LITERATURE REVIEW ANDTHEORETICAL

FRAMEWORK
LITERATURE REVIEW
Brand selection
The research study tiltled factors affecting the brand de
cision in the mobile phoneindustry in Asia by Liu
2002.This study found that the choice of a cellular phone
i s characterized by two attitudes to brands : attitude towards the
mobile phone brand on one hand and attitude towards the network on
the other. While price and regularity of service were found to dominate
choice between network providers, choices between mobile
phone br a n d s w e r e a ffe c t e d b y n e w t e c h n o l o gy f e a t u r e s s u c h a s
m e mo r y c a p a c i t y a n d S M S options, more than size. The brand
will actually be not towards smaller phones but towards phones with
better capability and larger screen.
Consumer satisfaction
This study is conducted by TRAI. It assesses the satisfaction level of
consumers encompassing quality of technical service, quality and
operational aspects of gadgets and social /psychological costs due to
unsolicited promotional calls /SMS. The analysis in this report shows
that the consumption behaviour of the mobile phone users in Delhi and
covers t h e a s p e c t s l i k e u s a g e p a t t er n o f t h e m o b i l e p h o n e
s e r v i c e s , a s s e s s m e n t o f t h e l e v e l o f satisfaction, preference for various
attributes and functionalities of gadgets.
Consumer behavior

The titled named consumer buying behaviour by Martin Ti na ; Sam

Manaberi [2005] discussed the industrial purchasing stands for more
than half of the whole economic activity in industrialized countries.
Therefore it is important to understand how industries perform buying
activities. The telecommunication industry is a fast growing industry
and therefore interesting to investigate. The purpose of this study was
to investigate the characteristics of industrial buying behaviour in the
telecommunication industry. The purpose has been further developed in forms
of research questions dealing with the buying process, buying center and choice
criteria. A case study was made with a customer, to the telecom
supplier Ericsson, from the company HI3G Access, also known as 3. A
highly topical company in the third generation telecom networks with
Ericsson as one of their primary suppliers.
Theconductedt e l e p h o n e i n t e r v i e w i n d i c a t e s a s w i f t b u y i n g p r
o c e s s , i n f l u e n c e d b y w o r d o f m o u t h . Additional findings
involve a
s m a l l b uy i n g c e n t e r, w h i c h i s m a i n l y c o n t r o l l e d b y t h e t e c h n i c a l
a n d p r o c u r e me n t s t a ff a n d t h e i m p o r t a n c e o f p r i c e a s a
s e l e c t i o n c r i t er i a a s t h e product is becoming a commodity.

Consumer behaviour
T h e a r t i c l e n a me d c o n s u m e r b uy i n g b e h a v i o ur i n m o b i l e p h o n e
m a r k e t i n F i n l a n d by EMAC conference, Track : New
Technologies and E Marketing. The survey conducted w i t h 3 9 7
consumers and looked at their motives to purchase new mobile
p h o n e s o n o n e hand and factors affecting operator choice on the other.

The results indicate that while price and properties w e r e t h e m o s t

i n f l u e n t i a l 0 f a c t o r s a ffe c t i n g t h e p u r c h a s e o f a n e w m o b i l e
p h o n e , p r i c e , a u d i b i l i t y a n d f r i e n d s o p e r a t o r w er e r e g a r d e d a s
t h e m o s t i mp o r t a n t i n t h e c h o i c e
ofthem o b i l e p h o n e o p e r a t o r. T h i s p a p e r c o n c l u d e s w i t h a
d i s c u s s i o n o f c o n t r i b u t i o n s a n d purposes ideas for future studies in
this under researched area.
Customer buying behaviour
The project study titled customer buying behaviour of mobile phone
brands by Riquelme ( 2 0 0 1 . S h e c o n d u c t e d a n e x p e r i m e n t w i t h 9 4
c o n s u m e r s t o i d e n t i f y t h e a mo u n t o f s e l f knowledge consumers
have when choosing between mobile phone brands. The study was build
upon six key attributes like telephone features, connection fee , access cost ,
mobile to mobile phone rates call rates and free calls related to
mobile phone purchasing respondents had to importance rate. The
research shows that consumers with prior experience about a product
can predict their choices relatively well but customers tended to
overestimate the i m p o r t a n c e o f f e a t u r e s , c a l l r a t e s , a n d f r e e c a l l
a n d u n d e r e s t i m a t e s t h e i m p o r t a n c e o f a monthly access fee, mobile to
mobile phones rates and the connection fee.
Consumer perception
The article titled consumer perception and its choice mobile telecom
service provider in Malaysia, Journal of Internat ional Business
and Economics , May, 2007byAhasanul Haque , Ali
Khatibi , AbdurRaquib , Shameem Al Mahmud . T h e s t u d y a i m s
t o f i n d o u t w h a t a r e critical factors those are playing an important role
to select the telecommunication service provider. Result provides

a comprehensive analysis of the important factors for playing an

importantr o l e f o r t h e c u s t o m e r t o s e l e c t t h e t e l e c o m m u n i c a
t i o n s e r v i c e p r o v i d e r . T h e a n a l y s i s confirms the significant
positive relationship of price, service quality, product quality and
availability, and promotional offer for consumer perception. These
factors are expected
toh a v e a g r e a t r o l e d u r i n g t h e t i m e t o c h o o s e t e l e c o m m u n i
c a t i o n s e r v i c e p r o v i d e r . I n c o n c l u s i o n , p r a c t i t i o n er s c a n b e
d e r i v i n g a b e t t e r u n d e r s t a n d i n g o f t h e a c t i v i t i e s t h a t a r e being
played a vital role for the consumer perception.

THEORETICAL FRAMEWORK

Consumer
An individual who buys products or servicesf or personal use and not
for manufacture or resale . A consumer is someone who can make the decision
whether or not to purchase an item at the store, and someone who can be
influenced by marketing and advertisements
Customer
A person, company , or other entity which buys good s and services produced
by another person, company, or other entity.
Customer service
According to Turban et al customer service is a series of activities designed to
enhance the level of customer satisfaction that is, the feeling that a product or

service has met the customer expectation. The needs, wants and preconceived
ideas of a customer about a product or service. Customer expectation will be
influenced by a customers perception of the product or service and can be
created by previous experience, advertising , hearsay, awareness of competitors
and brand image. The level of customer service is also a factor and a
customer might expect to encounter efficiency, helpfulness, reliability,
confidence in the staff and a personal interest in his / her patronage.
The main objectives of customer services are : Learn to identify and analyze customer needs and problems
Recognize the most common reasons for customer complaints
Discover techniques to cultivate and maintain special customer relationships
Assess your communication style and use two way communication skills to
level with people, to accept feedback from them, and to discuss problems
Identify specific problems in your customer service program and
apply treatment.
Customer satisfaction
Customer satisfaction is a measure of how products and services
supplied by the company m e e t o r s u r p a s s c u s t o m e r e x p e c t a t i o n .
S a t i s f a c t i o n i s a p e r s o n s f e e l i n g s o f pl e a s u r e o r disappointment
resulting from comparing a products perceived performance in
relation to his or her expectation.
Encourage face to face dealing
Be friendly and approachable
Respond to messages promptly and keep your client informed
Have a clear defined customer service policy

Attention to detail
Anticipate your clients needs and go out of your way to help them out
Honour your promises Kano's model of customer satisfaction distinguishes six
categories of quality attributes, from which the first three actually influence
customer satisfaction:
Basic Factors.
(Dissatisfies. Must have.) - The minimum requirements which will cause
dissatisfaction if they are not fulfilled, but do not cause customer
satisfaction if they are fulfilled (or are exceeded). The customer
regards these as prerequisites and takes these for granted. Basic factors
establish a market entry 'threshold'.
Excitement Factors .
(Satisfiers. Attractive.) - The factors that increase custo
m e r satisfaction if delivered but do not cause dissatisfaction if they
are not delivered. These factors surprise the customer and generate
'delight'. Using these factors, a company can really distinguish itself from
its competitors in a positive way
Performance Factors .
The factors that cause satisfaction if the performance is high, and they
cause dissatisfaction if the performance is low. Here, the attribute
performance-o v e r a l l s a t i s f a c t i o n i s l i n e a r a n d s y m m e t r i c .
T y p i c a l l y t h e s e f a c t o r s a r e d i r e c t l y c o n n e c t e d t o c u s t o me r s '
e x p l i c i t n e e d s a n d d e s i r e s a n d a c o mp a ny s h o u l d t r y t o b e
competitive here.
Indifferent attributes.

The customer does not care about this feature.

Questionable attributes.
It is unclear whether this attribute is expected by the customer.
Reverse attributes.
The reverse of this product feature was expected by the customer.
Five facts for improving productivity
A s s e n i o r m a n a g e r s , o nl y k n o w a b o u t t h e t i p o f t h e i c e b e rg, a
s m a l l f r a c t i o n o f a l l t h e problems your customers encounter.
Service can be a major marketing tool
Customer problems can cost not only an immediate lost sale, but also future
purchases by that customer and by other customers as a result of negative wordof-mouth behaviour.
We can and must quantify the expected payback from service and/or quality
improvements.
The market transaction (sale) often is not the key point of customer pain and
lost revenue.
DOING THE JOB RIGHT THE FIRST TIME + EFFECTIVE CUSTOMER
SERVICE =MAXIMUM CUSTOMER SATISFACTION/LOYALTY
CUSTOMER ORIENTED ORGANIZATION CHART

In this pyramid shows customers will be the top most priority and next
in importance are f r o n t l i n e p e o p l e w h o m e e t , s e r v e a n d
s a t i s f y c u s t o m e r s ; u n d e r t h e m a r e t h e m i d d l e managers,
whose job is to support the front line people so they can serve
customers well and at the base is top management, whose job is to hire and
support good middle managers.
Customer behaviour
Customer behaviour is to know about the customers way to obtain, use and
dispose products. It's important for marketing to know the customer
behaviour by using different strategies. There are so many different
ways to influence customers like new products, promotions,
advertisement, good quality and price etc. C u s t o m e r b e h a v i o u r a n a l y s i s
i s b a s e d o n c o n s u me r b uy i n g b e h a v i o u r, w i t h t h e

c u s t o m e r p l ay i n g t h e t hr e e d i s t i n c t r o l e s o f u s e r, p ay e r a n d
b u y er. R e l a t i o n s h i p m a r k e t i n g i s a n influential asset for customer
behaviour analysis as it has a keen interest in the re-discovery o f t h e
true meaning of marketing through the re-affirmation of
t h e i m p o r t a n c e o f t h e c u s t o me r o r b uy e r.
C u s t o me r b e h a v i o u r a n a l y s i s a i m s t o u l t i m a t e l y i mp r o v e b u s i n e
s s performance through an understanding of past and present
customers so as to determine and identify future customers and their
behaviour.
Customer-Focused Marketing
All marketing is done with the customer in mind. Marketing can in fact
be referred to as anon-going conversation occurring between business and
customer. It is therefore necessary for businesses to gain in-depth
knowledge of their relative customers so that the best marketing
strategies can be employed in order to attract these potential buyers.
This cans effectively be d o n e b y p er f o r m i n g a c t i v i t i e s s u c h a s
c u s t o m e r b e h a v i or s a n a l y s i s t o e n s u r e c u s t o me r
retention. Listed below are a number of tips to aid businesses
s t r i v i n g t o w a r d s c u s t o me r retention through marketing efforts:
Marketing as a Conversation:
Direct interaction with customers is necessary to essentially find out
what it is that they are wanting. This marketing conversation involves
a process running from action - reaction -feedback - repeat. Businesses
need to be willing to take the time to listen to their customers a s t h i s
c a n e n s u r e a b u s i n e s s o f p u t t i n g s o m e t h i n g u p f o r o ffe r w h i c h
i s o f g r e a t w o r t h amongst their targeted consumers, and is relative to
their particular needs and desires. It is required for businesses to

constantly perform marketing promotion so that these customers will

come back for more. Giving satisfaction to first-time buyers can prove
effective for a business in the long-run for the reason that by giving
customers what they desire the first time round, customer retention is
encouraged through this form of customer loyalty.
Active Customers:
Making customers feel as though they are in control is an effective
strategy in customer-focused marketing. This is done by transforming
consumers into active customers who are given the ability to make
choices for themselves by actively engaging in promotions and,
hereby, deciding on the best possible products and services their
money can buy. Customer r e t e n t i o n i s e n c o u r a g e d t hr o u g h t h i s
i n t e r a c t i o n w i t h c u s t o m e r s w h i c h a i d s i n c u s t o me r l oy a l t y.
B u s i n e s s e s n e e d t o m a k e e a c h a n d e v e r y o n e o f t h e i r c u s t o me r s
f e e l g o o d a b o u t themselves by giving them
S o m e t h i n g t o d o . Th e r e f o r e , r e t a i n i n g c u s t o m e r s m e a n s k e e p i n g
t h e m h a p p y by k e e p i n g them active.
Determining Future Customer Behaviour :
This is most effectively done through an analysis of the actual behaviour of past
and present c u s t o me r s .
A c t u a l b e h a v i o u r n e e d s t o b e d i ffe r e n t i a t e d f r o m d e mo g r a p h i c
behaviours
(which are implied consumer characteristics). Actual beh
a v i o u r i s , a s s u c h , b e t t e r a t predicting the future which is done
by keeping a watch over the actions customers perform with regard to
online purchases and the products they purchase over the Internet.
Allocating Resources for Marketing:

Businesses need to take their budget into consideration when

a l l o c a t i n g r e s o u r c e s f o r p r o mo t i o n s . I t i s w e l l - k n o w n a m o n g s t
b u s i n e s s e s t h a t s o me m a r k e t i n g a c t i v i t i e s w i l l generate higher
profits than others and data therefore needs to be created by
interacting with customers in order to consequentially identify the most
profitable promotions, which will be delivered to the right customer at the
right time, without wasting time or money. Hereby, effective marketing
means avoiding unprofitable promotion which will as such mean not reaching
ther ight customers and wasting money.

Customer buying behaviour

P r o c e s s b y w h i c h i n d i v i d u a l s e a r c h f o r s e l e c t , p ur c h a s e , u s e
a n d d i s p o s e o f g o o d s a n d services, in satisfaction of their needs and
wants. Types
Minor new purchase
these purchases represent something new to a consumer but in the
customers mind is not a very important purchase in terms of need, money or
other reason.
Minor re- purchase
t h e s e a r e t h e m o s t r o u t i n e o f a l l p ur c h a s e a n d o f t e n t h e
c o n s u m e r returns to purchase the same product without giving much thought
to other product options.
Major new purchase
t h e s e p u r c h a s e s a r e t h e m o s t d i ffi c u l t o f a l l p ur c h a s e
b e c a u s e t h e pr o d u c t b e i n g p ur c h a s e d i s i m p o r t a n t t o t h e
c o n s u m e r b u t t h e c o n s u me r h a s l i t t l e o r n o previous experience

making new decisions. The consumers lack of confidence in making

this type of decision often requires the consumer to engage in an
extensive decision making process
Major repurchase
the purchase decision are also important to the consumer feels confidentin
making these decisions since they have previous experience purchasing the
product
Six Stages to the Consumer Buying Decision Process .
.
Problem Recognition (awareness of need)
- - d i ffe r e n c e b e t w e e n t h e d e s i r e d s t a t e a n d t h e actual condition
were deficient? I.E., see a commercial for a new pair of shoes,
stimulatesyour recognition that you need a new pair of shoes.
Informationsearch - Internal search, memory.
E x t er n a l s e a r c h i f y o u n e e d m o r e i n f o r ma t i o n . Fr i e n d s a n d
r e l a t i v e s ( w o r d o f mo u t h ) . Marketer dominated sources; comparison
shopping; public sources etc.
3. Evaluation of Alternatives
-need to establish criteria for evaluation, features the buyer wantsor does not
want.
4. Purchase decision
-Choose buying alternative, includes product, package, store, method
of purchase etc.
Purchase - -

May differ from decision, time lapse between 4 & 5, product availability.
Post-Purchase Evaluation --outcome:
Satisfaction or Dissatisfaction.

Cognitive Dissonance
,h a v e y o u m a d e t h e r i g h t d e c i s i o n . T h i s c a n b e
r e d u c e d b y w a r r a n t i e s , a f t e r s a l e s communication etc. Buying
behaviour mode
Customer perception
Perception is the process of selecting, organizing and interpreting information
inputs to produce meaning. IE we chose what info we pay attention to, organize

it and interpret it. Information inputs are the sensations received through sight,
taste, hearing, smell and touch.

Selective Exposure
-select inputs to be exposed to our awareness. More likely if it is linked to an
event, satisfies current needs, intensity of input changes (sharp price drop).

Selective Distortion
-Changing/twisting current received information, inconsistent with beliefs.

Selective retention
Remember inputs that support beliefs, forgets those that don't.
Factors influencing perception
48
Factors in the perceiver Factors in the situation Factors in the target
Attitudes Motives Interest
Time Work setting Social setting Novelty Motions Sounds Size