Chapter 6: Analyzing Consumer Markets

Case Study: Touch-screen Phones

It seems like a forgone conclusion. Literally a David versus Goliath scenario. In one corner the much touted and much anticipated Apple iPhone, and in the other, the local home-made Taiwanese brand HTC. However, this may yet be a done deal. Many in the industry probably would not recognize the name High Tech Computer Corp (HTC). HTC is an original design manufacturer from Taiwan. In just a short space of time, HTC has carved out a singular position in the worldwide wireless industry. Seemingly from out of nowhere, the company quietly began shipping some of the most advanced wireless devices the industry has ever seen. Founded in 1997, HTC made its mark on the wireless industry in 2002 by being the first company to supply a smart phone running on Microsoft software. Since the Apple iPhone is still some time away from a product launch expected in mid-2008, mobile phone buyers all over Asia have been able to get their hands on a stylish yet affordable version of the smart touch screen phone offered by HTC. The company has successfully connected with Asian consumers through a series of product launches across Asian markets. This has made the brand one of those in consumers to-consider or evoked set when they make decisions to buy a new or upgrade a model of mobile phone. HTC has strategically positioned itself within the lucrative markets in Asia and staked a claim in the smart phone market. Asian consumers have warmed up to the brand, given its good design, affordability and Windows compatibility which enhances the interface between phone and PC as well as providing mobile internet access. In June 2007, HTC launched another new model called the Cruise Touch which features built-in GPS for personal navigation. The best is yet to come for this dynamic and far sighted Taiwanese company and its strong Asian consumer base has enabled it to withstand competition from the likes of large players like Nokia, Samsung and O2. But keeping ahead on the technology front is not enough. In terms of marketing, HTC will need to fight even harder to keep its brand constantly visible and credible. Asian consumers are not only known for being fickle and less brand loyal but, also in the case of mobile phones, for having voracious appetites for changing models every six months. Asia has one of the highest rates of conversion compared to anywhere else in the world. Questions for Discussion: Touch-screen Phones

1. After reviewing the short case of Apple iPhone and HTC, undertake a short internet research exercise to discover the background and product range of HTC. What do you think has contributed to the success of HTC over a relatively short period of time? To what extent has this success been attributed to just the functional properties of the HTC phone as compared to more favorable perceptions and attitudes towards the HTC brand? Which is more important and why? Discuss.

2. Consumers develop perceptions and attitudes towards brands. Use any one concept of perception and any one concept of attitudes discussed in the chapter and apply this to the process of understanding consumer evaluation and buying behaviors in relation to the purchase of smart phones such as the iPhone or the HTC Touch.

3. Using the expectancy-value model discussed in the chapter, draft out a suggested table showing the attributes and weights that consumers (such as yourself) might take into consideration when purchasing a smart phone. Use two brands the Apple iPhone and the HTC Touch phone as a basis for comparison. Did your analysis throw up any interesting findings such as the possible advantages that HTC might have over the Apple iPhone? And to what extent are these advantages based on functional properties as compared to consumer perceptions and attitudes towards the brand? Questions for Review: Touch-screen Phones

1. With respect to consumer decision making such as buying an expensive smart phone with a touch screen, the ________ is the set of strong contenders (such as Apple iPhone or the HTC Touchphone) from which one will be chosen as a potential brand to be purchased. a. total set b. awareness set c. consideration set d. choice set e. decision set Answer: d

2. Consumers form brand evaluations relating to the purchase of smart phones. In doing so they are confronted with many choices ranging from an established brand such as Apple to new contenders such as HTC. In general, two factors can intervene between the purchase intention and the purchase decision. One of these is unanticipated situational factors. What is the second factor? a. Amount of purchasing power b. Attitudes of others c. Short-term memory capabilities d. Ability to return merchandise e. The self-concept

Answer: b

3. The level of engagement and active processing undertaken by the consumers when making purchase decisions on expensive purchase of a smart phone such as the Apple iPhone is referred to as: a. elaboration likelihood b. consumer disengagement c. consumer involvement d. variety-seeking e. low-involvement Answer: c