A Factorial Study of Consumer Buying Behavior of Laptops of Post Graduate

International Journal of Management (IJM), OF ISSN MANAGEMENT 0976 – 6502(Print), ISSN (IJM) 0976 – INTERNATIONAL JOURNAL 6510(Online), Volume 4, Issue 2, March- April (2013)

ISSN 0976-6502 (Print) ISSN 0976-6510 (Online) Volume 4, Issue 2, March- April (2013), pp. 09-21 © IAEME: www.iaeme.com/ijm.asp Journal Impact Factor (2013): 6.9071 (Calculated by GISI) www.jifactor.com

IJM ©IAEME

A FACTORIAL STUDY OF CONSUMER BUYING BEHAVIOR OF LAPTOPS OF POST GRADUATE STUDENTS IN PUNE Vijay.R.Kulkarni M.Com, MBA Assistant Professor Sinhagad Institute of Management & Computer Applications Pune, Maharashtra, India

ABSTRACT The study is a factorial analysis of consumer buying behavior of Post Graduation students of laptops in the city of Pune, Maharashtra, India. For the purpose of the study Exploratory Research Design is used. Convenience sampling method is adopted for the study. Survey method is used for collecting the data. The data is collected from Post Graduate students in Pune city. A well structured questionnaire is designed for the study and due care is taken to avoid any kind of ambiguity. The sample for the study is 152 respondents. Nominal scale is used for all the variables. The study was conducted during the period 15.09.12 to 31.10.12. Kaiser-Meyer-Olkin Measure of Sampling Adequacy & Cronbach’s Alpha is used for Scale Reliability. Factor Analysis resulted in five factors viz. 1) Brand and Features 2) Price, Visibility & Service Center 3) Reliability & Responsiveness 4) Store Atmospherics & Assurance and 5) Warranty, Guarantee & After Sales Service Key Words: Buying Behavior, Reliability, Responsibility, Assurance, Warranty & Guarantee 1. INTRODUCTION The invention of Radio and followed by the television changed the lives of the humanity in the last century. Today the introduction of computer technology has transformed the lives of the humanity in general with the speed, quality and density with which the information is being transferred, retrieved and stored resulting in enhancing the efficiency and effectivity.

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International Journal of Management ((IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March March- April (2013) With the proliferation of brands and the intensified competition offering me too laptops the strategy of differentiation has lost its sheen in the lap top industry. The monopolistic situation as prevailed in the early stages of the evolution of the industry is the thing of past.. Today the market is highly fragmented and is translated into a level playing field. In terms of product attributes, there is not much of difference among the equivalent products of different brands. It is worth noting that each and every manufacturer of offers the same features like the quality and speed of microprocessors, RAM, wireless connectivity etc. The transformation of the branded laptop product category to a commodity has reduced the manufacturers helpless in their effort to differentiate their products products in the minds of the consumers.

LAPTOP SALES IN INDIA IN UNITS FOR THE PERIOD 2005-55 TO 2009 2009-10

(Source: Jaydeep Mukherjee and Mahalingam Sundararajan. HCL: Facing the Challenge of the Laptop Market: Management Case) MARKET SHAR SHARE OF LAPTOPS Table 1

(Source: Jaydeep Mukherjee and Mahalingam Sundararajan. HCL: Facing the Challenge of the Laptop Market: Management Case)

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) 2. BACKGROUND OF THE STUDY As a sequel to liberalization, the various reforms introduced by the Government of India resulted in all round growth in the economy. The boom so witnessed generated lot of employment opportunities in all the sectors particularly in management comprising of all the disciplines. Unlike in the past today just a graduation degree is not enough and calls for specialization so as to qualify and compete for jobs. It will not be out of place if it is stated that the entry level qualification in the industry is raised from graduation to post graduation. This resulted in sky rocketing of demand for post graduation studies which is aptly demonstrated from the following table. Table 2. HIGHLIGHTS OF THE PUNE UNIVERSITY FOR THE ACADEMIC YEAR 2009-10 Student Enrolment Undergraduates Colleges

3,41,025

Undergraduates External

50,833

Postgraduate University Departments Postgraduate Colleges Postgraduate External

6,648 56,370 55,625

*

Source: http://www.unipune.ac.in/university_files/snapshot.htm

While other sectors like Hospitality, civil aviation, Health care sector, to mention a few, witnessed faster computerization on the other hand education sector though slow initially is caught up with the trend and today there is emphasis on students owning/using their laptops in the masters programs for presentations, project work etc.. 3. CONSUMER BEHAVIOUR IN BUYING LAPTOPS It is seen that usage of laptops in higher education is increasing by the day. Contemporary Post Graduation students have already got used to the computers in their growing stages. The usage of computer technology has increased over time in education sector. With colleges/universities providing Wi-Fi facility has added to the usage of computer by faculties as well as students. This eventually resulted in increased usage of computer technology in class room teaching and learning process. Moreover with the amazing speed of storing, transferring and accessing the information students want the information anytime, anywhere calling for increased use of the laptops. It is witnessed that over a period of time the prices of the computers have become affordable to the masses coupled with finance schemes facilitating buying and use of laptops. Because of the portability feature a significant part of laptop usage is for entertainment too. Laptops are selfsufficient product, which come with inbuilt speakers and adequate battery life so that it is not necessary to plug in additional accessories most of the time; hence the overall cost to the consumer is perceived to be lesser. Due to its high visibility, the consumers are image and brand conscious which is reflected in their lap top buying behavior. 11

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) Laptops are purchased more often by Students who buy it for self use and their objectives are education coupled with entertainment. In many instances, B Schools provide Lap top to the students and the cost of the lap top is factored in the course fees. In case of individual purchases, it is the head of the family, typically the father who finances the purchases or through bank financing with the father paying part of the money. The user (Student) is the core decision maker. The siblings in the family or friends, relatives & fellow students in the same age group typically are the influencers regarding the brand, features, source of purchase etc. The student enrolment at Post Graduation level is indicative of the attractiveness of this segment which is large enough to be ignored by the manufacturers in the laptop category. Moreover current buyers (students) are the same customers who are going to be making repeat purchases through their careers and passing on the legacy to the next generation. 4. LITERATURE REVIEW Kotler defined a brand as “a name, term, sign, symbol, design-make or combination of these that identifies the maker or seller of the product or service” (Kotler 2008, p. 549). Moreover, consumers often use brands as non-verbal cues to communicate with their friends groups. Therefore, they choose brands they feel physically and psychologically comfortable with (Chernatony and McDonald, 1996). According to Nike, “brands are bigger than the products they represent” (cited in Haig 2004, p. 92). Branding itself conveys the quality of the product.1 “Everyone knows what customer satisfaction is, until asked to give a definition. Then, it seems, nobody knows.” This quote from Richard Oliver, respected expert and longtime writer and researcher on the topic of customer satisfaction, expresses the challenge of defining this most basic topic of customer concepts. Building from previous definitions, Oliver offers his own formal definition (p13): Satisfaction is the consumer’s fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption-related fulfillment. In less technical terms we interpret this definition to mean that satisfaction is the customer’s evaluation of a product or service in terms of whether that product or service has met the customer’s needs and expectations. Failure to meet these needs and expectations is assumed to result in dissatisfaction with the product or service.2 For many people, a trip to the auto dealers means the mind numbing hour or two in a plastic chair with same tattered magazines and stale coffee. But JM Lexus in Margate, Florida, features four massage chairs, in addition to its star buck’s coffee shop, two putting greens, two customer lounges, and a library. At another gleaming glass-and-stone Lexus dealership North of Miami, “guests”, as Lexus calls its customers, leave their cars with a valet and are then guided by a concierge to a EuropeanStyle-coffee bar for offering complimentary espresso, cappuccino, and a selection of pastries prepared by a chef trained in Rome. “We have customers checking in world –class hotels”, says a dealership executive, “They shop on Fifth Avenue and they expect a certain kind of experience.” Lexus knows that good marketing doesn’t end with making a sale. Keeping customers happy after the sale is the key to building lasting relationships. Dealers across the country have a common goal; to delight customers and keep them coming back. Lexus believes that if you “delight the customer, and continue to delight the customer, you will have a customer for life.” And Lexus understands just how valuable a customer can be, it estimates that the average lifetime value of a Lexus customer is $600,000. Despite the amenities, few Lexus customers spend much time hanging around the dealership. Lexus knows that the best 12

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) dealership visit is the one that you never make. So it builds customer pleasing cars to start withhigh-quality cars that need little servicing. In its “Lexus Covenant”, the company vows that it will make, “the finest cars ever built.” In survey after industry surveys, Lexus rates at or near the top in quality. Lexus has topped the list in seven of the last nine annual J.D. Power and Associates Initial Quality Study Ratings.3 Social factors such as education, preferences, income levels, and other cultural factors influence demand patterns in the different regions and therefore affect how a company operates in each region. The education and income level of users affects the brand perception of the computer manufacturers. Due to standardization among Windows PCs, switching costs are low and therefore competition is driven by pricing instead of product differentiation. Apple, on the other hand, competes on product differentiation by promoting premium products rather than low prices.4All things being equal, (value proposition, product features) the branded products give customers a reason to buy. This is a big advantage over unbranded products because customers will infer a level of quality from the branded products that facilitate their purchase decision. Two primary customer advantages result from brand associations. First, customers process, store and retrieve product information by brand, which is a big advantage for strong brands. People are more likely to connect information with a brand they know rather than sort through information on unfamiliar brands. For example, consumers generally don’t consider checking accounts form all banks; rather, they consider the branded product such as Bank of America’s checking or another brand they know. A second benefit is that strong brands generate a more positive attitude towards the product. Customers, generally have more upbeat thought about a powerful brand than a week brand or generic product.5 5. STATEMENT OF THE PROBLEM The laptop product category is achieved highest degree of standardization of components, features and attributes this product category is lost the ability to differentiate in its product offerings. This is the biggest challenge being faced by the industry. The only strategies that are left at their disposal are either expanding their product assortment or make their offerings more and more attractive to the target market. This therefore calls for an ongoing in depth study of the consumer behavior- internal drives and motives of the target market that influence their buying decision process of laptops 6. RESEARCH OBJECTIVE To find out the factors which impact the buying behavior of Post Graduate students while buying a Laptop? 7. RESEARCH METHODOLOGY For the purpose of the study Exploratory Research Design is used. Convenience sampling method is adopted for the study. Survey method is used for collecting the data. The data is collected from Post Graduate students in Pune city. A well structured questionnaire is designed for the study and due care is taken to avoid any kind of ambiguity. The sample for the study is 152 respondents. Nominal scale is used for all the variables. The study was conducted in Pune city. The study was conducted during the period 15.09.12 to 15.10.12. Kaiser-Meyer-Olkin Measure of Sampling Adequacy Reliability Statistics Cronbach's Alpha

13

.908 .944

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) 8. DATA ANALYSIS FACTOR ANALYSIS

Table 3 Communalities Initial

Extraction

Brand Processor

1.000 1.000

.532 .683

Trendy Aesthetics

1.000 1.000

.621 .749

Weight Life of Battery

1.000 1.000

.524 .710

RAM

1.000

.613

Warranty & Guarantee

1.000

.643

After Sales Service

1.000

.717

Variety Availability

1.000 1.000

.657 .724

Price Discount offers

1.000 1.000

.781 .665

Accessories

1.000

.566

Location of Store Store Atmospherics Quality of Sales Person

1.000 1.000 1.000

.474 .737 .692

Assurance-Employees Knowledge and ability to Inspire Confidence Visual Display and Merchandizing

1.000 1.000

.602 .721

Availability of Spare Parts Service center

1.000 1.000

.605 .590

Ease of Payment terms Reliability of the Brand

1.000 1.000

.615 .733

Relation Focus of the Brand

1.000

.749

Responsiveness-Willingness to help Customers and Provide Prompt Service

1.000

.804

Satisfaction and Value from the Brand

1.000

.728

Extraction Method: Principal Component Analysis.

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013)

Table 4 Total Variance Explained

Initial Eigen values

Extraction Sums of Squared Loadings

Rotation Sums of Squared Loadings

Cumu Cumu Compo % of Cumulative % of lative % of lative Nent Total Variance % Total Variance % Total Variance % 1 11.077 42.603 42.603 11.077 42.603 42.603 4.158 15.994 15.994 2

1.912

7.356

49.959

1.912

7.356

49.959 3.684

14.169

30.162

3

1.633

6.279

56.238

1.633

6.279

56.238 3.453

13.283

43.445

4

1.381

5.313

61.551

1.381

5.313

61.551 3.163

12.166

55.610

5

1.232

4.738

66.289

1.232

4.738

66.289 2.776

10.678

66.289

6

.967

3.719

70.008

7

.845

3.249

73.257

8

.732

2.817

76.074

9

.669

2.574

78.647

10

.632

2.431

81.078

11

.560

2.153

83.231

12

.492

1.892

85.123

13

.480

1.847

86.970

14

.432

1.662

88.632

15

.409

1.573

90.204

16

.342

1.317

91.521

17

.309

1.190

92.712

18

.300

1.155

93.866

19

.279

1.073

94.940

20

.258

.994

95.934

21

.215

.826

96.760

22

.210

.808

97.568

23

.185

.712

98.279

24

.159

.613

98.892

25

.153

.590

99.482

26

.135

.518

100.00

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013)

Table 5 Component Matrixa Component 1 Brand .581 Processor .715 Trendy .550 Aesthetics .620 Weight .601 Life of Battery .683 RAM .612 Warranty & Guarantee .621 After Sales Service .560 Variety .767 Availability .791 Price .769 Discount offers .649 Accessories .705 Location of Store .582 Store Atmospherics .561 Quality of Sales Person .640 Assurance-Employees Knowledge .599 and ability to Inspire Confidence Visual Display and Merchandizing .658 Availability of Spare Parts .575 Service center .616 Ease of Payment terms .536 Reliability of the Brand .656 Relation Focus of the Brand .703 Responsiveness-Willingness to help .709 Customers and Provide Prompt Service Satisfaction and Value from the .796 Brand Extraction Method: Principal Component Analysis. a. 5 components extracted.

16

2

3

4

.542 .504

.500

-.575

5

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013)

Table 6 Rotated Component Matrixa Component 1

2

Brand .661 Processor .693 Trendy .755 Aesthetics .816 Weight .631 Life of Battery .725 RAM .517 Warranty & Guarantee After Sales Service Variety .519 Availability Price .549 Discount offers .636 Accessories .501 Location of Store Store Atmospherics Quality of Sales Person Assurance-Employees Knowledge and ability to Inspire Confidence Visual Display and Merchandizing .701 Availability of Spare Parts .688 Service center .670 Ease of Payment terms Reliability of the Brand Relation Focus of the Brand Responsiveness-Willingness to help Customers and Provide Prompt Service Satisfaction and Value from the Brand Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 10 iterations.

17

3

4

5

.693 .768

.541

.508 .815 .743 .686

.590 .770 .751 .786

.622

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) TABLE OF FACTOR ANALYSIS Table 7 Factor Name

Eigen Value% Value Variance 11.077 42.603 Brand & Features 1.912 7.356 1.633 6.279 1.381 5.313 1.232 4.738 .967 3.719 .845 3.249 Total 19.047 73.257 .632 2.431 Price, Visibility & Service .492 1.892 .480 1.847 .432 1.662 .279 1.073 .258 .215 2.788 .210 .185 .159 .153

.994 .826 10.725 .808 .712 .613 .590

.135

.518

Total Store Atmospherics & Assurance

.842 .409 .342 .309 .300

3.241 1.573 1.317 1.190 1.155

Total Warranty, Guarantee & After Sales Service Total

1.36 .732 .669 1.401

5.235 2.817 2.574 5.391

Total Reliability & Responsiveness

Statements Brand Processor Trendy Aesthetics Weight Life of Battery RAM Variety Price Discount offers Accessories Visual Display and Merchandizing Availability of Spare Parts Service center Ease of Payment terms Reliability of the Brand Relation Focus of the Brand Responsiveness-Willingness to help Customers and Provide Prompt Service Satisfaction and Value from the Brand Location of Store Store Atmospherics Quality of Sales Person Assurance-Employees Knowledge and ability to Inspire Confidence Warranty & Guarantee After Sales Service

18

Loading .661 .693 .755 .816 .631 .725 .517 4.798 .519 .549 .636 .501 .701 .688 .670 4.264 .590 .770 .751 .786

.622 3.519 .508 .815 .743 .686

2.752 .693 .768 1.461

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) 9. DISCUSSION 1. Brand & Features Brand image refers to the graphic memory of the brand. It involves the target customer’s interpretation of the products features, usage, benefits and also about the manufacturing organization. It is the customer’s inner feelings and the way relate when they hear about the brand. Therefore the first and the foremost challenge facing the manufacturers are to consolidate the brand in the minds of the customers. This calls for increasing the value proposition and excitement of the brand by incorporating newer and newer features in the products. To survive and grow in this challenging and highly competitive environment companies need to have highly innovative approach, keep a keen eye on the changing needs and expectations of the consumers and at the same time build strong relationships with all the stakeholders including the consumers who prove to be valuable contributors to new ideas, product improvements to meet the ever changing needs of the customers. This will eventually lead to strengthening & successfully leveraging the brand. 2. Price, Visibility & Service Center Laptop being a high value/high involvement product for the student’s, price becomes a very critical aspect of lap top decision making process. Having lost the ability to differentiate due to high degree of standardization, other things being equal, the manipulation of price of the lap tops by innovating creative and exciting sales promotions is a potent tool in attracting and stimulating immediate purchases by the customers. Since the customers using the lap tops are very conscious of the brand and its visibility it calls for increasing visibility of the laptop brand through creative and exciting visual display and merchandizing in the stores. Spares and after sales service is part of a product (augmented) which are required by the customers once they start using the product. A technology product like laptop, in the absence of spares and well equipped service center is no more a usable product and hence spares and service center assumes high significance for this product category. In the event of breakdown quick availability of spares and availability of service center is called for without which the customer cannot use the product and would definitely result in post purchase dissonance. 3. Reliability & Responsiveness Reliability refers to ability to perform the promised service dependably and accurately and Responsiveness refers willing to help customers and provide prompt service. In contrast to FMCG products the customers when they invest considerably in buying technological and complex products like Laptop the basic expectation is that the brand they purchase performs at least to the extent as promised by the manufacturers. A laptop, for students is a prized possession and their genuine expectation is that they get bailed out when faced with problems with the lap top they are using. For the students it is not only a computer but an educational and entertainment tool and hence if the laptop does not function at the least as per the promises made by the manufacturer and also poor response to the customer problems by the organizations may result in dissatisfaction and creating a dejected and frustrated customer. Hence it calls on the part of the laptop manufactures to ensure that the product performs at the least to the extent of promises made by them and strive to give better value to the customers compared to the competitors and also need to resolve customer’s problems speedily. 19

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) 4. Store Atmospherics & Assurance Stores atmospherics is an integration of various elements like layout, design, illumination, display and merchandizing, colors, sounds/music, hygiene and cleanliness, perfumes, fellow shoppers, fixtures and fittings, behavior of sales and service personnel etc. An enticing store atmospherics impacts the senses of the customer favorably and motivates him to stay longer on the floor of the store, thereby increase the probability of sale and can contribute in building a positive image of the brand in the minds of the customers. Today’s customer compared to the customer in the gone by era looks forward to enticing and pleasing store atmospherics resulting in good buying experience. Assurance refers to the store/organizations employee’s knowledge and courtesy and their ability to inspire trust and confidence. Laptop being a technology product, customers looks forward to helping, caring, knowledgeable and confidence inspiring employees who can help the customers in taking a right buying decision. It therefore calls on the part of the laptop manufacturers to ensure that their own stores or stores of the franchisees are inviting and attractive enough to entice and motive the customers. Further it is required to train personnel having interface with the customers in behavioral, sales and customer management skills so that customer confidence in the personnel is enhanced. 5. Warranty, Guarantee & After Sales Service While buying a laptop the customers are investing heavily. Warranty and guarantee are the part of the product (augmented), the provision of which enhances confidence of the customers and they are contended with the knowledge that in case the product fails due to failure of components having warranty and guarantee they get compensated for the loss. In real life such a situation seldom arises but mere provision of warranty and guarantee satisfies and puts the customers at ease. Laptop being technology product, in the event of any functional issues, definitely calls for availability of instant service facility within customer’s easy reach. It therefore calls on the part of the organizations to make available service facilities so that customers are put at ease, are satisfied and continue to use the products through their life time. 10. REFERENCES 1. http://www.ukdissertations.com/dissertations/management/consumer-buyingbehaviour.php 2. Zeithaml, Bitner & Gremler: Services Marketing: Integrating Customer Focus across the Firm. McGraw-Hill Irwin 3. Consumer_markets_and_consumer_buyer_behavior.pdf www.studentsbaraza.com/uploads/9/7/3/0/9730120/consumer_markets_and_consume r_buyer_behavior.pdf) 4. Aditya Shah, Abhinav Dalal. The Global Laptop Industry pdf 5. Greg W. Marshall and Mark.W.Johnston. Marketing Management.pp.312-313 McGraw-Hill Irwin. New York 6. Zeithaml, Bitner & Gremler: Services Marketing: Integrating Customer Focus across the Firm. McGraw-Hill Irwin 7. C.R.Kothari. Research Methodology, Methods & Techniques by, Second revised edition, 2010, New Age International (P) Ltd, New Delhi, India. 8. Schiff man & Kanuk, Consumer Behaviour, 9th Edition, , Pearson. 20

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 – 6510(Online), Volume 4, Issue 2, March- April (2013) 9.

Anantnarayan & Jayashree Nimagadda. A Hand Book of Research Process, -2009 edition, Macmillan Publishers India Limited, New Delhi, India. 10. S.C.Gupta, Fundamentals of Statistics, sixth revised and enlarged edition, 2010, Himalaya Publishing House, Mumbai, India. 11. Richard I Levin & David.S. Rubin, Statistics for Management, Seventh edition, Pearson. 12. Vijay.R.Kulkarni, “A Study of Impact of Merchandise Variety and Assostment on Shopping Experience of Customer Sin Convenience Stores in Organized Retail in India, Volume 4, Issue 1, 2013, pp. 85 - 94, ISSN Print: 0976-6502, ISSN Online: 0976-6510, Published by IAEME. 13. Vijay.R.Kulkarni, “A Study of Impact of Music on Customer Buying Behavior in Retail, Volume 3, Issue 3, 2012, pp. 152 - 159, ISSN Print: 0976-6502, ISSN Online: 0976-6510, Published by IAEME.

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