The research on the consumer behavior and its factors about Xiaomi cellphone



Nowadays companies utilize various strategies in order to attract new customers, retain current customers and differentiate their products from their competitors. Perhaps, the most important and effective strategy to influence consumer behavior in the product selection is using the brand for the products. Brands are valuable to the consumers for two reasons: first, brands decrease the risks for the consumers. Second, it leads to saving the costs in decision-making. Furthermore, Keller and Lehmann argue that for customers, brands can simplify choice, promise a particular quality level, and/or engender trust. They also believe that brands serve as reminders of a customer’s overall past experience with a product. Aaker believes brands are important because companies are recognized through their brand. Customers have many brand choices but they have less time to make a choice. The brand specialty helps the customers in decision making to purchase a right product with less risk and according to set expectations. According to Ambler brand is considered to be the second most important asset of a company — only behind customers, however, according to Aaker, it is the most important asset for a company.

Therefore, we deal with two significant concepts — consumer behavior and Brand. The Consumer behavior study involves how an individual or groups select, purchase, use or dispose of products, services ideas, or experience to satisfy their need and desires. On the other hand “A brand is a name, term, sign, symbol or design or combination of them, intended to identify the goods and service of one seller or group of sellers and to differentiate them from those of competitors” [1]. Sometimes people make a mistake between brand and product, but they are two different things. According to McQuiston, “A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor, a brand is unique. A product can be quickly outdated, a successful brand is timeless” [2].

Studying consumers enables businesses to create the most appropriate marketing strategies for their target audience. It allows them to understand issues including how consumers think and rationalize before they select a product from the choices available, what influences them, their behavior when they shop and gaps that exist in information available with consumer. This presents them with the knowledge required to create marketing campaigns that elicit the desired response from the consumer. Consumer behavior, besides its application in marketing strategy, is also used in social marketing to connect with the customer. Beliefs and Attitudes surround a consumer’s view of a product and also build the brand image, thereby affecting their buying behavior. This triggers a marketer’s interest in them. By introducing specially tailored campaigns, marketers attempt to change consumers’ attitudes and beliefs. Consumer behavior refers to the psychological process that leads to a consumer’s decision to buy a product or service offering. This process involves decisions in terms of what, when, where, how and from which vendor to make the purchase. Xiaomi Inc. is a privately owned Chinese electronics and software company headquartered in Beijing. It is the world's 5th largest smartphone maker in 2017.

Factors Influencing Customers:

– Psychological factors such as the personal thinking process that includes motivation, personality, perception and the consumer’s attitude, the process of making the decision in marketing, consumer’s interaction with friends, family and peers and making the choice of where to buy from, based on cost, features and product appeal.

– Internal factors such as demographics, lifestyle, personality, motivation, information, beliefs and attitude.

– External factors such as reference groups, culture, family, race, social status, marketing mix.

The study applies different analysis tools to investigate the impacts of smartphone brands on the purchase buying behavior of smartphone buyers. The results provided strong support for our two hypotheses, which show the positive and direct role of brand awareness and brand loyalty in affecting brand equity. However, both perceived quality and brand association were found to have either very low or negative parameter estimates. Therefore, the results indicate that these two factors do not have a direct significant influence on brand equity. To our knowledge, our study is among the first in the literature that focus on the influence of smartphone brands on the consumer buying behavior.

The remainder of this paper is structured as follows. First, we provide an overview of the literature on the related issues include brand equity, which consists of brand awareness, perceived quality, brand association and brand loyalty, as well as presenting our hypothesis based on these four variables. Then, we discuss the research methods selected for this study. Providing the empirical findings will be another part of the paper. In the next part, the findings will be analyzed and discussed in relation to the reviewed literature. Finally, in the last part, we will provide our conclusions and suggestions for further research.

Review of Literature

Different definitions have been provided for the “Brand Equity”. Marketing literature defines the relationship between customers and brands as “brand equity”. According to Aaker, brand equity is “a set of brand assets and liabilities linked to a brand name and symbol, which add to or subtract from the value provided by a product or service” [3]. Keller believes that “Brand Equity is the added value endowed to products and services” [4]. This value may be reflected in how consumers think, feel and act with respect to the brand as well as the prices, market share and profitability that the brand commands for the firm. He explains, positive customer-based brand equity “can lead to greater revenue, lower cost, and so higher profit; it has direct implications for the firm’s ability to command higher prices, a customer’s willingness to seek out new distribution channels, the effectiveness of marketing communications, and the success of brand extensions and licensing opportunities” [5]. Finally according to Pride & Ferrell Brand equity can be defined as “the marketing and financial values linked with a brand’s strength in the market, including actual proprietary brand assets” [6].

Another aspect of the definition of brand equity that Aaker presented is the argument that brand equity also provides value to customers. It enhances the customer’s ability to interpret and process information, improves confidence in the purchase decision and affects the quality of the user experience.

He grouped the brand equity into five categories: perceived quality, brand loyalty, brand awareness, brand association, and other proprietary brand assets such as patents, trademarks, and channel relationships.

Among these five brand equity dimensions, the first four represent customers’ evaluations and reactions to the brand that can be readily understood by consumers, so they have been widely adopted to measure customer-based brand equity in previous studies.

Brand awareness affects perceptions and taste: “people like the familiar and are prepared to ascribe all sorts of good attitudes to items that are familiar to them” [7]. Perceived quality influences brand associations and affects brand profitability. Brand associations are anything that connects the consumer to the brand, including user imagery, product attributes, organizational associations, brand personality, and symbols. Finally, Brand loyalty is at the heart of brand’s value. In summary, strong brand equity means that customers have high brand-name awareness, maintain a favorable brand image, perceive that the brand is of high quality, and are loyal to the brand.

Based on Aaker brand awareness is the ability of the potential buyer to recognize or recall that a certain brand is a member of a certain product category. He also believes that brand name awareness plays an important role in decision making of consumer; if the customer had already heard the brand name, the customer would feel more comfortable at the time of making a decision. Customers do not prefer to buy an unknown brand. Therefore companies’ strong brand name is an important factor for customers to choose their brand over the unknown brand. Likewise, Grewal et al. believe brand awareness acts as a critical factor in the consumer purchase intention, and certain brands will accumulate in consumers’ mind to influence consumer purchase decision. A product with a high level of brand awareness will receive higher consumer preferences. Because people generally tend to buy brands that they are familiar with and on which they have confidence. To be able to get the loyalty and awareness of the consumer, brand awareness is a must, for which unknown brand has to face the tough competition from the brands already having a place in the market. There are two key factors for brand awareness dimension, which are the brand name and the logo.

A brand name offers a symbol that can assist consumers to identify service providers and to predict service results. Therefore, the brand name is the most important element in brand awareness. According to Aaker, the name of a brand is the fundamental indicator of the brand. Moreover, it is the basis for raising awareness of the brand and communication efforts. Often even more important is the fact that it can generate association which serves to describe the brand. Keller believes that brand name is the very significant choice because sometimes it captures the central theme or key association of a product in a very condensed and reasonable fashion. Brand names can be extremely successful means of communication. Some companies assign their product with a brand name that in reality has nothing to do with the emotional experience but is catchy and a name that people can easily memorize.

On the other hand, Aaker & Joachimsthaler define logo as Symbols with all that represent a brand, a tagline, a character, a visual metaphor, a logo, a color, a gesture, a musical note, a package, or a program. Logos help companies to develop the brand equity through raised brand identification and brand loyalty. Therefore, they are very important assets, which companies spend enormous time and money to promote them [8].

Zeithaml defined perceived quality as “the customer’s perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives” [9]. This issue is believed to be a competitive obligation and many companies today, have changed customer-focused quality to a powerful strategic tool. In addition, perceived quality provides value to customers by providing them a reason to buy by differentiating the brand from competing brands. Perceived quality of a brand influences the decision-making process of a consumer. It also directly influences the brand loyalty of the consumers. This influence is very important when customers are in a condition, which makes them unable to make an analysis of the quality. Perceived quality can be used as a helping tool when the company intends to utilize a pricing strategy with a premium price and further extend a brand in several markets. Therefore, any company that aims to gains a share of the market have to consider to the perceived quality closely, since Aaker argues a previous bad image of a product will influence consumers’ judgment on product quality in the future. Moreover, even the product quality has been changed, consumers will not trust to that product because of their previous unpleasant experience.

Therefore, perceived quality will be affected by factors such as previous experience, education level, and perceived risk and situational variables such as purchase purpose, purchase situation, time pressure, and social background from consumers.

Likewise, the term perceived quality refers to knowledge of customers about what they see and feel when they look and touch a product of a company. As Ajay and Murthi discuss because of perceived quality usually customers prefer to buy products from a well-known and familiar brand, rather than opting for the unknown and new brand. As a result, customers believe that always well-known branded products have more quality and always there is a risk for new brands. That’s why they have more trust to familiar brands and their preference is to purchase from them. Hence, we can argue that perceived quality can change consumer behavior so that customers even are willing to spend more money to purchase high-quality products.

Aaker defined brand association as thoughts and ideas that held by individuals in their memory related to a specific service or a product. There are values of a brand that are not as visible as other brands. These values can be based on the association of the brand with certain factors or personalities that provide confidence and credibility among the customers. This Association can be made through famous people, who represent the brand, and their well-known personality and lifestyle. For example, cars can be associated with the lifestyle or fame of the celebrities and their association with the particular brand. A company tries to associate certain attribute to their brand, which makes it harder for the new brands to enter the market. Some brands can be associated with other attributes, like good service; competitors trying to compete with this attribute, it can be extremely difficult because of the established trust and faith of the customer in the market.

Aaker believes that brand association and brand equity are strongly interrelated to each other because brand association enhances the memorable of a particular brand. According to Keller, the brand association can be created via the association with attitudes, attributes and benefits respectively [3].

According to Lee and Leh symbolic attributes that are commonly linked to a brand are:

Social Image: Lassar et al argue that social image can be viewed as the consumer’s perception of the esteem in which the consumer’s social group holds the brand. It includes the attributions a consumer makes and a consumer thinks that others make to the typical user of the brand.

Perceived value: Consumer choice of a brand depends on a perceived balance between the price of a product and all its utilities. A consumer might be willing to pay premium prices due to the higher brand equity.

Trustworthiness: Trustworthiness refers to the level of confidence consumer places in the organization. As a customer buys a good or service before experiencing it, fostering of trust is a key to building a customer relationship.

Country-of- origin: It refers to the country of origin of a firm or a product. Country of origin leads to associations in the minds of consumers. The country image can influence perceived quality and brand loyalty. Accordingly, Ross et al. argue brand association, which is the strength of a brand’s presence in the mind of the customers, contributes to enhancing the image, brand awareness, and brand loyalty [10].

According to Churchill and Peter brand loyalty is the consistency of a customer who continues to purchase the same brand of a particular product [11]. These customers usually do not change their mind to switch to buy another brand even at a lower price. In addition, brand loyalty is a measure of attachment that a customer has to a brand. As brand loyalty increases, the customers’ vulnerability base to competitive action decreases. Aaker discusses that the brand loyalty of the customer base is often the core of brand equity. If customers are indifferent to the brand and, in fact, buy with respect to features, price and convince with little concern for the brand name there is likely little equity. If on the other hand, they continue to purchase the brand even in the face of competitors with superior features, price, and convenience, substantial value exists in the brand and perhaps in its symbol and slogan [3]. Assael argues that brand loyalty is that consumers satisfy their past experience in the use of the same brand and incur repurchase behavior [12]. Also, Oliver argues that brand loyalty represents a repurchase commitment in the future purchase that promise consumers will not change their brand loyalty in different situations and still buy their favorable brands [13]. Bloemer and Kasper believe that a real brand loyalty include brand preferences and repurchase behaviors that present in a long term commitment, while Fornell proposes that brand loyalty include customer repurchase intention and price tolerance [14, 15].

Therefore, when customers repeat purchases from one brand we can say that they have become loyal to that brand. As we discussed there are many factors related to brand awareness, brand quality, and brand association that can affect loyalty of customers such as brand name, logo, quality, good service, well warranty, innovation, price, design and others. However, it depends on the companies to choose the best strategies for attracting and retaining customers to become loyal to the company. For example, Apple’s company uses a different operating system compare to other competitors for its products such as IOS for its smartphones and tablets, and MAC for its computers and laptops. As a consequence, this innovation has made many customers loyal to the company. Hence, customers may also be willing to pay more money to use the products of this company.

Androulidakis, G. Kandus correlated the brand of mobile phone to users’ security practices. Users show different behavior in an array of characteristics, according to the brand of the mobile phone they are using. As such, there is a categorization of areas, different for each brand, where users are clearly lacking security mind, possibly due to lack of awareness. Such a categorization can help phone manufacturers enhance their mobile phones in regards to security, preferably transparently for the user [16].

Tajzadeh Namin A. A., Rahmani Vahid, Tajzadeh Namin Aidin analysed that the process of deciding over (choosing) a brand may be influenced by situation and content. The findings suggest a significant relationship between the variables “brand attitude”, “corporate attitude”, and “product (cell phone) choice” [17]. In addition, no significant relationship was found between individual decision making processes (independent or mediated) and product choice.

The main objective of this article is to analyze the relationship between Information and Communication Technologies and Kazakh adolescents. Specifically, researchers have studied, through qualitative methodology, the characteristics of teenagers’ access and uses of technological devices and analyzed the purposes that motivate the utilization of Information and Communication Technologies, highlighting a close relationship between technologies and peer communication and entertainment. On the contrary, there is an under — utilization of all these devices for teaching and learning purposes.

Objectives of the Study:

To identify for the above questions the researcher framed the following objectives are as follows:

1. To study the socio-economic profile of the selected customers.
2. To identify the factors influencing for purchase decision.

Statement of the Problem:

The increasing trend in Smartphone among the people is the main reason that has amplified the interest to research on the topic. People’s obsession about the Smartphone has been increasing rapidly. The aim of this research is therefore to find out consumer behavior of Xiaomi Smart phone buyers in Kazakhstani Market. The research is trying to find out that why do people desire to purchase a smart phone, what influence people in purchasing a smart phone and what motivate them in making the purchase decision.

Methodology:

The data for the purpose of the present study have been collected through primary and secondary data.

Primary data has been collected through structured questionnaire. The sources of secondary data include published data such as data from books, journals, periodicals, brouchers, reports, etc.

Area of the Study:

The study was undertaken in Astana. Sample Size: A total of 100 respondents residing in the Astana form the sample.

Purposed sampling technique was followed for collecting response from the respondents.

Tools for Analysis:

The statistical tool used for the purpose of this study is simple Percentage.

Profile of Selected Consumers:

In Astana there are 50 consumers were taken for this study by adopting purposed sampling method.

The demographic factors of selected consumers include variables such as age, gender, marital status, educational qualification, occupation, and monthly income.

It is presented in table 1.

Table 1

The main features of the consumers

Particulars		Number	Percentage
Age	Up to 15 years	10	10
	15–25 years	50	50
	25–35 years	20	20
	35–45 years	10	10
	Above to 45 years	10	10
Gender	Male	70	70
	Female	30	30
Marital status	Single	65	65
	Married	35	35
Educational qualification	Up to school level	10	10
	Plus two	10	10
	Degree / Diploma	50	50
	Post-graduation	30	30
Occupation	Student	40	40
	Employer	30	30
	Business	30	30
Monthly income	Up to 1000 $	20	20
	1001–1500 $	50	50
	More then 1501 $	30	30

There are certain factors which are influencing purchase decision it is presented in table 2.

Table 2

Factors affecting on purchase decision

Factors affecting purchase decision	Number	Percentage
Product features	10	10
Durability	10	10
After sales service	2	2
Brand names	25	25
Battery	3	3
Larger memory capacity	20	20
Friends recommendation	10	10
Camera	2	2
Model at reduced price	18	18

From the tables 1 and 2 we can clearly understand that majority of the respondents (50.00 %) are belonging to the age group of 15–25 years.

Most of the consumers (70.00 %) are male, Majority of the consumers (65.00 %) are unmarried, most of the consumers (60.00 %) are under graduates and graduates, majority of the consumers (50.00 %) monthly income between 1000–1500$. Most of the consumers (18.00 %) are feeling that Brand name and model at reduced price as the primary factor while purchasing their products.

Findings:

1. Majority of the respondents (50.00 %) are belonging to the age group of 15–25 years.
2. Most of the consumers (70.00 %) are male.
3. Majority of the consumers (65.00 %) are unmarried.
4. Most of the consumers (60.00 %) are under graduates and graduates.
5. Majority of the consumers (50.00 %) have monthly income between 1000–1500 $.
6. Most of the consumers (18.00 %) are feel that battery and model at reduced as the primary factor while purchasing their products.

Suggestions of the Study:

1. Possession of mobile phones is high among the graduates and plus two holders. It is better for the Xiaomi manufacturers to manufacture user friendly mobile phones in order to reach the people having primary level education.
2. If Xiaomi give more attention to after sales services and if the service centers should be able to carry out fast repairs it can attract more customers.
3. Since the majority of the Xiaomi Mobile users are males, it is suggested to produce attractive and fashionable models catering specially to the females.
4. The buyers of mobile phone should insist that all the technical information are revealed on the use of mobile phone to enable them to use the products without any technical fault leading to frequent repairs.
5. The company should take initiative to insist buyers for free servicing of the mobile phones during the guarantee period.

Conclusion

From the study it is clear that consumer chooses smart phone after evaluating all the factors and analyzing all the alternatives on basis of their lifestyle, desire and need. The data finding clarifies that consumer purchase the product after analyzing the external and internal influence which motivates them to make the purchase decision. So therefore, the producer of smart phone should understand consumer interest much to find higher sale of their products. Marketers communicate with consumers and try to convince through every possible media. To achieve success in the market, it has become highly inevitable to produce goods as preferred by the customer, as he is the kingpin around whom the entire marketing activity revolves. Thus, a marketer who understands the behavior of the consumers and plan his marketing strategies to suit the needs and aspirations of the target market will definitely have an advantage over his competitors.

References:

1. Aghdaie, SFA, Honari, R (2014). Investigating the Role of Brand in Forming the Consumer Involvement. International Review of Management and Business Research, 3(1), 254–266.

2. Mcquiston, D. H. (2004). Successful branding of a commodity product: The case of RAEX LASER steel. Industrial Marketing Management, 33(4), 345–354. doi:10.1016/j.indmarman.2003.07.001

3. Aaker, D. A. (1991). Managing brand equity: Capitalizing on the value of a brand name. New York: Free Press.

4. Keller, K. L. (1993). Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Journal of Marketing, 57(1), 1. Doi: 10.2307/1252054

5. Keller, K. L., & Lehmann, D. R. (2006). Brands and Branding: Research Findings and Future Priorities. Marketing Science, 25(6), 740–759. doi:10.1287/mksc.1050.0153

6. Pride, W. M., & Ferrell, O. C. (2003). Marketing: Concepts and strategies. Boston: Houghton Mifflin.

7. Akkucuk, U. (2013). Market Prioritization Methods for Global Firms. Managerial Issues in Finance and Banking, 3–20. Doi: 10.1007/978–3–319–01387–9_1

8. Aaker, D. A., & Joachimsthaler, E. (2000). Brand leadership. New York: Free Press.

9. Zeithaml, V. A. (1988). Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence. Journal of Marketing, 52(3), 2. Doi: 10.2307/1251446

10. Ross, S. D. (2006). A Conceptual Framework for Understanding Spectator-Based Brand Equity. Journal of Sport Management, 20(1), 22–38. doi:10.1123/jsm.20.1.22

11. Churchill, G. A., & Peter, J. P. (1995). Marketing: Creating value for customers. Boston: Irwin/McGraw Hill.

12. Assael, H. (1998). Consumer behavior and marketing action. Cincinnati, OH: South-Western College Publ. Barwise

13. Oliver, R. L. (1999). Whence Consumer Loyalty? Journal of Marketing, 63, 33. Doi: 10.2307/1252099

14. Bloemer, J., & Kasper, H. D. (1995). The complex relationship between consumer satisfaction and brand loyalty. Journal of Economic Psychology, 16(2), 311–329. Doi: 10.1016/0167–4870(95)00007-b

15. Fornell, C. (1992). A National Customer Satisfaction Barometer: The Swedish Experience. Journal of Marketing, 56(1), 6. Doi: 10.2307/1252129

16. Influence of discount price announcements on consumer’s behavior. Journal of Business Administration, 5(26): 657–671.

17. Mixed methods research: A research paradigm whose time has come. Educational researcher, 33(7), pp. 14–26. Journal Mihart, C (2012)