Principles of Marketing. This report will gather research about characteristics that affect the consumer behaviour of a middle-class man in the UK, in choosing a mobile phone contract.

by gharibhotmailnl (student)

University Degree Business and Administrative studies

Introduction

With a staggering 82.7 million mobile phone subscriptions in the UK (Ofcom, 2013), it is extremely important for contract providers to have the edge in order to succeed in their market by winning over subscribers and generating profit. Especially during the recent recession, which has dropped the consumer confidence, it is vital for mobile phone providers to be able to attract customers through various ways in order to succeed. Successful ones always continue their extensive research and try to understand consumer behaviour, which will help them significantly when they are considering introducing a new plan. This report will gather research about characteristics that affect the consumer behaviour of a middle-class man in the UK, for getting into a mobile phone contract. His previous contract consisted of a basic handset and he was tied into a lengthy contract. The man, a family man in his mid-20s, is well-off and is employed by a well-known banking firm in Central London. During his travel to work, he likes to be entertained and has a fondness for games. In addition to this, he likes to spend as much time as possible with his family whenever he is off work.

As this report will be gathering its data from websites, it has to be considered as secondary research. This type of research is particularly useful and provides high quality data ‘’If stringent budget and time constraints are imposed on primary research’’ (stewart et al, 1993)

The Characteristics that Affect Consumer Behaviour

Consumers are influenced by number factors when purchasing a good or a service. The characteristics of the consumer behaviour are divided in to four; Cultural, Social, Personal and Psychological. In this case, the consumer of my choice is expected to be influenced predominantly by the social factor. This will mean that his family and friends will mainly be affecting his decision. As the buyer will be influenced by his friends and taking into account that 78% of people aged between 25 and 34 own a smartphone (Mintel, 2012), the buyer will be inclined into taking a contract with a smartphone handset included.

In addition to this, opting for a smartphone will also have the benefit of entertaining him during his journeys to work, which he demanded, and it will also come in to good use when spending time with his family, as he can capture memories by taking pictures and recording videos.

This buyer’s behaviour in buying a contract will also be influenced by personal factors. Even though males tend to spend less than women (Pant, 2011), the buyer is in his mid-20s which can be considered to be the younger generation. Research suggests that this segment prefers spending over saving (Mathus & Moschis, 2007). Since the buyer is working in Central London for a banking firm, we assume that he is not short of disposable income. Taking this information into account, it can be deducted that the buyer will be going for a top of the range smart phone.

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The Types of Consumer Buying Decisions

Due to the fact that the service and the product that the buyer will buy will not be cheap, and because he has several network providers to choose from, the consumer buying decision would have to be complex. Additionally, renewing a mobile phone contract is not something he will be doing frequently and this ”often takes place over an extended period of time, requires information from many sources, and encompasses many inter-organizational relationships”(Webster et al, 1972), hence there will be high involvement in the process of choosing the correct provider and type of contract.

An example of the purchase of a similar good or service, in terms of buyer involvement, can be used to support the theory of complex buying behaviour for this buyer. Car insurance can be used in this case. Similarly to the network provider, it has a wide range of companies the buyer can choose from. The buyer has also options in choosing different tariffs with his contract, likewise, he can choose from different types of insurance, e.g. Third Party only, Full Comprehensive etc. Since car insurance is not purchased frequently, it has a similar buying behaviour to choosing a mobile phone contract, which also is not obtained often.

The Components of the Decision-Making Process

John Dewey, in his book “How we Think” (1910) has broken down the decision making process of a person into 5 parts and has evaluated the importance of each stage. This report will be analysing and relate the significance of the 5 parts in the decision making process of buying mobile phone contract.

Since this is a case of complex buyer, the buyer will be going through all the five stages in the decision making process. These are described below.

Need recognition.

This is where the buyer “becomes aware of a difference between a desired state and an actual condition” (Pride et al, 2010). Because the buyer will be in need of a mobile phone contact and due to the fact that it is an inelastic service for him, this stage will not be long. This is because the contract is almost a necessity for him and it will not take him very long to realise that it is about to end. Even though this stage can be the shortest, it can be argued that it is the most important of them all, as without it, there wouldn’t be a process of buying a good or a service in the first place.

Information Search.

At this particular stage a buyer will gather information (if needed) to buy a specific good or service. Because the buyer in this case will be tied into a lengthy contract, there will be a risk involved in this buying process. Due to this the information search is likely to be a lengthy one.

The buyer will be using both internal and external information sources to help him with his decision making. Although not much, but important information will be gathered from internal sources like past experience and memory. Due to his bad service experience with his current network provider and insufficient minutes and texts at his disposal, the buyer will have some vital information.

External information will also have great influence in his decision making process. Since many people are sceptical about advertisements, we a are more likely to trust reviews of friends and family since they will “tell us if the product is good, or bad, and as a result we’re more likely to believe their recommendation” (Berger, J, 2013). Due to this it is vital for companies to focus on providing products of high quality at competitive prices rather than only marketing the product.

Figure 2 shows that the majority of people aged between 25 and 34 have an Apple Smartphone. Since the buyer falls within this category, we presume that his friends do so too, and because of the word of mouth, the buyer will probably look into the possibility of purchasing a contract with an Apple iPhone included in it.

Figure 3 shows the brand the brand recommendation of different network providers. The figure shows that O2 and EE are the only 2 providers that are recommended by people. Considering all the figures used in this report to be true in our case, the buyer will be likely to get a mobile phone contract with either O2 or EE and an Apple smartphone included within the contract.

Evaluation of Alternatives

This is the stage where the buyer will consider the possible purchases available to him, for example, choosing between different brands. As explained above most people within his age have an Apple iPhone and therefore the chance of him getting one too is great. This is an extremely important stage which marketers should take advantage of because it is the last step where they will be able to change the buyers mind. Marketers should give buyers demonstration, introduce special packages and provide testimonials.

The buyer in this case, will evaluate which particular phones meet his needs of entertaining him during travel to work, capture high quality memories of his family. This stage will not be very extensive as he is most likely to go with reviews from friends and family who are most likely to recommend O2 or EE and an Apple iPhone.

Purchase decision

Having acquired all the information research, recommendation and evaluation of alternatives, this will be a short process for the buyer to go through. This stage will give the buyer the option to either buy the product or service online via the internet or in store.

Post Purchase Evaluation

At this stage, the buyer will try to seek reassurance to justify his purchase to avoid the experience of “cognitive dissonance”, where the buyer feels guilt and disappointment after his purchase.

It is essential that the sellers give the buyer a sense of assurance after the transaction, especially in this case, where the buyer has a cooling down period of 14 days. Within these 14 days he can change his mind about the product and service and ask for a refund, hence it is vital for the network provider to offer an excellent after sales service, which might eventually contribute to the rising statistics of the word of mouth recommendations.

Marketing Recommendations

To be able to attract the buyer talked about in this report may be challenging. This is due to the fact that he is a well-off person with enough disposable income to choose for the best service and product. So if one simply has it, it will attract this customer whereas providers such as 3 and T-Mobile, who haven’t got the best recommendation score as shown in figure 3, will have a hard time challenging the well recommended brands. They will have to mainly concentrate on the Product part of the marketing mix, which in this case is the network service quality, to attract this particular buyer. The Place will not be an issue to network providers and promotion will have little effect on this buyer as he is mainly influenced by other external sources such as family and friends. Similarly, Price will not be of huge importance too due to his well-off status.

On the other hand, the Product might have not been a big factor at all if the buyer wasn’t very stable financially and the Price would have easily exceeded the Product in that situation. This shows that for marketers to be successful, they will have to surpass in all 4 P’s in order to provide for all different types of buyers and increase their market share.

Conclusion

To conclude, to satisfy this particular buyer, one has to have the best reputation available in the market. Since the figures showed that he is likely to be convinced by friends and family when doing his information search, he will hear recommendations of only reputable brands and will hear negative comments about bad services. Since he has got a complex buying behaviour to the mobile phone contract, he will be paying more attention to brands recommended to him and this underlines the importance of reputation even more.

Ofcom. (2013). UK Communications 2013 Fast facts. Available: http://media.ofcom.org.uk/facts/. Last accessed 21/11/2013.

Mintel. (2013). Report. Mobile Phones - UK - February 2013. 1 (1), p1-156.

Mintel. (2013). Report. Mobile Network Providers March 2013. 1 (1), p1-142.

Stewart, D.W., Kamins, M.A. (1993). Secondary Research Information Sources and Methods. 4th ed. USA: Sage Publications, Inc. p5.

Webster, F.E.JR, Wind, Y (1972). A General Model for Understanding Organizational Buying Behavior. 4th ed. USA: American Marketing Association. p12-19.

Pride, W.M., Ferrell, O.C. (2010). Marketing. USA: South-Western Cengage Learning. p216.

Berger, J (2013). Contagious: Why Things Catch On. USA: Simon & Schuster. p1-216.