BRM Report MBA I Parag Saikat Pragya

KIIT School of Management, Bhubaneswar Page 1
Business Research Methodology Project Report

on
"Viability study of Refurbished mobiles "

By
Parag Parmar - 13202027
Saikat Kumar Das- 13202038
Pragya Panda- 13202030

DECLARATION

We , Parag Parmar , Saikat Kumar Das & Pragya Panda, hereby declare that
this project report entitled " Viability study of Refurbished mobiles " is an
original piece of work.
This report has the requisite standard for the fulfilment of the survey done on
the mobile phones. To best of our knowledge and belief no part of this report
has been reproduced from any other report and the contents are based on the
original research.

Signed:
1.
2.
3.


ACKNOWLEDGEMENT

We would like to sincerely acknowledge the contribution of all those
people who have, directly or indirectly, been instrumental in helping us
complete this project. Also, we thank our institute , KIIT School of
Management for the support that we got during this project. We take
this opportunity to thank them and all the well-wishers for their
relentless encouragement and whole-hearted support.

We would also like to extend our special thanks to our faculty guide,
Prof. Dr. R. N. Subudhi & Dr. Sasmita Mishra, KSOM Bhubaneswar for
their constant cooperation & guidance at every step. Their teachings in
the field of questionnaire design, research structuring and analysis
have helped us by leaps and bounds.

Last but not the least, we thank our parents for being our pillars of
support constantly through the tiring times. Their motivation has
constantly boosted our endeavours to work harder and achieve more
each time.

Parag Parmar - 13202027
Saikat Kumar Das- 13202038
Pragya Panda- 13202030

TABLE OF CONTENTS

Sl. no. Particulars

Page no.
1 EXECUTIVE SUMMARY
5
2
INTRODUCTION
6-8
3
RESEARCH DESIGN AND METHODOLOGY
8
4
LITERATURE REVIEW
9-12
5
PROJECT OBJECTIVES
13
6
RESEARCH DESIGN & METHODOLOGY
4
7
PROJECT FINDINGS AND ANALYSIS
15-23
8
CONCLUSION
24
9
RECOMMENDATIONS
25
10
LIMITATIONS
26
11
REFERENCES
27

12
ANNEXURE
28-30

EXECUTIVE SUMMARY

This project proposes to study the viability for refurbished mobile phones in
Bhubaneswar. A refurbished mobile phone is a second hand mobile phone which is
repaired, faults are replaced & the handset is made as good as new, with probable
warranty & service features. In the recent trends in the technology market we have
observed an increasing trend of mobile phone users in the smartphones segment. This
gives us an opportunity to go ahead for a new business idea where refurbished phones
can be offered to customers at a very less and accommodative price so that they can go
for even high end smartphones within their budget.
The study is based on Primary data collected via structured questionnaire. With the help
of the primary data we shall analyze the findings and present the recommendations to on
how to include these findings in the product launch strategy. Through the questionnaire
we have looked forward to having an idea about what the customers know and think
about refurbished phones, what is their behavioural attitude towards smart phones in
general, is there a gender based effect on their perception and what attributes are
important to them while making a purchasing decision for any phone, be it first hand or
second hand.
We have included the background of the project and defined the problem. Further on, the
research methodology tools used and the findings have been reviewed by using
quantitative techniques.


INTRODUCTION

Refurbishment is the distribution of products (usually electronics) that have been
previously returned to a manufacturer or vendor for various different reasons.
Refurbished products are normally tested for functionality and defects before they are
sold, and thus are the approximate equivalent of certified pre-owned cars.
The main difference between "refurbished" and "used" products is that refurbished
products have been tested and verified to function properly, and are thus free of defects,
while "used" products may or may not be defective. Refurbished products may be unused
customer returns that are essentially "new" items, or they may be defective products that
were returned under warranty, and resold by the manufacturer after repairing the defects
and ensuring proper function.
Other types of products that may be sold as "refurbished" include:
Items used in field tests, sales displays or demonstrations
.

Items returned for reasons other than defect and tested by the manufacturer.
Items returned to the manufacturer because the box or item was damaged in
shipping.
Previously leased units that are turned in and resold after the lease ends
.

Used electronics that have been turned in to an electronic recycling program.
Used items that have been donated to a charity or non-profit organization.

What Is a Refurbished Mobile phone?
A refurbished cell phone is a pre-owned phone that has been returned either because the
buyer changed their mind during the first 30 days after purchase, or because it had some
sort of defect. These phones are brought back to as-new condition and are fully tested
before being sold as a refurbished phone. You will find these phones on most carriers
websites and at eBay and Amazon.
FACTORY-REFURBISHED CELLPHONES
Factory-refurbished cell phones have been refurbished by the original manufacturer, such
as Sony or Nokia. They may have been returned with defects like scratches, cracked
screens or problem buttons. The company replaces any broken or damaged components

and restores them in compliance with their production standards. Older models are often
completely restructured with a new microprocessor and new casing. They will be sold
with warranties and sometimes even include accessories and user manuals.
STANDARD OR VENDOR-REFURBISHED PHONES
Cell phones are sometimes refurbished by someone other than the manufacturer.
Although they will try and restore them to the original condition, they may not be to full
manufacturer's specifications or inspected by certified inspectors. Because of this, it is
better to purchase a factory-refurbished phone.
PROS OF A REFURBISHED CELLPHONE
The major advantage of buying a refurbished cell phone is the cost savings over buying
the same model new. You can buy a top-of-the-line refurbished phone for the same or
less as an everyday phone bought new. Another advantage of a refurbished phone is it is
environmentally friendly. It is a form of recycling that reduces the number of cell phones
going into landfills.
CONS OF A REFURBISHED CELLPHONE
Warranties on refurbished phones are generally not as long as for new phones. New
phones often have a one-year warranty, while a refurbished one may have 90 days. It is
important to test your phone fully when you get it and check that everything works, such
as the camera, and the sound is at a suitable level. Some refurbished phones are locked to
a particular network, which means you will not be able to switch carriers easily.

Need for refurbished phones
Increasingly, the newer phones in the market are coming at really very high prices Some
are even more expensive than a laptop. These mobile phones are aspirational products for
most customers, some of whom do have the purchasing power to buy these phones at a
60%-70% price level. Hence there exists a market potential for such phones in many of
the India's cities.
The IT boom has also enabled most people to become more tech-savy and in cities where
lots of IT companies have their presence, sale of technology items are the highest.
For a start-up company who want to enter this market it is a good opportunity as no
known or registered players exist in this market till now. Also, this is a totally
unorganized sector and entering into this would mean having a first mover advantage as
well.

Also, customers have very less options of disposing off their phones, which a refurbished
phone seller can give them by taking phones through buy-backs or even recycle donation
to charity.
We have used this research platform to get some exploratory knowledge of this market
and ascertain further course of direction in this regard.

RESEARCH DESIGN
Type of Research: Exploratory
Research Instrument/Tool: Structured Questionnaire
Sampling Method: Non-Probability convenience sampling
Sample Size: 50
Sample unit: Students of KIIT University who were chosen based on mutual
convenience.
The research also helped in understanding what factors influence customers, especially
the young buyers, while purchasing a phone and how much value they think a
refurbished phone can give them. There are certain apprehension about the mobiles being
second hand and this research will help us bring them to the fore. This research also
helped in finding out who prefers refurbished mobile phones as a value offering.
Scales used: Nominal, Ordinal, Ratio and Likert.
Tools used: Questionnaire, SPSS and MS Excel.


Literature Review
Consumers are individuals and households that buy the firms product for
personal consumption (Kotler, 2004). It often used to describe two different
kinds of consuming entities: the personal consumers and the organizational
consumers (Krishna, 2010). The activities these consumers undertake when
obtaining, consuming, and disposing of products and a service is known as
consumer behaviour. Consumer behaviour involves studying how people buy,
what they buy, when they buy and why they buy. When a consumer wanted to
make the purchase decision, they will pass through the process through
recognition, search information, evaluation, purchase, feedback (Blackwell,
Miniard, and Engel, 2006). At last, the consumer will choose a product or
brand to consume from various choices in the market. However, these factors
affecting the buying behaviour of consumers vary due to diverse
environmental and individual determinants.
Consumer buying behaviour is influenced by two major factors. These factors
are individual and environmental. The major categories of individual factors
affecting consumer behaviour are demographics, consumer Knowledge,
perception, learning, motivation, personality, beliefs, attitudes and life styles.
The second category of factors is environmental factors. Environmental
factors represent those items outside of the individual that affect individual
consumers decision making process. These factors include culture, social
class, reference group, family and household. The above mentioned factors
are the major determinants behind the decision of consumers to opt a given
good or service Blackwell, Miniard, and Engel, 2006).

Ref: Journal of Marketing and Consumer Research - An Open Access
International Journal Vol.2 2013

Saif (2012) analyzed the factors affecting consumers choice of mobile phone
selection in Pakistan. The results indicated that consumers value new
technology features as the most important variable amongst all and it also acts

as a motivational force that influences them to go for a new handset purchase
decision.
Subramanyam and Venkateswarlu (2012) conducted a study on factors
influencing buyer behaviour of mobile phone buyers in Kadapa district in
India. The researchers studied the various types of marketing strategies
adopted by market to acquire the attention and cognition of both existing and
potential customers, and to study what role these marketing strategies play in
consumer buying process. According to the results, income, advertising and
level of education in a family are the determining factors of owning a mobile
phone set. Malasi (2012) examined the influence of product attributes on
mobile phone preference among undergraduate university students in Kenya.
The study indicated that varying the product attributes has an influence on
the undergraduate students preferences on mobile phones. Various aspects of
product and brand attributes were considered such as color themes, visible
name labels, and mobile phone with variety of models, packaging for safety,
degree of awareness on safety issues, look and design of the phone.
Based on previous research studies and literatures reviewed (i.e. price, social
factors, durability, brand name, product features and after sales services)
thought to influence the dependent variable (i.e. decision to by) are identified
Various kinds of rating scales have been developed to measure attitudes
directly (i.e. the person knows their attitude is being studied). The most
widely used is the Likert Scale.

Likert (1932) developed the principle of measuring attitudes by asking people
to respond to a series of statements about a topic, in terms of the extent to
which they agree with them, and so tapping into the cognitive and affective
components of attitudes.
Likert-type or frequency scales use fixed choice response formats and are
designed to measure attitudes or opinions (Bowling 1997, Burns & Grove
1997). These ordinal scales measure levels of agreement/disagreement.
A Likert-type scale assumes that the strength/intensity of experience is linear,
i.e. on a continuum from strongly agree to strongly disagree, and makes the

assumption that attitudes can be measured. Respondents may be offered a
choice of five to seven or even nine pre-coded responses with the neutral
point being neither agree nor disagree.
In its final form, the Likert Scale is a five (or seven) point scale which is used
to allow the individual to express how much they agree or disagree with a
particular statement.
For example:
I believe that ecological questions are the most important issues facing human
beings today.
Strongly agree / agree / dont know / disagree / strongly disagree
Each of the five (or seven) responses would have a numerical value which
would be used to measure the attitude under investigation.
Likert Scale Examples
Agreement Frequency
Strongly Agree
Agree
Undecided
Disagree
Strongly Disagree
Very Frequently
Frequently
Occasionally
Rarely
Never
Importance Likelihood
Very Important
Important
Moderately Important
Of Little Importance
Unimportant
Almost Always True
Usually True
Occasionally True
Usually Not True
Almost Never True


How can you analyse data from a Likert Scale?
Summarise using a median or a mode (not a mean); the mode is probably the
most suitable for easy interpretation.
Display the distribution of observations in a bar chart (it cant be a
histogram, because the data is not continuous).

Critical Evaluation
Likert Scales have the advantage that they do not expect a simple yes / no
answer from the respondent, but rather allow for degrees of opinion, and even
no opinion at all. Therefore quantitative data is obtained, which means that
the data can be analyzed with relative ease.
However, like all surveys, the validity of Likert Scale attitude measurement
can be compromised due the social desirability. This means that individuals
may lie to put themselves in a positive light. For example, if a likert scale was
measuring discrimination, who would admit to being racist?

Exploratory Research: It helps investigators gain some initial insights and
may pave the way for further research. Since the type of project in question is
in a very niche and unchartered area, this research would be an exploratory
research to pave way for further conclusive research.


RESEARCH OBJECTIVES

To find out latent demand for refurbished mobile handsets.
To find out the factors that affect this demand.
To find out the traits customers look for as value addition in mobile
phones.
Establishing a viable opportunity for a launch into this new market.
Finding marketable attributes that will ignite the customers latent
demand.


RESEARCH DESIGN AND METHODOLOGY
Need for study:
There exists an unchartered market for refurbished mobiles in India in general
and Bhubaneswar in specific. We are trying to conduct an exploratory
research on this topic to establish some viability or some findings that can
help us bring these factors to the fore and enable us to go for further
conclusive studies.
Research Design:
We have used primary data as a source of research. Findings have been made
based on qualitative and quantitative data with the use of the various scales.
The kind of sampling was non-random convinience sampling.

Population:
As the population of Bhubaneswar is very large, so small portion limited to
the KIIT University has been taken for the research. Sample size is of 50
respondents.

Research Instrument:
Contacting the respondent personally and studying the response. The
questionnaire was filled out, related to usages of particular branded soaps.
Further the data was coded and analysed using IBM SPSS and MS Excel.


PROJECT FINDINGS AND ANALYISIS
After obtaining the Primary data we came through with the following project findings.
1.

INTERPRETATION:
Hence we found that 86% of sample has never bought a secondhand mobile phone. Very
few people we came across had actually bought a second hand mobile before.

14%
86%
Yes
No

2. Do you know about refurbished mobile phones?

INTERPRETATION:
From our sample we can see that 28% of sample know about refurbished more phones.
Hence, creating more awareness amongst the people should be a target for this industry.

14
36

Question 3: Which brand of mobile phone are you using right now?

INTERPRETATION: From our survey we can say that most people are using Samsung (36%)
& Nokia (32%) mobile phones. Hence, these are two easily available
brands in the market for consideration as input products.


Question 4: How much would you like to spend on your next mobile purchase?

INTERPRETATION:
From our sample we see that most number of people are buying expensive smart phones
which gives refurbished mobiles a good scope in the market to provide a cheaper
alternative.


Q5. Perception Mapping- who buys second hand phone?

Interpretation: We observe that people feel most number of people buying refurbished
phones are the ones who have a low budget. The target customers with latent demand
would be those aspiring a higher value product at low prices.

Customer demanding
features at low price
Customer having low
budget
Both low budget &
features at low price
Out side perception
area Cant Say

32%
16%
52%
%%
%%
%
10%

Question 6: Would you buy a phone with higher features, refurbished (renovated)
set if it were available to you for almost 60% of its price?

INTERPRETATION: From our survey we can find that most of the people didnt show
interest in purchasing refurbished mobile phones, but we still had 28% respondents
showing interest, & 32% saying they might go for such phones.


Question 7: Which type of mobile phones would you prefer as a customer?

INTERPRETATION:
From the above analysis, we can see that Android phones got highest ranking (1.7) So, as
a refurbished mobile seller we should should target customers with more of refurbished
Android phones & we can also look at phones with iOS & windows platform as a good
market chunk.

3.2
2.7
1.7
3.11
4.48
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
Windows
Mobile
iOS Mobiles Android Phones Blackberry Symbian/Others
Mean Ranking
Mean Ranking


Question 11: Giving a warranty on second hand/refurbished mobile phones makes it
a more secure purchase ?

INTERPRETATION:
From our sample we can see that most of people somewhat agree that if a warranty is
given on refurbished phone then it make a more secure purchase.
Hence, a refurbished phone should definitely have a warranty.


Gender wise consent distribution for refurbished mobiles

INTERPRETATION:
Most number of men say that they wouldnt go for refurbished mobiles but the woman
population was mostly divided in their opinion & are undecided. Yet, we see a patter
where women have kept their options open for a product which will give them a value for
money. Many maybe's mean that they can be shifted to a buyer if given the right mix of
products.

8
13
8
29
6
7
8
21
0 10 20 30 40 50 60
Yes
No
Maybe
Total
Yes No Maybe Total
Males 8 13 8 29
Females 6 7 8 21

CONCLUSION

People are somewhat open to the idea of refurbished phones, if provided
along with good service.
As a refurbished phone seller we should concentrate mostly on Android
and iOS Smart phones which are most preferred by the customers.
People like to sell off their old phones which is a good for our business.
Major population is in the switcher zone, hence latent demand does
exist.
Mid to upper-middle level smart phones are the most demanded by the
customers.
Women, as potential customers, show more promise than males, which
indicates they are looking for value for money.
From our findings we came to know that the insights are not yet
conclusive.
Further study needs to be done on the customer base to derive the latent
demand.


RECOMMENDATIONS AND SUGGESTIONS

We can see that there lies a lot of scope for further research, which is why descriptive and
further conclusive research should be done.
Refurbished mobiles have shown good promise where people are going to be benefitted
largely, especially those with higher aspirational products but low budget. Hence, here
lies a great opportunity to make this into a great market with good customer demand.
We suggest that the company interested in launching such kind of product should
definitely go for further conclusive research without prejudice but this is going in the
favour of the company as of now.


LIMITATIONS

The respondents were generally of the age group of 20-25.
Time
Geographical restrictions
Unavailability of secondary data.
Uncharted territory in mobile industry.


REFERENCES

en.wikipedia.org/wiki/smart_phones

http://www.pewinternet.org/fact-sheets/mobile-technology-fact-sheet/

http://www.gsma.com/publicpolicy/wpcontent/uploads/2012/03/environ
mobilelifecycles.pdf

Syed A. Ahson, Mohammad Ilyas, Smart phones : Intl. Engineering
Consortium & Co.


ANNEXURES
Research Questionnaire
*Respondent Name: ________________________________ *Age: ______
*Gender: Male Female Phone No. : ______________________
*Email id: _____________________________________________________

Prepared for academic research purpose under the area of Business Research
Methodologies. All personal details will remain confidential and will be used
only for academic purpose at the KIIT School of Management, Bhubaneswar.

1. Have you ever bought a second hand mobile phone?
A. Yes B. No

2. Do you know about refurbished mobile phone?
A. Yes B. No

3. Which brand of mobile phone are you using right now?
A. Nokia B. Samsung C. Sony D. Micromax
E. Others (Please Specify) ____________________________

4. How much would you like to spend on your next mobile purchase?
A. up to Rs 5000 B. Rs 5001-10000 C. Rs 10001-15000 D. Rs
15001- 20000 E. Above Rs 20000

5. Which customers buy second hand mobiles?
A. Customer demanding features at low prices
B. Customer having low budget

C. Both options A. and B.
D. Can't Say.

6. Would you buy a phone with higher features, refurbished (renovated)
set if it were available to you for almost 60% of its price?
A. Yes B. No C. Maybe

7. Do you think refurbished phones compromise on quality and features to
maintain low price?
A. Yes B. No C. Maybe

8. Which type of mobile phones would you prefer as a customer? (Please
indicate your preference in the order of 1-5 where 1 being the highest
preference and 5 being the lowest.)

A. Windows Mobile __________
B. iOS Mobiles __________
C. Android phones __________
D. Blackberry OS Mobiles __________
E. Symbian/Other Multimedia mobiles __________

9. If you get a warranty on second hand/refurbished phones, would you
consider it at par with a new mobile phone?
A. Yes, there would be no difference then.
B. No, second hand and first hand phones can never be the same
C. Maybe, just warranty doesn't make them at par.

10. Which of these is your favourite feature in mobiles?
A. Camera B. Games C. Internet and browsing apps D. Messaging
Apps


11. In the options available below, rank them as per your highest
preference being 1 and lowest being 5.
How would you dispose off your mobile phone?
A. Sell it off. _______
B. Give it to a relative/family member. _______
C. Do nothing and keep it idle. _______
D. Throw in mobile recycle bins. (Eco friendly) ________
E. Donate it to charity. _______

12. Giving a warranty on second hand/refurbished mobile
phones ..makes it a more secure purchase?
A. Strongly Agree. B. Somewhat Agree. C. Maybe
D. Somewhat Don't Agree. E. Strongly Don't Agree
13. What would your annual household income be?
Ans. A. upto 2 lakhs B. 2 lakhs to 4 lakhs. C. 4 lakhs to 6 lakhs. D. Above 6
lakhs.

14. These are some statements about the features of mobiles. Rate the
following statements on a scale of 1-5, where 1 being the least
important/least agreed with and 5 being the most important/most agreed
with to you.

A mobile has to have a long lasting battery life. _____________
A mobile should have the best service. _____________
A mobile should have a good (long) warranty period. _____________
A mobile should have fast processing of data. _____________
The price of the mobile is important to a customer while buying. _____________
A mobile should have a high pixel camera and powerful flash. _____________

Thank you for your time.

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Business Research Methodology Project Report

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