Mobile Phone Industry and Consumer Behavior Analysis

The provided assignment is a comprehensive analysis of the mobile phone industry and consumer behavior. It includes multiple studies and research papers that explore different aspects of mobile phone adoption, usage, and market trends. The content covers topics such as marketing technology in Eastern Europe, online purchase decision-making processes, mobile payment services adoption, and proximity mobile payments. The assignment also includes a questionnaire and calculations for mortgage loan repayment. The summary provides a detailed overview of the assignment's content and relevance to the mobile phone industry and consumer behavior.

ECO-FONE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Mobile Phone Market in UK.......................................................................................................1
TASK 2............................................................................................................................................1
Forecasting the UK adult smartphone use for 2018 and 2019 ...................................................1
TASK 3............................................................................................................................................2
Growing Popularity of Smartphones among older generation....................................................2
TASK 4............................................................................................................................................3
To Expand or Not to Expand......................................................................................................3
TASK 5............................................................................................................................................4
(a) Cost of acquiring new building..............................................................................................4
(b) Popular Commercial mortgage lenders in the UK................................................................5
TASK 6............................................................................................................................................7
Comparative Study of Putney as well as Richmond's Daily Net Takings .................................7
TASK 7............................................................................................................................................7
Evaluating Customer Satisfaction and drawing inferences thereof............................................7
TASK 8............................................................................................................................................9
Appropriateness of Poisson Distribution in the context of Eco-Fone.........................................9
CONCLUSION..............................................................................................................................10
REFRENCES.................................................................................................................................11
APPENDICES...............................................................................................................................12

INTRODUCTION
Technology has become more advanced in the recent years. The most affected segment
due to the advent of this innovation is the smartphone segment (Chan and Yee-Loong Chong,
2013). This assignment sought to study the changes in the aforementioned market in context of
Eco-Fone, a smartphone business. The company mainly deals in Smartphone and accessories.
They have two retail shops viz. one in Putney and another in Richmond. This report aims to
provide a brief discussion about the overview of mobile phone market in UK and analyse cross-
border expansion opportunities, challenges as well as quality assurance procedures. Also, a
detailed discussion regarding product, customer satisfaction and sources of finance has been
carried out in relation to Eco-Fone.
TASK 1
Mobile Phone Market in UK
A Mobile Consumer Survey was conducted by Deloitte UK in 2017. Through this
scrutiny, the company aimed to find the mobile usage in the UK market. There has been a
considerable increase in the usage of smartphones. This has led to an increase in annual sales of
handsets by 1.5 million. The Adult Population recorded a usage rate of 58% and is expected to
grow to 90% by the end of 2020 (Deloitte, 2017). The Survey attributed this increase to the
growing popularity of smartphones as a medium to help its users organize its day-to-day
activities both in personal as well as work-life. There are roughly 33.5 million users working out
of which 32 million use mobile phone as a sole medium for completing work-related chores. As
smartphones have helped many in solving, sorting as well as simplifying personal and work
space, a rapid growth is expected in future as well. Also, features such as E-mail, Messaging,
Video Conferencing, Reminders, Calender provide better organisation of work commitments.
Apart from this, there has been a growing trend among older consumers buying high-end
smartphones with a motive of mobile entertainment.
TASK 2
Forecasting the UK adult smartphone use for 2018 and 2019
Deloitte Report of 2017 regarding Adult Smartphone Use stated that 17 percent
population used their smartphones 100 times in a day. This demographic included users aged
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between 16 to 24 years. Also, it was observed that 12% of the same segment checked their
phones 200 times a day. 34 percent of smartphone users aged between 16 to 75 years were
declared addicted to mobile using them even while having food or in social gatherings. Similar
traits of addiction were found for the 49 percent of demographic including consumers of 16 to 24
years of age. On the other hand, 11 percent of people falling under the age segment of 16 to 75
years were found to be using their smartphones while crossing roads. More than 53 percent of
people exhibited the same habit while walking on side-walks (Smartphone sales boom, 2019).
Thus, it can be concluded that smartphone users of age group 16 to 75 years tended to use their
handsets more in comparison of others.
TASK 3
Growing Popularity of Smartphones among older generation
Increasing dependence on smartphones for daily usage has made an uproar not only
among the millennials but also older consumer base. This has resulted in an increase in sales of
smartphones in recent years. It is indicated that 71% of the consumers falling under the
demographic of 55 to 75 years of age own a smartphone. In addition to this, this rate has grown
rapidly, especially in past five years, as more consumers have sought to adapt to digital
revolution. Conversely, the usage rate for this segment is still falling behind as compared to the
younger demographic segments. This can be exhibited by analysing the rate at which consumers
check their phones within 15 minutes of waking up conducted for 1,163 people between May
and June 2017. Only 20% of the older consumers admitted to this habit in comparison to a
national average of 56%.
The key features that can be identified as underlying force driving consumers to display
this buying behaviour are:
 Possession of excess wealth in the hands of older consumers compared to their younger
counterparts is one possible factor that may guide such demographic to invest in premium
handsets;
 As younger generation is tech-savvy, they tend to replace their handsets as and when
new models are introduced in the market. As a result, they hand down their older models
to their parents. Replacing such older handset models with new is one feature that is
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likely to have boosted sales among older consumers (Chetlur and Dhillon, 2018) (Islam,
Kim Cheng Low and Hasan, 2013);
 With digitalisation of payments among public utility such as parking meters has led to an
increase in demand for mobile phones. Pressure to make a handset purchase is also a
contributing feature that has increased sales for such consumers (Engage with the new
generation of seniors, 2019);
 Highly user-friendly interface in terms of software, bigger screens as well as louder
audio is one distinctive feature that has affected smartphone sales in recent years among
older demographic. As their eyesight deteriorates, such devices are helpful as well as
easier to view providing them convenience.
 Growing popularity of Facial Recognition feature among the demographic. This feature
simplifies operating handset by just looking at it instead of pressing multiple buttons or
typing passwords. As a result, sales for such smartphones has also been affected to a
great extent (Jayaram, Manrai and Manrai, 2015).
TASK 4
To Expand or Not to Expand
Cross-border expansion is a crucial asset for the survival of any business. For Eco-Fone,
the operations are currently located in two shops of Borough of Richmond. As per the anecdotal
evidence collected by the company, it is observed that Eco-Fone is in a growing stage of its
product life cycle. This means that engaging in cross-border expansion would be the perfect
opportunity for the business to increase its operations, revenue as well as profits.
For this purpose, Kingston has been chosen as one of the potential areas for company's
operations in Canada. In order to weigh the options critical to the success of company's new
venture a pros and cons method has been summarized below:
Should we expand our business to Kingston?
Pros Score/10 Cons Score/10
Increased Revenue 9 Cultural Barriers 5
Brand Awareness 8 Currency Risk 6
Accessibility to a larger Customer Base 8
Attractive Foreign Investment Incentives 6
Growing Stage of Business' PLC 8
Highly Skilled Workforce 7
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Innovation-driven Market 8
Total Pros 54 Total Cons 11
Average Pros 6.75 Average Cons 5.5
As per the above table, Kingston offers a wide array of opportunities in the form of
highly skilled labour, attractive investment incentives in the form of tax deductions, free trade
zones. Also, the economy includes a highly innovative market which is important for a
smartphone based organization like Eco-Fone. As the company is thriving, it is only sensible to
say that being able to expand business to Kingston, the company will enjoy increased revenue,
brand equity through increased customer recognition with its products as well as an enhanced
customer base. The only two challenges the company is likely to face are the cultural barriers in
regards to values, beliefs of Canadian Society as well as Currency Risk. These are, however,
manageable through formulation of optimal business strategies for pricing, targeting, segmenting
and positioning the product accordingly. As the pros outweigh the cons, the company should
expand their business operations to Kingston.
TASK 5
(a) Cost of acquiring new building
Eco-Fone has decided to expand its operations to Kingston. For this purpose, a
requirement of highly-suitable premises has arisen. Since the company will be paying an Equal
Monthly Instalment, it will give flexibility and affordability for the company to apportion its
expenses with lesser burden to repay their debts. A brief break-up of this loan has been provided
below whereas a detailed calculation has been described in Appendices 1 of this report:
Loan Amount £350000
Number of EMIs 180
Annual Interest Rate 0.07
Monthly Interest Rate 0.00583
Monthly EMI Payment £3145.90
Total Loan Amount Payable £566261.81
Total Interest Payable £216261.81
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As the company prefers owning of property rather than taking a commercial plot of land
on lease, the acquisition cost for the same has been ascertained at £400000. On the other hand,
Eco-Fone has decided to undertake a mortgage loan for the same. This loan's principal has been
calculated at £350000 for a 15-year term at an annual interest rate of 7%. However, the company
has decided to repay this loan in an equal monthly instalment (EMI) format for a span of 180
months at rate of 0.00583%.
(b) Popular Commercial mortgage lenders in the UK
(1) THINK Business Loans Commercial Mortgages:
(2) Principality
(3) NatWest Commercial Mortgages
(4) Royal bank of Scotland Commercial Mortgages
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(5) Together Commercial Mortgages
(6) Alliance & Leicester PLC
(7) Bank of Ireland
(8) HSBC – UK Mortgage Lenders
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TASK 6
Comparative Study of Putney as well as Richmond's Daily Net Takings
In order to analyse the Eco-Fone’s two retail shops located in Putney and Richmond, the
net daily takings have been ascertained. The two shops offer discounted mobile phones and
accessories. Both shops have been running for several months. The following information was
collected regarding the same:
Particulars Putney Richmond
Mean 100 90
Standard Deviation 20 40
Sample data set 40 40
Total Net Daily
Takings
4000 (= 40*100) 3600 (= 40*90)
A sample of 40 net daily takings from the first shop has a mean £100 and a standard
deviation of £20. On the other hand, a sample of 40 net daily takings from the second shop has a
mean of £90 and a standard deviation of £40. From the above table, it can be inferred that the
daily net takings or sales of both the retail shops differ even though the sample taken for them is
same (Karimi, Papamichail and Holland, 2015). This can be attributed to the higher standard
deviation value recorded for the second shop (Malasi, 2012). As standard deviation is higher for
shop located in Richmond, the company tends to have increased variability in its sales as
compared to the shop located in Putney.
Also, the total sales or net takings are higher for Putney since as sample size and mean
increase for a given data set, the variability tends to reduce (Medzini, Meishar-Tal and Sneh,
2015). Since mean for Putney Shop is 100 and Richmond is only 90, there is lesser variability in
its profits. Hence, the total takings are higher for the shop in Putney as compared to Richmond
based shop.
TASK 7
Evaluating Customer Satisfaction and drawing inferences thereof
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From the above questionnaire results it can be inferred that Eco-Fone has a thriving
business with a highly satisfied customer base. These customers are likely to indulge in future
transactions with the business as well as a long-term commitment is observed to be established
(Sata, 2013). This has led to usage of smartphones for at least 3 to 5 years. The customers rated
quality of such products as a 4 indicating excellent state of the smartphones sold by the business.
However, improvements are required for sales staff (Questionnaire, 2019).
TASK 8
Appropriateness of Poisson Distribution in the context of Eco-Fone
Eco-Fone has a policy of following a quality procedure wherein the accounts department
sends approximately 10,000 invoices per month with an average of two returned invoices having
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an error on a monthly basis. Its quality assurance procedures require that any probability more
than three invoices will be returned in a month should be less than fifteen percent.
Poisson Distribution is a statistical distribution method that indicates how likely a number
of event is likely to occur in a given time-frame (Phonthanukitithaworn and Sellitto, 2015). Since
the event in Eco-Fone's case is of independent nature with a constant rate of occurrence, that is
monthly basis, Poisson Distribution is the most suitable method to be implemented. This is
because Poisson the company only needs to calculate the probability of occurrence or non-
occurence of the related event within a given time-frame (Slade and et.al., 2015). Since the
company has certain knowledge regarding occurrence of two returned invoices with an error in
it, the prediction of future occurrences is made easier by this statistical technique (Yang, 2012).
Hence, Eco-Fone must use Poisson Distribution for its quality assurance procedures.
CONCLUSION
From the above discussion it can be concluded that there has been a rapid advent in the
usage of smartphone UK Report. To be more specific old consumers have started to use
smartphones due to various reasons. These reasons were mostly related to easy accessibility of
big screens, audio-visual aids and excessive wealth. Apart from this, Eco-Fone's opportunities
and challenges were recognised in order to infer whether they should go ahead with cross-border
expansion to Kingston, Canada or not. These factors included increased revenue, currency risks,
cultural barrier, brand recognition and investment incentives among other things. In addition to
this, a research was conducted by using questionnaires methods to study the innovations and
understand the market. This resulted in Eco-Fone making a decision to expand its operations to
Kingston as well as generate a marketing strategy that would enhance the customer satisfaction
of its new customer base.
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REFRENCES
Books and Journal
Chan, F. T. and Yee-Loong Chong, A., 2013. Analysis of the determinants of consumers'm-
commerce usage activities. Online Information Review. 37(3). pp.443-461.
Chetlur, V. V. and Dhillon, H. S., 2018. Coverage analysis of a vehicular network modeled as
Cox process driven by Poisson line process. IEEE Transactions on Wireless
Communications. 17(7). pp.4401-4416.
Islam, Z., Kim Cheng Low, P. and Hasan, I., 2013. Intention to use advanced mobile phone
services (AMPS). Management Decision. 51(4). pp.824-838.
Jayaram, D., Manrai, A. K. and Manrai, L. A., 2015. Effective use of marketing technology in
Eastern Europe: Web analytics, social media, customer analytics, digital campaigns and
mobile applications. Journal of Economics, Finance and Administrative Science. 20(39).
pp.118-132.
Karimi, S., Papamichail, K. N. and Holland, C.P., 2015. The effect of prior knowledge and
decision-making style on the online purchase decision-making process: A typology of
consumer shopping behaviour. Decision Support Systems. 77. pp.137-147.
Malasi, J. M., 2012. Influence of Product Attributes on Mobile Phone preference among
university students: A Case of Undergraduate students. International Journal of
Academic Research in Economics and Management Sciences. 1(6). p.10.
Medzini, A., Meishar-Tal, H. and Sneh, Y., 2015. Use of mobile technologies as support tools
for geography field trips. International Research in Geographical and Environmental
Education. 24(1). pp.13-23.
Phonthanukitithaworn, C. and Sellitto, C., 2015. User intentions to adopt mobile payment
services: A study of early adopters in Thailand. Journal of Internet Banking and
Commerce. 20(1).
Sata, M., 2013. Factors affecting consumer buying behavior of mobile phone
devices. Mediterranean Journal of Social Sciences. 4(12). p.103.
Slade, E. and et.al., 2015. Exploring consumer adoption of proximity mobile payments. Journal
of Strategic Marketing. 23(3). pp.209-223.
Yang, T., 2012. The decision behavior of Facebook users. Journal of Computer Information
Systems. 52(3). pp.50-59.
Online
Deloitte. 2017. [Online]. Available through:
<http://192.168.1.18/projectfiles/internal_chat_attatchment/deloitteglobalmobileconsumersurvey
2017_ukcut1552049277.pdf>.
Engage with the new generation of seniors. 2019. [Online]. Available through:
<https://www.mintel.com/blog/consumer-market-news/how-to-engage-with-the-new-
generation-of-seniors>
Smartphone sales boom. 2019.[Online].Available
through<https://www.bbc.com/news/technology-41319684>
Questionnaire. 2019. [Online]. Available Through:
<https://www.mintel.com/consumer-research>
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APPENDICES
1. Calculation of Monthly Cost for repayment of Mortgage Loan:
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