Factors Affecting the Demand of Smartphone Among Young

Adult.
International Journal on Social Science Economics & Art
Conceptual Paper: Factors Affecting the Demand of Smartphone among
Young Adult.
Mei Min, Chow1, Ling Hong, Chen2, Jian Ai, Yeow3, Pei Wah, Wong4
1,2,3
Faculty of Business & Law, Multimedia University (MMU), 75450, Bukit
Beruang,
Melaka,
Malaysia.
E-mail:
[email protected];
[email protected]; [email protected]
4
Centre for Diploma Programmes, Multimedia University (MMU), 75450,
Bukit Beruang, Melaka, Malaysia. E-mail: [email protected]
Abstract The term Smartphone has commonly discussed among young
adult especially students from higher learning institutional. Cell phone has
becoming a part of their life-tool eventually. Young adult eventually used
their phone to communicate with people, alarming themselves from few
reminders, direct ways, downloading songs and games, texting messages
and more. According to Rice and Katz (2008), the cell phone can be said
as a social medium that developing into a multimedia digital platform which
has the ability to provides, obtains, and shares personal and social
information. However, the market eventually has a higher technology which
is called Smartphone. Several industries have hurriedly espoused mobile
devices, such as personal digital assistants (PDAs) which have the
capabilities of integrating wireless connections and mobile devices that
auxiliary pushed the demand effectively in every industry by having a new
buzzword, Smartphone, illustrates this popular PDA-phone amalgamation
with numerous capabilities (Park and Chen, 2007). The factors affecting
consumer demand towards Smartphone are complex in nature and usually
there is no single factor or simple reason can be determined. Nowadays,

consumers tend to shift their preferences from a basic cell phone to a

Smartphone. It is obviously the major lead for mobile phone manufacturers
to switch the production towards Smartphone due to high demand. The four
independent variables under investigation in this study include product
features, brand name, price and social influences. The dependent variable
is the demand of Smartphone among young adult. Young adults may
include fresh graduates with no working experience, industrial trainee from
higher learning institutional or students that study in higher learning
institutional. In other words, the target respondents are those youngsters
whose age falls between 17 to 25. The main objective of this study is to
develop a literature review of factors affecting the demand of Smartphone
among young adult. This conceptual paper showed a strong relationship
between the variables. A pilot test will be carried out to test the reliability of
the variables. Keywords Smartphone; Product features, Brand name,
Price, Social influences
I. INTRODUCTION The issue of industries are moving to globalization has
alerted the world since 1990s and until recently, it is still a booming area of
research among educators and society. The significance level of
globalisation is swelling throughout the world in the 21st century (Rato,
2006). The enhancement of technologies and succession in communication
are causative for companies to import raw materials and also export their
product though the pace of improvement can be say as a streak of lightning
and therefore telecommunication tools no longer can be mistreated by
anyone in this new era (Craig, Samuel and Douglas, 1996). The most
commonly used phone in the market is called as basic phone. Basic phone
are chiefly used for voice communication and short text messaging
services (SMS) and may support constrained browsing (Subramanian,
2009).
According to Rice and Katz (2008) the cell phone can be say as a social
medium that developing into a multimedia digital platform which have the
ability to provide, obtain, and share personal and social information.
However, the market eventually has a higher technology which is called
Smartphone. One of the approaches that can distinguish a Smartphone
and a cell phone is to determine whether or not the phone uses a mobile
operating system as traditional cell phones do not employ any operating
systems while Smartphone are all administrated by systems which

including Windows Mobile, iPhone OS, Symbian OS, Google Android or

Linux (Sanne, 2009). Smartphone uses an operating system that allows
third party applications to run on it. At the same time, it also summarized
that a Smartphone will have more innovative wherewithal compared to
normal cell phones which concluded both PDA and cell phone in a
Smartphone. Therefore, the society has
44
slowly moved their cell phone purchasing decision to Smartphone. The key
gadgets for accessing the mobile Internet or currently been named as
Smartphone are powerful new computing devices endow with traditional
wireless voice service as well as native software applications and, perhaps
most importantly, the capability to connect to and run an innumerable of
Internet-based services including email, geolocation, streaming video, and
social networking, while providing a good user experience (Kenny and Pon,
2011). These gadgets attracted consumers to purchase Smartphone.
Therefore, this study will emphasize on the factors that affect the demand
of Smartphone. Several industries have hurriedly espoused mobile devices,
such as personal digital assistants (PDAs) which have the capabilities of
integrating wireless connections and mobile devices that auxiliary pushed
the demand effectively in every industry by having a new buzzword,
Smartphone, illustrates this popular PDA-phone amalgamation with
numerous capabilities. (Park and Chen, 2007).According to Gartner (2006),
in the first quarter of 2006, worldwide PDA and Smartphone shipments
summed out 3.65 million units, increment of 6.6 percent from the first
quarter of 2005 while pure PDA shipments were dwindling and
consignments of smart mobile devices rose 55 percent year-on-year in Q2
2006. This results shows that the popularity of Smartphone had overcome
PDAs. The advancement in mobile internet technology has created new
value positions in the retail industry by having the exponential expansion
number of internet-enabled mobile phone subscribers (Yang, 2010). As the
market for the technologies and devices accompanying, this tendency as
well perk up at a fast pace mobility and becomes an increasingly common
force in shaping the lifestyles of consumers (Kumloglu, Nasir and Nasir,
2010). This was also supported by Shankar and Malthouse (2007) by
stating that technology developments in mobile communications have
begun to foster new platforms for brand-consumer interactions. Nowadays,

consumers tend to shift their preferences from a basic cell phone to a

Smartphone is obviously the major lead for mobile phone manufacturers
moved their production towards Smartphone. If a comparison is made with
other durables goods, the technology-based products will be having a more
distinctively brief lifecycle and therefore for those consumers who desire for
upgrade will be attracted by firms next generation products which firms
intended to earn profit from these consumers, example, older model cell
phones are rapidly replaced by newer models with augmented functions
(Tseng et al., 2011). The advancement of science and technology as well
giving a hand for mobile phone manufacturers to innovate on their existing
product, due to the rapidly advancement technology manufacturers have to
persist in improving their phones from time to time in order to catch the
pace of others in the industry. Anderson (2010) stated that mobility do not
only tolerates us to develop ideas at workspace but it also increase the
possibilities for being more productive. As a result, it is crucial for
manufacturers to improve on new technologies and dump the old; the pace
of changing is unpredictable, what is today, might not be the same
tomorrow. Therefore, consumers are keeping themselves with high concern
with technologies might change their devices from time to time. In other
words, devices can be easily be replaced due to the fast pace of
advancement in technology. The main objective of this study is to develop
a literature review of factors affecting the demand of Smartphone among
young adult. By conducting this study, adequate knowledge can be
generated to fill out the existing research gap. Also, through this research,
each and every mobile phones producers, designers and programmers are
able to gain more insights about how consumers perceive on mobile
phones and therefore take any corresponding actions needed. Last but not
least, this research may contribute towards the Malaysian Plan 2011-2015;
The Big 10 ideas. II. LITERATURE REVIEW A. Demand Demand can be
defined as the willingness and the ability to pay a price for a specified
product and service (Sexton, 2007). Intention to purchase depends on the
degree to which consumers expect the product to satisfy them when they
consume it (Kupiec and Revell ,2001). When a consumer wanted to make
the purchase decision, they will pass through the process through
recognition, search information, evaluation, purchase, feedback (Blackwell,
Miniard, and Engel, 1995). Therefore, the consumer will choose a product
or brand to consume from various choices in the market. According to

Bettman, Johnson and Payne (2000), different situation will be affected by

different factors. Consumer has different tastes, needs, motivation and
lifestyle when they want to purchase a product (Chisnall, 1985). Some of
them preferred high quality and willing to pay high price, some of them are
not (Monroe, 2003). Furthermore, the consumer behaviour towards
purchasing a product can be investigating through the consumer
characteristics. It include brand conscious, price conscious, quality
conscious, recreation conscious, innovation conscious, confused by over
choice, impulsive and brand (Leo, Bennett, and Hartel, 2005). Therefore, it
is important to study the factors that affect t consumers decision towards
buying a Smartphone. The variables under investigation in this study
include product features, brand name, price and social influences. B.
Product Features A feature is an attribute of a product that to meet with the
satisfaction level of consumers needs and wants through the owning of the
product, usage, and utilization for a product (Kotler, Philip, Armstrong, and
Gary, 2007). In such modern technology days, consumers have come to
realisation that different feature will bring a diverse level of satisfaction
towards Smartphone. In this new era, Oulasvirta et al. (2011) stated that
the phones now feature with wireless connectivity, a built-in Web browser,
application installation, full programmability, a file management system,
multimedia presentation and capture, high-resolution displays, several
gigabytes of storage and location and movement sensors. Besides,
operation system and camera are the features that most Smartphone users
focus on. The most popular
45

operation system for mobile phone are Symbian, RIM Blackberry, Apple
iPhone, Windows mobile, Google Android and Linux (Gowind, 2010).
According to Chang and Chen (2005) each operating systems has its own
exclusive personalities and backgrounds. Wickliffe and Psyarchik (2001)
suggested that consumers select products based on attributes which create
specific benefits that engender specific outcomes that are supportive of
personal values. Products with attributes that enhance these factors are
therefore selected based in the importance of integration. According to
Puth et. al. (1999) consumers uses attributes to make a comparison
between competitive brands and marketers therefore use attributes in
advertising to influence the consumer's evaluation of substitution by
featuring the product's significant attributes. C. Brand Name In recent
changing global environment, competitive advantage, profitable ways and
efficiencies are the most important gears that companies are force to seek
for in order to differentiate among them in the business world (Mei, Dean
and White, 1999). Brand names are valuable assets that help correspond
quality and suggest precise knowledge structures which related to the
brand (Srinivasan and Till, 2002). Researchers have distinguished that
brand name as an important tool in improving a products value (Dodds,
Monroe and Grewal, 1991). According to Rotfled (2009), brand name is an
exclusive and is to indicate product itself to the market. Besides according
to the American Marketing Association, they defined the brand as name,
term, symbol, or design, or a combination of them intended to identify the
goods and services of one seller or group of sellers and to differentiate
them from those of competition (Khasawneh and Hasouneh, 2010). Haigh
(2007) has proposed three definitions: trademark is a logo with
associated visual elements, brand is a trademark with associated
intellectual property rights, and branded business covers the whole
organization. According to Rao and Ruekert (1994), they stated that one of
the major objectives of a brand name is to provide information on the
quality of a product. The value of a brand name adds to the product is
named as brand equity (Farquhar, 1989). Developing brand equity is
thought to be an important component of brand building (Keller, 1998).
Brand equity is assumed to convey several benefits to a firm (Pappu,
Quester and Cooksey, 2005). Brands might develop sustainable
competitive advantage for firms (Aaker, 1989). As a result, if consumers
perceive a particular brand favourably, then the firm may have a

competitive advantage (Pappu, et. al, 2005). More and more companies
realized that one of their most priceless assets is the brand names that
related with their products or services (Cornelis, 2010). In recent
aggressive competitive market place, the most critical success element for
companies is the brand name that were being used by a product, and
further stated that the brand names are consider as the last source of
differentiation for the companies products and services (Lim and OCass,
2001). According to Khasawneh and Hasouneh (2010), the products brand
name will influence consumers evaluation and subsequently, affect the
buying decision.
Brand extension is a strategy that many companies follow with the aim of
benefiting from the brand knowledge achieved in the current markets
(Aaker and Keller, 1990).When a new product is marketed under a wellknown brand name, failure rates and marketing costs are reduced
(Martinez and Pina, 2010). Benefits of a great brand include a short-term
gain on recognition to long-term competitive advantage on loyalty, which
are ultimately translated into revenues and profits. D. Price Nagle and
Holden (2002) stated that price can play a role as a monetary value
whereby the consumers to trade it with the services or products that were
being sold by the sellers. Price will always be the key concern of
consumers before making any purchasing decision (Smith and Carsky,
1996). The level of price is found to positively affect behavioral intentions
mainly because price establishes image of the brand in the eyes of the
consumers (Aaker, 1991). In a consumers heuristics, a high (low) price
connotes a high (low) quality and image. For a conceptual convenience,
there are two types of products by price: high-priced brands and low priced
brands (Kunal et al., 2010). High-priced brands are brands on the market
whose image is seen as the key factor. Consumers of these brands often
purchase them mainly for image and are willing to pay a premium price for
their perceived high quality and status, which make them price-inelastic
(Bolton, 1989). Low-priced brands tend to be purchased for utilitarian value,
with the consumer relying on the perceived value for price. Consumers
would typically look for low prices of these brands or substitutes to get the
best value (Kunal et al., 2010). Consumers tend to interpret higher prices
with higher quality, and low prices are perceived as an indication of inferior
quality (Rao and Monroe, 1988). Rao and Monroe (1988) studies is
consistent with Etgar and Malhotras (1981) findings. Etgar and Malhotras

(1981) explained that most of the consumers will regard high price goods
and services equals to high quality. Thus, if the price level is at a peak but
the quality or features are comply with the consumers expectation; they
might perceive as fair and are more willing to pay a at a higher price to
owns a better quality goods or services (Monroe, 2003). According to
Thaler (1985), there is more than couple of brand of mobile phone that
consumer will find in todays market, this will most likely influence the
consumers indicator on the pricing that being sold. Price is no longer an
element that can be ignore for investigation whether or not it is an crucial
factor that affects consumers behaviour in products and services.
Recently, most of the consumers are pursuing a high quality services,
though service is an important factor, yet the unwillingness of consumers to
pay for obtaining a higher level of service by sacrificing an extra amount
can still be seen (Tse, 2001). On the other hand, price might not be part of
their considerations especially when dealing with web shopping, which the
major concern falls on convenience, security and store offer (So, Wong and
Sculli, 2005). According to Kenning, Evanschitzky, Voegl and Ahlert (2007),
over 90 percent of retailers in this market screen the prices of their
competitors on a regular basis. Price
46

knowledge is a psychological construct that relevant to retailer success,

since it influences both a consumers buying decision and the sales margin.
At the same time, it can help the retailer to exploit consumer willingness to
pay. The price of a product is one of the most important marketingmix
tools which are currently used excessively to attract consumers to a certain
product or store (Evanschitzky, Kenning and Vogel, 2004). E. Social
Influences Social influences means one person causes in another to make
a change on his/her feelings, attidudes, thoughts and behaviour,
intentionally or unintentiaonally (Rashotte, 2007). It resulted from
interacting with each other. Social influence includes the influence of
media, parents and peers (Nelson and McLeod, 2005). Social Influence is
defined as the degree to which an individual perceives that important
others believe he or she should use the new system (Venkatesh et al.,
2003). Generally, peer are the primary influences, followed by media and
parents, at a research in United States. According to Nevenzahl and
Secunda (1993), social influences are concerned with how individuals learn
the skills, knowledge and attitude relevant for consumption. According to
Rashotte(2007), conformity, power and authority are different with social
influence. Conformity will occur when a person expresses an opinion in
order to meet the expectation of others. Power means one person force
another person in order to control his/her outcomes. Furthermore, authority
is the power that is believed to be legitimate by those who are responsible
to it (Rachotte, 2007). Many researchers have found that the social
influences play a vital role when the consumers are making decision on
purchasing (Mourali, Laroche and Pons, 2007). People tend to be easier
influenced by the word of others (Kelman, 1961). In a survey of teenager,
both male and female reported that they always seek for advice and
opinions of their friends based on fashion-related items and tend to
purchase the similar clothes that their friends wear (Nelson and
McLeod,2005). In recent research from NARs Center for Realtor (2009),
reported that the most smart phone application category they used is Social
Media application e.g. Twitter, Facebook and etc. Consequently, smart
phone users decide to use smart phone to keep contacting with their
friends, colleagues or others in social network sites. This shows that people
will influence by their friends when they are making decision on buying a
product. According to Rashotte (2007), social has a great influence on an
individual, especially when a large portion of an individual holds a particular

thought, attitude, feeling or behaviour. It is likely that the individual will

adopt the particular thought, attitude, feeling and behaviour as well. III.
METHODOLOGY A. Theoretical Framework The theoretical framework of
the study is constructed at Fig. 1.
Product Features
Brand Name Demand of Smartphone Price
Social Influences Fig. 1: Theoretical Framework of Factors Affecting
Demand of Smartphone
B. Hypotheses Development This paper studies the association between
the four independent variables, such as product features, brand name,
price and social influences, and demand of Smartphone among young
adults. With this goal, we propose to test the following hypotheses: H1:
There is a relationship between product features and demand of
Smartphone among young adults. H2: There is a relationship between
brand name and demand of Smartphone among young adults. H3: There is
a relationship between price and demand of Smartphone among young
adults. H4: There is a relationship between social influences and demand
of Smartphone among young adults. C. Sample This study focuses on
students at Multimedia University, Melaka. The target respondents are
those undergraduate and post graduate students who aged between 17 to
25 and 300 students will be targeted in this study. The convenience
sampling method will be employed to identify the respondents for the
purpose of study. D. Measurement The study used a self-administered
questionnaire to obtain information related to the study topic. The variables
under investigation in this study were product features, brand name, price,
social influences and demand of Smartphone. The items were identified
and adapted by the researchers after a review of selected literature
available such as Market Analysis and Consumer Research Organization
(MACRO); Rio, Vazquez, and Iglesias , 2001; Cheong and Park, 2005;
Pederson, n.d; Bouwman, Reuver, and Visser, n.d; Park and Chen, 2007;
Venkatesh, Morris, Davis, and davis, 2003, Cheong and Park, 2005.
TABLE 1 provides the key variables, items used to operationalize the
variables, and their respective sources.
47

TABLE 1 KEY VARIABLE AND ITS SOURCES

Variable Product Features
Item 1. I like smartphones design. 2. Smartphone has more applications
than basic hand phone. 3. Smartphone provide high quality of games. 4.
Smartphones internet accessibility is speedier than basic hand phone. 5. I
use smartphone due to its operation system (Apple iPhone, RIM
Blackberry, Google Android or others). 1. I prefer to buy an international
recognized smartphone. 2. I prefer to buy a trustworthy brand of
smartphone. 3. I will only buy my favorite brand of smartphone. 4. Brand
name is a major factor that will influence my decision towards buying a
smartphone. 1. I am willing to buy smartphone even though the price is
higher. 2. I will only buy smartphone during price deduction period. 3. I
think that using smartphone is expensive in overall. 4. Price is my main
consideration when deciding whether to buy a smartphone. 1. Almost all of
my friends/family members are using smartphone. 2. My friends/family
members think that we should all use smartphone. 3. My friends/family
members influenced me to buy smartphone. 4. People around me have
stimulated me in using smartphone. 1. I intend to use smartphone
continuously although there is new hand phone in the market. 2. I intend to
increase my use of the smartphone in the future. 3. I intend to use
smartphone to do e-commerce.
Source Market Analysis and Consumer Research Organization (MACRO)
4. I will find out more details about smartphone. 5. I intend to recommend
others to use smartphone.
(Item 5).
Brand Name
Rio,Vazquez, and Iglesias , 2001
The questionnaire was relatively short (consisting of only22 items) and
easy to understand. There were three sections in the questionnaire.
Section A of the questionnaire included information pertaining respondents
background such as gender, race, age, education background. Five point
Likert scale (5=strongly agree, 4=agree, 3=neither agree nor disagree,

2=disagree and 1= strongly disagree) was used in Section B to measure

the five variables, namely product features, brand name, price, social
influences and demand of Smartphone. While the last section of the
questionnaire, Section C was an open-ended question which attempted to
seek additional comments from the respondents. Prior to release of the
survey, researchers conducted a pilot test to refine the questions in the
survey. Questionnaires were given to 55 students from the targeted pool of
respondents and 41 questionnaires were collected and were used for pilot
test. They were asked to answer the questionnaires which were
subsequently carried out to check whether the respondents could
understand all the questions. Comments and feedbacks given were
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