Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers Chapter 1: Introduction 1.0 Introduction Telecommunication device help us to communicate at a distance. The first telecommunication device called pager. Pager is small telecommunications devices that can only use to receives or transmit alert signals and send short messages. In year 1973, Hand phone was invented by Motorola researcher Martin Cooper. The traditional hand phone is design in large and bulky in size and only carry some basic function such as call and short messaging system (SMS). Hand phone is now further refined to smaller and compact version. From the hand phone that consists of numerous buttons, phone is now evolving becomes smartphone as it can be control by touch screen. In general, a smartphone is an extension of the traditional handheld hand phones. However, it performs a wider range of functions. Nowadays, smartphone has been deeply accepted by most people around the world and have become an integral part of everyone around the globe. In addition, due to vast improvements in technology, more advanced and sophisticated smartphone are introduced and launched almost every year. Smartphone has been deeply accepted by most people around the world especially among young adult consumers. This research studies and analyses the factors that trigger the purchase decision of female young adult in smartphone brand. This research studies and analyses the relative differences among different smartphone brands that in turn affects the consumer purchase intention towards the different available brands. This chapter provides an overview of the research. Chapter one cover the research 1 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers background, problem statement, research objectives, research questions, hypothesis of studies, significant of studies, chapter layout and conclusion. 1.1 Research background In today’s society, people are becoming more and more rely on technology especially when communicating with others. Smartphone is one of the highly technology communication device that allowed users to connect with each other and transfer information to around the globe. Smartphone has brings huge benefit to the society, the beneficial aspects includes it allow users to call and talk straightaway, send short message service (SMS), assist business person to make schedule of working and meetings, work as navigation system (GPS), access to the internet, entertainment, downloading applications, store data and even help in legal matters such as track criminal via tracking system. According to The Sun Daily report, smartphone penetration in Malaysia has increased in the year 2012 from 47 percent to 63 percent (The Sun Daily, 2013). Therefore, the trend of the society in purchasing mobile phone has slowly moving towards smartphone (Min, et al., 2012). Nowadays, consumers pay more attention to the brand while choosing smartphone (Knapman, 2012). Many smartphone brands that are popular among the users include Apple, Samsung, Sony, HTC, LG, Motorola, HuaWei and XiaoMi have entered into Malaysia recent years. Among these brands, Apple and Samsung gain the highest market share in the market. According to The Star, many large mobile phone makers were threatened by high-end phone companies such as Apple and Samsung and by lower end Chinese phone companies. Those companies were said to be suffering due to lack of differentiated offering and strong brand (The Star, 2012). 2 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers In 2012, a survey has been taken by Malaysian Communications and Multimedia Commission to determine the usage of mobile phone among Malaysian. The survey result came out with a statistic of young adult aged 15 to 29 owning a mobile phone stand 44.5 percent among the other age brackets (Malaysian Communications and Multimedia Commission, 2012). Young adult are more towards new technology and innovation features which consider fast adoption curve. Therefore, they are able to embrace new technology faster than other age brackets. Besides, the survey also shows that there are 43.5 percent of the total smartphone users are female while the other 56.5 percent are male smartphone users. Although male are more likely to own smartphone than female, however brand gave more impact on female (Karen, Han Benjamin, 2013). Thus, this research is taken to determine the factors influencing purchase intention of smartphone brand: A study of young female adults in Klang Valley. Consumers are defined as the individuals who purchase a good or service in the intention to utilize them. Normally, consumers will consider a few set of alternatives before they make their respective purchase decision. Moreover, there are many factors involved during a consumer decision making process. These factors affect the consumers purchase intention. With a clear and precise understanding of the consumer purchase intention pattern of behavior, marketers will be able better position their products in the marketplace. However, in order to understand the consumer purchase intention towards smartphone brand, research has to be carried out. There are several factors that affect consumer purchase intention towards smartphone brand. We have identified 4 factors that affect the purchase intention of smartphone include brand image, pricing, product specification and peer influence. At the end of the research, marketers may have a better understanding on factors that will bring brings impact to the young female consumers’ purchase intention towards smartphone brand. 3 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers 1.2 Problem statement In this global era, technology has become an integral part in our lives. The saying ‘world is at your fingertips’ has become predominant nowadays. From desktop to laptops, technology has further minimised to smartphones. Smartphone industry has boomed in this country since 1983. Since then, there has been many large mobile phone companies ‘stepping their foot’ into the industry. Due to the large entry of mobile phone companies, many smartphone brand has introduced to the market in Malaysia, namely Apple, Samsung, Sony, Lenovo, HTC, Huawei, LG, Motorola, Asus, Nokia, Blackberry, Oppo, Ninethology, and XiaoMi. In this ‘technology savvy’ era, it is very difficult to study, analyse and interpret consumer purchase intention. Smartphone companies as well as telecommunication providers even willing to financially invest in order to study their respective potential consumers purchasing behaviour. Therefore, this research is intended in the quest to study the consumer purchase intention towards smartphone brands. Although many researches and studies have been preliminarily carried out on consumer purchase intention and hypothesis are formed, however there is still room for improvement. A framework as a whole indicating the distinct relationships between the related variables to consumer purchase intention towards smartphone brands can be further development for future studies and research. Moreover, although there has been many researches carried out previously on purchase intention towards smartphone brands, there has not been a research carried out on linking between young female adult purchase behaviour and its corresponding purchase intention towards smartphone brand. This research is solely focussed on female consumers, their buying preferences and factors that affect their buying decision .This study is intended to study and analyse specifically the factors affect the purchase intention towards smartphone brands of young female adult consumers. Young female adult female within the specified age range range is selected because these group of woman have the highest smartphone purchase rate. This age group is 4 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers the ‘active’ group among female. Therefore, this research serves as a bridge linking the two main variables, young female adult purchase behaviour and purchase intention towards smartphone brand. 1.3 Research Objectives Based on the problem statement, there are numbers of objectives being developed as below: 1.3.1 General Objectives This research has been developed to identify, examine and better understanding the relationship between young female adult consumers and smartphones brand. The general objective of this research is to examine the factors that affect purchase intention towards smartphone brand among the young female adult consumers. 1.3.2 Specific Objectives (i) To examine effect of brand image on young female adult consumers purchase intention towards smartphone brand. (ii) To examine effect of price on young female adult consumers purchase intention towards smartphone brand. (iii) To examine effect of product features on young female adult consumer purchase intention towards smartphone brand. (iv) To examine effect of peer group influences on young female adult consumer purchase intention towards smartphone brand. 5 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers 1.4 Research Questions (i) Does brand image play a significant role in young female adult consumer purchase decision towards smartphones brand? (ii) Does pricing influence the purchase intention of young female adult consumer towards different smartphone brands? (iii) Does the product features affects young female adult consumer decision making in choosing a smartphone brand? (iv) How does the peer group influence can affect the young female adult consumer purchase intention towards different smartphone brands? 1.5 Hypothesis of the study Subsequent of reviewing relevant literature, there are four (4) hypotheses that corresponding to the sub-research questions is developed: 1.5.1 First Hypotheses H₀: Brand image has no relationship towards young female adult consumer’s purchase intentions for smartphone brand H₁: Brand image has positively relationship towards young female adult consumer’s purchase intentions for smartphone brand 6 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers 1.5.2 Second Hypotheses H₀: Pricing has no relationship towards young female adult consumer’s purchase intentions for smartphone brand H₁: Pricing has positively relationship towards young female adult consumer’s purchase intentions for smartphone brand 1.5.3 Third Hypotheses H₀: Product features has no relationship towards young female adult consumer’s purchase intentions for smartphone brand H₁: Product features has positively relationship towards young female adult consumer’s purchase intentions for smartphone brand 1.5.4 Fourth Hypotheses H₀: Peer group influence has no relationship towards young female adult consumer’s purchase intentions for smartphone brand H₁: Peer group influence has positively relationship towards young female adult consumer’s purchase intentions for smartphone brand 7 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers 1.6 Significance of the study This study able to provide a concept for smartphone firms a better understanding on factors that influence the purchase intention of smartphone among young female adult in Malaysia. The importance and attention given to a smartphone is rapidly increasing everyday. The complexity and the sophistication involved in the highly advanced smart phones is making the purchase process of a smart phone getting more intense. In fact, the smart phone purchase is increasing from the past 4 years. Smartphone sales has reached 34% of the total sales of mobile in 2012 (Gartner.com,2012). “Factors affecting purchase intention towards smartphone brands; A study of young female consumers” ,although similar studies have been carried on smartphone brands and its respective purchase intentions, however this research is directed mainly and only towards young female adult consumers. This particular research is designed and directed on the female consumers and the factors that affect their purchase intention towards smartphone. Nowadays, both male and female contributes relatively a large percentage in smartphone purchase. A study says that woman purchase behavior has changed and its plays a significant impact on the sales of goods in marketplace. Dr. Anu Nagpal Chopra (2014) states: woman are most powerful consumers in the world, since up to eighty percentage of household spending decision is made by them. In addition, since the role of woman has changed, their significance of purchase intention has also changed. The role of woman changing refers to the scenario that nowadays a significant percentage of smartphone purchase comes from woman. Since the employment of woman labour in the work sector, the disposable income of woman increased (Schiffman & Kanuk in Shim & Kotsiopulos, 1993).This literally means that this study can serve as a reference for woman during their purchase process of smartphone. Besides, this research helps women consumers understand the emerging trend of smartphone brand. 8 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers This study provides an insight to researchers and marketers on the analysis of young female adult purchase intention towards smartphone brands, and how all the four main factors affect their purchase intention, brand image, pricing, product feature and peer group influence. This is crucial for marketers as this will aid them to reconstruct and tailor their marketing message to the needs of female consumers. In a nutshell, this research helps smartphone firms to capture the needs of young female adults. The smartphone company can benefit when the respective firm is able to cater the needs of young female consumers and this will induce a higher sales and purchase for the respective smartphone brand company. 1.7 Chapter layout This research consists of five (5) chapters: Chapter One provides the overview of entire research study which contains research background, follow by the problem statement, research objective, research question and hypotheses for the research study that used to deliver supervision for the accurate method of this research. After that, significance of the study, chapter layout and lastly is the conclusion of the chapter. Chapter Two consists of literature that presents concept of consumers purchase intention towards smartphone brand, the contribution of four (4) dimensions that will influence the consumers purchase intention towards smartphone which includes brand image, pricing, product features, and peer influence, followed by the review of theoretical framework, conceptual framework, and hypotheses development of the chapter. 9 Factors affecting purchase intention towards smartphone brand: A study of young female adult consumers Chapter Three deliberate about the research methodology which consists of the research design, data collection methods, sampling design, research instruments, data processing and data analysis. Chapter Four discusses with data analysis presents a generally of the result and the data collected from respondent are used to analyze the research findings. Besides, Statistical Package for Social Science 21 (SPSS) was used in this research to demonstrate the chart and tables. Chapter Five includes discussion and conclusion of our research study. Research findings will be précised and discussion of major findings in this research, follow by the limitations of the research for improvement. Last part will be the recommendations for prospect research. 1.8 Conclusion In general, chapter one is provide an overview of the research study and as a guideline for researcher for proper their way in following research objective and define the problem statement of the topics. 10