A FACTORIAL STUDY OF CONSUMER BUYING BEHAVIOR OF LAPTOPS OF POST GRADUATE by iaemedu

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									 INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
  International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –
  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
                                                                             IJM
© IAEME: www.iaeme.com/ijm.asp                                         ©IAEME
Journal Impact Factor (2013): 6.9071 (Calculated by GISI)
www.jifactor.com




     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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                                 March-
6510(Online), Volume 4, Issue 2, 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 ofoffers 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
                                                                products
manufacturers helpless in their effort to differentiate their products in the minds of the
consumers.


                                                           5    2009-10
        LAPTOP SALES IN INDIA IN UNITS FOR THE PERIOD 2005-5 TO 2009




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

                                   SHARE
                            MARKET SHAR OF LAPTOPS

                                           Table 1




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


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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                        6,648
          Postgraduate Colleges                                      56,370
          Postgraduate External                                      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 self-
sufficient 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.


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        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 European-
Style-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

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dealership visit is the one that you never make. So it builds customer pleasing cars to start with-
high-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                            .908
      Reliability Statistics Cronbach's Alpha                                    .944



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8. DATA ANALYSIS

                                        FACTOR ANALYSIS


                                           Table 3
                                        Communalities
                                                                  Initial   Extraction
Brand                                                             1.000       .532
Processor                                                         1.000       .683
Trendy                                                            1.000       .621
Aesthetics                                                        1.000       .749
Weight                                                            1.000       .524
Life of Battery                                                   1.000       .710
RAM                                                               1.000       .613
Warranty & Guarantee                                              1.000       .643
After Sales Service                                               1.000       .717
Variety                                                           1.000       .657
Availability                                                      1.000       .724
Price                                                             1.000       .781
Discount offers                                                   1.000       .665
Accessories                                                       1.000       .566
Location of Store                                                 1.000       .474
Store Atmospherics                                                1.000       .737
Quality of Sales Person                                           1.000       .692
Assurance-Employees Knowledge and ability to Inspire Confidence   1.000       .602
Visual Display and Merchandizing                                  1.000       .721
Availability of Spare Parts                                       1.000       .605
Service center                                                    1.000       .590
Ease of Payment terms                                             1.000       .615
Reliability of the Brand                                          1.000       .733
Relation Focus of the Brand                                       1.000       .749
Responsiveness-Willingness to help Customers and Provide Prompt   1.000       .804
Service
Satisfaction and Value from the Brand                             1.000       .728
Extraction Method: Principal Component Analysis.




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                                           Table 4
                                   Total Variance Explained

                                             Extraction Sums of    Rotation Sums of Squared
                Initial Eigen values         Squared Loadings              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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                                      Table 5
                                  Component Matrixa
                                                          Component
                                         1          2        3         4     5
Brand                                   .581
Processor                               .715
Trendy                                  .550       .542
Aesthetics                              .620       .504
Weight                                  .601
Life of Battery                         .683
RAM                                     .612
Warranty & Guarantee                    .621
After Sales Service                     .560                          .500
Variety                                 .767
Availability                            .791
Price                                   .769
Discount offers                         .649
Accessories                             .705
Location of Store                       .582
Store Atmospherics                      .561                -.575
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.




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6510(Online), Volume 4, Issue 2, March- April (2013)


                                      Table 6
                             Rotated Component Matrixa
                                                        Component

                                       1          2        3         4      5
Brand                                   .661
Processor                               .693
Trendy                                  .755
Aesthetics                              .816
Weight                                  .631
Life of Battery                         .725
RAM                                     .517
Warranty & Guarantee                                                       .693
After Sales Service                                                        .768
Variety                                          .519
Availability
Price                                            .549                      .541
Discount offers                                  .636
Accessories                                      .501
Location of Store                                                   .508
Store Atmospherics                                                  .815
Quality of Sales Person                                             .743
Assurance-Employees Knowledge                                       .686
and ability to Inspire Confidence
Visual Display and Merchandizing                 .701
Availability of Spare Parts                      .688
Service center                                   .670
Ease of Payment terms                                     .590
Reliability of the Brand                                  .770
Relation Focus of the Brand                               .751
Responsiveness-Willingness to help                        .786
Customers and Provide Prompt
Service
Satisfaction and Value from the                           .622
Brand
Extraction Method: Principal Component Analysis.
 Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 10 iterations.



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6510(Online), Volume 4, Issue 2, March- April (2013)

                                 TABLE OF FACTOR ANALYSIS

                                        Table 7

Factor Name               Eigen Value%            Statements                        Loading
                          Value Variance
Brand & Features          11.077 42.603           Brand                              .661
                           1.912  7.356           Processor                          .693
                           1.633  6.279           Trendy                             .755
                           1.381  5.313           Aesthetics                         .816
                           1.232  4.738           Weight                             .631
                           .967   3.719           Life of Battery                    .725
                           .845   3.249           RAM                                .517
                    Total 19.047 73.257                                              4.798
Price, Visibility &        .632   2.431           Variety                            .519
Service                    .492   1.892           Price                              .549
                           .480   1.847           Discount offers                    .636
                           .432   1.662           Accessories                        .501
                           .279   1.073           Visual Display and                 .701
                                                  Merchandizing
                          .258       .994         Availability of Spare Parts        .688
                          .215       .826         Service center                     .670
                 Total    2.788     10.725                                           4.264
Reliability &             .210       .808         Ease of Payment terms              .590
Responsiveness            .185       .712         Reliability of the Brand           .770
                          .159       .613         Relation Focus of the Brand        .751
                          .153       .590         Responsiveness-Willingness to      .786
                                                  help Customers and Provide
                                                  Prompt Service
                          .135       .518         Satisfaction and Value from the    .622
                                                  Brand
                Total     .842      3.241                                            3.519
Store Atmospherics &      .409      1.573         Location of Store                  .508
Assurance                 .342      1.317         Store Atmospherics                 .815
                          .309      1.190         Quality of Sales Person            .743
                          .300      1.155         Assurance-Employees                .686
                                                  Knowledge and ability to
                                                  Inspire Confidence
                  Total   1.36      5.235                                            2.752
Warranty, Guarantee       .732      2.817         Warranty & Guarantee               .693
& After Sales Service     .669      2.574         After Sales Service                .768
                  Total   1.401     5.391                                            1.461




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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.

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International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –
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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-buying-
      behaviour.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
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   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.

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   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,
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   11. Richard I Levin & David.S. Rubin, Statistics for Management, Seventh edition,
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   12. Vijay.R.Kulkarni, “A Study of Impact of Merchandise Variety and Assostment on
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      0976-6510, Published by IAEME.
   13. Vijay.R.Kulkarni, “A Study of Impact of Music on Customer Buying Behavior in
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      0976-6510, Published by IAEME.




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