1.

Introduction
Smartphone had been increasingly demanded in the market nowadays and
it seems that the trend of smartphone will not decrease due to the improvements of
technology. This demand increasing also caused by most consumers who are very
dependent on their smartphones. Back then, mobile phones were used by
consumers mostly to do phone calls and text message. By the technological
development and the implementation of it in smartphones, consumers started to
see smartphones as their daily need since smartphones can make their life better
and easier. Smartphone has the ability to deliver the function of computer
programs called application in a small computing device (Weinberg, 2012).
The need of smartphone by consumers cannot be separated by the fact that
internet addiction is getting bigger in the market. Internet addiction is viewed as
personals psychological dependence on the internet (Lu and Wang, 2008). This
internet addiction can be seen on people who are: increased in online time,
uncomfortable feeling when offline, having relationship or occupational problem
without any visible reasonable thing. Most people these days cannot go outside
without their smartphones since they need the Internet provided by their
smartphones. Furthermore, this dependency on internet will lead to future
smartphone purchase behavior.
1.1 Research Background
Researching purchase behavior of smartphone industry cannot be
separated with the theory of Consumer Behavior. Consumer Behavior model
generally passes through 5 stages in making decision, which include needs
recognition, information research, evaluation of alternatives, purchase decision,
and post-purchase behavior. These decision making can be categorized into 3
types: nominal decision making, limited decision making, and extended decision
making (Kotler and Keller, 2012). Nominal decision making is decision where
people dont need to consider picking a brand because of past experiences with
the brand or product to make decision. Limited decision making is a consumer
decision making used when purchasing products that commonly used by the

consumer, but still need to find more information about which brand or model will
best fit the consumers needs. Extended decision making is a consumer decision
making that involve more information and going to a further intention or aim
which is to satisfy a need. These stages of consumer behavior and decision
making also differently applied through different market segmentation.
Previously, extended decision making mostly only applied to perhaps expensive
and unfamiliar products. However, with the improvements of technology which
makes research towards products in the market become easier over time,
consumers with high technological literacy often make limited or extended
decision making. Therefore, businessmen have to know the desired target market
so that the marketers can aware of what they are facing in the market, obviously
by knowing the characteristic of the targeted segment.
The starting point of deciding market segmentation is the question of to
whom the product should be marketed. If the target is not segmented, its called
Mass Marketing with mass production and mass distribution with the purpose of
reducing the cost of production. Nowadays, this might not valid anymore since the
cost of mass marketing is becoming higher and more difficult to reach targeted
market (Kotler and Keller, 2009)
When entering the market by selling smartphone products, marketers
obviously know that the amount of consumers are greater in younger generation.
Every generation has its own characteristics and level of significance towards the
market. People are influenced based on their society and the time they grew up.
The factors that can influence an individual consist of music, movie, politic, and
local event in certain period (Kotler and Keller, 2012) Generation Y or Millennials
has been the generation who are impacted the most by the changes in the market
and also bring the most changes in the market. Millennials consist of people born
from 1980 to 2000 (Stein, 2013). The idea is; millennials love to buy. This fact
forced the businessmen to reshape the business and be adaptive to the new
demands in the market.

Most of smartphones and internet users come from Millennials. As per

2014, over 85% of millennials owns smartphones. Millennials also have the
highest social networking penetration compared to any other generation. Over
past two decades, millennials have great significance impact toward the market
and became important market segment to be considered by businessmen (Noble,
Hoytko & Phillips, 2009). In fact, this generation has the highest purchasing
power compared to any other generation (Morton, 2002).
Its true that most businessmen have to consider or focus more on targeting
millennials; however, its hard to deliver the brand loyalty to millennials.
According to Kotler and Keller, here are millennials attitudes about causes:

85% millennials are likely to switch from one brand to another brand that
is about the same in price and quality, if the brand is associated with a
good cause

86% millennials consider a companys social or environmental

commitments when deciding which products and services to recommend
to others

84% millennials consider a companys social or environmental

commitments when deciding what to buy or where to shop

87% millennials consider a companys social or environmental

commitments when deciding where to work

86% millennials say when a product or company supports a cause whether

its a social or environmental issue they care about, they have a more
positive image of that product, even the company.
The biggest issue that exists here is the brand loyalty of millennials. They

tend to change the brand or product especially technological products which are
very fast changing and improving through years. Brand loyalty originally came
from single purchase made by customer; however, as a human with unlimited
needs, consumers tend to purchase certain kind of product more than once.
Therefore, consumers will have a choice whether to loyal to the previous brand or
change to another brand (Odin and Florence, 2001)

For a customer to reach brand loyalty, there are four stages: Liking,
Satisfaction, Commitment, and Trust (East, Gendall, Hammond, & Lomax, 2005).
Liking is done when the first research toward a product of a brand to fulfil a need
of a customer. After the process of buying, there will be satisfaction. This
satisfaction later will bring a customer a commitment to a product based on the
trust toward the product of the brand. This brand loyalty doesnt only come from
the repeated buying attitude itself, but also come from recommendation from
relations or the society of the individual.
1.2 Research Question
1. What are the effect of culture and social status that influence the smartphone
purchasing behavior of millennials?
2. What are the effect of internal factors including perception and emotion of the
millennials that influence their smartphone purchasing behavior?
3.

What should a smartphone manufacturer do to maintain the brand loyalty of

its customer?

1.3 Research Objective

The research objectives for this study are as follows:
1. To analyse what are the factors that influence customers especially millennials
in purchasing smartphone.
2. To seek what are the factors and purchase intentions before buying
smartphone and the satisfaction level of it which leads to brand loyalty.
3. To analyse how do the existing theories can be used in the research of the
issue in fast changing market condition.
4. As additional theory or references to other research related to brand loyalty,
technological improvement, millennials, consumer behavior, and marketing.
1.4 Research Benefit
For Businessmen:

The businessmen especially smartphone manufacturer can be more aware

toward the millennials, who have huge power in the market, to survive in the
future. The result of this research also can be used as an opportunity to build
customer loyalty which results in stable profitability. Smartphone manufacturers
also can have the idea of how they should design and build their future product
based on what the customers want.
For Customers:
This can be used as a self-reflection when they want to purchase a
smartphone. This research will increase brand awareness of customers; therefore,
customers can be smarter in choosing brand for their future smartphone. This also
can make customers faster in choosing smartphone in the future due to the
knowledge of the factors that can be considered when choosing the brand.
For researches in the future:
This research will be beneficial to other researches in the future which
related to customer purchasing behavior, smartphone marketing, and brand
loyalty.

References
East, R., Gendall, P., Hammond, K., & Lomax, W. (2005). Singular, additive, or
interactive?. Australian Marketing Journal, 13(2), 10-26.

Kotler, P. & Keller, K. (2009). Marketing Management (13th ed.). Pearson

education.

Kotler, P. & Keller, K. (2012). Marketing Management (14th ed.). Pearson

education.

Lu, H. P., & Wang, S. (2008). The role of Internet addiction in online game
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Mobile Millennials: Over 85% of Generation Y Owns Smartphones. (2016).

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Noble, S.M., Haytko, D.L. & Phillips, J., 2009, What drives college-age
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http://dx.doi.org/10.1016/j.jbusres.2008.01.020

Odin, Y., Odin, N. & Vallete-Florence, P. (1999). Conceptual and operational

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Stein, J. (2013). Millennials: The Me Me Me Generation. TIME.com. Retrieved 5

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Weinberg, D. (2012). Smartphone features [Online]. Techtips.salon.com.

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Frederick Christianto
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