The Effect Of Technology On Consumer Buying Behaviour In Apple Inc

Project and Seminar Material for Marketing

The Effect Of Technology On Consumer Buying Behaviour In Apple Inc


Abstract


The study examined the effect of technology on consumer buying behavior in Apple Inc, Ikeja, Lagos State.

The study adopt quantitative research design. The focus of the next layer of research onion was the research method which was adopted since its a fundamental and critical decision pointer. Primary data for this study was collected using structured questionnaires.

The data was analyzed using manual and electronic based methods through the data preparation grid and statistical package for the social sciences, (SPSS). Also descriptive, statistical and content analyses techniques was used in the analysis of the data collected. The study uses the descriptive analysis to achieve the mean, frequency distribution and percentage results of the research work. The study also make use of the statistical tools such as the Pearson Correlation analysis in testing hypotheses and also for the interpretation of results.

The findings revealed that: the technological trend in Apple products has a way of influencing consumer buying behavior. Technology environment influenced the buying behavior of consumer. The uniqueness in Apple product such as the fingerprint sensor for easy unlocking, battery durability, easy to navigate and its colour could have an influence on the consumer buying behavior.

The study concluded that technology has a positive significant relationship on the buying behavior of consumers of Apple Inc, Ikeja, Lagos State. The study further recommends that; Organizations should focus on the add-on features of their product in order to have an influence on the buying behavior of consumers. customer relationship management must be given a maximum attention and also the brand must have much impact on their behavior to build a strong relationship between their brand and consumer behavior. Organizations need to design training and other educational programs that motivate employees to adopt and use of technology innovation.


Chapter One


Introduction

1.1. Background of the Study

Currently, the innovative and technological equipment have penetrated our life due to the huge improvements of technological products; simultaneously, severe competition has appeared in this area. In order to be more competitive in the market, an increasing number of organizations swarms to launch more marketing activities to obtain information concerning customers’ preference towards their brand, product, price; and this information will help the company improve their products and services, (Schmitt, 2003)

Apple Computer Inc. originally started with a core value of “Simplicity is the ultimate sophistication”, and they have been struggling to create the most user friendly interface and application experience for consumers. Despite the product itself, outstanding consumer experience may be one of the reasons that help the company achieve a global leading place today, (Brakus, Schmitt, & Zarantonello, 2009)


1.2. Background of the Research

Consumer behaviour phenomenon is widely analyzed in the studies assigned to various scientific fields. Several decades ago, one of the most popular future visions was the adjustment of smart technologies to consumer needs. Therefore, the development of smart products in the market, firstly, affects new business decisions that involve consumers and the satisfaction of their needs. In the works of economists, information about households, their properties, income and economic situation is retrieved from statistical databases, regular consumer surveys are carried out, and economic indicators are measured. Psychologists refine upon the emotional consumers’ state and factors influencing their behaviour. Sociologists observe the society, its livelihood and factors shaping its attitudes. Business enterprises are concerned not only with ways to establish themselves on the market, but they also wish to recognize and assess consumers’ needs and factors that encourage consumption, (Glock & Nicosia, 2013)

Consumer behavior is the decision making of people in spending their available resources like time, money and effort on consumption related items. Consumer behavior is affected by many factors like cultural factors, economic factors, psychological factors, personal factors, and technological factors. In this article the influence of technological factors on consumer behavior is emphasized, (Ausra Skrudupaite, 2006).

The journey of change from conventional devices to modern devices with super speed data helped the organizations to reach consumers of all ages and satisfy their needs. With the help of technology, organizations can be connected with the consumer whether the consumers are online or offline. Technology makes the whole world a one community and that helped the organization to reach all consumers easily and quickly. In olden times, if a consumer wants to buy a product, he needs to reach shop within the working hours of that shop. Otherwise he won’t be able to buy that product. But with the emergence of e-commerce, customers can buy products at any time. If they want to buy a product or get any information about the product, he can get it at another time (Agarwal, 1998). Now, every consumer knows that he is the king of the market and that have much more power than the marketer. Consumers level of expectation is also changed a lot when these is smart devices got a place in our life. So all business should be careful in updating with the changes, or they will be thrown out of market. The attitude of marketer is greatly influenced by social media. Customer services were provided by companies through emails and phone calls. But with the popularity of social medias and live chats, if an enquiry from a customer is not answered within seconds, the brand reputation of the company will be affected and there is no place for the company in the minds of whole world. In short, with technology consumers are more connected, their expectations become high and more sophisticated tools are being used for getting the needs satisfied.

Technology-Stages Of Transition

About a century ago, no one could even imagine shopping from home through internet or virtual stores. But, now it became a reality. Barter system was common in this era. Goods produced at one place is sold locally and transported to faraway places. Most of the retail business is done in small scale as a family owned establishment. During this era, the transportation system became more popular and effective. As it is less costly, people began to use this mode for transporting goods to distant places. Then the retail sector began to grow. The largest retail store “Marble Palace” was built by Alexander Stewart in 1846. It became the first department store and later it influenced others to develop stores in this design. The introduction of small paper roll recording each transaction resulted in first “sales receipts”. Later, this became inevitable for doing any business. Then department stores began to flourish. This is a period of boom for mail order business. During this period, Catalogues became popular. Mail order catalogues specifying name of product and price helped to keep a record for sending goods to long distance. After the Second World War, a population explosion known as “baby-boom” increased the consumer demand. As a result, new highways, shopping centers etc. were emerged. Then the first credit card program is launched in America 1958. In 1960 the debit card is invented. In 1962, discount stores like Walmart, Target etc. were opened. In the late 1900s, with the emergence of large bulk item stores, department store faces a decline in their business. Big box store chains got a place in the minds of consumers as they can purchase all items at one location. Walmart became largest retail store. Amazon.com became very active, selling goods online through internet. From 2000s till now, since the internet age, many retail shops and department stores came to an end. They close the doors as the consumer turned to online shopping from their homes. Amazon became the largest online retailer. In 2006 Face book debuted, and companies could promote themselves on social network. In 2008, Apple and iTunes, became the largest music retailer in the world. The technology paved way to calculate myriad transactions in seconds.

In order for an organization to survive, a business needs to customize its products. Consumers are voting again and again (through their purchases) for devices they offer peace of mind and anticipate their needs. They offer convenience and peace of mind to consumers”.

Following are some of the innovative trends shown impact on consumer behaviour:

Smart Phones

Out of 5 billion people who are using mobile phones, 1.08 billion people are smart phone users. People prefer smart phones than normal mobile phone because of the multi-function utilities of smart phones. They can be used for the purpose of gaming, apps, mobile advertising and social networking. There is a direct impact between increasing demand of smart phone and purchase pattern of consumers. Smartphone increases the convenience of users as it helps for e-mail, chat, shopping and so on. Smart phones work as a useful shopping aid, for instance, getting instant shopping, scanning product bar code and so on.

Social Media

Social media is a platform for communication both for consumers and sellers. Consumers seek advice on making purchase whether consumer durable or service through social networking sites like Facebook and Google. Similarly, many organizations are using them to influence consumer opinions and buying patterns.

Online Education

Many students are moving from traditional method of learning to E-learning. Online segment is categorized into different sub-segments like Higher Education learning, Corporate E-learning and so on. Online education helps the students to get access of highly qualified professors across different geographical regions in the country.

Mobile Payments

Now days, consumers are making payment online. Mobile payment facilitates transfer of money through mobile phone. It can be made through premium SMS, Direct mobile billing, Mobile web payments, and contactless NFC (Near Field Communications).

Mobile Apps

Mobile apps can greatly influence the consumer behavior. Nowadays, mobile apps are widely use in every industry like banking, consumer goods, manufacturing, media & entertainment, pharmaceuticals, travel and hospitality.

Therefore, technology is a powerful tool in influencing and changing consumer behaviour. Unless, organizations go along with technology, they will be thrown out of market. It is expected that consumer behaviour, over a period of time may be completely influenced by an information that is primarily processed through the internet. In a world where new technologies are emerging all the time, those organizations that satisfy consumer needs first will survive and win.

Therefore, this study will look at how technology influences consumer buying behaviour using Apple Inc., as the case study.


1.3 Research Purpose

As mentioned in the prelude of this section, this research piece seeks to establish the level of influence technology has on the buying behaviour of customers within its industry. This research will focus on Apple Inc as the case study. The analysis and findings derived will provide better understanding and the rationale behind the impact of technology within a product and buying decision especially on luxurious goods like phones to customers. The work uses Apple Inc products to develop the case study. In addition, the findings will contribute to the existing knowledge around customers’ buying behaviour. The implication in practice are, specific knowledge a technological organization can have on their customers, the better they will be able to serve them and modify their investments in innovations. Hence, increasing internal and external value to stakeholders of the company.


1.3 Problem Statement

It is often believed that when carrying out customers’ buying behaviour analysis, focuses are always being placed on the economic and social factors of why customers make buying decision for example looking at the purchasing power level of the customers or the social class the target customers belong. However, not so much has been said on other factors that can influence customers’ buying decision making.

In an increasing homogeneous product market, what makes products outstanding in a limited pool of customers becomes the most important issue. In order to differentiate from competitors, Pine II and James (1999) proposed a new concept–an experience stager, which describes the company that offers not only goods or services but the resulting experiences toward the customers. Recall the cell phones’ user interface today, every company tries to provide a unique design, which is a kind of consumer experiences, to consumers for supplying a better service and differentiating from competitors simultaneously.

A study conducted by Gofman (2010) on the impact of brand colours of packaging on consumer buying behaviour. It was discovered that colours have a strong impact on perception and so, colours of packaging can be important. The right choice of colours is a vital to be considered in creating the impression needed to influence brand and product selection. In similar study, Kang and James (2004) revealed that the technical and functional dimensions of a product quality are both important predictors of customer buying intention and satisfaction.

According to the study conducted by Heidenreich, and Spieth, (2013), resistance to innovations can be caused as a result of the product’s specific features (functional barriers) and consumer’s inner factors (psychological barriers). Considering this study, it can be stated that resistance to innovation has to be based on factors of two categories: product’s characteristics and consumer’s traits. Furthermore, Ciftci and Cop (2007) conducted a study to ascertain the factors influencing Iphones preference of college students and found that product uniqueness, capacity to meet the demands of customers, striking product designs, reliability of brand and quality features of the products influenced the preference of consumers.

However, it has been observed that, many of these studies were not carried out in Nigeria, and as it also be seen from the literature that, there is paucity of study on the influence of technology on consumer buying behaviour, therefore, this study is examined to fill this gap.


1.4 Research Objectives

The main objective of the study is to evaluate the effect of technology on consumer buying behaviour. The specific objectives are to;

  1. To determine the consumers perception around the technological trend of Apple products.
  2. To find out if the technological environments influence consumer buying behaviour
  3. To evaluate the influence of Apple products uniqueness on consumer buying behaviour

1.5 Research Questions

  1. How do consumers perceive the technological evolvement of apple products?
  2. What is the effect of technological environments on consumer buying behaviour?
  3. What is the influence of Apple products uniqueness on consumer buying behaviour?

1.6 Research Limitations

This work is likely to face some limitations in the process of carrying out the work. For instance, accessing relevant data from the various respondents. Adopting questionnaires through a survey form due to time may undermine the value relative to semi-structured interviews, which can provide more insightful understanding. However, this allows room for future studies and rightly so, can serve as a preliminary work. Another issue is the sample size of 60 respondents, like the earlier suggested concern, the smaller fraction relative to the existing population of youths using luxurious products like the Iphone may undermine the findings.


1.7 Structure of the Project

This dissertation is divided into five main chapters with each chapter consisting of the following:

  • Chapter one will be the main introduction of the project and this will spell out the main aim and objectives of the research together with research background, research questions and research limitations.
  • Chapter two of this dissertation will have a review of the theories and literatures that are relevant to the research areas which have been carried out by various researchers in the topic area.
  • Chapter three of this research will examine the research method, philosophy as well as the research design that will be used in analysing the data gathered.
  • Chapter four will be where the findings and analysis of the research will be carried. This will be done by making use of both the secondary data and primary data gathered.
  • Chapter five, will be the conclusion of the research project which will be based on all the findings both in literatures and in the analysed data. The chapter will equally consist of the recommendations made as well as the research contribution.

Chapter Five


Summary, Conclusion and Recommendation

5.0 Introduction

This section of the study presents an overview of the study. Comprising of summary of the research work from chapter one to chapter four, the research findings from the data gathered from field survey and the implications of the findings. It further emphasized on the previous findings of other researchers related to the study on the effect of technology on consumer buying behavior. The purpose of the study was to examine the effect of technology on consumer buying behavior, a case study of Apple Inc., Ikeja, Lagos State. In the study three (3) research questions were put forward and tested using the Pearson correlation analysis.


5.1. Summary of Work

This study examined the effect of technology on consumer buying behavior in Apple Inc, Ikeja, Lagos State. In the chapter one, it focused on the introduction to the study comprising of the background to the study, the problem statement was highlighted, while three objectives were formulated to address the problem statements which were to; determine the impact of technological features of Apple’s products on consumer buying behavior; examine the effect of Apple’s products uniqueness on consumer buying preference; and assess the influence of Apple’s product colour choice on consumer buying behavior. Also, the research questions, significance of study, scope of the study and definition of terms were all highlighted in chapter one. Chapter two focused on discussion of relevant literature on technology and consumer buying behavior. It consists of the conceptual framework, the theoretical framework and the review of relevant literature. Chapter three focused on research methodology which described the methods of data analysis, the introduction, the research design, the sample size, the data gathering method, the sources of data, the instruments of data collection, description of questionnaire, the validity and reliability of instruments, the administration of instrument and the method of data analysis. Chapter four focused on the data presentation, analysis and interpretation, and finally, the chapter five focused on the summary of findings, conclusions and recommendations for future research study.


5.2. Empirical Findings

These findings were derived from the data analyzed from the questionnaire and were backed up by past findings. These include:
Research question one states that how do consumers perceive the technological evolvement of Apple products? This was confirmed in the Pearson correlation with coefficient value of 0.791, at 0.000 significance level, which is lesser than the expected p-value of 0.05. This implies that, the technological trend in Apple products has a way of influencing consumer buying behavior, this trend could be advancement in the features of the products that could affect the buying decision of consumers. Empirically, this finding corroborate with that of Loken, Ross and Hinkle, (1986) who found that consumer buying behavior of product in some cases rely upon technological features on the product.
Research question two states that, what is the effect of technological environments on consumer buying behavior? This was confirmed in the Pearson correlation with coefficient value of 0.871, at 0.000 significance level, which is lesser than the expected p-value of 0.05. This implies that, the technology environment influenced the buying behavior of consumer, that is, an environment where there is frequent technology advancement could have an influence in the buying decision of its consumers. Empirically, this finding corroborate with that of Animesh et al. (2011) who conducted a study to analyze technology environment and the impact of the space environment on the behavior of consumers to purchase virtual products in a virtual environment. The study revealed that, the technical environment, including interactive and social space environment density and stability have a strong and impacting influence on the buying behavior of consumers.
Research question three states that, what is the influence of Apple’s product uniqueness on consumer buying behavior? This was confirmed in the Pearson correlation with the coefficient value of 0.930, at 0.000 significance level, which is lesser than the expected p-value of 0.05. This implies that, the uniqueness in Apple product such as the fingerprint sensor for easy unlocking, battery durability, easy to navigate and its colour could have an influence on the consumer buying behavior. Empirically, this finding corroborate with that of Gofman (2010) who discovered that colours have a strong impact on perception and so, colours of packaging can be important. The right choice of colours is a vital to be considered in creating the impression needed to influence brand and product selection. Similarly, Kang and James (2004) revealed that the technical and functional dimensions of a product quality are both important predictors of customer buying intention and satisfaction.


5.3. Conclusion

In conclusion, this study has sought to examine the effect of technology on consumer buying behavior in Apple Inc, Ikeja, Lagos State. The study showed that technology innovations bring major changes in the purchasing behavior of consumers. The consumers have natural tendency to purchase new products to improve their living standard. It has been found that product innovation in terms of product features, and uniqueness are factors that able to influence consumer buying behavior. Therefore, organization’s marketers should lay emphasis on the outward appearance and add on features that make it different from the other rival in the market. It was also found that consumers are passionate about the use of Iphone as it reflects their personality and makes them be a part of something. The evidence from the study revealed that the buying behavior of consumers can be influenced by the technological trend or features, technological environment and uniqueness in the product, therefore, organizations should focus on these three (3) aspects. Therefore, it was concluded that, technology has a positive significant relationship on the buying behavior of consumers of Apple Inc, Ikeja, Lagos State.


5.4. Recommendation

In view of the above, the following recommendations were deemed necessary.

  1. Organizations should focus on the add-on features of their product in order to have an influence on the buying behavior of consumers.
  2. Customer satisfaction is a very vital component to attract and retain customers especially in the telephony business environment where competitions among firms are very intensive and unabated. Customer services such as complains handling, waiting time and customer relationship management must be given a maximum attention and also the brand must have much impact on their behavior to build a strong relationship between their brand and consumer behavior.
  3. Organizations need to design training and other educational programs that motivate employees to adopt and use of technology innovation. To implement and manage technology innovations that enhance human capabilities and performance, management must recognize the organizational, individual and social factors as well as demographic factors that influence consumers
  4. Consumers influenced by their social network in adopting or at considering an innovation, since many of them do not want to be left behind, as a result of the advancement in technology environment.

5.5. Limitations of the Study

The study geographical location is a limitation, as it was only carried out in Ikeja area of Lagos State. There was lack of geographical coverage to seek for wider range of data as the data is only obtained from one local government area of Lagos State. Hence, this sample size might not accurately represent all. The time allocated for data collection may not have been sufficient to enable the respondents complete the questionnaires as accurately as possible, considering that they were at the same time carrying out their daily duties and priority is of essence.


5.6. Suggestion for Further Studies

The current study focused on responses from the users of Iphones with respect to how technology influenced their buying behavior of the product. It is hoped that the findings of this study, will contribute to the existing body of knowledge and form basis for future researchers. Further, the study has focused only on smartphones. There is a wide scope to conduct such studies for other technology intensive products such as electrical notepads, laptops, and music players. It was further suggested that future research should focus on a wider geographical location, increase the sample size and to make use of other data analysis techniques like the ANOVA, regression, and co-integration be use.


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