Consumer Buying Behavior Study
Consumer Buying Behavior Study
on
in
Sistema Shyam Teleservices Ltd.
Pune
In Partial Fulfillment of
University of Pune MBA Degree 2009-11
DECLARATION
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Contents
Particulars Page No.
Acknowledgement I
List of Tables II
List of Figures III
Executive Summary 1
Introduction
1.1 Consumer Buying Behavior 2
1.2 Literature Review 6
1.3 Need For the Study 8
1.4 Statement of the Problem 9
1.5 Objectives of the Project 10
1.6 Scope of the Study 11
Profile of the Organization
2.1 Sector Profile 12
2.2 Company Profile 14
2.3 Product Profile 16
Research Design and Methodology
3.1 Research Design 19
3.2 Sampling Design 19
3.3 Sources and Methods of Data Collection 20
3.4 Methods of Data Analysis and Statistical Techniques 20
3.5 Limitations of the Study 21
Data Presentation, Analysis and Interpretation
4.1 Age Profile of the Sample Population 22
4.2 Qualification of the Respondents 23
4.3 Number of People in the Family 24
4.4 Income of the Family 25
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Acknowledgement
I am highly obliged to Mr. Arun Vajpai (Area Sales Manager) who has
provided me guidance, inspiration, perspective and stimulating discussion,
through the project. His constant review and excellent suggestions throughout
the project are highly commendable.
A study like this cannot be completed without help from other persons
and therefore I would like to express my gratitude to Prof. Rachita
Bhattacharya to provide me crucial guidance in the analytical part of this
project.
Finally I would like to thank our friends and family member for giving
me constant support and encouragement.
Jyoti A. Gohil
MBA Marketing
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List of Tables
Table No. Title of the Table Page No.
Table No. 1 MBlaze Unlimited Plans 16
Table No. 2 MBlaze Prepaid Plans 18
Table No. 3 MBlaze Postpaid Plans 18
Table No. 4 Age Profile of the Sample Population 22
Table No. 5 Qualifications of the Respondents 23
Table No. 6 Number of People in the Family 24
Table No. 7 Income of the Family 25
Table No. 8 Different Uses of Internet 26
Table No. 9 Sources of Information 27
Table No. 10 Influence of company brand name on customer 28
purchase decision
Table No. 11 Influence of Net Speed on customer purchase 29
decision
Table No. 12 Influence of area wise connectivity 30
Table No. 13 Influence of company price of the product 31
Table No. 14 Influence of tariff plan on customer purchase 32
decision
Table No. 15 Influence of availability of product in the store 33
Table No. 16 Influence of convenience in handling 34
Table No. 17 Influence of Different promotional activities 35
undertaken by MTS
Table No. 18 Influence of offers/discounts provided 36
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List of Figures
Figure No. Title of the Figure Page No.
Figure No. 1 Shareholding of Sistema and Shyam Groups in 14
SSTL
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Executive Summary
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Introduction
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Consumer behavior involves study of how people buy, what they buy, when they
buy and why they buy. It blends the elements from psychology, sociology, socio
psychology, anthropology and economics. It also tries to assess the influence on the
consumer from groups such as family, friends, reference groups and society in general.
The aim is to appreciate the consumer’s decisions and actions. The point of this process is
to determine what it is exactly that the buyer wants by studying demographics,
psychographics and behavioral variables. This process will also look at the influence that
various categories make, such as; Reference groups, friends, family, and general society.
Here I have inserted a quote from Belch and Belch describing what consumer behavior is
in their eyes:
'The process and activities people engage in when searching for, selecting, purchasing,
using, evaluating, and disposing of products and services so as to satisfy their needs and
desires'.
Buyer behavior has two aspects: the final purchase activity visible to any observer
and the detailed or short decision process that may involve the interplay of a number of
complex variables not visible to anyone.
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A. Social Factors
Social factors refer to forces that other people exert and which affect consumers’
purchase behavior. These social factors can include culture and subculture, roles and
family, social class and reference groups.
Example:
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B. Psychological Factors
These are internal to an individual and generate forces within, that influence
her/his purchase behavior. The major forces include motives, perception, learning,
attitude and personality.
Example:
C. Personal Factors
These include those aspects that are unique to a person and influence purchase
behavior. These factors include age, stage in the life cycle, occupation, economic
circumstances, lifestyle, values and situational factors.
Example:
Lifestyle is an indicator of how people live and express themselves on the basis of
their activities, interests, and opinions. Lifestyle dimension provide a broader view of
people; about how they spend their time, the importance of things in their surroundings
and their beliefs on broad issues associated with life and living and themselves. This is
influenced by demographic factors and personality.
E.g. A CEO or Manager is likely to buy more formal clothes, ties and shoes or
PDAs and less informal clothes like jeans as compared to a Mechanic or Civil engineer.
So according to their lifestyle and profession, the buying behavior of people differs from
one another.
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Successful marketing requires that companies fully connect with their customers.
Adopting a holistic marketing orientation means understanding customers—gaining a
360-degree view of both their daily lives and the changes that occur during their lifetimes
so that the right products are marketed to the rights customers in the right way. Also
before business can develop marketing strategies, they must understand what factors
influence buyer’s behavior and how they make purchase decisions to satisfy their needs
and wants.
Buyers are moved by a complex set of deep and subtle emotions. Their behavior
results from deeply held values and attitudes, their perception of the world and their place
in it, from common sense, impulse or just plain whimsy.
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• What are the factors that influence the buying decision of the customer’s
while purchasing wireless internet broadband connection?
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• To find out the basic requirements of the customers from a wireless internet
connection
• To find out what marketing strategies should be undertaken to increase the market
share of MTS MBlaze in the Pune region
B. Secondary Objectives
• To understand how social factors affect customers buying decision
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The study is mainly focused on various factors that affect consumers buying
decision. Three major factors that influence consumer’s behavior viz. social,
psychological and personal are studied. Also some other factors like economic and
technological factors are studied.
The survey was conducted among different groups and all possible local areas in
Pune were considered for the study. The sample size was of 100 people who included
people from various age groups and different income levels. The data was collected
through filling of questionnaire and interview.
The survey helped in understanding the various factors that influenced the buying
decisions of the customers and understanding their needs when it comes to wireless
internet connection. This study thus helped in suggesting some strategies to MTS in
increasing their number of user’s of MTS MBlaze.
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Profile of the
Organisation
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The booming domestic telecom market has been attracting huge amounts of
investment which is likely to accelerate with the entry of new players and launch of new
services. According to the Department of Industrial Policy and Promotion (DIPP), the
telecommunications sector attracted foreign direct investment (FDI) worth US$ 2,554
million during 2009-10. The cumulative flow of FDI in the sector during April 2000 and
March 2010 is US$ 8,930.61 million.
The telecom industry also witnessed some major merger and acquisition (M&A)
deals worth US$ 22.73 billion during April-June 2010, which includes the Zain deal
between India’s Bharti Airtel and Kuwait based Zain telecom, Uninor merger of Norway
based telecom operator Telenor and India based Unitech. The government has approved
the foreign direct investment (FDI) proposal of the Federal Agency for State Property
Management of the Russian Federation to buy 20 per cent stake in telecom service
provider Sistema-Shyam for US$ 660.1 million.
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c) 3G Services
The Department of Telecom has taken the pioneering decision of launching of 3G
services by BSNL and MTNL and initiation of process for auction of spectrum for 3G
services to private operators. Allocation of spectrum for third-generation (3G) and
broadband wireless access (BWA) services was done through a controlled simultaneous,
ascending e-auction process.
All the 71 blocks that were put up for auction across the 22 service areas in the
country were sold, leaving no unsold lots. Auction for 3G spectrum ended on May 19,
2010 after 183 rounds of intense bidding over a span of 34 days. The Government is
expected to morph revenue worth US$ 14.6 billion. All the available slots across 22
circles have been sold to seven different operators.
d) Data Services
The sales (shipments) of data cards and USB modems crossed the one million
mark (1,002,169 nos.) in the 12 months ending June 2009, according to the findings of
IDC’s “India Quarterly Data Card and USB Modem Market Review, Q2 CY2009”. The
sharp increase in the demand for data cards/USB modems in the last four quarters has
gone up from 1.76 lakh units in July-September 2008 quarter to 4.05 lakh in April-June
2009. While in the quarter ending July-September 2008 one data card/USB modem was
sold for every 4 notebook computers, this number improved to 3.2 data cards/USB
modems sold for every 4 notebook computers in the April-June 2009 quarter. One-thirds
of the million data cards/USB modems were sold (shipped) in the first six months – July
2008-Decemeber 2008 – while two-thirds were sold (shipped) in the second half –
January-June 2009. Currently the Wireless Internet market is dominated by CDMA
operators in the country. CDMA data card/USB modem shipments accounted for nearly
69% of the total market in Q2 CY2009. The average sales value (ASV) or price of a data
card/USB modem is around Rs. 3,000; going forward, with increasing demand, prices are
likely to come down. This will help improve the overall penetration of wireless
internet/broadband. Currently data cards/USB modems are available mostly in bundled
offerings from operators. However, with increasing demand, IDC India expects more
open market data cards becoming available, thus providing an opportunity to customers
to choose their favorite service provider along with their preferred device. Incumbent
operators (BSNL and MTNL) are pushing 3G data cards/USB modems to increase
subscribers on their recently launched 3G service networks. Private telecom operators are
yet to launch 3G services in the country.
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MTS, the mobile telecom service of SSTL, has seen its subscriber base cross 4
million in April 2010 and the numbers continue to grow exponentially. MTS has
completed a year of its operation in India in March 2010. It is the fastest growing
telecom brand in the country.
MTS unveiled its green data centre in Chennai in April 2010. In April 2010,
Sistema JSFC has been recognized as the ‘Best Russian company of 2009’ operating in
India.
SSTL and MTS created history in March 2010 by enabling a first ever Live
Webcast to facilitate an open dialogue for public communication with a visiting Head of
Government to India. The visiting Chairman of the Government of the Russian
Federation, Mr. Vladimir Putin, interacted from the Sistema office in Delhi with an
audience that was spread across the metro cities of Mumbai, Kolkata and Bengaluru.
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2) MBlaze Standard
MBlazer Monthly Rental (Rs) Free Usage Validity (in days) Extra Usage Charges
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Mblazer Monthly Rental (in Rs.) Bundled Free Usage Extra Usage charges#
Mblazer 1 598 1 GB 40 p / MB
Mblazer 2 698 2 GB 40 p / MB
Mblazer 3 798 3 GB 40 p / MB
Mblazer 6 898 6 GB 40 p / MB
Mblazer 10 1050 10 GB 40 p / MB
Mblazer 15 1500 15 GB 40 p / MB
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Research Design
And
Methodology
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The working individuals in the field of IT, engineering, etc, stock brokers, students
pursuing their education in professional courses forms the sampling unit for the study.
Sampling frame considered for studying the consumer behavior are the people dwelling
in city of Pune and who internet users.
In this study there scope for estimating the probability that each item in the population
has been included in the sample. Hence, non-probability sampling technique is preferred
for study, as the samples are deliberately chosen from the huge population. Thus since
unrestricted sampling technique of element selection is used the sampling technique used
for the study can be defined as convenience sampling.
Since the research design selected is such that it makes provision for protection from any
kind of error while selecting the sample and maximize the reliability; there very less
chances of sampling errors. Also while selecting the sample for study, due care is taken
to minimize the cost as much as possible.
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The techniques used for collecting primary data are questionnaire and schedules.
Also telephonic interviews were conducted for the purpose of collecting the data. The
questionnaire consisted of 13 questions which collected all the information required for
the study. The questions asked were multiple choice questions with 4 to 5 options. Also
some close ended questions were asked. In the questionnaire Likert-type scale was used
to measure the respondent’s attitude towards a particular feature.
For collecting secondary data several websites and blogs were searched like MTS
corporate site, economic times website, etc. Some books related to consumer buying
behavior and basic marketing concepts were referred while carrying out the research
study marketing management Philip Kotler 13th edition, consumer behavior by Aaker,
Kumar and Day, etc. All sources used for the study are listed out in the bibliography at
the end of the report.
After editing the coding of the data was done by assigning numerals and the data
was classified into number of categories according to the attributes under study and
different classes.
For analyzing the data various tools like tabular analysis, percentage analysis and
graphical analysis are used. For graphical analysis bar graphs are used.
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• The finding of the survey is strictly based on the responses of the respondents. It is
difficult to find the euthenics to be true, so we are assuming them to be true.
• It was very difficult to explain the respondents about how to fill the questionnaire
& it took time for data collection.
• The sample is too small to study behavior of large population of Pune city. Thus
the results obtained cannot be said as the exact replica of the viewpoint of the
people of Pune city.
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Data Presentation,
Analysis and
Interpretation
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28-45 Years 14
Interpretation:
Most of the people are in the age group of 18 to 28 years who are either
studying or working in some firms. These people are using internet for various
purposes regularly.
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12th pass 6
Graduate 45
Post Graduate 32
Professional Courses 15
Interpretation:
It can be seen that most of the people are well educated having a graduate or
post graduate degrees. These people are those who use internet regularly are the
most likely customers of wireless internet connection.
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Up to 2 Members 9
2-4 Members 13
4-6 Members 70
Interpretation:
Most of the family consist of 4 to 6 family members which mother, father
and their children. Also some families have their grandparents along with them.
Out of 4-5 members in each family at least 2-3 of use internet.
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Between Rs.15000-Rs.25000 26
Between Rs.25000-Rs.40000 42
Interpretation:
It is found that families have their income in the range of Rs.15000-
Rs.40000. These are those working in one or the firm with high spending power.
These people need internet for their business needs and also for their family use.
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Research/Studies 28
Job Search 80
Email 100
Chatting 92
Downloading 100
Banking/Stocks/Investments 36
News/Weather Reports 20
Interpretation:
It can be observed that mostly use internet either to get in touch with their
friends and colleagues or for downloading various stuffs from the internet. Hence
they would like to have internet with unlimited download plans.
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Interpretation:
From the above statistics, it is seen that while gathering information about data
service people mostly rely on the opinions of their friends and relatives other than any
other source. The reason behind this would be that they find the experiences shared by
the friends/relatives more true and reliable than any other source.
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Importance Percentage
Extremely Important 54
Somewhat Important 28
Neither Important nor Unimportant 10
Somewhat Unimportant 6
Not at all important 2
Tab. no. 10 Influence of company brand name on customer purchase decision.
Interpretation:
It can be seen above that people while going for any technically advanced product,
people prefer branded products than local products as they feel branded products are
good in quality and are warranty products to use.
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Importance Percentage
Extremely Important 44
Somewhat Important 37
Neither Important nor Unimportant 15
Somewhat Unimportant 4
Not at all important 0
Tab. No. 11 Influence of Net Speed on customer purchase decision
Interpretation:
Nearly 50% percent of the people say that Net Speed is important while
he/she is to have a wireless internet connection. Good net Speed is required to surf
all the websites easily.
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Importance Percentage
Extremely Important 39
Somewhat Important 54
Neither Important nor Unimportant 6
Somewhat Unimportant 1
Not at all important 0
Tab. No. 12 Influence of area wise connectivity
Interpretation:
Large number of people found that internet connectivity of data card should
be good across various localities as wireless internet is purchased by customers so
that they can use it anywhere they want.
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Importance Percentage
Extremely Important 38
Somewhat Important 29
Neither Important nor Unimportant 17
Somewhat Unimportant 9
Not at all important 7
Interpretation:
It can be observed that price of the product plays an important part while
purchasing product as people don’t like to spend more of their hard earned money
in stuff like internet data card; when they have a wired internet at their house.
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Importance Percentage
Extremely Important 36
Somewhat Important 29
Neither Important nor Unimportant 23
Somewhat Unimportant 12
Not at all important 0
Interpretation:
Tariff Plans are the regular expense that they have to pay every month.
Hence they want minimum tariffs available while selecting the data card.
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Importance Percentage
Extremely Important 33
Somewhat Important 26
Neither Important nor Unimportant 19
Somewhat Unimportant 11
Not at all important 11
Interpretation:
According to study, the Data card should be easily available for the people
as they would not waste their time in searching the product since it is not very
important for them and they do their work using other wired connection.
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Importance Percentage
Extremely Important 15
Somewhat Important 37
Neither Important nor Unimportant 21
Somewhat Unimportant 19
Not at all important 8
Interpretation:
People will not buy such products which are difficult to handle when they
are to be carried along while travelling. Hence the product should be such that it an
be easily carried along and easy to use.
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Interpretation:
It is found company sales team is highly influential in convincing people to
go for MTS. Also the reason behind this would be less promotional activities done
by MTS through other media sources.
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Importance Percentage
Extremely Important 23
Somewhat Important 35
Neither Important nor Unimportant 22
Somewhat Unimportant 13
Not at all important 7
Tab.no.18 Influence of offers/discounts provided
Interpretation:
It is observed that when it comes to purchasing wireless internet card, people
go for the one giving attractive offers or discounts. As along the product they get
extra benefits to use
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Findings
And
Observations
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• Following are the factors that affect the buying behavior of the
consumers with respect to wireless internet connection—
A) Personal factors
1) Age & Life cycle stage: From the survey it is cleared that 69% of people in
Pune that were in the survey are in the age group of 18-28 years. These are
students from colleges or working individuals with high spending income. Efforts
need to be taken to capture this group.
2) Education: Most of the population under survey in Pune is well educated with
degree in their hand. Therefore it can be concluded that “Education” is an
important stimulus affecting consumers buying behavior
B) Social factors
1) Number of people in the family: Most of the families have 4 to 6 members in it.
These include parents, their children and the grandparents. These people’s need
could become an influencing factor for the company.
C) Psychological factors
1) Brand Name: For 54 % of people brand name is very important for having
the data card.
2) Price of the product: 67% people find price as an important factor while
taking the purchase decision. Hence price should be such that the customers
feel to buy.
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5) Tariffs plans, Offers and Discounts: 36% people find tariffs plans important
while purchasing data card. Hence they would like to go with minimum
tariff plans available in the market.35% people feel that offers and discounts
do affect the buying behavior of people. Therefore, they would go with
product that comes with most attractive offers and discounts in the market.
D) Economic Factors
1) Income of the family: It is observed that 68% people are earning their monthly
income between Rs.15000-Rs.40000. Thus it can be seen Pune citizen have huge
spending power, but they would like to spend on useful products available at the
best deal.
E) Technological Factors
Various technical aspects considered in study are net speed, area wise connecting
and convenience in handling
1) Net Speed: Most of the people use internet for downloading, emailing, etc.
This requires having good speed and hence 81% people feel it influential in
taking buying decision.
2) Area wise connectivity: The product is used while traveling and would be
used in and around the city. Therefore, 93% people find it important to have
good connectivity in all possible areas.
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Suggestions
And
Recommendations
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MTS has several tariff plans but it would have to improve network
connection along with aggressive promotional strategies’ to become an unbeatable
advantage in upgrading the consumer throughout his lifetime and also making him
brand loyal in the process.
According to study, weak signal strength and slow net connection speed
could be a deterrent for MTS MBlaze. Hence MTS should aim to providing higher
network coverage, good signal strength and more efficient response requests. This
can be done by setting up more network towers and having a more customer
friendly focus.
Also it was found that youngsters use internet mostly for entertainment. This
target segment can be attracted by advertising in Television and Internet. Also
word of mouth publicity clearly scores above all forms of information search,
primarily because of its convenience and source credibility. Everybody being
surveyed believed in consulting their circle for opinions while buying connections.
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Recommendations on 4 P’s
• Product
• The product should focus on improving service response i.e. better customer
service and greater connectivity. This can be done by increasing customer
service facility by setting up more number of customer care centers..
• The product should come up with technical advancement like having an in-
built memory in the data card.
• During study it was found out that in and around Pune good connectivity is
not available. So MTS should increase its infrastructure and reach the areas
where it is not present like Dehuroad, Talegaon, Sinhgad, some parts of
Kothrud, etc.
• Price
• MTS has the lowest plans available with them and their modem prices are
competitive with the other players. Still MTS should keep focus on reducing
extra usage rates and become a price leader for price sensitive heavy usage
segments.
• Promotion
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• Also it is found that word of mouth marketing has an excellent effect on the
consumer purchasing behavior. So promotion strategies could be given focus
on viral marketing campaign like on SMS, e-letters or blogs and so forth.
• Place
• MTS should strengthen its distribution network and also focus on creating
more web worlds with easy accessibility outside cities as they are perceived
to be authentic by consumers.
• During survey, it was found that MTS uses a number of modes to distribute
the modem in the city like directly to retailers, to the distributors and to the
sales team. This causes an unusual competition among the distributors and
the retailers. To avoid such things MTS should have a single distributor
appointed in a particular region and that distributor will supply to the sales
team and the retailers in the area.
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Bibliography
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Bibliography
Journals
• Beatty, S.E. and Smith, S.M. (1987). External search effort: An investigation
across several product categories. Journal of Consumer Research, 14 (1), 83-95
• Moorthy, S., Ratchford, B. and Talukdar, D. (1997). Consumer information
search revisited. Journal of Consumer Research, 23 (4), 263-277.
• Alba, J.W., and Hutchinson, J.W. (2000). Knowledge calibration: What
consumers know and what they think they know. Journal of Consumer
Research, 27 (September),123-156
• Coupey, E., Irwin, J.R. and Payne, J.W. (1998). Product category familiarity
and preference construction. Journal of Consumer Research, 24 (4), 459-468.
• Chernev, A. (2003). When more is less and less is more: The role of ideal point
availability and assortment in consumer choice. Journal of Consumer Research,
30 (2), 170-183.
• Solomon, M.R. (2001). Consumer Behavior. Buying, Having, and Being. 5th
ed. NJ: Prentice-Hall.
• Bockenholt, U. and Dillon, W.R. (2000). Inferring latent brand dependencies.
Journal of Marketing Research, 37 (1), 72-87.
• Swait, J. and Adamowicz, W. (2001). The influence of task complexity on
consumer choice: A latent class model of decision strategy switching. Journal
of Consumer Research, 28 (1), 135-148.
• Press Release of IDC India Ltd. Dated September 18, 2009.
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Websites
• http://www.cybermedia.co.in/press/pressrelease137a.html
• http://www.mtsindia.in/corporate/about-sstl.html
• http://www.mtsindia.in/corporate/about-mts.html
• http://www.eurojournals.com/ejsr_28_4_03.pdf
Books
• Kothari C. R., Research Methodology, 2nd Edition, New Delhi, New Age
International (P) Ltd. Publishers, 2004
• Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha,
Marketing Management,13th Edition, New Delhi, Pearson Education, 2008
• Leon G. Schiffman, Leslie Lazar Kanuk, Consumer Behavior,9th Edition,
New Delhi, Prentice Hall of India Pvt. Ltd., 2007
Newspapers
• The Times of India
• The Economics Times
• Business Standard
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Questionnaire
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Questionnaire
Respected madam/sir,
As a part of my project I would like to gather some information from you
which will help me in an in depth study of project. The information provided by
you will be kept confidential and will be used for academic purpose only. I would
be obliged if you co-operate with me in filling the questionnaire.
1. Name ………………………………………………….
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Sistema Shyam Teleservices (SSTL)
10. Rate the following attributes according to the importance you give while
buying a wireless internet broadband connection?
Net Speed
Area wise
Connectivity
Monthly Tariff
plans
Availability of the
Product
Convenience of
Handling
Special
Offers/Discounts
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Sistema Shyam Teleservices (SSTL)
12. If yes, how did you come to know about MTS MBlaze?
a) TV Advertisement b) Friends c) Retail Stores
d) Company Sales Executives
e) Newspaper/Magazines
f) Any Other Source (Please Specify)……………....
13. Now that you know about MTS MBlaze would you like to purchase it?
a) Yes b) No
Thank you!!!
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Sistema Shyam Teleservices (SSTL)
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