable
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Ward Method
1 2 3
60 and
0 .0% 0 .0% 0 .0%
above
7
Cluster 3
27
9 31 and above
Cluster 2
48
Upto 30
8
Cluster 1
80
0 20 40 60 80 100
The above table and bar diagram clearly shows the split on the basis of age. The analysis
shows that the smartphone users predominantly belong to the 20-30 age group. In the bar
diagram, the data has been consolidated into 2 groups – upto 30 and 31 and above, to make it
easier to interpret the data. Cluster 1 is best suited to target the 20-30 group closely followed by
cluster 2. To target the age group of 30-40, cluster 3 seems like a better option. The data is highly
skewed towards a particular age group but if we are go by the data, 40-50 age group can be
targeted by cluster 2.
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Understanding the Indian Smartphone User
Ward Method
1 2 3
80
70 67
60
50
42
40 Male
Female
30
21 22
20 15 14
10
0
Cluster 1 Cluster 2 Cluster 3
The above bar graph and table clearly shows the segmentation on the basis of gender
across the 3 clusters. Males clearly dominate the smartphone using population and this is in
coherence with the literature review. A marketer who is trying to target females should lay
emphasis on focusing respondents belonging to the third cluster as it has larger number of
females. Cluster 1 for males, Cluster 3 for females and cluster 2 has a good mix of both male and
female population
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Ward Method
1 2 3
Column Column
60000 and
40 45.5% 21 36.8% 26 72.2%
above
This table clearly indicates that most of the smartphone users have a combined family
monthly income of 60000 and above. It is a trend that is present across the clusters. The third
cluster focuses more on this group with 72% concentration around this income group. Hence, the
first cluster should focus not on the 60000 and above group but on the 20000-30000 and the less
than 20000 family monthly income group. The second cluster could be used to give a better
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45 40
40
35
30 26
25 21
20 Cluster1
15 13 12 12
8 7 9 9 Cluster 2
10 6 6
4 Cluster 3
5 2 1 2 2 1
0
educational qualification is given in the table above. Also, a bar-chart has been provided
Ward Method
1 2 3
PostGraduate and
22 25.0% 15 26.3% 14 38.9%
above
All the 3 clusters are skewed towards post graduates However, on observing the
relationships, marketers should try to target cluster 1 to reach out to the consumers who are
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graduates, cluster 2 to target undergraduates and cluster 3 to target the consumers who are post
graduates.
14
Cluster 3 20
2
0 20 40 60
As can be seen in the table and the bar graph, smartphones are preferred by people who
work in the service sector, who are students and in the others category. On analyzing the clusters
on the basis of occupation, we can see that Cluster 1 would be the ideal choice to target
consumers working in the service sector whereas cluster 2 would be optimal to target the
“Others” community of smartphone users. The ‘Students’ category can be better targeted through
cluster 3.
Ward Method
Occupation 1 2 3
Self
5 5.7% 2 3.5% 0 .0%
Employed
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40 37
35
30 26
25 20
20 16 17
13 13 14 Cluster 1
15
10 5 6 Cluster 2
5 2 2 3 2 1 2 1
0 0 1 0 Cluster 3
0
IMPLICATIONS
The study has been planned in such a way that it will study both the consumer as well as
the industry perspective of and will try and bridge the gap that exists in the expectations from the
consumer end and the offerings from the industry end. This study will offer something to both
the parties involved. The customer is being understood in a better manner, something which has
not been done in the Indian context in terms of smartphone consumers. Once that clarity is
achieved this study will further focus on profiling these consumers and will then aim at
recommending ways to the marketers to target these consumers in a better manner than what is
being followed today. After both the sides are studied and understood suggestions wherever
possible will be formulated to ensure that the consumers get what they desire and the industry get
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a chance to reach out to these consumers in a more appropriate and adequate manner and thereby
The industry, now, can understand the perspective of the smartphone user
The study segments the smartphone consumer on the basis of various demographic
variables enabling the marketer to target them in a more effective and efficient
manner
The study throws some light on how to approach the smartphone consumer in a less
intrusive manner on the basis of the various advertisements that are sent to them
The study showcases the manner in which the smartphone user uses his/her
smartphone giving the marketer better opportunity at reaching out to them in a more
targeted manner through their communications. The marketers will have a clear idea
The study defines what a smartphone is to the Indian consumer vis-à-vis a mobile
Their usage patterns and expectations, in terms of purchase intentions, have been
documented
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They could be at the receiving end of better promotional offers from the marketers and
also in a less intrusive manner as the marketers understand the customer better now
They get to contemplate on their usage behavior in a more practical manner which could
As the factors have been identified, marketers now have a better understanding of what
are the main underlying themes within the usage patterns and purchase intentions.
Marketers get to know about the kind of variables that play a vital role within each
factor. For example-Under “Basic features”, voice clarity plays a more important role
compared to sound quality and battery life, 3g capability under the “Internet”
category, camera within the “Entertainment” category, brand name under the ”
Brand” category and multiple SIM amongst the “Price and features” category. This
personalized manner which will translate into sales and improve customer
relationship.
Similarly for usage pattern, marketers get to understand that the 4 factors determine
the way a smartphone user makes use of his/her smartphone. Internet browsing is the
most important variable under “Internet”, searching for news the most important
parameter under “Information”, playing games the most important usage parameter
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Understanding the Indian Smartphone User
Functions”
The following table gives a quick snapshot about the segments marketers could use to
Variable
skewed towards the towards age groups of 20-30 towards 30-40 age
the data.
Gender Has the highest Has a decent mix of both Should be used to target
population
businessmen as well
Average <30000. Both the 40000-50000 and 50000- 60000 and above has a
Monthly initial income group 60000 should be the income concentration of about
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Understanding the Indian Smartphone User
Income(in 0-20000 and 20000- groups that are being 72% in this cluster and
INR) 30000 can be targeted using this cluster this should be the one
cluster marketers
Qualification
In addition to these findings, descriptive analysis was performed earlier which gives more
information on the smartphone consumer. As per the responses obtained, a smartphone has been
defined by the respondents in terms of essential features like access to email and social
networking websites like facebook, twitter etc and internet connectivity. A mobile phone which
connects to the internet is perceived to be a smartphone as that’s the most important feature
people look for in a smartphone. Similar learning in terms of number of consumers who make
use of m-commerce and mobile banking is just 36% as of now, and those who buy paid services
account to just 20% of the smartphone consumers as per our study. Other important insights
worth noting is that the kind of advertisements that are noticed/viewed the most are the ones
incorporated into mobile apps and nearly 85% of the people found advertisements incorporated
in apps, browsers and sent through smses annoying. Android was found to be most preferred
smartphone type and the reason for purchasing a particular type of smartphone was dependent on
a lot of factors but the most important one found to be availability of a large number of apps.
These are important lessons for any marketer looking to target these consumers. These are the
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Understanding the Indian Smartphone User
CONCLUSION
How do Indian smartphones consumers use their smartphone and what are the parameters
on the basis of which they purchase a smartphone? Our research objective was to understand the
Indian smartphone consumer and then unearth the underlying theme that governs the usage and
purchase intention.
Respondents were asked to fill an online questionnaire and their responses were recorded.
The online survey was filled by 181 respondents who were asked to rate various parameters
relating to usage pattern and purchase intention. A 5-point scale ranging from agree to disagree
was employed for the same. The data was filtered for smart phone users and was analyzed via
factor analysis.
A four factor solution was obtained for usage patterns. The four factors were labeled
Similarly a five factor solution was obtained for purchase intention. The five factors were “Basic
Functionality”, “Internet Related”, “Entertainment”, ”Brand” and finally “Price and External
Features”. These factors withstood all the reliability tests and confirmed the trends mentioned in
These 9 factors along with four other usage variables average monthly usage bill, number
of hours of usage, price of the smartphone and type of smartphone were used to perform a
hierarchical agglomerative cluster analysis and a 3 cluster solution was obtained containing 88,
57 and 36 members. These clusters were segmented on the basis of various demographic
variables like age, occupation, gender, average monthly household income and educational
qualification and various implications were drawn as to how marketers could use this research
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Understanding the Indian Smartphone User
Also, descriptive analysis was done on the basis of the collected data to obtain various
insights about understanding the Indian smartphone consumer in terms of how they rank various
features that are essential for a smartphone vis-a-via a mobile phone, the kind of advertisements
that are noticed by smartphone consumers, the smartphone manufacturer profile of the sample
etc. This further corroborates the secondary research and the facts mentioned in the literature
review establishing the fact that some of the global trends are applicable for India too.
There is scope for improving this research by trying to understand the smartphone
consumer located in particular geographies and determine if location has a role to play in
influencing the usage behavior. This should be extended to a much larger sample size to
strengthen the research findings. Also, this study can be taken forward to segment the customers
on basis of other psychographic and lifestyle parameters. A longitudinal segmentation might also
yield interest results and when combined with a qualitative research, it could help us understand
the value perceived for the smartphone by its user and also will also determine the type of
LIMITATIONS
Although utmost care was taken towards achieving a well representative sample, the
distribution of the age groups is skewed towards the 20-30 year old age group owing to the
limited resources of money and time. Though literature confirms this trend amongst smartphone
users, a larger sample size with more representation from the other age groups could have
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Understanding the Indian Smartphone User
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APPENDIX
QUESTIONNAIRE
Understanding the Indian Smartphone Consumer
* Name
* Age
10-20(1)
20-30(2)
30-40(3)
40-50(4)
50-60(5)
60 and above(6)
* Gender
Male(1)
Female(2)
* Occupation
Business(1)
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Understanding the Indian Smartphone User
Self Employed(2)
Service(3)
Student(4)
Housewife(5)
Unemployed(6)
Others(7)
* Educational Qualification
Up to High School(1)
Undergraduate(2)
Graduate(3)
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Understanding the Indian Smartphone User
Yes(1)
No(2)
Nokia(1)
Samsung(2)
Apple(3)
Motorola(4)
Sony Ericson(5)
LG(6)
Micromax(7)
Others(8)
* According to you, which among the following features are essential for a smartphone? Please tick all
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Understanding the Indian Smartphone User
3G(1)
Powerful camera(2)
QWERTY keyboard(4)
Touch Screen(5)
< 3 months(1)
3–6 months(2)
6-12 months(3)
12-24 months(4)
>24 month(5)
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Understanding the Indian Smartphone User
* How many hours (approximately) do you spent on your smartphone/mobile phone on any given day?
0-2 hours(1)
2-5 hours(2)
5-7 hours(3)
7-10 hours(4)
10 or more hours(5)
* What is your average monthly mobile phone usage expense/bill?(in Indian Rupees)
0-500(1)
500-1000(2)
1000-1500(3)
1500-2000(4)
* If you plan to buy a smartphone in the near future, which price category would your smartphone
belong to?
5000-10000(1)
10000-15000(2)
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Understanding the Indian Smartphone User
15000-20000(3)
20000-25000(4)
Android(1)
Windows Mobile(2)
Apple Iphone(3)
Blackberry(4)
Others(5)
* Why? Please choose the reason behind choosing a particular type of smartphone?
Apps(1)
Stylish/Cool factor(2)
Trendy(3)
Ease of use(4)
Friends/Peers recommendation(5)
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Understanding the Indian Smartphone User
User –friendly(7)
Others(8)
* Listed below are some features most people consider important while buying a smart phone. Rate
each feature according to you.
(1 star = least important and 5 stars= most important)
Brand(1)
Design(2)
Multiple SIM(4)
Screen Size(5)
Touch screen(6)
QWERTY Keyboard(7)
Multitasking(8)
Camera quality(9)
Voice Clarity(10)
Sound quality(11)
Video quality(12)
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Understanding the Indian Smartphone User
Games(13)
Apps variety(14)
3G capability(15)
Internet(16)
Battery-life(17)
Ease-of-use(18)
Online reviews(19)
Status symbol(20)
* Listed below are some functions people use their smartphones most for. Rate these according to how
you use your smartphone
(1 star= least important and 5 stars= most important)
Talk(1)
Text(2)
Games(3)
Music(4)
Take Pictures(5)
Personal e-mails(6)
Internet Browsing(7)
Watch Videos(8)
Data Transfer/Downloads(9)
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Understanding the Indian Smartphone User
Social Networking(10)
Instant messaging(11)
Apps(12)
News(13)
Weather info(14)
GPS/street map/geo-location(15)
Yes(1)
No(2)
Yes(1)
No(2)
* Do you find advertisements on the mobile through apps, browsers and smses annoying?
Yes(1)
No(2)
* Which of the following advertisements have you noticed while using your smartphone?
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Understanding the Indian Smartphone User
Sms advertisements(2)
Alerts on promotions/sales(3)
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