Consumer Behaviour on Laptops Essay Example

are differences among these groups in terms of the factors affecting their future laptop purchases when they are upgrading their laptops. INTRODUCTION Laptop sales in India have risen drastically, which accounts for over 25% of the total personal computer market. Laptop sales only accounted for a 3% of the total personal computer till 2003. The sales of the laptops has reached a mark of 0. 68 million unit in fiscal year 2006-2007 which accounts for a growth of 59% over the same period in fiscal year 2005-2006. Sale of desktop computers and laptops has touched the mark of 8. million units in the fiscal year 2007-2008. There are various main players in the Indian notebook market. The objectives of the study are to understand the brand position in the minds of the laptop owners and to map their perception. It also focuses on mapping the dealer perception about the top performing brands in the laptop sales. From the study it was found that customers prefer a particular brand compared to others. This particular brand is preferred mainly by the youths because of the good configuration available and its brand image. The company being studied seems to be lacking in considered attributes.

Businessmen however use a combination of all the brands; this could be probably because of the various applications of theirs. The customers find cash discount and free accessories most attractive while making a purchase. A reasonable percentage of people also have a mind to accept new offers also. The success rate in achieving good market share by the highly preferred company by customers proves that the advertising media plays a crucial part in promoting their

products. The dealers find the incentives by this particular company most attractive compared to other IT and technology companies.

There are seminal studies on consumer purchase decision models in the literature, however, consumer purchase decisions vary greatly depending on the product to be purchased. Therefore, sectoral studies are needed to delineate the factors affecting consumer purchase decisions in various product markets. The International Data Corporation (IDC, 2006) report mentioned that in 2005 consumers continued to respond very positively to very attractive price points, but portable demand in the business space remained very strong too. According to What Laptop (2005), Dell was the number one choice in worldwide with 7. million sales. It was followed respectively by HP (7. 4 million), Toshiba (5. 8 million), IBM (4. 3 million), and Acer (3. 9 million) in year 2004. Furthermore, revenue generated from notebooks has long surpassed desktops, thanks to higher average selling prices for notebooks. According to CRN (2006) in June 2005, notebook sales accounted for $216. 1 million, or $1,442. 66 per notebook whereas desktops accounted for $113. 9 million, or $762. 98 per unit. The average notebook price fell 11. 8 percent from $1,635. 07 in the year-ago month and in the same period, desktop prices fell 5 percent from $803. 38 (CRN, 2006).

In addition, new product launches to the market, acquisitions and mergers in the sector, rapid developments in the nano-technology, integrated wireless networking, and decreased prices make it extremely vital for the companies to understand the factors underlying consumers’ laptop purchase decisions. The customer base of a company consists of three groups of consumers: stayers (those who had never switched from a previous brand),

satisfied switchers (those who switched for reasons other than dissatisfaction), and dissatisfied switchers (those who switched because they were dissatisfied from their previous brand).

Understanding the attitudes of these three different groups of customers plays an important role when implementing effective and feasible retention and loyalty strategies. Furthermore, it is also crucial to understand whether there are differences among these groups in terms of the factors affecting their future laptop purchases when they are upgrading their computers. The objectives of this study are twofold. Initially, it is aimed to determine the factors influencing consumers’ laptop purchases, and the findings of this first objective will provide the basis for the second research objective in the study.

Secondly, it is intended to find out whether there are differences among consumer groups of a computer company with respect to the importance given to the factors influencing consumers’ laptop purchases. In the following part a brief and recent literature will be given about consumers’ purchase decisions. BACKGROUND The literature on purchase decision in this part has been limited to IT related purchase decisions due to the product category which will be examined in this current study.

Consumers can prefer certain products, brands or companies over others, and to understand the reason behind these choices is exceptionally essential in order to market existing products more effectively than rivals. Consumers’ demographic profile, purchase perceptions, and their attitudes towards products or brands influence their purchase decisions. Jarvenpaa and Tedd (1996/1997) identify many factors that affect a consumer’s electronic shopping purchase decision: product understanding, shopping experience, customer service, and consumer risk. Geisler and Hoang (1992) identify five steps in the decision process to purchase IT:

1. Establish
   

or articulate the need for IT.

The authors conclude that services companies follow a relatively logical and analyzable decision process. According to decision making model, consumers process the environmental cues; the physical factors of the product, psychosocial cues, such as advertising, and consumers put these cues into a set of perceptions that shape their preferences.

Based on these preferences, consumers make their choices subject to situational constraints, such as price. According to Hong and Lerch (2002), people evaluate various objective features when buying an IT product, and because of imperfect information and simplifications according to the decision rules people often abstract these various features into few perceptual dimensions such as ‘usefulness’ and ‘price’. In another research conducted by Kim et al. (2002), small-office/home-office professional (SOHO) procurement choices are influenced by a number of salient dimensions (i. e. ncome, performance, price, inter-purchase time, network externalities). Furthermore, surveys have repeatedly identified performance and price as two of the most important attributes in SOHOs' PC purchase decisions. In a more recent study, Dillon and Reif (2004) examine factors influencing consumers’ e-commerce commodity purchases, and find that a history of e-commerce purchasing have a more positive attitude towards on-line buying.

What is the Consumer Behavior Report?

The Consumer Behavior Report is designed to give merchants, media and industry analysts insight into shopping trends, pricing and market share. Each month, a different topic will be the focus of the report.

What is the Portable Laptop Trends Report?

The portable laptop is the topic of PriceGrabber. com

March 2008 Consumer Behavior Report. Portable laptops trends and data were collected from a survey of 1,868 online consumers conducted in February 2008. Additional data is sourced from Market Reporter, a statistical database that tracks consumer shopping behavior on PriceGrabber. com. The Notes from the Green section is compiled by Olivia Zaleski, an eco friendly blogger for PriceGrabber. com Shop Green section.

The focus of the Shop Green section is to provide more than 20,000 products to help consumers live a greener lifestyle. PriceGrabber. com is a major shopping comparison engine, with more than 26 million unique users per month and up-to-date daily pricing of products supplied more than 12,000 sellers. Future Laptop Trends What does this mean for the future of laptops? As laptops become smaller, will traditional sized laptops become obsolete? In a recent PriceGrabber. com survey, 44 percent of online consumers say they would travel more often with their laptop if it was a portable-style.

Smaller laptops and devices are certainly more attractive to consumers, as long as the price and performance are comparable. Gartner states: By 2012, half of all workers will use devices other than their laptops when they travel. Even though notebooks continue to shrink in size and weight, traveling workers lament the weight and inconvenience of carrying them on their trips. Vendors are developing solutions to address these concerns: new classes of Internet-centric pocketable devices at the sub-US$400 level; and server and Web-based applications that can be accessed from anywhere.

Consumer Behaviour Report

Eighty-eight percent of respondents say they would consider a portable-style laptop when purchasing a new laptop; however, performance and price play a significant part in their decision to purchase.

In

line with the research purposes of this study, a questionnaire was prepared and then it was spread in the city Hyderabad. With the help of my friends I could spread this questionnaire and collect the data of consumer buying behavior on purchase of laptop.

Since this research was focused on the factors influencing laptop purchase decisions of consumers, it was seen appropriate to perform a traditional survey. In addition, a cover letter, which had explained the purpose of the study, with the questionnaire was sent to the customers. During the data collection of this research, most of the electronic shops were selling IBM laptops as well as desktops. Hence, even though IBM no longer exists as a PC brand name, Lenova was included to the questionnaire as IBM launched Lenova logo for its expansion. Another PC brand Compaq was eliminated from the questionnaire, since it was long ago merged with HP.

Furthermore, in order to omit the confusion of national or international brand distinction from the minds of consumers, only international brands were examined in this study. The laptop brands examined in this research were limited by the following brands: Acer, Dell, HP, HCL, Lenova, and Sony. A total of 122 responses were collected, but only 48 of the respondents declared that they had a laptop. Furthermore, 4 of the responses were eliminated since they were considered as unusable, so as a consequence, 44 of the responses were covered in this study. Questionnaire Design and Measures of Constructs

In the first part of the questionnaire, the consumers were asked whether they had a laptop or not, and those who had a laptop were only considered in the survey.

The brand name of their laptop was also asked to the consumers. As stated earlier, this course of independent study has classified the consumer base of a company into three groups: stayers, satisfied switchers, and dissatisfied switchers. Therefore, the consumers in this study replied to the question about whether the current brand that they were using was their first laptop brand or whether they had switched from a previous laptop brand.

As a following question, consumers, who had switched, were asked to state the reason of why they switched from a previous laptop brand to their current brand. The options for switching included (a) overall dissatisfaction from the previous laptop brand, and (b) reasons other than dissatisfaction. These questions helped us divide respondents into three groups as (1) stayers (those who had never switched from a previous laptop brand), (2) satisfied switchers (those who switched for reasons other than dissatisfaction), and (3) dissatisfied switchers (those who switched because they were dissatisfied from their previous laptop brand).

One of the objectives of this study was to investigate the factors that influence consumers’ laptop purchase decisions. For that purpose, a list of laptop features was stated in the questionnaires, which were gathered from the analysis of PC journals as well as personal interviews with the experts from the sector. The consumers were asked which factors they found important when they were purchasing a laptop. Finally, demographic questions such as age, education and gender were also asked.

Demographic Profile of the Respondents

Of the 44 respondents, approximately 22% were female whereas 78% were male. Additionally, almost 85% of all respondents were under the age of 35. The age structure of the participants

of this survey was as follows: 31. 5% of the consumers was between 18-25 year old, 53. 2% was between 26-35, 11. 6% was between 36-45, and finally 3. 7% was 46 and above. The education level of the respondents was high as expected; 4. 6% of the respondents were high school graduates, 86% were university or school of applied disciplines graduates or students, and 8. 6% had a MA or Ph. D. egree Brand Usage Profile of the Respondents The participants were asked to choose the laptop brand that they were using at the time of the survey. Table 1 illustrated the frequency distribution of laptop brands by the respondents of the survey. In other words, the frequency of laptop brands used by the respondents can be summarized as follows: 4. 5% Acer, 18. 18% Dell, 22. 7% H. P, 13. 6% HCL, 6. 8% Sony, 18. 18% Lenova and 18. 9% other brands.

The respondents of this study were also asked whether the current laptop brand that they were using was their first laptop brand or whether they had switched from a previous laptop brand. Furthermore, the participants who declared that they had switched from another brand, were asked to state the reason of why they had switched. The alternatives for switching included (a) overall dissatisfaction from the previous laptop brand, and (b) reasons other than dissatisfaction.

Hence, the laptop users were classified into three groups: (a) stayers (those who did not switch), (b) satisfied switchers (those who switched for reasons other than dissatisfaction), and (c) dissatisfied switchers (those who switched because they were dissatisfied from their previous laptop phone brand). Table 2 demonstrated that

62. 4% of the respondents were stayers, while 25. 7% of them were satisfied switchers and 11. 9% of them were dissatisfied switchers.

The Features Influencing Consumers’ Laptop Purchase Decisions

Consumers, who participated to this survey, were given a list of features related with laptops and then they were asked to show how important these features for them while purchasing a laptop. Respondents who found a feature “very important” gave “4” to that item while others who found it “unimportant” gave “1”.

Hence, as it was seen in Table 3, processor speed and type, memory and hard disk capacity, guarantee and warranty conditions, wireless internet and display resolution quality became the top five features which had the following highest mean values respectively: 3. 80, 3. 66, 3. 66, 3. 62, 3. 58. It was also noteworthy to mention that all the features listed in the survey were considered important by the respondents since the lowest mean value was 2. 65 for the feature of TV/Audio Connection.

Importance of Laptop Features in Consumers’ Purchase Decisions

The mean importance scores for three groups of consumers with respect to factors influencing laptop purchase decisions are presented in Table 4. According to this table, dissatisfied switchers gave less importance to “price and payment conditions” when compared to stayers and satisfied switchers.

Furthermore, stayers found “price and payment conditions” factor more important than satisfied switchers. In addition, it has to be noted that “connectivity ; mobility feature” has the lowest mean score across all groups of consumers. On the other hand, “core technical features” has the highest mean score for all consumer groups (stayers: 3. 68, satisfied switchers: 3. 66, and dissatisfied switchers: 3. 69) which

means that stayers, satisfied switchers, and dissatisfied switchers gave the highest importance to this factor among all factors, and the three consumer groups did not show any difference with respect to core technical features.

On the other hand, the second most important factor was found to be “post purchase services” for all three groups of consumers.

Conclusions

Year by year the number of people who are using and owning personal computers (PC) substantially increases in all over the world. Contrary to the introduction years of computers, today they have been used by almost all age groups, and by both males and females, and the gap between age groups and the gap between males and females with respect to computer usage/ownership decreases.

Furthermore, consumers’ desire for portable and attractively designed PCs forces the companies to produce laptops/notebooks. In addition, extended battery life, price cuts, prevalence of home-offices, and integrated wireless networking also cause to the increased sales of laptops. On the supply side of the market, the companies try to make profit and even survive in a highly competitive environment. Furthermore, the rapid development in technology, particularly in nano-technology, leads companies to make huge amounts of investments in R;D.

Moreover, the acquisitions and mergers in the sector and new players in the market also influence the companies operating in IT industry. In such a volatile industry, it becomes extremely important to learn the factors that are influencing consumers’ purchase decisions. The customer base of a company is comprised of its current customers and those customers who are attracted from competitors. In addition, the customers who are acquired from competitors can be either satisfied switchers or dissatisfied switchers.

Hence, it is equally crucial

to learn about whether there is a difference among stayers, satisfied switchers and dissatisfied switchers with respect to their laptop purchase decision factors. This issue becomes exceptionally vital when the consumers decide to upgrade/change their laptops. In this study, it has been found that there are seven factors which influence consumers’ laptop purchase decisions. These factors can be stated as follows: core technical features, post purchase services, price and payment conditions, peripheral specifications, physical appearance, value added features, and connectivity and mobility.

On the other hand, stayers, satisfied switchers and dissatisfied switchers demonstrate a significant difference only in one factor: price and payment conditions. The results show that when compared to stayers and satisfied switchers, dissatisfied switchers give less importance to price and payment conditions related factor. From the managerial perspective, the findings of this study imply that when a consumer of a company decides to buy a new laptop or in technical terms to upgrade his laptop, the company should consider which customer base he belongs to.

For instance, if the consumer is a stayer, the company can offer price discounts when he decides to upgrade his laptop. Likewise, the company can give special promotions to stayers when they bring their former laptop and exchange it with a recent model of the company’s laptops. It is also seen that among all factors, mobility and connectivity factor has received the lowest importance from three groups of consumers. This can be attributed to the fact that due to the nature of laptops, being mobile is an expected feature.

Another explanation to this result can be that consumers usually do not like to use technological words such as infrared and

Bluetooth, they prefer to say connecting to Internet or mobile phone, sending pictures and documents to printer, and etc. Hence, it will not be sufficient and efficient to merely underlie this feature in advertisements. If this feature has to be mentioned in ads then the tone and the words used should be plain and explanatory. However, since all consumer groups find core technical features and post purchase services extremely important, these features should be emphasized in advertisements.

It has to be also noted that post purchase services factor is tremendously important since it is directly related with customers’ brand loyalty. This study recommends companies to invest in technology through R;D and create differentiation at utmost level. This research has been limited to laptop/notebook sector and the factors influencing consumers’ purchase decisions in this market, since sectoral differences play a vital role, it is also recommended to replicate this study in distinct sectors.