Lifestyle Based Segmentation On Mobile Phones Marketing Essay
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 5405 words||✅ Published: 1st Jan 2015|
The purpose of this thesis is to examine the applicability of lifestyle-based segmentation on mobile phones in the context of Mauritius. Normally this carried out to exemplify how market segmentation will target the customers with their respective mode of living. A convenience sample of 125 respondents is taken and their mode of living and opinions on mobile phones will be recorded using structured questionnaires. After that these data will be used as inputs for the analyses. The first part of the study is an introduction of the mode of living of people in Mauritius and also is based on the evolution of mobile phones in the country. The second part is about the purpose of the research that is based on what criteria we have chosen to do such a research. Furthermore we have also specified the advantages of segmenting the Mauritian market. Then comes the literature review part where we have observed the different views of different authors on lifestyle and segmentation. The different theories they have developed and we have also search for the gap by contrasting these theories. The next section is the methodology that has been used to analyze people’s lifestyle towards mobile phones. There are some steps that have to be followed while conducting the Research process. This part also specifies how to construct a questionnaire and finally the problems encountered while conducting the survey. Now comes the part of analysis of findings where normally all the data gathered will be used as inputs. Various variables will be analyzed and the outputs generated will be mostly in tables and charts. Moreover different hypotheses will be tested using two variables to find if there is any relationship between them using the sample of 125 respondents. The recommendations and suggestions session is conducted so as to find solutions how to improve the mobile phones market in Mauritius. This will benefit the citizens of Mauritius in a way by simply improving their lifestyles by providing them with different kinds of facilities in the upcoming mobile phones. As concerned for the service providers they can provide better services to the citizens of Mauritius. Finally is the conclusion part where there is the summing up of the assignment as a whole.
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Although the Mauritian mobile market is small in terms of population size, the market is one of the most vibrant markets in sub Saharan Africa. In 2009, the mobile penetration rate stood at over 80 percent, one of the highest penetration rates in the continent. There are 3 mobile operators namely Orange, Emtel and MTML in Mauritius. Orange is the market leader, with almost 54% in 2009 while Emtel and MTML are the challengers, with 44% and 2% respectively. The Mauritian mobile maturation is near-saturation, which translates in the decline in voice revenues and subscriber growth. Therefore, mobile operators have shifted focus on data services, to offset the decline in voice revenue levels.
The mobile phone phenomenon is a unique in the histories of both the telecommunication and consumer electronics markets. In less than a decade, people have adopted mobile phones on a massive scale, as a result of which the yearly production rate continues to rise; Growth has been fueled by the spectacular evolution of mobile phones technologies, both in terms of performance and miniaturization. As a result, unlike many other appliances, users change their mobile phones on average every two years. Consequently, the replacement handset, today represent about 80% of all mobile phone purchase.
In this era of globalization, mobile phones have moved beyond their primary role of voice communication and have graduated to become an essential entertaining device for mobile users. We are in an era where users buy mobile phones not just to be in such today’s youth use it to express their lifestyle: for social networking, to show their interest, play games, read news, surf on the internet, listen to music, chat instantly with families and friends and check their bank balances.Mobile phones are used for a variety of purposes, including keeping in touch with family members, conducting business, and having access to a telephone in the event of an emergency. Some people carry more than one cell phone for different purposes, such as for business and personal use. Multiple SIM cards may also be used to take advantage of the benefits of different calling plans-a particular plan might provide cheaper local calls, long-distance calls, international calls, or roaming.
Consequently, faster better or funkier hardware alone is not going to help phone firms to sell more mobile phones. Instead, these manufacturer keen to get more out of their customers should not just be pushing the technology for its own sake. Consumers are far more interested in now mobile cells fit in their lifestyle. Although consumers do what they always did but use a phone technologies it possible to gradually drive new habits and lifestyles. For instance, older people have started adopting mobile phones compared to some 5 years back.
Lifestyle refer to a way of living of individuals, families (households), and societies, which they manifest in matching their physical, psychological, social, and economic environments on a day-to-day basis. In addition, lifestyle is determined by a system of variables which comprises many elements: sociodemographic indicators, values and socio-psychological characteristics of individuals, behavioral variables, consumption of products and services.
Lifestyle is expressed in both work and leisure behaviour patterns and (on an individual basis) in activities, attitudes, interests, opinions and values. It also reflects people’s self image or self concept; the way they see themselves and believe they are seen by the others. Moreover, Lifestyle is a composite of motivations, needs and wants and is influenced by factors such as culture, family, reference, and social class. An analysis of consumer life styles is an important factor in determining how consumers make their purchase decisions.
Purpose of research
The objective of this survey is to understand the impact lifestyle has upon the use and purchase of mobile phones. Mobile phones has become a common utility in this new era and with the changes taking place in this technological field it has become a must to be able to sell mobiles phones not only at low price, but to the right defined target market. More specifically, the primary goals of this study are:
To better understand the segment of mobile phones
Provide a theoretical framework for the practice of market segmentation
To find out how big firms tackle important issues concerning market segmentation
WHY SEGMENT MARKETS?
Customer market segmentation is a powerful and commonly used mechanism enabling organizations to reap certain advantage: (Blythe, 1998 and Kotler, 1998)
By segmenting, the firm can get to understand best its customers and organize its strategy in a better way to target the relevant audience. Moreover, the most profitable customer groups will be given special attention, matching customers’ needs and requirements with the aim of improving loyalty and retention.
Better returns and profit realization
The profit potential of each segment can be easily determined by analyzing the revenue and cost impacts associated with serving the segments. Efficiency is gained through segmentation because unprofitable groups are handled appropriately. Hence business profits are increased by reaching untapped revenue streams and provide opportunities for growth. Nevertheless, it is possible to develop premium segments in which customers accept a higher price level and they are distinguished from the mass market by features like additional services, exclusive points of sale, product variations and so on.
In serving specific segments of the market, the business gains reputation for expertise and quality as compared to the competitors. The company will be able to increase its market share by becoming a preferred supplier of a targeted market.
Effective resource allocation
Companies’ scarce resources can be concentrated more effectively on a few consumers, rather than spread thinly across the masses. This will lead to efficiency gain through segmentation.
Strategic marketing planning
Planning becomes easier once the firm has a clear picture of its best customers. Hence, the company can impose the design of products and services which best fits the lifestyle of the desired segment. Therefore, the performance of each segment is measured to adjust the segmentation approach progressively as market conditions change.
Higher market shares
In contrast to an undifferentiated marketing strategy, segmentation supports the development of niche strategies. Thus marketing activities can be targeted at highly attractive market segments in the beginning. Market leadership in selected segments improves the competitive position of the whole organization and strengthens the brand and ensures profitability. On that basis, organizations have better chances to increase their market shares in the overall market
Segmentation provides information about smaller units in the total market that share particular needs. The identification of these needs enables a planned development of a new or improved product that better meet the wishes of these customer groups. Thus, profit margins and profitability of the innovating organization increase.
Segmentation is a technique for assigning consumers or customers into homogenous groups based on some segmentation variables (Wedel and Kamakura, 1998), providing opportunities to develop targeted marketing strategies towards a specified group of Consumers. The concept of market segmentation, first introduced by Smith (1956), has attracted much marketing attention. The concept is based on three basic premises (Engel et al., 1972): (1) customers are different, (2) differences in customers relate to differences in demand, and (3) segments of customers can be isolated within the overall market.
Market segmentation comes about as a result of the observation that all potential users of a product are not alike. They are different in the consumption behaviors, in their lifestyles, and in patterns of buying and using. As a result, the same general appeal will not interest all prospects and satisfy every customer’s needs. Therefore, in order to enhance customers’ satisfaction, it is necessary to divide the generic market into segments. Different marketing strategies and tactics will be developed accordingly by properly considering both the differences among potential consumers and that the firm’s objectives and resources.
The psychological variables derive from two principal types of customer; personality profiles and lifestyle profiles (psychographics). Psychological profiles are often used as a supplement to geographic and demographics when these does not provide a sufficient view of the customer behaviour. While the traditional geographical and demographical bases (sex, age, income etc.) provide the marketer with accessibility to customer segments, the psychological variables provide additional information about these and enhance the understanding of the behaviour of present and potential target markets (Gunter and Furnham, 1992: 26).
The literature discusses two principal approaches to segmentation. They are a-priori and post-hoc or data driven (Dolnicar, S., 2004; Kara and Kaynak, 1997, Wind, 1978). A prior segmentation requires first to choose variables of interest and then classify buyers according to that designation (Wind, 1978). This approach may guarantee within segment similarity by ensuring, for example, that all segment members come from similar geographic regions and income ranges. However, this does not necessarily mean that all segment members will respond in the same way to marketing stimuli (Hoek, Gendall and Esslemont, 1996). The second approach is to segment markets on a post-hoc basis where a range of interrelated variables is selected and then buyers clustered into groups whose average within-group similarity is high while between-group similarity is low (Wind, 1978). The interrelated variables in this case are called bases, and then the segments can be further examined for differences in other characteristics- called profiled variables. These variables are not concurred with the based variables. Moreover, the number of segments is not known until the cluster analysis has been completed. In this paper, the post- hoc approach to segment is applied.
Over the past half-century the spontaneously appealing notion that individuals and groups exhibit routine of “style” in living fueled intensifying interest in the lifestyle concept among social satirists and social scientists alike. Yet, while the term lifestyle gained popular currency, it continued to defy conceptual and operational consensus (Ferber and Lee 1974). At the same time the term lifestyle became part of our popular and professional expression, its conceptual and operational vagueness was compounded by a semantic network confusing lifestyle with psychographics, confusing and impeding lifestyle research, and compromising the usefulness of lifestyle as a segmentation variable.
Life-style is a systems concept. It refers to a distinctive or characteristic mode of living, in its combined and broadest sense, of a whole society or segment. The aggregate of consumer purchases, and the manner in which they are consumed, reflect a society’s [or consumer’s lifestyle. Writing at the same time, Levy (1963) proposed a contrasting concept of lifestyle, one suggestive of Adler’s conviction that a fictionalized goal or theme pervades one’s life providing structure to both self-concept and behavior.
An individual’s life-style is a large complex symbol in motion. It is composed of sub-symbols; it utilizes a characteristic pattern of life space or the proximity of perceived constraints in the surrounding environment; and it acts systematically to process objects and events [including products, services, and consumption itself] in accordance with these values.
Levy’s definition encouraged Kelley (1963) to put forward an important marketing implication of the lifestyle concept. According to him Marketers are not selling isolated products which can be viewed as symbols; they are selling, or consumers are buying, a style of life or pieces of a larger symbol. That is consumers buy their products taking into consideration their interests, opinions and activities.
On the contrary Moore (1963) suggested still another definition of lifestyle to bridge conceptual and operational interpretations of the term closely approximating those which have come into current use.
The term “life style” suggests a patterned way of life into which [people] fit various products, events or resources. It suggests that consumer purchasing is an interrelated, patterned phenomenon products are bought as part of a “life style package”.
A persistent thread through the marketing literature is the notion that lifestyle involves characteristic patterns of behavior (Andreasen 1967; Bernay 1971; Lazer 1963; Moore 1963; Myers and Gutman 1974). Berkman and Gilson’s (1978) definition is only one of several contemporary interpretations of lifestyle but is representative.
Lifestyle may be defined as combined patterns of behavior that both determine and are determined by consumption. The term “unified patterns of behavior” refers to behavior in its broadest sense. Attitude formation and other types of subjective activity are not readily observable, but are behaviors nonetheless. Lifestyle is an integrated system of attitudes, values, opinions and interests as well as overt behavior.
“Lifestyle segmentation” has been a useful concept for marketing and advertising planning purposes (Wells and Tigert, 1977; Kaynak and Kara, 1996). Lifestyle, of course, has been defined simply as “how one lives”. In marketing, “lifestyle”, however, describes the behavior of individuals, a small group of interacting people, and large groups of people (e.g. market segments) acting as potential consumers. Thus, the concept of the lifestyle represents a set of ideas quite distinct from that of personality. The lifestyle relates to the economic level at which people live, how they spend their money, and how they allocate their time (Anderson and Golden, 1984). Lifestyle segmentation research measures people’s activities in terms of:
â€¢ How they spend their time;
â€¢ What interests they have and what importance they place on their immediate surroundings;
â€¢ Their views of themselves and the world around them; and
â€¢ Some basic demographic characteristics.
The most widely used approach to lifestyle measurements has been activities, interests, and opinions (AlO) rating statements (Wells and Tigert, 1977). The focus of marketers and consumer researchers has generally been on identifying the broad trends that influence how consumers live, work, and play. It allows a population to be viewed as distinct individuals with feeling and tendencies, addressed in compatible groups (segments) to make more efficient use of mass media. In general, researchers tend to equate psychographic with the study of lifestyles. Psychographic research is used by market researchers to describe a consumer segment so as to help an organization better reach and understand its customers. Hence, lifestyle patterns provide broader, more three dimensional views of consumers so that marketers can think about them more intelligently. The basic premise of lifestyle research is that the more marketers know and understand about their customers, the more effectively they can communicate with and serve them (Kaynak and Kara, 1996).
In 1996, Mary Douglas introduced a life style theory. Four different sub-cultures stem from this theory; these are: competition and individualism; isolation and avoidance of social controls; equity and negotiation; and hierarchical communities. Moreover, Thomas Hojrup introduced a similar concept of life-mode in his book “State, Culture, and Life-Modes: Foundations of Life Mode Analysis (2003)”. He argues that our values are constrained by cultural-relational dialectics and are product of cultural life modes. He attempted to address the problem that different cultural values conflict when they are brought together. The three life modes he introduced are: self-employed life mode, wage earner life mode, and career oriented life mode.
This chapter tends to explain the methodology that has been used to analyze people’s lifestyle towards mobile phones. Nancy Costopulos, Chief Marketing Officer of the American Marketing Association, defines marketing research as follows:
“Market Research is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment.”
Information on customers, their needs, activities, attitudes, interests and opinions often come from marketing research. Consequently, marketing research provides information, which enables managers to make decisions about how to tap these people’s lifestyle to develop appropriate marketing mix: product, place, price and promotion.
The Research Process
Every research has to be done in a methodological and scientific manner for validity and reliability. The research process used for this assignment is based upon the eleven steps developed by Kothari (1990), which are as follows:
Formulating the problem
Developing the hypothesis
Preparing the research design
Determining the sample design
Collecting the data
Execution of the project
Analysis of data
Generalization and interpretation
Preparation of the report
Formulating the problem
A problem which is well defined is taken to be half solved. Having reviewed some of the literature, different factors relating lifestyle have been noticed. However, the main question that one should asks here is: How do people’s lifestyles affect the purchase of mobile phones in Mauritius?
Consequently, this study has been undertaken to analyze customers’ lifestyles towards the purchase of mobile phones. Hence, the objectives can be framed as follows:
Do people’s interests influence the purchase of mobile phones?
How opinions of people can help businesses to bring new or improve mobile phones.
Whether activities play an important role in customer’s buying behavior.
Customer’s attitudes towards mobile phones.
Developing the research hypothesis
Kothari (1990) believed that’s that developing hypothesis “is tentative assumptions made in a view to identify and test logical or empirical consequences”. Research hypothesis, which are developed, are considered to be important since they provide a sense of direction to specific parts of the study. The hypothesis formulated seems to be interesting and important in today’s mobile phone industry. In regard to this study, only one hypothesis will be tested:
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Hypothesis: The purchase of a mobile phone is influenced to a large extent by people’s lifestyle.
It can be noticed that the purchase of a mobile phone involves complex decision making, and hence it will eventually be influenced by the lifestyle adopted by people. Thus, businesses operating in the mobile phone industry can see lifestyle as an important basis for segmenting the mobile phone.
Preparing the research design
Once the research problem has been formulated and the hypothesis has been developed, a formal research structure needs to be developed as well. As such, a research design would be a plan of action, guide in collecting and analyzing data. Moreover, it helps to identify how and where the information is collected. Thus, it is simply a blue print that is followed in completing the study.
The types of research design used for this assignment are exploratory and descriptive. In fact, the research was done through the search of statistics, trade journal articles, other articles, magazines, newspapers and books to look for data and to gain insights of the problem being studied. Major part of the literature was obtained from various books, which were consulted for some definitions so as to get a deeper insight of the subject.
Indeed, some articles were consulted from concerned websites in order to get a clearer idea on the subject. Similarly, 100 questionnaires were prepared and a face to face interview was held for the collection of the data.
Determining the sample design
A sample is a segment of the population selected to represent the population as a whole.
“Proper planning prevents poor performance” as an old saying goes. This phase ensures that what has been planned so far will be correctly implemented. Hence, an effective sampling plan calls for 3 decisions:
Sampling unit: Who is to be survey?
Sample size: How many people should be surveyed?
Sampling procedures: How the respondents should be selected?
The sampling unit answers the question of who is going to be interviewed. For this study, people from different age group have been selected to get a fair picture. People of age 16 to above 60 years old have been interviewed. (Only those who own at least a mobile phone)
How many people should be surveyed? Indeed a large sample is more likely to generate more reliable results than small samples. However, if well chosen, samples of less than 1 percent of a population can also give good reliable results. A sample size of 125 has been taken for this study and respondents are taken at random in order to ensure fairness and equity. For instances, at the university, houses, streets and so on.
For the purpose of this study we have chosen simple random sampling. This has been seen as the most appropriate sampling method as most people of different age group possess mobile phone(s) and in relation to that they are all concerned with this study.
Collecting the data
Data collection is a very crucial stage since it entails a large proportion of possible errors. “No question is asked in a social vacuum. Sometimes people give answers they think the interrogator(s) would like to hear, that they believe are socially acceptable or that they wish were the case. At times, they tell the truth (or at least their perception of it” (Deacon et al, 1997). The collection of data has been done by questionnaires through a face-to-face interview.
A questionnaire consists simply a list of pre-determined questions whereby respondents are requested to respond to the questions. Due to its flexibility, questionnaire is seen as probably the most used instrument for collecting primary data. Therefore, questionnaire should be carefully developed, tested and debugged before they are administered to the target respondents. We can emphasize on 3 major areas to construct a good questionnaire.
Principle of wording
A combination of closed-ended and open ended questions has been developed whereby Likert scale questions have also been used to get more insights of the problem being studied. Moreover, such types of questions help in coding easily for subsequent analysis.
Principles of measurement
The principles of measurement must be followed to ensure that data collected are appropriate to test the above formulated hypothesis.
General appearance of the questionnaire
It is extremely important to lay emphasis on the layout of the questionnaire. A well designed, attractive and well-arranged set of questions, as well as response alternatives will make it easier for the respondents to answers the issues presented in the questionnaire. Moreover, it provides a sense of motivation on the part of the respondents to answer the questions in the possible way and thus help to minimize errors.
After much reference on the mobile phone market and lifestyle of Mauritius, we designed a questionnaire based on its features, characteristics and functions. The questionnaire consisted of 3 sections: Section A, Section B and Section C.
The first section is the Respondent Profile section. It deals with the profile of the respondent, that is, the demographic characteristics but also geographic and income based. This section will help to identify the respondent and also to generate a basic idea about his/her lifestyle.
Section B of the questionnaire tries to focus on the specifications, characteristics, functions and preferences of the mobile phone. This will show which factors will affect the user when purchasing a mobile phone and also how his lifestyle will influence his purchase. Combining Section A and B we will be able to have a better understanding on the relationship between lifestyle and mobile phone. Also the service provider that the user chooses is based on his/her lifestyle as he/she will choose a service in which he can optimize all his needs.
The last section concentrates mostly on the opinions and views of the respondents. It tries to identify and seek what the user will want to have when purchasing a handset or any ideas that the user wish to have when purchasing a new mobile phone. So this section basically concentrates on the suggestions that the respondent will look in when choosing a mobile phone.
Pre- testing of the questionnaire
Pre-testing is one of the important aspect in questionnaire and research design. It is vital to conduct a pre -testing process of the questionnaire as this will help us to pinpoint the omissions, flaws and ambiguities before the final draft of the questionnaire is edited and drafted. For this assignment, the questionnaire has been pre-tested among 7 people.
Execution of the project
The execution of the project is controlled minutely in order for the research process to be reliable and to have a high degree of validity. The sample size has to be respected in order to ensure that it is representative. Furthermore a checklist had to be devised in order to ensure the proper running of the data collection process.
Analysis of data
Once the valid questions have been asked to the right person and once the process of collecting data were over, they needed to be analyzed. However, the data collected from the interview were raw and unmeaningful; hence they had to be converted in such a way, that they suited the context for better interpretation. The initiate behind the analysis of data were primarily performed so that they answer the research questions. For this purpose, several operation had to be conducted, the operation are as follows;
In most processions of data collection, errors and omission are bound to occur. Thus, editing of that questionnaire is a must in order to guarantee that the quality of raw data collected was in line with the standard that had to be set when designing the questionnaire. In addition, the editing for each questionnaire was done particularly just after the data for that questionnaire was collected so as to ensure reliability of the response. Thus, editing is a crucial process in Questionnaire design.
All answers which were collected through the questionnaire were coded using the SPSS as analytical software. For the numerous multiple choice questions, numbers were assigned to the answers so that the interviewers (we) could input them in SPSS.
For tabulation process, the Standard Package for Social Science (SPSS) is used to perform this operation; the data analysis must be in line with the requirement of the information needs identified at the initial phase of the research. After considering the descriptive statistic, the data were analyzed with the specific purpose of testing hypothesis.
Using hypothesis testing, it is possible to test the relationship between 2 independent variables. This was done using the Pearson chi-square tests. Moreover, correlation and regression analysis have also been utilized in order to determine the possible relationship between variables. Cross tabulation has also been used in developing several hypotheses.
Generalization and interpretation
Generalization and interpretation of the analyzed data has provided us with the final assumptions that can be made from the collected data through the use of hypothesis testing and also through the interpretation of findings.
Preparation of the report
It is known to be the final stage of the research process which is concerned with writing up the report in which we have used the findings supported by the results of the survey. This has helped us to analyze the lifestyles adopted by people towards mobile phones.
Problems encountered during survey
Some respondents were having problems in understanding some of the questions set. Hence being the interviewers, we had to translate the questions into Creole for some respondent due to illiteracy.
Majority of the respondents devoted much time to answer section C of the questi
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