INFLUENCE OF BRANDING AND

PRICING ON PURCHASING
DECISION OF SMART PHONES
BA (Hons) International Business & Finance

STUDENT ID : C18Y2073
FINAL YEAR RESEARCH WORK PLAN

Component Marks allocated Weightage Deadline

Dissertation 100 80%

Chapter 1 - Introduction 10 30th November

Chapter 2 – Literature Review 25 30th November

Chapter 3 - Conceptualization & Operationalization 15 30th November

Chapter 4 - Data Analysis 40 22nd December

Chapter 5 - Results & Conclusion 10 5th January

Viva 100 20%

Students are expected to face the viva with a presentation. The research presentation should consist of a
maximum of 15 slides, 3-4 slides could be used to list down the research objectives, research question and
the methodology. The balance should be utilized to detail the findings of the research.

NOTE TO STUDENTS

1. Three feedback sessions have been incorporated.

a. 1st feedback to be obtained by latest 30th November (Students who do not contact the
mentor and complete substantial work by this deadline will not be allowed to submit
the research project with the current batch)
b. 2nd feedback to be obtained by latest 22nd December (Students who do not meet
thresholds set by the mentor by this deadline will not be allowed to submit the
research project with the current batch)
c. 3rd feedback will be provided between 4th & 10th January 2020. The feedback will be
jointly provided by both the examiner and the supervisor.
2. Deadlines:
a. Deadlines for obtaining feedback as provided in (1) above.
b. Dissertation (hard bound) – 19th January 2020
i. No spiral bound submissions are required
ii. Hard bound formatting provided in page below.
c. Viva session – 8th – 9th February
3. It is the responsibility of the student to obtain written feedback from the mentor.
4. The Administration will not take any responsibility for delays at the student’s end and will not
liaise with the mentors in view of supporting the student.

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DECLARATION AND COPYRIGHT

I, Husny Ahamed Deen Shareef, do hereby declare that the research described in this
dissertation has not already been submitted for any other Degree, Diploma or academic and
professional qualifications. I certify that to the best of my knowledge all sources used and any
help received in the preparation of this dissertation have been acknowledged.

Signature: …………………

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Acknowledgments

I am most grateful to God Almighty for his guidance and sustenance for the gift of all whose
encounter with me has made this life meaningful.

This study was made possible through cooperation, moral and financial support from several
individuals. First and foremost, I am so much indebted to my research lecturer Mr.Mahen
Muttiah and my project mentor Mr. Reshan Uzman for his patience, guidance, assistance,
mentoring, intellectual support and encouragement that went beyond the call of duty
throughout the process of writing this dissertation have been a driving force in my success.

I also extend my sincere appreciation to my Father, my Mother and other family members. It
is my responsibility to express my sincere gratitude to all my colleagues and friends who
were willing to spare their time and to offer their wisdom and suggestions in making this
work a success.

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Abstract

This study analysis how does brand and price influence the purchasing decision of
smartphones. The primary objective was to determine the factors influencing the smartphone
buyers purchasing decision, second objective was to identify the influence of branding to the
purchasing decision of smartphone and the third objective was to identify the influence of
pricing to the purchasing decision of smartphone.

Convenience Sampling method was used in this study to select the respondents. The study
was targeted on 100 respondents through online surveys where questionnaires were fed into
Google Forms and were circulated among the population.77 of them responded to the
questioner and the study was finally conducted with those response.

Descriptive Statistics including frequency, descriptive and cross tabulation from the database
template were used.

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CHAPTER 01

01.1 Introduction to the study

The development of Smartphones and technology has been an extended history of innovation
resulted due to the dynamic changes in the customers’ needs and preferences. Among the
development, the mobile phones have experienced the fastest adoption rate of any technology
around the world. (TA, 2008). Nowadays, Smartphones have become an integral part of
human daily life and personal communication across the globe.

Smartphone is a device with computer abilities and internet access, small in size and portable
compared to computers. Now these smartphones have become a source of entertainment,
communication tool, a search engine and much more. Smartphones have extensive data
storage capacity and processing power. (all, 2010). This has increased the market demand for
smartphones globally and took many companies attention to enter the smartphone industry.

Currently in the market there are many brands of smartphones such as Apple, Samsung,
Huawei, OPPO etc. The statistics of “State counter Global Stats” shows that out of the
smartphones available globally, Samsung, Apple and Huawei accounts for 31.98%, 22.04%
and 9.04% respectively. In Sri Lanka Samsung, Huawei and Apple accounts for 44.06%,
24.29% and 8.29% respectively. (Statsounter Globalstats, 2019).

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01.2. Problem Statement

Smartphone purchasing becoming a normally behavior, the emergence of many brands, that
has the similar features of one another, to the market has made the manufacturing companies
to focus on the factors affecting the purchasing decision of customers. In the current market
condition, branding and the pricing of the product plays a vital role in influencing the
purchasing decision of the customers.

The term ‘branding’ refers to how the company positions its brand in its customers whereas
‘brand’ is a permanent mark composed of name, logo and design that is sealed into a product,
which makes the product distinct from one another. The brand also makes the company
unique and differentiates it from its competitors. (Christensen, 2003).

The term ‘price’ is the amount a customer pays for a product in exchange for the benefit or
using a product. (Njeru, 2017) The customers use price to differentiate products that possess
almost similar characteristics and therefore pricing acts as a differentiating element between
substitute products. Pricing strategy is important to every company because it provides a cue
about the company and its products.

Since branding and pricing is considered to be the central for customer purchasing decision,
this study seeks to analyze the influence of branding and pricing to the purchasing decision of
smartphones.

01.3. Research Questions

“How does branding and pricing influence the purchasing decision of smart phones?”

01.4. Research Objectives

The key objectives of this study are to;

• To determine the factors influencing the smartphone buyers purchasing decision.

• To identify the influence of branding to the purchasing decision of smartphone.
• To identify the influence of pricing to the purchasing decision of smartphone.

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01.5. Literature Review

The overview of the literature review done in the Chapter 02 is given below.

This chapter mainly focused on two main independent variables and a dependent variable.
Each variable are supported by five theories and they were critically analyzed in the chapter
two. The main variables and the theories discussed are given below.

Brand

▪ Brand equity
▪ Brand awareness
▪ Brand association
▪ Brand loyalty
▪ Perceived quality

Price

▪ Cost plus pricing

▪ Value based pricing
▪ Competitive pricing
▪ Price skimming
▪ Penetration pricing

Purchasing decision

▪ Engel, Kollat and Blackwell Model

▪ Anderson Model
▪ Nicosia Model
▪ Bettman’s information processing Model
▪ Howard-Sheth Model

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01.06. Scope of the Research

The topic focused here was the influence of branding and pricing to the purchasing decision
of smartphones.

The independent variables of the study were “Branding and Price”. Branding was sub divided
in to 3 variable components namely brand image, loyalty and quality. The dependent variable
was “Purchasing Decision of the Customer.” The interrelationships were acknowledged
through the study.

The target population for the research were all smartphone users who reside in Colombo
District.

01.7. Significance of the Study

There are low switching costs for smartphone users. In the dynamic environment, as
smartphones get obsolete, new products are to be produced and innovated within a time
constraint. This is vital for survival of smartphone manufacturers. Hence, the cost related to
Research and development must be recovered through sales. However, since the switching
cost is low, if a competitor’s product price and brand is more appealing, they will lose sales.

Therefore, this study focuses on identifying the impact of branding and price on the decisions
of customers when purchasing smart phones. This would enable smartphone producers to
understand what customers value and how customers could be retained in the long run.

01.8. Limitations

• The data was collected through convenience sampling, so the level to which the
findings could be generalized was highly doubtful.
• Also, only participants from Colombo district were approved. Therefore, findings
would differ if the entire nation was considered.
• The level the sample represented the population of the study was questionable.
• The reliability of the data gathered was uncertain.
• Biasness of individuals who were participated in the study could affect accuracy of
the findings.
• Time was a constraint therefore research might be basic in nature.

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CHAPTER-02

Review of related Literature and Studies

This chapter emphases on reviewing the related literature and the studies on the topic under
study. The core purpose behind this review is to get a wider range of concepts regarding the
study which will contribute greatly to the conceptualization of the research model.

This chapter is mainly focus more on dependent and independent variables relating to the
study and which are given below.

➢ Independent variables
• Branding
✓ Brand image
✓ Loyalty
✓ Quality
• Pricing
➢ Dependent variables
• Purchasing decision of the customers
2.1 Definition and features of the Parent theory

2.1.1Branding

The branding can be defined as per the scholars in many different ways and perspectives.
Accordingly, in a journal which studies about the ‘Branding’ in between 2010 – 2015 refers;
Brand is a strong asset that contributes identity and character, guides consumers for product
choices and build the relations among consumers. (Bahtışen Kavak, Dec 2015)

And it also defined by another scholar as, A brand is a name, term, design, symbol, or any
other feature that identifies one seller’s good or service as different from those of other
sellers”. (Marion, 2014)

The process of creating a unique name and image for a product in the market, mainly by
conducting advertising campaigns with a consistent theme. Branding aims to build a
significant and differentiated existence for the product that attracts and retains loyal
customers. (Hardy, 2019)

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2.1.2Pricing

Pricing, is all about placing a value on a particular product, is commonly used by both
economics and finance. Pricing is quite complicative part since the entities struggle with the
question of “how to set a price?” and Price vs Cost. (PEAVLER, 2019)While setting the price
entities focuses on many aspects like covering the cost, getting the desired profit, looking at
the competitors price, retaining the customers and attracting new customers etc.

According to Charles Toftoy, associate professor of management science at George

Washington University, pricing is probably the toughest thing there is to do and it is part art
and part science. (Wasserman, 2019)

Even though there are many ways to set the price according to Willet, “successful entities use
combination of tools and the customer first concept. The more entities got to know about its
customers it can provide what they value and be able to charge more from them.”
(Wasserman, 2019)
According to Lovelock all other elements of marketing mix except pricing are related to
expenses while pricing generates revenue for the companies. (Dudu Oritsematosan Faith,
2014)
Diamantopoulos suggests that among the elements of marketing strategy price is the most
flexible element that can be implanted quickly compared to the other elements of marketing
strategy. (Dudu Oritsematosan Faith, 2014)

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2.2 Theories related to the independent variables
This section is going to focus mainly on the main theories related to the independent
variables.

2.2.1 Theories related to Branding

Brand equity
According to D. Aaker brand equity includes brand awareness, perceived quality, brand
association and brand royalty. Also D. Aaker argues that the brand equity is depend on the
number of customers who are making regular purchase. (Petrauskaite, 2014) Those terms are
discussed as theories below.
According to D. Bello and M. Holbrook, customers willing to pay more for the branded and
well-known product rather paying a not known branded products. (Petrauskaite, 2014)
One of the first critical article about the brand equity is done by Feldwick and he states
against the concept of brand equity by saying brand equity is an unclear concept due to its
measurability and application in the business environment. (David J. Smith, 2007)
As Feldwick was argued against the brand equity Kotler coming up with the saying that
“brand equity is the value of the brand based on to which it has high brand awareness, brand
loyalty, perceived quality, strong brand association and other assets related to brand” (David
J. Smith, 2007) to support the brand loyalty.
Further Ehrenberg continues the argument by stating that there is no clear definition and lack
of tangibility in the brand equity. Baldinger and Rubinson, debates against Ehrenberg ,
showing a research that customer attitude can be measured with some level of validity and
brand shows a decrease in the strength when look over a long period of time. (David J. Smith,
2007)

Brand awareness
Brand awareness refers to the ability of the target customers to identify the brand among
other similar items when a customer makes the purchasing decision. (Petrauskaite, 2014)
In simple terms brand awareness can be described as the degree to which a brand is known
among the public.
D. Blackwell states that the highly recognized brands are more likely purchased by customers
than those of low recognition. (Petrauskaite, 2014)

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D.Aaker introduced brand awareness pyramid which has four levels and those are given
below (Petrauskaite, 2014)
01. Brand Unawareness
Here customers not know that there is a so call brand and have no idea to become loyal to the
brand that is not known.
02. Brand recognition
This refers to the relatively low level of brand awareness.
03. Brand recall
Indicates a deeper level brand awareness. Well-known brands will take place.
04. Top level of brand awareness
D.Aaker debates that in this level a company’s brand is the first brand that customers can
recall.

Keller argued that brand awareness could influence the purchasing decision of the customers
through strong brand association. (Erfan Severi, 2013)

Brand Association
According to D.Aaker brand association is the relationship between customer’s memory and
the brand. (Petrauskaite, 2014) K.Keller suggests that customer’s association towards the
brand creates an unique brand image and that helps to maintain the brand equity.
(Petrauskaite, 2014)
Aaker argues that brand association can create positive vibes to customers about the brand
that give value to the customers to buy the brand. In order to build a high brand equity there
should be a high customer brand association. (Mohammad Reza Jalilvand, 2011)

Keller states three main categories of brand association as: attributes, benefits and attitude.
Those three are discussed below. (A. BeleÂn del RõÂo, 2011)
01.Brand attribute
Brand attributes are descriptive characters of a product or service that a customer thinks what
a product or service. Attribute includes both intrinsic and extrinsic brand attributes. (Stephen
Wen-Hung Wang, 2011)
Intrinsic attributes are purely related to the products. Intrinsic brand attributes are mentor and
differ from product to product based on the product’s ingredients and features, which
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determine the product’s nature and the level of performance. (Stephen Wen-Hung Wang,
2011)
Extrinsic brand attributes are mainly related to non-product attributes. Extrinsic attributes are
the external features of the product that enhance its purchase. Extrinsic attributes are related
to the brand symbolic attributes and the quality of the product. Extrinsic attributes are helps
to satisfy customer’s self-esteem or social approval needs. (Stephen Wen-Hung Wang, 2011)

02. Benefits
These are the personal values the consumers assign to the brand attribute. Simply these are
consumer’s thinking about what a brand can do for them. (Stephen Wen-Hung Wang, 2011)

03. Attitudes
Banyte, Joksaite and Virvilaite states attitudes as “an achievable comparatively permanent,
purposeful, more or less intensive and motivate customers’ intention to respond to a
particular product. (Ghorban, 2012)
In simple terms it is the consumers’ overall evaluation about a specific brand.

Perceived quality
Aaker suggests that the perceived quality of the brand is not the original quality of the
product but it is the customers perception about the overall quality of the product.
(Petrauskaite, 2014)
In current business market many businesses turned towards customer driven quality by
providing customers with their expected quality products while keeping their profitability.
(Mohammad Reza Jalilvand, 2011)
Perceived quality is not only the overall emotion associated with a certain brand but also the
reliability and the quality that the customers gaining from a particular brand. Perceived
quality is the evaluation of customers’ personal evaluation of the brand’s superiority.
Perceived quality is a subjectively determined level of quality rather than objectively
determined level of quality. (Yen-YooYou, 2016)
Aaker argues that perceived quality can show the noticeable variation between the products
and make a brand more attractive in consumers mind. Further he suggests that previous bad
experience of a customer will affect his purchasing decision. Aaker continues his argument
saying previous bad image of the customer will not change even if the product is changed in
quality. (Dr. Hsin Kuang Chi, 2009)
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Also, Aaker argues that customers don’t have enough time and information to assess the
perceived quality of the product. In addition to that perceived quality also can affected by the
factors like previous experience, education level and perceived risk. (Dr. Hsin Kuang Chi,
2009)

Brand loyalty
Jacoby and Chestnut defines the brand loyalty as “the biased, interactive response, expressed
over the period of time, by specific customer group, with regard to one or more alternative
brands out of a pool of such brands, and it is a psychological process of evaluating and
decision making process. (Faridah Ishak, 2015)
Jacoby and chestnut states customers’ commitment as an important element as it
differentiates the loyalty and repeat buying behavior. (Faridah Ishak, 2015)
Brand loyalty is when a customer constantly chooses the same brand with in a product
category. It is measured by the methods like word of mouth publicity, repetitive buying, price
sensitivity, commitment, brand trust, customer satisfaction, etc. (Juneja, 2015)
A brand could be in a stronger position in the market if the brand has more loyal customers.
K.Keller suggests that repeat purchasing cannot be considered as a brand loyalty since they
might purchase the product because of specific habits they have or buying it for specific
promotion. (Petrauskaite, 2014)
Brand loyalty enables the company to go to the market with premium pricing, enables greater
bargaining power with channels of distribution, reduces the costs and providing a secure
market by building a strong barrier to potential new entries into the market. (Faridah Ishak,
2015)
Assael, Samuelsen and Sanvik argued that in the behavioral approach to brand loyalty they
consider the constant purchase as brand loyalty but in cognitive approach to brand loyalty
they state that only the behavior can not reflect the brand loyalty. (Erfan Severi, 2013)
But, according to Yoo, brand loyalty has the power of impacting consumer decision making
and make the consumer to buy the same products. (Erfan Severi, 2013)Yoo also concludes
the brand loyalty as the core brand value. In addition to that Strategic Marketing and
Research Technique coming up with the saying that brand loyalty and purchasing decision
have a positive relationship. (Erfan Severi, 2013)

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2.2.2Theories related to pricing
Cost plus pricing
According to Drury cost plus pricing is the model where companies simply adding a markup
to the cost of product or service to get the selling price. (Reinaldo Guerreiro, 2012) For that
purpose, the direct material cost, direct labor cost and direct overhead costs are added
together to get the cost and the markup percentage is added to the cost to get selling price.
Dolgui and Proth argued that since the cost-plus pricing is not considering the consumers’
behavior it should be avoided. (Reinaldo Guerreiro, 2012)
Critique relating to cost plus pricing are given below. (Albari, 2018)
• This is ineffective as it does not consider the customers perspective
towards the price.
• It creates a culture of working only for getting profit rather than
customer satisfaction.
various researches found that only few companies are following this pricing strategy as it
does not match for all sectors in the business world. Most probably the monopoly companies
are using this strategy as they have no competition and consumers have no option but to go
for it.

Value based pricing

Value based pricing considering the value that a product or a service delivering to a
particular customer group as a base to derive the price for the given product or service. This
strategy is treated as the superior strategy to all other pricing strategy and suitable for the
profit-oriented firms to maximize their profit. (Dudu Oritsematosan Faith, 2014)
According to Andreas following are the barriers for the implementation of value-based
pricing (Antony Sije, 2013)
• Difficulty in assessing the value
• Difficulty in communicating the value
• Not having an effective market segmentation
• deficit in sales force management
• failure obtain support from senior management

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Also, many scholars claim that this value-based pricing does not consider the need,
prevalence and the affordability of the consumers. Also, they recommended that value-based
pricing must be one of the parts of pricing strategy of the businesses to become successful.
(Albari, 2018)
Competitive pricing
Michael explains the competitive pricing as a strategy of having competitor prices as the base
for setting own prices. Under this strategy price is not necessary to be as same as
competitor’s price. Therefore, the price can be bit lower, higher or same as competitors that
depending on the price setting company’s strategies on the product or service. (Gibson
Gidion Ndyamukama, 2015)
The main strength of competitive pricing is that the data is already available and the
weakness is it does not consider the demand for the product in the market.

Competitive pricing can take two forms which are given below. (Anon., 2014)
1. Going rate pricing
Under this theory the price is set for a product or service by having the current market
price as a base. This is more applicable for the products which are homogeneous and very
little different from one to another.
There are more chances that going rate pricing can occur under the following situations
• The market where degree of price leadership is existing
• Reluctancy of the businesses to set different prices because of the risk of price war,
that would reduce the profit to all businesses
• When there is a single price leader in the market
2. Competitive bidding
Under the competitive bidding the process the of drawing a detailed specification for a
product and putting the contract out to tender takes place and then potential suppliers quote
their price that is confident to them. After that process the buyer will select the lowest price
quoted supplier.
Companies following competitive pricing sometimes need to set the price less than their
production cost that will lead to cut in their profit and running out of money in the company.

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Price skimming
Price skimming is where a firm enters in to a market with a new product with high
introductory price. The customers who are searching for quality products and ability of the
product to satisfy their needs are targeted under this scheme. (Chen, 2017)
To achieve the maximum revenue as much as possible the firm must carry out high
promotional campaigns in order to ensure the product acceptance even at a high cost. This
strategy is most suitable in a market where the potential customers are large enough to justify
the effort. Also, the firm can go with high price and low promotion to the market which is
well known the product and small size. (Dudu Oritsematosan Faith, 2014)

Following are needed if a company wants to go the market with price skimming strategy and
as this strategy is depending on the following factors this is criticized by many scholars.
(Zare, 2013)
• Sufficient number of buyers with higher demand
• Production cost of single product is not that high
• The market should not attract more competitors since the company is going with the
high price initially
• The product must have a great image in the market.

Penetration pricing
Penetration pricing strategy is used by firms in order to gain the market share quickly by
setting a low price for the product or service initially. This strategy is often used by firms
who are new entrance to the market. This strategy is applicable in a situation where the price
of the product determines the increase in sales volume. (NYAGA, 2017)
Penetration pricing can be used by firms who are doing bulk production and having
specialized employees which will reduce the production cost and enable the firm to set a
lower price. Following are the main objectives of penetration pricing. (Wissa Harry Pamudji,
2015)

• Capture new market share quickly

• Creating brand loyalty among consumers
• Grabbing competitor’s customers
• Creating substantial demand and utilizing the economies of scale

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2.3. Critical Analysis of the Theories Related to the Independent Variables

The theories discussed about the first main independent variable, branding, shows the extent
to which it will influence and what factors affects when a customer considers to make a
purchasing decision. According to D. Bello and M. Holbrook, customers willing to pay more
for the branded and well-known product rather paying a not known branded products.
(Petrauskaite, 2014)Also D. Blackwell states that the highly recognized brands are more
likely purchased by customers than those of low recognition. (Petrauskaite, 2014)So, this will
help to determine how branding influence the purchasing decisions of the customer.

Pricing is evidenced, through the theories, as an important factor that also customer will
consider when making his purchasing decision. The theories discussed in the literature part
explains how consumers perceive different prices and how that influences the purchasing
decisions of consumers. So, this will help to find out the extent to which pricing will
influence the purchasing decisions of the customers.

2.4 Discussion of the dependent variable

2.4.1 Purchasing decision of customers

Consumer purchasing decision making process is begins from a consumer to buy the good or
services in exchange for money. It enables the seller to sell his product in the market. (Gözde
KANDEMİR, 2019)

Kotler introduced a list that influence the consumer purchasing decisions with two main
categories namely, the market stimuli and buyer characteristics. Under market stimuli the
factors like product, price, place and promotion will include and under buyer characteristics
factors like culture, social, personal and psychological factors will take place. (Dr. Tabitha
Waithaka, 2017)

Some of the factors that effects the purchasing decisions of the customers are discussed
below. These factors are considered here in order to link how they influence the purchasing
decision of smartphones in connection with the branding and pricing, which is discussed in
Chapter 04.

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 I. Demographic Factors

Age: one of the main factors that effects the purchasing decision is the age of the customer.
The older customers possess more purchasing experience than younger customers. Older
customers consider more factors before making purchasing decision while the younger
customers only consider the brand and the price. (Thu Ha, 2014)

Gender: Dora states that men and women demand certain different product since their role
in household activities are different and they behave differently while making the purchase.
More over women are more emotional than the men and easily attracted to advertisements
than men. Another research call Global PL-Trande state as gender has no influence in buying
behavior. (Thu Ha, 2014)

Income: income has a greater impact in the purchasing behavior of the customers. Level of
income affects the life style and the attitude of the customers. A high-income earning person
choose costly products and the low-income earning person goes to low cost products. (Thu
Ha, 2014)

2.5. Theories related to independent variable

Anderson model

This model is proposed by Anderson in 1965 and considered as one of the earliest models
relating to the consumer behavior. Even though this model fails to consider the consumers’
attitude relating to repeat purchase behavior it recognizes the importance of information in
consumer decision making and highlights the importance of consumer attitudes in decision
making process. (Diksha Panwar, 2019)

In this process all the collected information is filtered and match with behavioral aspects
namely beliefs, norms, values etc.; along with search for substitutes. As a final stage it
considers the budget and fit for needs and making the decision of purchasing.

This model is so complicated to be used in all time when a person needs to make a
purchasing decision. Also, this model is not applicable in variety of situations and this is too
strict for the predictions of human behaviors. (Deborah Lines Andersen, 1977)

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 Figure 02: Anderson model

Source: (Diksha Panwar, 2019)

Nicosia model

This model was introduced by Francesco in 1966, describing the buyer behavior through the
creation of link between the organization and its customers. (Stankevich, 2017)

According to this module the messages convey by the companies first influences the
predisposition of the customer towards the product and then based on the situation the
customer will have certain attitude towards the product. The outcome will be the search for a

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product or the evaluation of a product that will satisfy the customer. If all those steps satisfy
the customer then he will buy the product otherwise the reverse may occur. (K, 2014)

Nicosia module has four basic areas namely consumer attitudes based on firms’ message,
search and evaluation, act of purchase and feedback. Those areas are discussed below. (Jha,
2014)

Consumer attitudes based on firms’ message: This area is divided into two and the first
area includes the marketing environment of the company and the communication effort done
by the company to affect the customer attitudes, competitive environment and the target
market characteristics.

The second area lay down the characteristics of the customers like experience, personality,
and how he deals with the promotional ideas of the product.

Search and evaluation: Under the second area search and evaluation done by the customers
about the product advertised by the company and also the search of new alternatives will take
place.

Act of purchase: If the second area ended in motivating the customer to purchase the
product it will become as an input for the third area of how consumers actually buys the
products.

Feedback: The fourth area involves the use of purchased items and also can be used to
receive feedback on sales done by the company.

There are some major limitations of Nicosia Model is given below. (Trenton Milner, 2013)

• This model is focusing from marketer’s point of view rather than consumer’s point of
view
• This model defines the consumer activities very broadly
• Relationships shown in this model are not in fact valid

This model was criticized by many scholars because it was not empirically tested and most of
the variables were not defined. Anyhow this was recommended by some scholars as it
considered the relationship between firms and the customers. The firm communicates with its
consumers through marketing messages and the got purchase as a response from potential
consumers. (Jha, 2014)

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 Figure 03: Nicosia model

Source: (Diksha Panwar, 2019)

Engel, Kollat and Blackwell Model

Nicosia model is adjusted by Engel, Kollat and Blackwell in the late 1960s. The main
strength of this revised model is that feedback of search loop option in this model. This
model is presenting a linear model of decision-making process. (Trenton Milner, 2013)

This model includes a clear flow of tasks relating to decision-making where the consumers
know there is a problem with the solution but he is lacking of other related knowledge and
then looking for other source of information relating to the solution and evaluating the
alternatives against some criteria through which he comes to a purchasing decision. (Gözde
KANDEMİR, 2019)

Criticism against this model are discussed below. (Trenton Milner, 2013)

• The main criticism against this model is the linear nature of this model as that do not
occur every single time of purchasing decision making.

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 • The other criticism against this model is that this assumes that customers have the
capacity of evaluating each and every alternative and make a rational decision on the
best suited alternative.
• Bray states that this model failed to apply the mechanistic approach well to different
decision-making contexts. Also, the environmental and consumer variables and their
influence of the decision-making does not clearly include in this model.

This model providing a clear picture of the process of consumption and making it easy to
comprehend. However, the mechanistic approach of this model is criticized for its too
restrictive nature relating to the variety of the consumer decision making. (Bray, 2016)

Figure 01. Engel, Kollat and Blackwell Model

Source: (Bray, 2016)

23
Bettman’s information processing model

Bettman introduced his model in 1979 stating that consumers have limited capacity for
processing information, therefore rarely analyze the complex alternatives in the process of
decision making and apply very simple strategy. This model consists of seven major steps
which are disused below. (Jha, 2014)

i. Processing capacity: Anderson assumes that consumers has limited capacity for
processing information, not willing to do complex analysis and use very simple
strategies.
ii. Motivation: motivation is linked with hierarchy of goals’ mechanism that gives
variety of sub goals to make easy the choice selection.
iii. Attention and perceptual encoding: this are quite related to consumers’ goal
hierarchy and has two types of attentions namely voluntary and involuntary attention.
Voluntary attention deals with allocation of processing capacity to goals while the
involuntary deals with automatic reply to disruptive events. Both types of attention
have effects in recaching goals and choice. Encoding consider different steps to
ensure the whether consumer need more information or not.
iv. Information acquisition and evaluation: if the present information is inadequate
then consumers start searching more information, newly gathered information will be
evaluated to assess the suitability. Here consumer will search for information until
getting enough information or thinks its costly to gather information.
v. Memory: consumer store all information he collects and will go first here when he
needs to make a choice. If the collected information is not sufficient, he will start
looking outside for getting information.
vi. Decision process: here the application of heuristics or rules of thumb will be used to
the selection and evaluation of specific brand
vii. Consumption and learning process: this considers the future results after the
purchase. Here the consumer will get experience after the evaluating more alternative
and that experience will be used in the future.

24
This model is essentially or unessentially totally relying on the information processing so it is
so narrow in focus. Also, this model is criticized by many scholars for practically unsuitable.
Its start with motivation for the search, be attentive for information and evaluate information,
take a decision and focusing on using it on for future purchasing. (Jha, 2014) Therefore it is
somewhat applicable for purchasing decision.

Figure 04: Bettman’s information processing model

Source: (Kate, 2018)

25
Howard- Sheth model:

this model is introduced in 1969, stating the importance of inputs and talk about the ways in
which consumers orders the inputs before comes to final decision. It is not a perfect model as
it does not consider the buyer behavior. This model talks about three levels of decision
making which are discussed below. (Jha, 2014)

i. Extensive problem solving: here consumer does not have any information about the
brands and he will start searching for all the information relating to all the brands.
ii. Limited problem solving: here consumer have little knowledge about the market and
to select a brand some comparative brand information will be gathered.
iii. Habitual response behavior: here consumer well aware of all the brands and has the
ability to distinguish the brands. Consumer will made decision to purchase a specific
brand.

There are four major set of variables in this model and those are discussed below.

Inputs: consists of three different types of information sources. Namely significative,

symbolic and social. The significative and symbolic includes quality, price, service and
availability. Social includes family, reference group and social class.

Perceptual and Learning Constructs: the central part of the model involves with the
psychological variables when consumer is considering a decision. Some of this are perceptual
in nature, therefore concerned how consumer receives and understands the information from
input and other parts of the model

Outputs: these are the results of the above variables and how the consumers will response to
these variables.

External variables: these are not directly part of the business but some relevant external
variables include consumer personality traits, religion and time availability.

This model is more comprehensive by including multiple variables and multiple relationship
between the internal processes. This is also one of the short comes of this model. (Trenton
Milner, 2013)

This model suffers from conceptual limitations and it is evident that as the model is too
complicative for the routine purchases the consumers do not follow the entire path of this

26
model. Another problem with this model is that this suggests consumers always move one
step to another in linear fashion based always but it could be changed. (Trenton Milner, 2013)

Even though this model has some criticism this model is better than the Nicosia model as this
model bring the consumer decision making trend away from mathematical models to
conceptual models. (Trenton Milner, 2013)

Neman questioning the validity of this model due to lack of empirical work, employing
scientific method, examining the organization of the model and the inclusion of the individual
constructs. (Bray, 2016)

Louden suggest that this model is unsuitable for explaining the joint decision-making
process. (Bray, 2016)

However, it is commendable that an effort has been given to understand the influence of
exogenous factors on the basis of various hypothesis constructed by Howard and Sheth.
(Bray, 2016)

Figure 05: Howard- Sheth model

Source: (Jha, 2014)

27
2.5. Relationship of the Independent Variables to the Dependent Variable

There is a strong relationship between the independent variables, brand and price with the
dependent variable, purchasing decision. Branding and prices influence the purchasing
decision of consumers widely.

Monroe and Lee states that price have a great impact on consumer purchasing decision since
price giving value to the product and consumers take their purchasing decision by looking the
perceived value. (Dr. Tabitha Waithaka, 2017)

Mohamed Aamir and Sameen Nasir states the brand as a factor that influences the purchasing
decision of the smartphones. Further, in their research they include that according to D.
Aaker brand awareness influence and impact of consumer purchasing decisions. (Akber,
2016)

Owusu Alfred states, in his research of influence of price and brand quality, that both price
and brand quality have great impact on the purchasing decision of smartphones. (Puneet
Walia, 2017)

Deepa Gularia conducted the research of factors affecting purchasing decisions of

smartphones and concludes that price and branding influence the purchasing decision of
smartphones. (Puneet Walia, 2017)

28
CHAPTER 03

Research Frame work

This chapter mainly focuses on the research framework that includes research frame work,
research hypothesis, operationalization of the main variables and the research methodology.

3.1 Theoretical framework

Theoretical framework refers to the studies, drawn from the literature review, being uses as
the basis of the study.

Consumer purchasing decision is one of the most complicated and dynamic issue which
cannot be defined easily and commonly. There are many researches conducted in relating to
the factors influencing the consumer purchasing decision.

The main theories that have been used as a basis of analysis of this study are given below

• Branding related theories

• Pricing related theories

The detailed explanation of these theories is available in Chapter- 02

3.2 Conceptual framework

Conceptual framework illustrates the specific map of ideas of the study being conducted.
The conceptual framework based on the main theories related to the study can be illustrated
as follows. This will begin with the contribution of independent variables and end up with the
results that the problem of study expects.

29
 Brand Image

Brand
Loyalty
Branding
Brand
Quality
Purchasing
Decision

Price

Figure 06: Conceptual framework

The above framework illustrates how the independent variables impact on the purchasing
decision of smart phones which is the dependent variable.

3.3 Research Hypothesis

A hypothesis is an informed assumption about a certain problem. Research will be conducted

on main two hypothesis and questionnaire designed according to achieve the research
objectives.

Hypothesis No. 01

H0 – Branding does not influence the purchasing decisions of consumers.

H1 – Branding does influence the purchasing decisions of consumers.

Hypothesis No. 02

H0 – Pricing does not influence the purchasing decisions of consumers.

H1- Pricing does influence the purchasing decisions of the consumers.

One Sample T testing was used in testing the hypothesis of this study

30
3.4. Operationalization of the Independent and Dependent Variables

Concept Definition Operational Level of

component measurement
Branding Independent Question number Multiple choice
Variable 04,05,08,10,11 Linear scale
Pricing Independent Question number Multiple choice
Variable 06,09,12 Linear scale
Purchasing decision Dependent Variable Question number Multiple choice
07,13,14,15 Tick box grid
Table 01: Operationalization of the Independent and Dependent Variables

Research Methodology

Under the research methodology section, a detailed explanation about the methods used,
respondents and sampling procedures, research instrument, collection of data and the
statistical treatment of data will be discussed.

3.5. Methods of Research Used

The research is done through the application of both qualitative and quantitative approach.
Qualitative is used with regard to the brand which is hard to quantify and a need for
descriptive analysis is prevalent. Quantitative approach is used for price as price is
measurable, and hence numerical scrutiny is used.

3.6. Respondents and the Sampling Procedures

Population and the sampling frame

The target population consists of all smart phone users from Colombo district. This study is a
district-based research with limitations in age group from 18-40 years. Further number of
respondents restricted to 77, due to time concerns.

Convenience Sampling Technique was used as it selects a particular group of people where
smart phone users within the Colombo district have only been considered. The limitation of
this sampling is that it does not come close to sampling all of the population

31
3.7. Research Instruments

Please refer Appendix A for the complete template of the questionnaire. It was solely
designed for the collection of primary data for this study.

3.8. Collection of Data

Primary data

Primary data was collected through the circulation of questionnaires that is given in appendix
A. The questionnaires were sent to 100 smartphone users and only 77 responded.

Number of Respondents

23

77

responded non responded

Figure 07: Number of respondents

Secondary data

Secondary data collection was done through searching and referring to the available literature
on the study from articles, books and previous studies. The detailed interpretation of the data
is done in chapter 02.

Further the researcher edited, encoded and analyzed the obtained data up to its finalization.

3.9. Statistical Treatment of Data

Microsoft Excel and SPSS (Version 13) were used for the analysis of data, construction of
graph and computing statistics.

Pie Charts and Histograms were used to present the data graphically.

32
CHAPTER 04

Presentation of the Data and Critical Discussion of Results

The data collected from 77 smartphone users are presented and critically discussed in in this
chapter. This will help to understand the influence of branding and pricing on the purchasing
decisions of smartphones. The data will be presented using graphs, frequency tables and
statistics following with a discussing of the findings and interpretation of the results.

4.1. Analysis of the Findings related to demographic data

4.1.1. Age of the customer

Age to age the people perception change so some people concerns more on price they do not
want to pay more for purchase and some people concerns more on value for the money so
they will prefer value of the money over the brand and price they pay which is subjective.
The reason why age is considered is to link how peoples’ perception towards price and brand
change according to their age when making purchasing decisions.

The findings show that the age groups of below 20, 26 to 30 and above 35 pay more attention
on the brand than the price while the age groups of 21 to 25 and 31 to 35 are concerning more
on the price. So, smartphone companies targeting the age groups of below 20, 26 to 30 and
above 35 should go to the market with branded smartphones and companies targeting the age
groups of 21 to 25 and 31 to 35 should go with low priced or reasonable priced smartphones.

Different age groups and their preference for the

purchasing decision

25

20

15

10

0 Brand preference Price preference

Belov 20 21 to 25 26 to 30 31 to 35 above 35

Figure 08: Bar Chart for age groups and their preference for purchasing decision
33
4.1.2. Gender

The purchasing pattern will change based on the gender difference as female customers are
more attractive towards the branded products and most of the times male customers consider
price before their purchasing. So, the gender is considered to link how it is affecting the
purchasing decisions of customers with regards to price and brand.

The finding shows that both male and female are more attracted by brands than price in
relating to purchasing decision of smartphones but in a small margin. So smartphone
companies considered to target based on gender wise they should go to the market with
branded smartphones rather than go with low priced smartphones.

Gender * What is reason for the purchasing decision of the current smartphone?
Crosstabulation

Count
What is reason for the
purchasing decision of
the current
smartphone?
Price
Brand concern
Gende "Male"
23 21
r
"Female
17 16
"
Total 40 37

Table 02: Cross Tabulation of Gender and their reason for the purchasing decision

4.1.3. Income level

Income level of the customers has an impact on the purchasing decisions as high income
earning customers always prefer branded items over low price products while low income
earning customers pay more attention towards the price of the products before make their
purchasing decisions.

It is clearly shown in the following chart that according to the income level the price and
brand concerns are differing in relating to the purchasing decision of smartphones. According
to the findings below smartphone companies who are targeting the 50,000 to 75,000 and

34
above 100,000 income earning groups better go the market with the branded smartphones.
Also, companies targeting 75,000 to 100,000 income earning group should pay more
attention on the price of the smartphones than brand. The income earning group of below
50,000 can be targeted by smartphone companies with both branded and low priced
smartphones.

Figure 09: Bar Chart for different income level and their reason for the purchasing of
current smartphone.

35
4.2. The First Main Independent Variable

When analyzing the first main independent variable, brand, five main questions were asked
which will be discussed below.

Q04- How long have you been using the same smartphones?

It is observable from the results revealed from the below figure that majority (53.2%) of the
smartphone users using the same smartphone brand for the period of 2 to 4 years while the
rest (46.8%) of them using the same brand for less than 2 years.

How long have you been using the same smartphones?

Frequenc Valid
y Percent
Valid Less than 2
36 46.8
years
2 to 4 years 41 53.2
Total 77 100.0
Table 03: Duration of using the same smartphone

Cross tabulation of “Q4- How long have you been using the same smartphones?” and “Q10-
Will you shift from the current brand of smartphone you are currently using when purchasing
your next smartphone?” was done in order to identify the brand loyalty of the customers and
its influence over the customer purchasing decision regards to smartphones. The results
showed that majority of the smartphone users are loyal to their brand smartphones and not
willing to shift to another brand while some of the smartphone users are not loyal to their
brand and willing to shift to another brand. Also, another part of the smartphone users are not
sure about using the same brand of smartphones. So, the smartphone companies who are go
the market with branded smartphones can target both smartphone users who are willing to
shift to another brand and who may shift to another brands.

36
How long have you been using the same smartphones? * Will you shift from the current
brand of smartphone you are currently using when purchasing your next smartphone?
Crosstabulation
Count
Will you shift from the current
brand of smartphone you are
currently using when
purchasing your next
smartphone?

Yes No May be
How long have Less than 2
you been using the years 12 19 5
same smartphones?
2 to 4 years 15 13 13
Total 27 32 18
Table 04: Cross Tabulation of period of using the same smartphone and will they shift

Q05- what is the current smartphone brand you are using?

The results of Q05 showed that 45.5% of the customers are using the Samsung while 44.2%
of customers are using iPhone and Huawei, Oppo and other brands accounting for 7.8%,
1.3% and 1.3% respectively.

What is the current smartphone brand that you are using?

Frequenc Valid
y Percent
Valid I phone 34 44.2
Samsung 35 45.5
Huawei 6 7.8
Oppo 1 1.3
Other 1 1.3
Total 77 100.0
Table 05: Brand of smartphone

Cross tabulation of “Q05- What is the current smartphone brand you are using?” and “Q07-
What is the reason for the purchasing decision of the current smartphone?” was carried out to
identify the impact of brand in the purchasing of smartphones. Out of 77 current smartphone
users 40 are purchased by considering the brand so it is obvious that branding influences their
purchasing decision of smartphones.

37
 What is the current smartphone brand that you are using? * What is reason for
the purchasing decision of the current smartphone?

What is reason for the

purchasing decision of
the current
smartphone?
Price
Brand concern
What is the I phone
current
smartphone brand 34 0
that you are
using?
Samsung 4 31
Huawei 2 4
Oppo 0 1
Other 0 1
Total 40 37
Table 06: Cross Tabulation of current smartphone brand and reason for the
purchase

Q8-In a scale of 1 to 5, how satisfied are you with the current smartphone brand you
are using?

This question tends to determine to what extent the smartphone users are satisfied with their
current brand of smartphone they are using. The below statistics showed a mean of 3.90 with
the standard deviation of 1.107, which means most of the smartphone users are satisfied with
regard to the purchasing of their current smartphone.

Descriptive Statistics

Minimu Maximu Std.

N m m Mean Deviation
In a scale of 1 to 5,
how satisfied are you
with the current 77 1 5 3.90 1.107
smartphone brand
you are using?
Valid N (listwise) 77
Table 07: Descriptive Statistics of satisfied level

38
Q10- Will you shift from the current brand of smartphone you are currently using
when purchasing your next smartphone?
The ultimate purpose of this question is to identify the brand loyalty of the smartphone users
which will have a great impact over their purchasing decision of new smartphone. According
to the outcome of the following finding shows that majority of the smartphone users are not
willing to shift from the smartphone brand they are currently using, while second majority
willing to shift to another brand and some of the smartphone users may shift to another brand.
So, the smartphone companies who are go the market with branded smartphones can target
both smartphone users who are willing to shift to another brand and who may shift to another
brands

Will you shift from the current brand of smartphone you are currently using when
purchasing your next smartphone?

Frequenc Valid
y Percent
Valid Yes 27 35.1
No 32 41.6
May
18 23.4
be
Total 77 100.0

Table 08: will you shift from the current smartphone brand

Q11- If yes what will be the next smartphone brand you will purchase
The results of Q11 shows that 41.6% of smartphone users are loyal to the brand and not
willing to shift to another brand while the rest is willing to shift to another brand while they
make a purchasing decision for new smartphone. Accordingly, the smartphone companies
who are targeting customers based on brand preference can focus on grabbing this
opportunity and possibly increase their market share. The smartphone companies also
targeting those who prefer other brands by making their brand even more special also.

39
 If yes, what will be the next smartphone brand you will purchase?

Frequenc Valid
y Percent
Valid 0 32 41.6
iPhone 37 48.1
Samsung 3 3.9
Huawei 1 1.3
Oppo 3 3.9
Other 1 1.3
Total 77 100.0

Table 09: Next smartphone brand intended to purchase

4.3. The second main independent variable.

When analyzing the influence of the price in the purchasing decision of smartphones
following questions were asked and their results were discussed below.

Q6- Price range of the current smartphone you are using

This question aims to identify the price ranges of the smartphones that are currently used in
order to determine the price preference towards the purchasing of smartphones by the
customers. It is shown in the following finding that among the current smartphone users first
and second majority of the smartphone users prefer the comparatively low-priced
smartphones, only few of the smartphone users prefer the prices which are in between high
and low and only the least and 11.7% of smartphone users prefer the high-priced
smartphones. So, the companies, targeting smartphone users who are concerning prices of
smartphones, should go to the market with more smartphones with low prices and less
smartphones with high prices.

40
 Price range of the current smartphone you are using.

Frequenc Valid
y Percent
Valid Below 30,000 27 35.1
30,000 to
22 28.6
50,000
50,000 to
12 15.6
75,000
75,000 to
7 9.1
100,000
Above 100,000 9 11.7
Total 77 100.0
Table 10: Price range of current smartphone

Q9- In a scale of 1 to 5 how will you rate the value for money you paid for purchasing
current smartphone
The reason why this question is discussed here is to identify to what extend the smartphone
users are satisfied with the value for the money they paid as a price to purchase the current
smartphones. Because if they feel like the value for money is not good enough their
purchasing decision for the next smartphone will be influenced by this factor.

Accordingly, the below finding shows a mean of 3.65 denotes that the smartphone users are
somehow satisfied with the value for the money they paid to purchase the smartphones.

Descriptive Statistics

Minimu Maximu Std.

N m m Mean Deviation
In a scale of 1 to
5, how will you
rate the "value for
money" you paid 77 1 5 3.65 1.109
for purchasing
current
smartphone?
Valid N (listwise) 77

Table 11: Descriptive statistics of value for money

41
Q12- What is the maximum you will spend for a smartphone?
In order to determine the pattern of prices that are preferred by customers when they intend to
purchase new smartphones are discussed in this question. The findings below indicate that
most of the customers are willing to pay comparatively high prices for smartphones while
only a small portion of the smartphone users are willing to spend few amounts of money in
smartphone purchasing. So, there is a high chance that smartphone companies can go to the
market with comparatively high-priced smartphones and become successful in the future.

What is the maximum you will spend for a smartphone?

Frequenc Valid
y Percent
Valid Below 30,000 6 7.8
30,000 to
12 15.6
50,000
50,000 to
23 29.9
75,000
75,000 to
24 31.2
100,000
Above 100,000 12 15.6
Total 77 100.0

Table 12: Maximum amount of money intended to use for smartphone

4.4. The main dependent variable.

In part of analyzing the main dependent variable, purchasing decision, 04 main questions
were asked. Those are discussed below.

Q7- What is the reason for the purchasing decision of the current smartphone

The main purpose of this question is to identify how far the branding and pricing influencing
the purchasing decision of smartphones. The results, of this question, shown in the below
frequency table revealed branding has an upper hand than price concern but only with the
small margin of 4%.

42
 Figure 10: Concern for purchase

Q13- Rank the below smartphone brand based on your brand preference
Since this study is about how does branding and pricing influencing the purchasing decision
of smartphones it is important to identify the perceptions of smartphone user towards various
brands when they make a purchasing decision. That is why this question is circulated and the
results are given below.

When customers make a decision to purchase a smartphone and consider mainly the brand
according to the below chart each and every smartphone are ranked 1 to 4 and each ranked
are given specific scores and average is calculated based on the total scores calculated and
total number of respondents. Accordingly, iPhone, Samsung, Huawei and Oppo are
accounted First, second, third and fourth places respectively with the average of 3.5, 2.9, 2.1
and 1.5. The working is provided in the appendix 02

43
 Rank the below smartphones based on your
50 "Brand" preference

40

30

20

10

0
Rank1 Rank2 Rank3 Rank4

iPhone Samsung Huawei Oppo

Figure 11: Rank based on brand preference

Q14- Rank the below smartphones based on your “price” preference

Different perceptions and preference of smartphone users towards the price could influence
their purchasing decision, in order to identify how smartphone users’, prefer different brands
based on price concern is discussed in this question.

According to the below chart each and every smartphone are ranked 1 to 4 and each ranked
are given specific scores and average is calculated based on the total scores calculated and
total number of respondents. When its come to price concern Huawei secure the first place
with an average of 3.2, Oppo, Samsung and iPhone accounted second, third and fourth
respectively with the averages of 2.8, 2.5 and 1.6. The calculation is given in the appendix 03.

Rank the below smartphone brand based on your

"Price" preference.
50

40

30

20

10

0
Iphone Samsung Huawei Oppo
Rank 01 Rank 02 Rank 03 Rank 04

Figure 12: Rank based on price preference

44
Q15- Rank the below smartphones based on you “value for money” paid for purchasing
the below smartphones.

These days the consumers are rational consumers as they expect more by spending less.
These consumers often look at the value for the money before they purchase anything, so
when relating to smartphone purchase the customers definitely have a look on the value for
the money they are going to spend for smartphones and it will have a great influence over
their purchasing decision of smartphone.

This question aims at how customers place value for money spent on the smartphones and
how its influence their purchasing decision of smartphones. The average is calculated by
giving points to the ranks and divide them by total number of respondents to identify the
preferences of smartphone users according to the value for money and the results shows that.

Samsung secure the first place with an average of 2.9, second place goes to iPhone with an
average of 2.6, Huawei accounted the third preference with 2.4 average and final place goes
to Oppo for an average of 1.9. The working is shown in the appendix 04.

Rank the below smartphone brand based on your

"value for money" paid for purchasing the below
brands.

35

30

25

20

15

10

0
Rank 01 Iphone Rank
Samsung
02 Huawei RankOppo
03 Rank 04

Figure 13: Rank based on value for money paid

45
4.5. Hypothesis Testing

In order to check above hypothesis, sample t test was carried out using the SPSS 13.0
Software assuming the hypothesized mean of 3 and the critical value of the hypothesis was
decided by looking at 50 degrees of freedom at 95% confidence level

4.5.1. Hypothesis 01

HYPOTHESIS 01 H0- Branding does not influence the purchasing decisions of

consumers
H1 – Branding does influence the purchasing decisions of
consumers

Q8- In a scale of 1 to 5, how satisfied are you with the current smartphone brand you
are using?

One-Sample Statistics

Std.
Std. Error
N Mean Deviation Mean
In a scale of 1 to 5,
how satisfied are you
with the current 77 3.90 1.107 .126
smartphone brand
you are using?
Table 13: One Sample Statistics of Hypothesis 01

46
 One-Sample Test

Test Value = 03
95% Confidence
Interval of the
Mean Difference
Sig. (2- Differenc
T df tailed) e Lower Upper
In a scale of 1 to 5,
how satisfied are you
with the current 7.102 76 .000 .896 .64 1.15
smartphone brand
you are using?
Table 14: One Sample Test of Hypothesis 01

It can be seen that the mean value of 3.90 is higher than the expected mean of 3. As the T
value is 7.102 which is higher than the critical value of 2.009, there is enough evidence to
reject the null hypothesis, thereby accepting the alternative hypothesis.

4.5.2. Hypothesis 02

HYPOTHESIS 02 H0 – Pricing does not influence the purchasing decisions of

consumers.

H1- Pricing does influence the purchasing decisions of the

consumers.

Q9- In a scale of 1 to 5 how will you rate then value for money you paid for purchasing
current smartphone
One-Sample Statistics

Std.
Std. Error
N Mean Deviation Mean
In a scale of 1 to
5, how will you
rate the "value for
money" you paid 77 3.65 1.109 .126
for purchasing
current
smartphone?

Table 15: One Sample Statistics of Hypothesis 01

47
 One-Sample Test

Test Value = 03
95% Confidence
Interval of the
Mean Difference
Sig. (2- Differenc
t Df tailed) e Lower Upper
In a scale of 1 to
5, how will you
rate the "value for
money" you paid 5.136 76 .000 .649 .40 .90
for purchasing
current
smartphone?
Table 16: One Sample Test of Hypothesis 01

It can be seen that the mean value of 3.65 is higher than the expected mean of 3. As the T
value is 5.136 which is higher than the critical value of 2.009, there is enough evidence to
reject the null hypothesis, thereby accepting the alternative hypothesis.

4.6. Summary of Chapter 04

The data analyzed in chapter 04 used descriptive analysis in terms of frequency tables,
descriptive, cross tabulation. Results had also been presented through pie charts and bar
charts. The study findings (discussed in Chapter 05) reveal that all three objectives of this
research were captured under the data gathered by the researcher.

48
CHAPTER 05

In this chapter the overall summary of the findings is discussed, conclusion and
recommendations are given based on the research objective and analysis done.

5.1. Summary of findings

With the help of the analysis done in the chapter 04 the researcher was able to identify the
following findings.

➢ The result of Q4 relating to the Brand shows that most of the smartphone users
are loyal to the brand they are used to. It is supported by the finding of 53.2%
of smartphone users are using the same brand of smartphone for the period of
2 to 4 years
➢ Cross tabulation of Q4 “how long you are using the same smartphone brand”
and Q10 “will you shift from the brand”, in the study reveal that 32
respondents are not willing to shift to a new brand and loyal to the brand, 27
respondents are willing to shift and not loyal to the brand and 18 may change
to the new brand of smartphones.
➢ Cross tabulation of Q5 “current smartphone brand using” and Q7 “reason for
the purchasing decision of current smartphone” shows that 40 respondents are
purchased the current smartphone for the brand while 37 are purchased for the
price concern. It is observable that both brand and price play a major role in
influencing the purchasing decision of smartphones.
➢ Outcome of Q6 “price range of current smartphone brand using” shows that
35.1% of the smartphone users purchased smartphones which are low in price
that is below Rs.30,000, while only 9.1% and 11.7% of the users are using
smartphones which are premium priced , that is Rs.75,000 to 100,000 and
above Rs100,000. And the rest is in between.
➢ The results of Q9 “In a scale of 1 to 5 how will you rate then value for money
you paid for purchasing current smartphone” shows the mean of 3.65 that is
they are satisfied with the price they paid.
➢ It was also noted from the result revealed from the Q12- “What is the
maximum you will spend for a smartphone?” that only 7.8% and 15.6% of
smartphone users are willing to buy smartphones which are low in cost
basically priced through cost-plus pricing while 29.9%,31.2% and 15.6% are
willing to buy premium priced smartphones.

5.2. Conclusion
This study includes both quantitative and qualitative approach to study the influence of
branding and pricing on the purchasing decision of smartphones. Convenience sampling
technique was used, due to lack of time and resources, which has a limitation of not coming
close to sampling all the population. All the data were collected through the circulation of
questioners among those 100 smartphone users within the Colombo district and obtained 77
responds. This model included two independent variables namely brand and price.

Finding of the study demonstrates that both branding and pricing have a significant influence
on the purchasing decision of smartphones. The research findings are also in conformity with
the literature review discussed in chapter 02 to obtain the knowledge to what extend brand
and pricing influence the purchasing decisions of smartphones.

49
5.3. Suggestions

By looking at the analysis done in the previous section, it is observable that brand equity,
brand awareness, brand association, brand loyalty and perceived quality along with all pricing
methods have played most significant role in purchasing decision of smartphones.

5.4. Further researches

Even though this research covers the influence of branding and pricing on the purchasing
decision of smartphones it did not cover any other factors that influence the purchasing
decision of smartphones. So future researches can focus on those factors that could influence
the purchasing decision of smartphones and could derive the conclusion.

50
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Appendix A

01. Age
• Below 20
• 20 to 25
• 25 to 30
• 30 to 35
• Above 35

02. Gender
• Male
• Female

03. Income level

• Below 50,000
• 50,000 to 75,000
• 75,000 to 100,000
• Above 100,000

04. How long have you been using the smartphones?

• Less than 2 years
• 2 to 4 years

05. What is the current smartphone brand that you are using?
• Samsung
• Huawei
• I phone
• Oppo

06. Price range of the current smartphone you are using

• Below 30,000
• 30,000 to 50,000

54
 • 50,000 to 75,000
• 75,000 to 100,000
• Above 100,000

07. What is reason for the purchasing decision of the current smartphone
• Brand
• Price concern

08. In a scale of 1 to 5 how satisfied are you with the current smartphone brand you are using
• 0 to 1
• 1 to 2
• 2 to 3
• 3 to 4
• 4 to 5

09. In a scale of 1 to 5 how will you rate then value for money you paid for purchasing current
smartphone
• 0 to 1
• 1 to 2
• 2 to 3
• 3 to 4
• 4 to 5

10. Will you shift from the current brand of smartphone you are currently using when
purchasing your next smartphone?
• Yes
• No

11. If yes what will be the next smartphone brand you will purchase
• Samsung
• I phone
• Oppo
• Huawei

12. What is the maximum you will spend for a smartphone?

• Below 30,000
• 30,000 to 50,000
• 50,000 to 75,000

55
• 75,000 to 100,000
• Above 100,000

13. Rank the below smartphone brand based on your brand preference

Rank01 Rank02 Rank03 Rank04

iPhone

Samsung

Huawei

Oppo

14. Rank the below smartphone brands based on your price preference

Rank01 Rank02 Rank03 Rank04

iPhone

Samsung

Huawei

Oppo

15. - Rank the below smartphones based on you “value for money” paid for purchasing
the below smartphones.

Rank01 Rank02 Rank03 Rank04

iPhone

Samsung

Huawei

Oppo

56
Appendix 2

iPhone Brand preference

No. of
Points preference score
Rank 01 4 45 180
Rank 02 3 26 78 Average = 3.506494
Rank 03 2 6 12
Rank 04 1 0 0
77 270

Samsung
No. of
Points preference score
Rank 01 4 25 100
Rank 02 3 30 90
Rank 03 2 15 30
Rank 04 1 7 7
77 227 Average= 2.948052

Huawei
No. of
Points preference score
Rank 01 4 5 20
Rank 02 3 18 54
Rank 03 2 30 60
Rank 04 1 24 24
77 158 Average= 2.051948

Oppo
No. of
Points preference score
Rank 01 4 2 8
Rank 02 3 3 9
Rank 03 2 26 52
Rank 04 1 46 46
77 115
Average= 1.493506

57
Appendix 03 Price preference

iPhone
No. of
Points preference score
Rank 01 4 0 0
Average
Rank 02 3 9 27 = 1.597403
Rank 03 2 28 56
Rank 04 1 40 40
77 123

Samsung
No. of
Points preference score
Rank 01 4 12 48
Rank 02 3 30 90
Rank 03 2 17 34
Rank 04 1 18 18
77 190 Average= 2.467532

Huawei
No. of
Points preference score
Rank 01 4 35 140
Rank 02 3 20 60
Rank 03 2 22 44
Rank 04 1 0 0
77 244 Average= 3.168831

Oppo
No. of
Points preference score
Rank 01 4 30 120
Rank 02 3 18 54
Rank 03 2 10 20
Rank 04 1 19 19
77 213
Average= 2.766234

58
Appendix 04 Value for money

iPhone
No. of
Points preference score
Rank 01 4 30 120
Rank 02 3 12 36 Average = 2.675325
Rank 03 2 15 30
Rank 04 1 20 20
77 206

Samsung
No. of
Points preference score
Rank 01 4 30 120
Rank 02 3 23 69
Rank 03 2 16 32
Rank 04 1 8 8
77 229 Average= 2.974026

Huawei
No. of
Points preference score
Rank 01 4 12 48
Rank 02 3 28 84
Rank 03 2 19 38
Rank 04 1 18 18
77 188 Average= 2.441558

Oppo
No. of
Points preference score
Rank 01 4 5 20
Rank 02 3 14 42
Rank 03 2 27 54
Rank 04 1 31 31

59
77 147
Average= 1.909091

60