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VISHWAKARMA INSTITUTE OF MANAGEMENT-

PUNE

Research paper

On

“Factors affecting purchase of Laptop”

Submitted by,

Sagar D. Ghenand.

Roll no:10012016

MBA – I

Div: B

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Abstract

The rapid developments in IT sector accompanied by increased competition and acquisitions


and mergers in the market, lead both academicians and practitioners to concentrate on the
consumers’ purchase decisions in portable PC industry i.e. laptop. It was in 2005 that sales of
laptops surpassed the sales of desktop computers for the first time in India. Laptops are
popularly used in India more for their portability rather than mobility. Portability has become
the number one factor as to why more Indians are buying these portable PCs. The laptop
market in 2007 saw a significant growth to 84.8 per cent. This research seeks to develop a
better understanding of the factors influencing consumers’ laptop purchases. This research
also seeks the differences among three consumer groups (stayers, satisfied switchers, and
dissatisfied switchers) of a company with respect to the factors influencing consumers’
laptop purchases. It is found that core technical features, post purchase services, peripheral
specifications, physical appearance, value added features, and connectivity and mobility are
the six factors that are influencing consumers’ laptop purchases.

Introduction

A customer is anyone makes regular purchases from a company or a store, while a consumer
is one who makes any transactional decisions of economic nature including buying of goods
and services. Consumer can be both personal consumer who buy for his or her own person
and family consumption and organizational consumer which could include nongovernmental
organization, political groups, companies and governments. Consumer behaviour is the study
of how individuals, group, and organizations select, buy, use, and dispose of goods, services,
ideas, or experiences to satisfy their needs and wants. Buying Behaviour refers to the buying
behaviour of the ultimate consumer. Buying Behaviour is the decision processes and acts of
people involved in buying and using products which includes social and mental processes.

According to IDC India, Laptop sales in India have raised drastically, which accounts for
over 25% of the total personal computer market. Laptop sales only accounted for a 3% of the
total personal computer till 2003. The sales of the laptops has reached a mark of 0.68 million
unit in fiscal year 2006-2007 which accounts for a growth of 59% over the same period in
fiscal year 2005-2006. Sale of desktop computers and laptops has touched the mark of 8.5

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million units in the fiscal year 2007-2008. There are various main players in the Indian
notebook market. A premier global market intelligence firm, the laptop market has registered
79% Year-on-Year (YoY) growth during 2006. The laptop sales is growing at much faster
rate than projected. India's personal computer market is undergoing a major transition.
However, laptop computers cannot completely wipe out desktop computers, because both are
designed to meet different needs or different consumer segments.

The Laptop market is growing at a fast rate because of change in work life of consumers. As
the need for "anytime anywhere" access to information is increasing, the sales of Laptops are
also increasing. Other factors that are responsible for the hike in sales figure are reduction in
prices and affordability. Laptops are now sold at approximately half the price at which they
were sold two years ago. Laptops prices are now almost at par with the desktop computer
prices. The third most important factor is duty free import of Laptops as a personal baggage
that has helped a lot in increasing the penetration level of the product among the consumer
population. Awareness about laptops has also increased over the years.

The International Data Corporation (IDC, 2006) report mentioned that in 2005 consumers
continued to respond very positively to very attractive price points, but portable demand in
the business space remained very strong too. According to What Laptop (2005), Dell was the
number one choice in worldwide with 7.9 million sales. It was followed respectively by HP
(7.4 million), Toshiba (5.8 million), IBM (4.3 million), and Acer (3.9 million) in year 2004.
Furthermore, revenue generated from notebooks has long surpassed desktops, thanks to
higher average selling prices for notebooks. According to CRN (2006) in June 2005,
notebook sales accounted for $216.1 million, or $1,442.66 per notebook whereas desktops
accounted for $113.9 million, or $762.98 per unit. The average notebook price fell 11.8
percent from $1,635.07 in the year-ago month and in the same period, desktop prices fell 5
percent from $803.38 (CRN, 2006). In addition, new product launches to the market,
acquisitions and mergers in the sector, rapid developments in the nano-technology, integrated
wireless networking, and decreased prices make it extremely vital for the companies to
understand the factors underlying consumers’ laptop purchase decisions.

Background
The literature on purchase decision in this part has been limited to IT related purchase
decisions due to the product category which will be examined in this current study.
Consumers can prefer certain products, brands or companies over others, and to understand

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the reason behind these choices is exceptionally essential in order to market existing products
more effectively than rivals. Consumers’ demographic profile, purchase perceptions, and
their attitudes towards products or brands influence their purchase decisions. Jarvenpaa and
Tedd (1996/1997) identify many factors that affect a consumer’s electronic shopping
purchase decision: product understanding, shopping experience, customer service, and
consumer risk. Geisler and Hoang (1992) identify five steps in the decision process to
purchase IT:

1. Establish or articulate the need for IT.


2. Establish or determine which unit(s) will receive the new or modified IT.
3. Select the technology.
4. Select the suppliers.
5. Authorize the purchase and sign the authorization to commit the necessary funds.

The authors conclude that services companies follow a relatively logical and analyzable
decision process. According to decision making model, consumers process the environmental
cues; the physical factors of the product, psychosocial cues, such as advertising, and
consumers put these cues into a set of perceptions that shape their preferences. Based on
these preferences, consumers make their choices subject to situational constraints, such as
price. According to Hong and Lerch (2002), people evaluate various objective features when
buying an IT product, and because of imperfect information and simplifications according to
the decision rules people often abstract these various features into few perceptual dimensions
such as ‘usefulness’ and ‘price’. In another research conducted by Kim et al. (2002), small-
office/home-office professional (SOHO) procurement choices are influenced by a number of
salient dimensions (i.e. income, performance, price, inter-purchase time, network
externalities). Furthermore, surveys have repeatedly identified performance and price as two
of the most important attributes in SOHOs' Laptop purchase decisions. In a more recent
study, Dillon and Reif (2004) examine factors influencing consumers’ e-commerce
commodity purchases, and find that a history of e-commerce purchasing have a more positive
attitude towards on-line buying.

Objective:

• To find factors influencing purchase decision of laptop.

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Definition

Three groups of consumers

• Stayers - Those who had never switched from a previous brand


• Satisfied switchers: Those who switched for reasons other than dissatisfaction
• Dissatisfied switchers: Those who switched because they were dissatisfied from
their previous brand

RESEARCH METHODOLOGY

Data Collection
According to the research purposes of this study, a questionnaire was prepared and then it
was spread among students and professionals of VIM and VIIT College and collected the
data of consumer buying behavior on purchase of laptop. Since this research was focused on
the factors influencing laptop purchase decisions of consumers, it was seen appropriate to
perform a traditional survey. In addition surveyor had explained the purpose of the study,
with the questionnaire to the customers.
The laptop brands examined in this research were limited by the following brands: Acer,
Dell, HP, HCL, Lenovo, Toshiba, Compaq and Sony.
A total of 50 responses were collected, but 49 of the respondents declared that they had a
laptop. Furthermore, 2 of the responses were eliminated since they were considered as
unusable, so as a consequence, 47 of the responses were covered in this study.

Questionnaire Design and Measures of Constructs


In the first part of the questionnaire, the consumers were asked whether they had a laptop or
not, and those who had a laptop were only considered in the survey. The brand name of their
laptop was also asked to the consumers. As stated earlier, this course of independent study
has classified the consumer base of a company into three groups: stayers, satisfied switchers,
and dissatisfied switchers. Therefore, the consumers in this study replied to the question
about whether the current brand that they were using was their first laptop brand or whether
they had switched from a previous laptop brand. As a following question, consumers, who

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had switched, were asked to state the reason of why they switched from a previous laptop
brand to their current brand. The options for switching included (a) overall dissatisfaction
from the previous laptop brand, and (b) reasons other than dissatisfaction. These questions
helped to divide respondents into three groups as (1) stayers (those who had never switched
from a previous laptop brand), (2) satisfied switchers (those who switched for reasons other
than dissatisfaction), and (3) dissatisfied switchers (those who switched because they were
dissatisfied from their previous laptop brand).
One of the objectives of this study was to investigate the factors that influence consumers’
laptop purchase decisions. For that purpose, a list of laptop features was stated in the
questionnaires, which were gathered from the analysis of PC journals as well as personal
interviews with the experts from the sector. The consumers were asked which factors they
found important when they were purchasing a laptop. Finally, demographic questions such as
age, occupation and gender were also asked.

DATA ANALYSIS and RESULTS

Demographic Profile of the Respondents


Of the 47 respondents, approximately 6.38% were female whereas 93.62% were male.
Additionally, almost 93.61% of all respondents were under the age of 30. The age structure
of the participants of this survey was as follows: 85.10% of the consumers was between 18-
23 year old, 8.51% was between 24-29, 6.38% was 30 and above.
Of the 47 respondent 93.61% are students 6.39% are professionals.

Brand Usage Profile of the Respondents


The participants were asked to choose the laptop brand that they were using at the time of the
survey. Table 1 illustrated the frequency distribution of laptop brands by the respondents of
the survey. In other words, the frequency of laptop brands used by the respondents can be
summarized as follows: Dell 31.91%, Compaq 10.64%, Acer 12.77%, Sony 10.64%, Toshiba
4.26%, HCL 6.38%, HP 12.77%, and Lenovo 10.64 %

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Table 1: Frequency distribution of laptop brands
Frequency distribution of laptop brands
Brands Frequency Percentage (%)
Dell 15 31.91
Compaq 5 10.64
Acer 6 12.77
Sony 5 10.64
Toshiba 2 4.26
HCL 3 6.38
HP 6 12.77
Lenovo 5 10.64
Total 47 100.00

Graph 1: Brand Usage Profile of the Respondents

Distribution of respondents according to three customers group


The respondents of this study were also asked whether the current laptop brand that they
were using was their first laptop brand or whether they had switched from a previous laptop
brand. Furthermore, the participants who declared that they had switched from another brand
were asked to state the reason of why they had switched. The alternatives for switching
included (a) overall dissatisfaction from the previous laptop brand, and (b) reasons other than
dissatisfaction. Hence, the laptop users were classified into three groups: (a) stayers (those
who did not switch), (b) satisfied switchers (those who switched for reasons other than
dissatisfaction), and (c) dissatisfied switchers (those who switched because they were
dissatisfied from their previous laptop phone brand). Table 2 demonstrated that 85.11% of

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the respondents were stayers, while 8.51% of them were satisfied switchers and 6.38% of
them were dissatisfied switchers.
Table 2: Distribution of respondents according to three customers group

Three customers groups


Frequency Percentage (%)
Stayers 40 85.11
Dissatisfied switchers 3 6.38
Satisfied switchers 4 8.51
Total 47 100.00

Graph 2: Distribution of respondents according to three customers group

Features Influencing Consumers’ Laptop Purchase Decisions


Consumers, who participated to this survey, were given a list of features related with laptops
and then they were asked to show how important these features for them while purchasing a
laptop. Respondents who found a feature “most important” gave “5” to that item while others
who found it “Least important” gave “1”. Hence, as it was seen in Table 3, processor speed
and type, memory and hard disk capacity, Brand image, after sales service and display
resolution quality became the top five features which had the following highest mean values
respectively: 4.51, 4.26, 4.04, 4.02, and 3.96. It was also noteworthy to mention that all the
features listed in the survey were considered important by the respondents since the lowest
mean value was 2.70 for the feature of TV/Audio Connection.
Table 3: Importance of laptop features in consumer's purchase decision
Importance of laptop features in consumer's purchase
decision
Items N Mean
Processor speed & type 47 4.51
Memory & hard disk capacity 47 4.26
Brand image 47 4.04
After sales service 47 4.02
Display resolution quality 47 3.96
Repair maintenance 47 3.94
Guarantee & warrantee 47 3.70
Wireless intern ate 47 3.57
Weight 47 3.43

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DVD/CD player 47 3.36
Bluetooth 47 3.30
Design and colour 47 3.23
Speakers 47 2.87
TV and audio connection 47 2.70

Graph 3: Importance of laptop features in consumer's purchase decision

Importance of laptop features in consumer's purchase decision stayers


Stayers shows somewhat similar trend as seen in aggregate respondent about factors
important while purchase of laptop. As processor speed and type at same place and repair and
maintenance came 2nd in case of stayers.

Table 4: Importance of laptop features in consumer's purchase decision stayers

Importance of laptop features in consumer's purchase decision stayers


Item N Mean
Processor speed & type 40 4.45
Repair maintenance 40 4.25
Memory & hard disk capacity 40 4.225
After sales service 40 4.05
Brand image 40 3.875
Display resolution quality 40 3.85
Guarantee & warrantee 40 3.825

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Wireless internet 40 3.475
Weight 40 3.425
Bluetooth 40 3.4
DVD/CD player 40 3.325
Design and colour 40 3.075
Speakers 40 2.875
TV and audio connection 40 2.7

Graph 4: Importance of laptop features in consumer's purchase decision stayers


Importance of laptop features in consumer's purchase decision for satisfied switchers
As results in table 5 supports the answers of respondents that ‘they were satisfied with
previous brand but wants to experience some other brand hence switched from previous
brand’ and ‘they were satisfied with their previous brand but for up gradation switched to
other brand’ as some of them mentioned now a day’s internet TV is getting popular hence for
TV and Audio connection they are upgrading and switching to other brands which provide
these technology. Thus we can see the factor which is least important in aggregate became 2nd
important in satisfied switchers consumer group.
Thus as highest mean values for brand image 5 and TV and audio connection 5, processor
speed and type 4.75 supports answers as they consider these things important while
purchasing laptop.

Table 5: Importance of laptop features in consumer's purchase decision for satisfied


switchers
Importance of laptop features in consumer's purchase decision satisfied
switchers
Items N Mean
Brand image 4 5
TV and audio connection 4 5
Processor speed & type 4 4.75
Repair maintenance 4 4.5
After sales service 4 3.75
Display resolution quality 4 3.75
DVD/CD player 4 3.5
Speakers 4 3.5

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Memory & hard disk capacity 4 3
Guarantee & warrantee 4 3
Wireless internet 4 3
Bluetooth 4 2.75
Design and colour 4 2
Weight 4 1.75

Graph 5: Importance of laptop features in consumer's purchase decision for satisfied


switchers

Table 6: Importance of laptop features in consumer's purchase decision for dissatisfied


switchers
Table 6 shows that while purchasing laptop dissatisfied switchers consider processor speed
and type, design and colour and brand image as important factor with highest mean of 5 each.
Importance of laptop features in consumer's purchase decision
dissatisfied switchers
Items N Mean
Processor speed & type 3 5
Design and colour 3 5
Brand image 3 5
Wireless internet 3 4.67
Memory & hard disk capacity 3 4.33
After sales service 3 4.33
Display resolution quality 3 4
Weight 3 4
Bluetooth 3 4
DVD/CD player 3 3.33
Guarantee & warrantee 3 3
Speakers 3 2.67
TV and audio connection 3 2.67

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Repair maintenance 3 2.33

Graph 6: Importance of laptop features in consumer's purchase decision for dissatisfied


switchers

Conclusion/finding:
Year by year the number of people who are using and owning personal computers (PC)
substantially increases in all over the world. Contrary to the introduction years of computers,
today they have been used by almost all age groups, and by both males and females, and the
gap between age groups with respect to computer usage/ownership decreasing.
In such a volatile industry, it becomes extremely important to learn the factors that are
influencing consumers’ purchase decisions.
Among all the consumer groups it is found that processor speed and type and brand image
are in top five factors which are considered important while purchasing laptop.
For aggregate results processor speed and type, memory and hard disk capacity, Brand
image, after sales service and display resolution quality became the top five features which
influence purchase of laptop.
In case of stayers they show somewhat similar trend with aggregate results in important
factors considered while purchasing laptop.
In case of satisfied switchers brand image, TV & audio connection , Processor speed and
type, repair and maintenance, after sales service are top five features which they consider
most important while purchasing laptop.

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In case of dis-satisfied switchers Processor speed and type, Design and colour, Brand image,
wireless internet, memory and hard disk capacity are top five features which they consider
most important while purchasing laptop.
Thus we can say that as the consumer group changes important given to factors also changes.
It is observed more in case of satisfied and dissatisfied switchers due to their experience
about various factors from previous brand.

References:
http://www.consumermate.com/survey-report-on-consumer-buying-behavior-on-electronic-
products.html

http://www.google.co.in/#hl=en&biw=1345&bih=583&q=consumer+buying+behavior+on+p
urchase+of+laptop&aq=f&aqi=&aql=&oq=&gs_rfai=&fp=73a526cd30607c24

http://www.learnmarketing.net/consumer.htm

http://www.scribd.com/doc/28726420/Consumer-Buying-Behaviour-on-Electronic-Products

https://mr.pricegrabber.com/March_CBR_Portable_Laptop_Trends_v9_FINAL.pdf

http://www.udel.edu/alex/chapt6.html

www.pricegrabber.com

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Annexure:

Study of factors affecting purchase of laptop

Personal information

Name

Contact no.

Gender Male Female

Occupation Student Professional

Age group 18-23 24-29 30 & above

Questions

Do you have laptop? Yes No

What is brand name of laptop?

Whether current brand is your first Yes No


brand?

If no then reasons for changing

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a) Dissatisfaction from previous brand in terms of following

1. Battery back up

2.After sales service

Other reason if any:

b) Reason other than dissatisfaction.

1. I was satisfied with previous brand but for up gradation I am


switching to other brand.

2. I was satisfied with previous brand but want to experience other


brand.

3. Other reason if any:

4. To which brand you have switched :

Features influencing purchase of laptop

Please rate following items as per given scale

"1" Least important

"5" Most important

Sr.n Features Rank


o.

1 Processor speed and type

2 Memory and hard disk capacity

3 Guarantee and warranty

4 Wireless internet

5 Display resolution quality

6 DVD / CD player

7 Speakers

8 Weight

9 Bluetooth

10 TV and Audio connection

11 After sales service

12 Repair and maintenance

13 Design and colour

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14 Brand image

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