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Project Title:

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Consumer Replacement Behaviour: Investigation into the

influence of planned obsolescence, consumer nature and

industry retention strategies formobile phone

replacement decisions

Abstract

Whether planned obsolescence, the nature of consumer behaviour or industry specific

retention strategies determine replacement behaviour is a debatable topic. The purpose

of this research was to determine the primary drivers influencing consumers’

replacement decisions, through product-specific research into mobile phone

replacement. A mixed-methods research strategy included the completion of 151

quantitative questionnaires by mobile phone users. In addition, qualitative semi-

structured interviews were conducted with 6 mobile phone users who had recently

replaced their phone. The findings reveal that the nature of consumer behaviour, further

driven by retention strategies and low pricing, rather than planned obsolescence in

product design, holds significant influence in consumers’ replacement decisions. The

desire to own the latest product, limited functionality of an owned device, contract

service plan renewals and price related factors appear to be key determinants for

consumers’ replacement decisions. Distinctive implications for the mobile phone

industry involve incorporating sustainability into phone design, in order to reduce

consumers’ unnecessary expenditure. However, given that this research only focuses on

mobile phone replacement, further research into other products could establish whether

the primary drivers influencing replacement decisions, derived from this study are

complete and consistent.

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Keywords:Planned obsolescence, Product design, Consumer replacement behaviour,

Replacement decisions, Retention strategies, Replacement rates, Mobile phones.

Planned Obsolescence: Planned obsolescence as a business strategy is the design

concept of a product which includes the process of the

product becoming obsolete, that is unfashionable or no

longer useable, in order to maintain consumer spending.

Replacement Rates: Replacement rates refer to the time period between an

individual’s purchase of a product and its replacement by

another product with the same function.

Acknowledgements

I would like to thank everyone who supported me throughout this research project,

including all those who contributed their kind efforts towards research completion.

In particular, I must thank my personal supervisor Dr Grahame Fallon for his continuous

support and guidance. I would also like to thank my family and close friends for their

encouragement throughout the course of this project.

I hope this research project is a valuable and interesting read.

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Contents

Chapter 1 Introduction 8

1.1 Background 8

1.2 Project Rationalisation 9

1.3 Research Aim 10

1.4 Research Objectives 10

1.5 Project Synopsis 11

Chapter 2 Literature Review 12

2.1 Introduction 12

2.2 Planned Obsolescence through Product Design 13

2.2.1 Limited Life Design 13

2.2.2 New Product Development 14

2.3 The Individual Natures of Consumer Behaviour 15

2.3.1 Consumer Choice and Resistance 15

2.3.2 Consumer Perceptions 16

2.3.3 Consumer Desire and Fashion 17

2.4 Consumer Retention Strategies in the Mobile Phone Industry 17

2.4.1 Contract Service Plans and Pricing 17

2.4.2 Limited Editions influencing Competitive Consumption 19

2.5 Influences on the Replacement Decision 19

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2.6 Summary 20

Chapter 3 Research Methodology 22

3.1 Introduction 22

3.2 Methodological Approach 22

3.2.1 Triangulation 23

3.2.2 Positivism and Interpretivism 23

3.2.3 Inductive and Deductive 23

3.2.4 Quantitative and Qualitative 24

3.3 Research Methods Applied 24

3.3.1 Self-Completion Questionnaires 24

3.3.2 Semi-Structured Interviews 25

3.3.3 Pilot Study 26

3.4 Data Analysis 27

3.4.1 Quantitative Data Analysis 27

3.4.2 Qualitative Data Analysis 27

3.5 Alternative Methods 28

3.5.1 Focus Groups 28

3.5.2 Observations 28

3.6 Ethical Issues 28

3.7 Practical Problems and Limitations 29

3.8 Summary 30

Chapter 4 Findings, Analysis and Discussion 31

4.1 Introduction 31

4.2 Planned Obsolescence shortening Replacement Rates 31

4.2.1 Planned Obsolescence influencing Replacement Decisions 35

4.3 Natures of Mobile Phone Users 36

4.3.1 Natures of Phone Users influencing Replacement Decisions 42

4.4 Consumer Retention Strategies and Mobile Phone Replacement 43

4.4.1 Consumer Retention Strategies influencing Replacement Decisions 46

4.5 Summary 46

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Chapter 5 Conclusions and Recommendations 48

5.1 Conclusions 48

5.2 Implications for the Mobile Phone Industry 49

5.3 Limitations and Scope for Further Research 49

References 51

Appendices 58

Appendix 1: Pilot Questionnaire 58

Appendix 2: Pilot Interview Guide 60

Appendix 3: Final Questionnaire 61

Appendix 4: Final Interview Guide 63

Appendix 5: Sample Interviews Transcribed 64

Appendix 6: Brunel Business School Research Ethics Form 73

Appendix 7: Participant Information Sheet 76

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Chapter1-Introduction

1.1 Background

Recent years have seen renewed interest amongst marketing academicsregarding the

heightened awareness of planned obsolescence in product design, attempting to shorten

product lifespans;therefore, influencing consumer replacement behaviour (Cooper,

2004). More recently, however, literature has emerged arguing the individual natures of

consumers and specific industry strategies also contribute towards increased

replacement purchases (Nes and Cramer, 2005). Despite this, there still remains a lack of

understanding about the primary drivers of product replacement decisions (Guiltinan,

2009).

The concept of planned obsolescence originated in the 1930’sfrom Bernard London,

through a publication titled ‘Ending the Depression through Planned Obsolescence’. This

publication received widespread attention from claimingthe cause of the great

depression was prolonged consumer useof products, beyond the time predicted by

statisticians (Slade, 2006 cited in Boradkar, 2010, p.181).London also argued for

economic stimulation; products needed specific lifespans, which would be a sure

mechanism of economic growth (White, 2008).

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The impact of planned obsolescence on product design has resulted in many academics

(Geyer and Blass, 2010; Guiltinan, 2009; Howard, 2011) criticising the concept as

unethical. These researchers suggest designing products that wear prematurely, result in

unnecessarily high consumer expenditure(Howard, 2011). Moreover, planned

obsolescence results in severe environmental implications (Geyer and Blass, 2010),

evident from the rising number of functional durable goods in landfills (Guiltinan, 2009).

The mobile phone industry in particular has received criticism for using planned

obsolescence to exploit consumer expenditure, in order to have a positive effect on

industry profits (Kahney, 2011; Leonard, 2005). Nonetheless, academicsclaim(Nes and

Cramer, 2005; Wilhelm et al., 2011)the active use of planned obsolescence alone, does

not account for the ever increasing phone replacement sales. The nature of consumer

behaviouraspiring to own something newer, better, sooner than necessary (Stevens,

1956 cited in Adamson, 2003, p.129)influences replacement decisions by reducing the

time between repeat purchases.Furthermore,specific strategies including new product

development and consumer retention strategies (Guiltinan, 2009; Wilhelm et al., 2011)

employed by the mobile phone industry support planned obsolescence generate sales

(Jobber, 2007).

1.2Project Rationalisation

Although research into planned obsolescence and consumer replacement behaviour has

attracted vast attention amongst marketing academics (Grewal et al., 2004; Guiltinan,

2009; Nes and Cramer, 2005), the primary drivers of replacement decision-making are

yet to be clarified (Guiltinan, 2009).So far, most consumer behaviour literature has

focused on initial purchases, rather than the arousal of replacement behaviour, which is

remarkable considering the majority of durable product purchases are replacement

purchases (Nes and Cramer, 2005). This providessignificant opportunity to contribute

towards the study of consumer replacement behaviour by exploring the precise factors

influencing consumers’ replacement decisions (Guiltinan, 2009; Nes and Cramer, 2005).

Additionally, marketing scholars in the field have called for investigation into product-

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specific research (Cooper, 2004; Guiltinan, 2009) which would be useful in determining

the above.

With sources indicating over 5billion phones are in use globally (CBS news, 2010 cited in

Wilhelm et al., 2011, p.21) and that millions of functioning mobile phones are discarded

each year (Guiltinan, 2009);exploring mobile phone replacement motives ensures

gaining a concentrated understanding about what prompts consumers to make

replacement decisions.Moreover, the mobile phone industry has been accused of using

planned obsolescence and specific retention strategies to exploit consumption (Kahney,

2011; Leonard, 2005; Wilhelm et al., 2011). These factors have focused research to

mobile phones, in regards to conducting product-specific research.

1.3Research Aim

1.4Research Objectives

In order to achieve the project aim, the following measurable objectives lead to

observable outcomes:

Identify the effectiveness of planned obsolescence in product design, by the

mobile phone industry, on shortening product replacement rates

Determine the individual natures of consumer behaviour that either resist or

drive mobile phone users’ replacement decisions

Explore how price and consumer retention strategies employed by the mobile

phone industry further influence consumers’ replacement decisions

This project aims to contribute towards an existing community of consumer

replacement behaviour research, by determining the primary drivers influencing

consumer replacement decisions through product-specific (mobile phone) research;

considering factors of planned obsolescence, natures of consumer behaviour and

industry consumer retention strategies.

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1.5Project Synopsis

The following structure has been applied to subsequent chapters:

Chapter two- Literature Review

A Venn Diagram emphasises the considerable overlap between research topics

in regards to mobile phone replacement decisions

Critically reviews key literature on planned obsolescence, the natures of

consumer behaviour and consumer retention strategies

Identifies a model of factors influencing replacement decisions

A concise summary heightens the need for product-specific research

Chapter three- Research Methodology

Identifies the research strategy and data collection methods

Reviews alterative research methods and discusses data analysis techniques

Reflects upon potential ethical issues and practical research problems

Chapter four- Findings, Analysis and Discussion

Key findings generated from primary research are presented

Findings are analysed and discussed in relation to research objectives and

reviewed literature

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Chapter2-Literature Review

2.1 Introduction

Consumer replacement behaviour has recently attracted vast attention, due to the

heightened awareness of planned obsolescence in product design increasing

replacement purchases. Cooper (2004)proposes planned obsolescence holds significant

power ininfluencing product replacement. However, Wilhelm et al., (2011) suggest

planned obsolescence alone does not account for the ever increasing mobile phone

replacement sales; factors such as consumer behaviour and industry strategies

contribute towards product replacement.

Figure1illustratesplanned obsolescence, consumer behaviour and consumer retention

strategy research topics, although separate fields of study, have considerable overlap in

regards to replacement decision-making. This chapter critically reviews existing literature

around planned obsolescence in mobile phone product design and individual natures of

consumer behaviour that influence replacement behaviour. Additionally, this chapter

addresses how consumer retention strategies embedded in the mobile phone industry

further encourage replacement; in order to determine specific factors influencing

consumers’ replacement decisions.

Chapter five- Conclusion and Recommendations

Concludes with an overview of the project outcomes

Practical recommendations for further research are suggested

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2.2Planned Obsolescence through Product Design

Planned obsolescence as a product design strategy involves the process of a product

becoming obsolete, that is unfashionable or no longer useable (The Economist, 2009).

Cooper (2004) indicates planned obsolescence encouragesconsumer replacement

behaviour; emphasising planned obsolescence exists to maintain consumer spending

(BBC News, 2011).Roster (2001) describes replacement as a process that requires the

abandonment of an old product relationship,in order to form a new relationship with a

replacement product.

Previous research by Geyer and Blass (2010, p.516) exploring mobile phone consumption

and disposal behaviour, identifies over 60% of mobile phone sales are replacement sales,

and 90% of phones are in a functioning condition when discarded. This suggests the

mobile phone industry has successfully implemented planned obsolescenceto increase

replacement sales; favourable to their profits.

2.2.1 Limited Life Design

Recent research by Wilhelm et al., (2011) focusing onmobile phone industry trends,

found limiting the lifespan of mobile phones through designheavily stimulates product

Planned obsolescence in mobile phone product design

The individual natures of consumer behaviour

Consumer retention strategies employed by the mobile phone

industry

Consumers’ product replacement decisions

Figure1: Venn Diagram (relationship between research topics and area of study)

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replacement. Slade (2006, cited in Guiltinan, 2009, p.20) supports these findings, stating

purposely designing a product to have a restricted life is a functional obsolescence

mechanism, which has significant control over replacement decisions through altering

product quality.

Product design is further reinforced by limited warranty and poor repair or maintenance

services by mobile phone companies (Wilhelm et al., 2011).Adolphson (2004) discusses

the lack of repair services, outlining most electronic appliances have high repair prices;

therefore,increasingproduct replacement rather than repair. Similarly, Antonides (1991)

states when deteriorating performance of an owned product is the motive for

replacement, consumers compare costs of replacing against maintaining in their

decision-making process.

Kahney (2011) uses a recent example to illustrate the extent of planned obsolescence by

the mobile phone manufacturer Apple, who was accused of unethically switching to new

tamper-proof screws in early 2011. This prevented users from attempting to repair their

phones themselves; making users reliant on Apple repair and maintenance services,

assisting Apple’s sales. Despite experiencing unethical views, Apple was awarded 8th

position in the top100 best global brands for 2011 (Interbrand, 2011). This ranking

supports the suggestion by Braga (2010) that there is a general acceptance of planned

obsolescence, as consumers understand technology is far more ephemeral now, than it

has ever been, and products built are expected to break, not to last. However,

Nieuwenhuis (2008)points out the inability to fix an owneddevice results in a loss of

control and separation from the product.

Bloch et al., (2003) draw our attention to production materials of electronic goods,

emphasisingpoor quality materials cause design failure in electronic appliances. More

recently, Cooper (2005) considers reduced aesthetics satisfaction, such as easy ‘wear and

tear’ as a primary replacement cause. Overall, functional obsolescence mechanisms in

manufacturing designpush consumers to replace through purposeful product failure and

declining performance.

2.2.2 New Product Development

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Enhancing mobile phone features through regular software advancements and cosmetic

developments has led to a negative influence on product longevity (Guiltinan, 2009).

Furthermore, even when improvements are not obvious, an empirical study byBoone et

al., (2001) indicates rapid product development strategies are interpreted by consumers

as cues to higher rates of product improvement; resulting in a policy of ‘continuous

upgrading’. This creates a sense amongst consumers that their existing product is

obsolete, therefore,shortening replacement rates. Moreover, frequent technological

advances, such as increased mega-pixels to camera phones,inspire individuals to

consider mobile phones as transient fashion items rather than durable goods (Slade,

2006 cited in Wilhelm et al., 2011, p.28). Heely and Nersesian (1994) recognise there

areoften only a few enhancements to newer models,consequently, not making

currentmodels completely obsolete, suggesting consumers are not necessarily forced to

replace their existing product.

Adamson (2003)proposesproduct development strategiesare a form of psychological

obsolescence mechanisms. Packard (1960, cited in Guiltinan, 2009, p.20) terms these

mechanisms as ‘voluntary’, as there is no reason why consumers cannot continue using

their existing functioning product; associating replacement behaviour withconsumer

desire to own something new.

Nevertheless, the traditional view by Packard (196) fails to fully acknowledge consumer

satisfaction when using the term ‘voluntary’ to describe replacement behaviour.

Nowadays, in most cases, the continuous use of a functioning product does not ensure

satisfaction. Mobile phone manufacturers incorporate fashion into product design to

ensureconsumer satisfaction, furtherincreasing replacement purchases (Guiltinan, 2009).

2.3The Individual Natures of Consumer Behaviour

Success of planned obsolescence ultimately relies onconsumer decisions(Guiltinan,

2009). Decisions are influenced by consumer behaviour, involving thoughts and feelings

people experience during consumption, relating to external factors within the

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environments in which decisions are made (Foxall et al., 1998).Therefore, consumer

mind-setimpacts the replacement decision based on individual wants or needs.

2.3.1 Consumer Choice and Resistance

Nes and Cramer (2003) claim consumers decide when and whether to replace products;

presenting the power of consumer choice as an element ofreplacement decisions.

Subsequently, this gives less attention to external and product factors such as industry

marketing efforts and product design.Consumer power enables price

negotiations,aidingthem financially (Blanke, 2007) and access to online product

reviewsprovides replacement options, promoting rivalry in the market place (Bosteels,

2011).

Individual choice allows consumers to fight against planned obsolescence and resist

replacement influenced by retention strategies(The Economist, 2009). Schiffmanet al.,

(2010) support resistance behaviour, claiming consumer actions are based on careful

individual considerations of rationality over emotional motives. Furthermore, Laukkanen

et al., (2007) distinguishindividual replacement behaviours between consumer age

groups.The likelihood of behaving rationally and resisting replacement is more common

in mature consumers,through effective management of assets.

In addition, research on mobile phone consumption behaviour by Wilhelm et al., (2011)

indicates over 50% of their sample expectsmobile phones to last longer in terms of

durability. This suggests consumer resistance is becoming more powerful, perhaps due

tothe need for sustainable innovations (Cooper, 2005; Guitinan, 2009). Nonetheless, so

far, there has been little discussion within literature about resistance behaviour

impacting replacement decisions.

2.3.2 Consumer Perceptions

Product replacement literature (Kim et al., 2001; Wilska, 2003) emphasises consumer

perceptions as a behavioural typemotivating frequent replacement. Coogan and Kangas

(2001 cited in Wilska, 2003, p.449) specify mobile phone consumption is a result of peer

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pressure, particularly for younger consumers. Possession of a mobile phone for younger

users symbolises a sense of belongingness to a group. Furthermore, Oksman and

Rautiainen (2001 cited in Wilska, 2003, p.449) note mobile communication is seen as a

‘lifeline’ by many users.

Additionally,Kim et al., (2001) indicate technology-sensitive individuals have greater

disutility, the degree to which a commodity fails to satisfy human wants; therefore,

replacement is more commonamongst these people. Wilska (2003) strengthens these

findings;signifyingtechnological enthusiasm and trend-consciousness are linked to

frequent phone replacement.

2.3.3Consumer Desire and Fashion

As mentioned briefly, Slade (2006 cited in Wilhelm et al., 2011, p.28) argues slight

product style changes result in consumers viewing durable goods as fashion items. Bayus

and Gupta (1992) suggest consumer desire to keep up-to-date with the latest trends is

driven by fashion adaptionsembedded in product design; influencing a view of currently

owned goods being outmoded, thus shortening replacement rates.However, this

viewoverlooks the fact that previous models are still usable, therefore, not obsolete.

Despite this, academics comparing functional and psychological obsolescence

mechanisms within planned obsolescence (Cripps and Meyers 1994; Grewal et al., 2004)

discovered unforced replacement decisions, driven by technological developments and

fashion adaptions account for the majority of replacement sales. Furthermore, Adamson

(2003) claims consumers are more excited, interested and motivated in voluntary

product replacement.Conversely, Cooper (2004) highlights product deterioration

through direct planned obsolescenceas the primary factor ofreplacement decisions.

2.4Consumer Retention Strategies in the Mobile Phone Industry

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Consumerretention strategies used by the mobile phone industry reinforce phone users’

replacement needs (Miao, 2011). Wilhelm et al., (2011) maintainphone replacement is

primarily driven by contract service plans and promotional pricing, encouraging

regulardevice replacement.Contrastingly, previousstudies (Antonides, 1991; Grewal et

al., 2004)claim replacement behaviour isa result of consumer desireto own something

newer.

2.4.1Contract Service Plans and Pricing

Planned obsolescence, both limited product life through design alterations and regular

product development,support consumer retention strategies such as contract service

plans(Guiltinan, 2009). Through offering consumers free or steeply discounted new

handsets when signing or renewing monthly contracts, this low priced product strategy

aims to enticephone replacement(Wilhelm et al., 2011). Modellers in economics and

marketing who have studied durables replacement behaviour (Ellison and Fudenberg,

2000) presume an underlying decision process, where consumers value replacement

products by making cost-benefit comparisons with owned goods; therefore, associating

replacement decision-making with price factors. The ‘rational consumer model of

durables replacement decision-making’ (figure2-below) supports and emphasises that

price related factors are the most dominant factor influencing the decision to replace.

Nonetheless, this model dismisses consumer behaviour fundamentals of individuality

(Peter and Oslon, 2010) and external factors of restricted product design (Mason, 1985).

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Moreover, consumers have recently highlighted price levels of contract service plans as

exploiting excessive expenditure. This has led to introductions of new regulations

applicable to the mobile phone industry. Firstly, lengthyphone contracts provide mobile

phone providers with guaranteed sales for longer periods of time. This issue has been

viewed as limiting the power of consumers (The Guardian, 2011). As a result, the

communications regulator Ofcom hasplaced a ban on 3year (36months) contracts (The

Guardian, 2011). Nonetheless, although this regulation aims to eliminate the exploitation

of consumer expenditure; from a replacement rate view it appears to encourage more

frequent phone replacement by reducingcontract lengths.

Secondly, further reinforcing that consumers are impacted by price,research by Ofcom

(2011) indicates 1.4million phone users on contract service plans, for years, have been

hit by unexpected monthly high bills; named ‘bill-shocks’ (BBC News, 2012). Ofcom has

contacted mobile phone service providers attempting to encourage them to develop and

promote measures which allow consumers to control their monthly spend. Tariffs that

enable consumers to set personal restrictions on phone usage, and alerts informing

phone users when they have nearly reached their monthly budget have been suggested

to tackle this financial problem (Ofcom, 2011).

2.4.2 Limited Editions influencing Competitive Consumption

Mobile phone manufacturers make individuals susceptible to limited edition strategiesby

promoting one off products, resulting in the consumer feeling of not wanting to miss an

opportunity. In turn, this strategy further encourages replacement of still functioning

devices (Balachander and Stock, 2009). An example of this within the mobile phone

industry is launching devices in different colours, for limited sale periods.Schor (1998

cited in Wilhelm et al., 2011, p.24) indicates this type of consumer retention strategy

promotescompetitiveconsumption and novelty-seeking amongst consumers. The need

for uniqueness, associated with competitive consumptionentices frequent replacement

Figure2: Rational consumer model of durables replacement decision-making (Guiltinan, 2010, p.164)

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behaviour.Furthermore, Mugge et al., (2005) propose product lifetime is primarily driven

by the end-user, not by the manufacturer; suggesting although specific

retentionstrategies exist, the ultimate replacement decision is dependent on consumer

choice.

2.5Influences on the Replacement Decision

A combination of the above reviewed literature appears to be reflected in the ‘model of

factors influencing the replacement decision’ (figure3-below). Nes(2010 cited in Wilhelm

et al., 2011, p.26)constructed this model whenexploring replacement behaviour and

design solutions for longer lasting products.

The model outlines replacement needs involve consumer classification, referring to

individuals as unique in terms of differences between people that explain why, in the

same situations, different people make different replacement decisions (Nes and

Cramer, 2003).Dissimilaritiesin individual characteristics are heavily influenced by

external or situational factors, extrinsic to the actual product (Nes and Cramer, 2003).

Replacement decisions at the product level address design strategies such as planned

obsolescence limiting product lifespans, forcing consumers to replace. Furthermore,

product attributes providing consumers with added value through product development

Figure3: Model of factors influencing the replacement decision (Nes, 2010 cited in Wilhelm et al., 2011, p.26)

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and technological advancements further influence replacement decisions (Nes, 2010

cited in Wilhlem et al., 2011, p.26). Moreover, Nes and Cramer (2005) propose the core

replacement decisioninvolvescomparisonsbetween an old and new product,

identifyingthepotential relative advantage to be gained. Similarly,Ellison and Feinberg

(2000) suggest consumers perform cost-benefit analysis when replacing a product.

2.6Summary

Consumer behaviour and decision-making are interdisciplinary academic fields of study

(Schiffman et al., 2010). Early theories relating to consumer replacement decision-

making were based on economic theories, that individuals act rationally to maximise

self-benefits (Ellison and Fudenberg, 2000); suggesting replacement decisions are driven

solely by consumers. Nes and Cramer (2005),likewisepropose product lifetime is a result

of user decisions, and not predetermined by design criterion.

Recent views incorporate external factors as a major influence on replacement decisions.

These include a combination of sociocultural environments such as fashion cycles,

marketing efforts, and product design stimulating replacement purchases (Guiltinan,

2009).Literature on replacement behaviour is complex and heterogeneous. This is

evident from the model of factors influencing the replacement decision (Figure3-

page20). The model incorporates diverse views from consumer rationality (Schiffman et

al., 2010) to industry strategies influencingproduct replacement (Wilhelm et al., 2011).

The differing schools of thought within literature suggest a lack of understanding about

the influential factors of consumer replacement behaviour. This reinforces the need for

product-specific research to determine the primary drivers influencing consumers’

replacement decisions.

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Chapter3-Research Methodology

3.1 Introduction

This chapter aims to justify the methodological approach guiding this research.

Secondary data is existing data, such as books and journalswhich have been reviewed in

chapter two. Original data is known as primary data, collected at source, therefore

controlled(Collis and Hussey, 2003). The primary research strategy, data collection and

analysis methods have been outlined in this chapter. Alternative research methods,

ethical issues and limitations have also been addressed.

3.2Methodological Approach

Saunders et al., (2009) in their book ‘Research methods for business students’ illustrate

the Research Onion Model to exemplify diverse research approaches (Figure4). The

projects methodological approach has been guided by the research layers emphasised in

the model below. This research represents mainly interpretivism philosophy by

understanding replacement behaviours through a deductive approach. Triangulation has

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incorporated quantitative questionnaires and qualitative interviews. Justification of

following this research approach is provided in the section below.

3.2.1 Triangulation

More than one method of data collection within a single study strengthens the reliability

of findings; overcoming potential bias and sterility of a single-method research approach

(Collis and Hussey, 2003; Lee and Lings, 2008). Furthermore, previous studies exploring

product lifetimes (Nes and Cramer, 2005) and mobile phone replacement motives

(Wilhelm et al., 2011) have utilised a mixed-method research approach successfully;

influencing an equivalent style in this project.

3.2.2 Positivism and Interpretivism

The outer layer of the Onion Model considers scales of philosophies (Saunders et al,

2009). Implementation of triangulation has includedelements ofpositivist style through

quantitative research,studying in an objective manor which is particularly useful for large

samples (Fisher, 2004). Moreover, following mainly an interpretivist approach within

research has proven valuable in exploring natures of consumer behaviour. This style

understands behaviour in a subjective way, considering emotions and meanings in a

social context; crucial for a study of this nature (Bryman and Bell, 2011).

Figure4: The Research Onion Model (Saunders et al., 2009, p.138)

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3.2.3 Inductive and Deductive

Inductive and Deductive research approaches classify logic. Inductive research is

developed from reality, thus, general inferences are induced from particular instances,

moving from specific to general patterns (Collis and Hussey, 2003). However, this study

adopted a deductive approach,strengthening knowledgethrough existing theory, moving

from general to particular; increasing focus(Collis and Hussey, 2003). Current consumer

replacement behaviour literature has enabled topic understanding; subsequently,

primary researchhas tested literature, underpinning the main factors motivating

consumers’ decisions to replace.

3.2.4 Quantitative and Qualitative

Quantitative research favours positivism. By using closed questions in

questionnaires,objective measurable data has been found (Collis and Hussey, 2003),

displaying relationships between theory and research(Bryman and Bell, 2011).Qualitative

research favours interpretivism (Collis and Hussey, 2003). Through using open-ended

questions within interview discussion, subjective findings have exposed mobile phone

replacement influences (Bryman and Bell, 2011).

3.3Research Methods Applied

3.3.1 Self-Completion Questionnaires

Self-completion questionnaires as a research method were chosen as they collect large

sample data within a considerably short space of time, at minimal cost (Saunders et al.,

2009). Additionally, previous studies exploring mobile phone consumption styles (Wilska,

2003), product lifetimes (Nes and Cramer, 2005) and mobile phone replacement motives

(Wilhelm et al., 2011), have adopted this method. This suggested data collection through

questionnaires would be suitable for a similar study.Nonetheless, questionnaire

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limitations involve the researcher’s ability to produce effective questions (Saunders et

al., 2006) and potential low validity findings by taking people away from their natural

environments when exploring behaviours (Bryman and Bell, 2011).

Questionnaire design involved a reasonable number of questions generated from

reviewed literature. Short, closed questions in logical ordering were intentionally used so

respondents would perceive the questionnaire as not wasting their time; aiming to

improvethe accuracy of questionnaire completion(Jankowicz, 2005). Certain questions

addressing frequency of occurrence and level of importance used Likert-Scale formatsfor

descriptive results, whilst other questions used multiple choice answers. For the purpose

of subsequent data analysis,questions were pre-coded; producing quantifiable results

(Sekaran and Bougie, 2010). The questionnaire focused on the effectiveness of planned

obsolescence influencing phone replacement, by asking questions such as: ‘When

replacing your mobile phone, is it usually in a functioning or un-functioning condition?’

and ‘How often do you replace you mobile phone?’. Additionally, contract service plan

questions evaluated the impact of retention strategieson replacement decisions. A full

version of the final questionnaire is provided in Appendix3.

Simple random sampling strategy of a sound size was followed, to increase the

generalisability of findings to a wider population (Sekaran and Bougie, 2010).However,

sample members were required to be mobile phone users, in order to address research

objectives. These phone users were approached in a direct manner at Brunel University,

with questionnaire completion and collection turnaround taking 3-5minutes. In total,

151 questionnaires were collected entirely complete, thus proving a simple

questionnaire design and sample selection based on researcher convenience of

proximity to the sample led to a considerably large sample base.

3.3.2 Semi-structured interviews

Semi-structured qualitative interviews, as a second research method were chosen as

they are useful for accessing individuals’ attitudes towards certain topics (Silverman,

2006).Additionally, figure5 illustrates semi-structured interviews gather in-depth databy

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allowingresearcher flexibility to accommodate emerging themes from interviewee

responses through adapting proceeding questions (Hague et al., 2004). Furthermore,

previous studies exploring the impact of planned obsolescence on consumer decision-

making (Guiltinan, 2008) and mobile phone replacement motives (Wilhelm et al., 2011)

have conducted interviews effectively; reinforcing this method collects reliable data.

Nonetheless, limitations to interviews involve researcher influence (Creswell, 2003), a

small number of individuals being sampled (Sekaran and Bougie, 2010), participants

misremembering occurrences (Bryman and Bell, 2011) and interviewees not attending

scheduled interviews. Firstly, these limitations support reasoning behind using a mixed-

method research approach. Secondly, selection of sample members on the basis that

they had replaced their mobile phone within the last 12months minimised the chances

of participants misremembering their replacement experience. Furthermore, keeping

the interview structure loose helped reduce researcher bias, and sending polite

reminders about scheduled interviews lessened the risk of interviewee un-attendance.

The outcome of questionnaires enabled the development of a comprehensive interview

design, with an aim of encouraging interviewees to discuss their mobile phone

replacement experience, in detail;identifying all factors that influenced their

replacement decision. This enabled focus on the fundamental reasoning behind

replacement and decision-making process. Although interview structure was deliberately

quite loose, to gain in-depth understanding; interview guidelines(Appendix4) were

devised prior conducting interviews, linking directly to research objectives (Cameron and

Price, 2009). This followed an interpretivist approach, listing themes to be covered

during interviews (Saunders et al., 2006).

Figure5: Different types of interviews in market research- Depth Interviewing (Hague et al., 2004, p.61)

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The sample strategy for interviews was adjusted to a small size of 6 mobile phone users,

which appeared more feasible for this data collection method. On average one-to-one

interviews lasted 15minutes and were recorded (with consent) to avoid losing important

findings (Bryman and Bell, 2011). Sample interview transcripts are provided in

Appendix5.

3.3.3 Pilot Study

A pilot study of questionnaires andinterviewsprovided the opportunity to eliminate

potential errors during research (Bryman and Bell, 2011). A test respondent provided

feedback on flow and precision of interview and questionnaire structure, resulting in

minor changes to questioning style and format. Pilot interview guidelines and

questionnaire can be found in Appendix1 and 2.

3.4Data Analysis

3.4.1 Quantitative Data Analysis

For quantitative findings from questionnaires, data was analysed through Microsoft

Excel, enabling data conversion into visual representations of graphs and charts. For

Likert-Scales, a statistical software programme, SPSS 18.02 was utilised. This permitted

comprehensive data analysis (Collis and Hussey, 2009); uncovering means and standard

deviation of variances between answers. The collective use of Microsoft Excel and SPSS

has identified clear relationships and trends in consumer replacement decisions.

3.4.2 Qualitative Data Analysis

For qualitative findings from interviews, a qualitative research software package, Nvivo,

was considered for data analysis as it classifies unstructured information into meaningful

conclusions (QSR International, 2011). However, due to time constraints of training and

complexity of use, this alternative was dismissed.

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Data was analysed by Content Analysis Strategy, an accepted method of textual

investigation (Silverman, 2006). This process involved theme coding, through clustering

key words to identify patterns (Creswell, 1998). By highlighting commonly used words by

interviewees within transcripts,themes were recognised effectively. Moreover, the use

of specific quotations from interviews supports quantitative findings within analysis and

discussion of results; emphasising a mixed-method research approach makes findings

more credible (Saunders et al., 2006).

3.5Alternative Methods

3.5.1 Focus Groups

Focus groups follow an inductive approach and typically explore themes in detail

(Bryman and Bell, 2011). This method would haveallowed participants to discuss their

replacement experiences with one another; therefore, triggering each other’s memory

effectively. However, low researcher control through dominant group members may

have hindered group discussion. This would have limited other group member input,

leading to biased and low validity findings (Sekaran and Bougie, 2010). Furthermore,

focus groups involve time constraints of organising and transcribing, as ‘who says what’,

between a group of 8-10 members needs to be considered (Bryman and Bell, 2011,

p.516). Consequently, maintaining this data collection methodappeared unfeasible;

therefore, it was dismissed from primary research.

3.5.2 Observations

Observations to collect data were also considered as they recognise behavioural traits of

consumers within their natural environment; therefore, eliminate bias (Bryman and Bell,

2011). Unfortunately, due to unavailable consent of observing behaviour within a mobile

phone shop, and time limitations of observations being known as a slow process

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(Sekaran and Bougie, 2010), this data collection method was omitted from the research

process.

3.6Ethical Issues

Ethical issues can ascend at various stages in business research (Bryman and Bell, 2011).

Saunders et al., (2006, p.178) state the way researchers design and perform ethical

research is through ensuring it is conducted ‘both methodologically sound and morally

defensible to all those who are involved’.Subsequently, ethical responsibilities within this

project were considered in relation to the fundamental researcher responsibilities,

outlined by the British Educational Research Association at www.bera.ac.uk (Cameron

and Price, 2009, p.121). These responsibilities include:

Prior undertaking any research, ethical approval was confirmed by Brunel University

(approved research ethics formis provided in Appendix6). Participants often face

concerns about confidentiality of information they provide (Bryman and Bell, 2011);

hence all participants were voluntary and remained anonymous throughout the study.

Additionally, participants were assured data and information gathered from research

would not be available to any personoutside the direct involvement of the project.

Preceding research conduction, issuing participant information sheets (Appendix7),

provided participants with the informed study purpose and reiterated the above

confidentiality issues; ensuring sound understanding of participantcontribution to

research. For data protection purposes, resultsobtained were stored in a password-

protected folder, on a personal computer.

3.7Practical Problems and Limitations

Researcher responsibilities to the participants/respondents

Research responsibilities to those sponsoring or commissioning the research

Research responsibilities to the wider community

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Practical research problems include limited time, cost (Collis and Hussey, 2003) and

access to relevant data (Saunders et al., 2009). Collis and Hussey (2003) propose

research normally takes longer than expected; therefore, time is viewed as a limited

source. The use of short-term objectives by the researcher enabled realistic time

management whichovercomethis research limitation. Furthermore, access is crucial to

the success of any research project (Saunders et al., 2009). Abundant academic

resources and a considerably large sample of mobile phone users were accessible

through the researcher being based at Brunel University, where primary research took

place. This allowed ease of questionnaire distribution and eliminated any travelling costs;

resulting in the project being feasible in terms of data, time and costs.

3.8Summary

The aim of this chapter was to highlight the methodological approach adopted in

gathering data. A mixed-method research approach to this study hasimplemented both

quantitative questionnairesand qualitative interview research methods; allowing

sufficient depth and breadth of data collection. This research takes a deductive

approach, incorporatingmainly interpretivism philosophy in understanding behavioural

phenomena. Conducting a pilot study prior final research contributed to refined research

methods; aiding successful data analysis. Significant justificationswere given to chosen

research methods and alternative methods were explored. Ethical consideration was

given to participants through the fundamental researcher responsibilities outlined by the

British Education Research Association. Finally, practical research project limitations

were addressed.

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Chapter4-Findings, Analysis and Discussion

4.1 Introduction

This chapter presents the most relevant research findings, synthesising analysis and

discussion of findings to literature reviewed in chapter two. Section4.2reflects

onplanned obsolescence shortening mobile phone replacement rates.

Section4.3discusses the natures of mobile phone users impacting replacement decisions.

Finally, Section4.4focuseson consumer retention strategies influencing mobile phone

replacement.

Figure4.1.1 shows 151mobile phone users completed the questionnaire. Basic

demographic findings indicatethe younger age group (18-24 year olds) were over

represented (41%). In addition, 6 mobile phone usersparticipated in semi-structured

interviews; two were 46 years old or over, three were between 18-24 years old, and one

was between 32-38 years old.

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4.2 Planned Obsolescence shortening Replacement Rates

The first research objective was to identify the effectiveness of planned obsolescence

in product design, by the mobile phone industry, on shortening product replacement

rates.

Figure4.2.1specifies65% of the questionnaire sample replaces their mobile phone within

1-2 years of purchase and 9% replace every 1 year or less. The remaining phone users

(26%) replace their phone on average, every 2 years or more.

Moreover, 86% of the phones replaced within less than 2 years of purchase are in a

functioning condition when replaced, as shown in figure4.2.2.

Figure 4.2.1: Mobile Phone Replacement Rates of the questionnaire sample

Figure 4.1.1: Distribution of age amongst the questionnaire sample

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These primary research findings echo the results by Geyer and Blass (2010); identifying

90% of mobile phones when discarded are in a functioning state. Collectively, these

results show reasonable, but not conclusive evidence, that the mobile phone industry is

utilising planned obsolescence to fosterfrequent phone replacement; benefiting industry

profits.

During the interview process, interviewees were given the opportunity to express their

thoughts on planned obsolescence used by the mobile phone industry. Interviews

uncovered a general negative view against planned obsolescence:

Additionally, some interviewees seem to be concerned about the environmental impact

of planned obsolescence:

These findings reinforce the view of critics and marketing scholars that planned

obsolescence is unethical (Geyer and Blass, 2010; Guiltinan, 2009; Howard, 2011);

suggesting deliberate alteration of product design increases unnecessary consumer

expenditure and environmental impact.Furthermore, these findings partially support the

statement by Wilhelm et al., (2011) that disposal to landfills represents the most

common end-of-life scenario for mobile phones. Moreover, the results reject the claim

by Braga (2010) that consumers accept planned obsolescence as a viable strategy aiding

economic growth. As indicated by phone users from the interview sample, the desire for

‘I’m totally against the strategy. I think manufacturers should make things last longer and help us save money’

‘Well it certainly doesn’t give mobile phone companies a good image…. I would have happily carried on using my phone if it hadn’t of broke’

‘I’m assuming most mobiles are just thrown away when they break…. This can’t be good for the environment’

‘My old broken phone went straight into the bin…. I couldn’t find anywhere to recycle it’

Figure 4.2.2: Condition of mobile phones replaced within 2 years of purchase

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products to last longer does exist. This perception mirrors findings by Wilhelm et al.,

(2011) for product longevity, as over 50% of their sample expected their phones to be

more durable. The thoughts by interviewees that planned obsolescence leads to

troublesome environmental consequences are also in alignmentwith previous research

by Guiltinan (2009) studying environmental ethics and planned obsolescence, concluding

there is a need for sustainable innovation within mobile phone design, due to

sustainable consumption.

Questionnaire respondents were asked how often they face a problem or fault with their

device. This question was devised in order to determine whetherthe statement by Slade

(2006),claiming altering product design quality, resulting in technical faults shortens

replacement rates. The results of this question are shown in figure4.2.3. 59% of phone

users claim they rarely encounter a fault with their phone. Descriptive statistics

(figure4.2.4) indicatethe average answer to the question, ‘How often do you face a fault

or problem with your mobile phone?’ is 2.51, between occasionally and rarely.

Figure 4.2.4: (A scale where 0=Always and 4= Never)

Figure 4.2.3: Problem or fault occurrence in mobile phones

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These resultssomewhat contradict the statement by Slade (2006), as it appears

functional obsolescence mechanisms of limiting mobile phone lifespans through design,

resulting in technical faults occur less frequently than previouslydetermined.

Moreover, interview findings recognisewhen device faults do occur, mobile phone users

consider repair and maintenance of owned goods before re-purchasing. However, in

most cases, consumers opt to replace instead of repair, due to financial reasons:

The statements above are in agreement with previous literature (Adolphson, 2004;

Nieuwenhuis, 2008; Wilhelm et al, 2011),outliningthe inability to fix devices due to high

repair prices results in product separation and replacement with a new functioning

device.

Planned obsolescence through frequent model update releases incorporating software

advancements was found to influence replacement behaviour amongst consumers:

These interview resultsreiterate findings by Boone et al., (2001) that continuous product

development strategies are inferred by consumers as signals of device improvement,

thus shortening replacement rates. Nonetheless, it is evident that psychological

obsolescence mechanismsof technological developmentsdo not force device

replacement; they simply aim to motivateproduct replacement. These findings

‘when the screen smashed I took it to a phone shop to see if they could fix it, but the price they quoted was too much, wasn’t worth fixing’

‘At the time I wish I’d taken out insurance so I could’ve got it fixed, but looking back on it now I think £6 on top of my monthly bill is too expensive…. I ended up just buying a new one’

‘I used to have the iPhone3, then the iPhone4 came out so I got that…… because I wanted to have all the extra features with my upgrade…. I’m thinking about getting the iPhone4S as well, but I might just wait until my next upgrade…. iPhone5 will probably be out by then anyway’

‘Technology is moving so fast these days, so it’s important to keep up-to-date with all the latest gadgets’

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strengthen the termination of ‘voluntary replacement’used by Packard (1960) as

products are not obsolete; they just appear outdated by consumers.

4.2.1 Planned Obsolescenceinfluencing Replacement Decisions

The underlying planned obsolescence factors influencing replacement

decisionsinvolvecontinuous new product development by mobile phone manufacturers,

and the inability of many phone users to repair un-functioning devices due to financial

issues. Academics studying the impact of planned obsolescence on consumers (Boone et

al., 2001; Guiltinan, 2009) argue psychological obsolescence mechanisms of rapid

product development encourage consumers to think owned products are outmoded,

therefore limit product longevity.This research study agrees with previous literature

(Adamson, 2003; Geyer and Blass, 2010; Slade, 2006) as firstly, it was found consumers

are more excited to replace without force; secondly, the majority of replaced phones are

still functioning. Finally, a high proportion of replacement rates appear to be

considerably short. These results indicate psychologicalobsolescence mechanisms of

product development influence replacement decisions, rather than functional

obsolescence mechanisms of limited product life through design, previously suggested

by Cooper (2004).

In addition,consumers place considerable emphasis on price related factors within

replacement decisions. Mobile phone users clearly compare the cost of replacing against

maintenance of a device within their decision-making processes. These findings are

consistent with previous literature on planned obsolescence (Antonides, 1991) stating

high repair prices shorten replacement rates, as consumers perceive this option as the

most cost effective.

4.3Natures of Mobile Phone users

The second research objective was to determine the individual natures of consumer

behaviour that either resist or drive mobile phone users’ replacement decisions.

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During interviews, phone users were asked to describe their product replacement

experience. Evidence shows consumers think logically in their decisions by replacing with

the product that benefits them financially:

Firstly, these findings agree with economics and marketing scholars (Ellison and

Fudenberg, 2000; Schiffman et al., 2010), claiming consumers act rationally in decision-

making by conducting cost-benefit comparisons between products. Secondly, the results

are parallelwith consumer power literature (Blanke, 2007) stating price

negotiationsinitiated by consumers helpreduce spending. These results also propose

access to product information online assists consumers make the most appropriate

replacement decisions. In agreement with this finding Bosteels(2011) implies product

reviews on the internet provide consumers with replacement options. Additionally,

these phone users’ replacement decisions were ultimately dependent on low

price;highlighting price is an influential factor within the decision to replace.

Questionnaire respondents were asked how often they resist replacing their phone in

order to determine if consumer resistance behaviour impacts replacement decisions.

Figure4.3.1 specifies38% of consumers rarely resist replacing their phone, whilst only

11% always resist replacement. Descriptivestatistics (figure4.3.2) analysing resistance

behaviour identifies the average answer to the question, ‘How often do you resist

replacing your

phone (even if

it is due for an

‘When I was looking for a new phone, I looked online first to check if there was any good deals, then I rang up Orange and told them O2 were offering me a good deal... They matched the deal so I ended up staying with Orange and got the phone I wanted too’

‘I looked at pay as you go phones online….. Quite a few phone companies stocked the phone I was after….. I decided to buy the phone from Phones4U because they had the cheapest offer at the time’

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upgrade)?’ is 2.23, between occasionally and rarely.

However, these

results need to be interpreted with caution as demographic factors indicate 41% of the

questionnaire sample was between 18-24 years old which may have influenced findings.

By extracting the occurrence of resistance of those phone users aged 46 years or over, it

appearsresistance behaviour is considerably high for this age group. 55% of mature

consumers from the questionnaire sample always resist device replacement, as shown in

figure4.3.3.

Figure 4.3.2: (A scale where 0=Always and 4= Never)

Figure 4.3.1: Frequency of Mobile Phone Replacement Resistance

Figure 4.3.3: Frequency of Mobile Phone Replacement Resistance (46 years old or over sample)

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These results match previous research (Laukkanen et al., 2007); finding product

replacement resistance is common within older consumers due to effective management

of assets. Further supporting these results, the two mobile phone users aged 46 years or

over from the interview sample stated their main usage of aphone is communication.

Additionally, these consumers claim they generally take good care of their devices and

feel if their phone was in a working condition, replacement of the device would not have

occurred. Moreover, factors of price appear to override the final segment of their

decision-making process:

Strengthening the interview findings above, questionnaire results on factors of

replacement for mature consumers,specify 81% of mature phone users replace due to

damage or loss of their device, as shown in figure4.3.4.

The remaining 19% of mature phone users replace to benefit from new technology and

features, promotional or low pricing and other unstated reasons. 0% replace due to peer

‘I only use my phone for keeping in touch with the family and for emergencies.. I wouldn’t have got a new one if it didn’t break….’

‘Generally I’d say I look after my phone so I was quite disappointed when it broke…. It fell out of my pocket… I just went with the cheapest pay as you go phone because there was no point in spending so much on something I hardly use’

Figure 4.3.4: Replacement motives for mature mobile phone users

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pressure or the desire to keep up-to-date with the latest mobile phone. Additionally, 0%

of mature consumers replace because of a free handset with contract renewal. This

result is accurate as none of the questionnaire sample aged 46 years or over stated they

are signed to a contract service plan.

Figure4.3.4 above indicatesreplacement mainly occurs for mature consumers when a

device is in an un-functioning condition, therefore limiting communication. These results

suggest that for mature phone users,functional obsolescence mechanisms that threaten

functionality and usage of devices drive replacement; whilst rational thinking of

prolonging the life of owned productsleads to high levels of replacement resistance.

Bayus and Gupta (1992) argue consumers desire to keep up-to-date with latest trends

motivate product replacement. Figure4.3.5below somewhat supports this claim by

displayinghalf of the questionnaire sample feel it is important to own one of the latest

mobile phones. Descriptive statistics (figure4.3.6 below) identifythe average answer to

the question, ‘How important is having one of the latest mobile phones to you?’ is 1.75,

between important and neither important nor unimportant.

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However, as previously mentionedwith resistance behaviour results, the findings above

must be interpreted with caution as 41% of the questionnaire sample was of a young

age. By analysing motivators of replacement for the young segment of the questionnaire

sample, it appears their main reason for replacing is due to the desire to keep up-to-date

with the latest mobile phone (31%), as shown in figure4.3.7 below. Contrastingly, 0% of

the mature questionnaire sample stated they replace for the same reason. Nonetheless,

a free handset with contract renewal (26%) and benefits of new technology or features

from newer models (23%) also appear to influence young phone users’ replacement

decisions.

Figure 4.3.6: (A scale where 0=Very Important and 4= Unimportant)

Figure 4.3.5: Importance of owning one of the latest mobile phones

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Additionally, figure4.3.7 shows 13% of young consumers replace because of promotional

or low pricing, and a total of 4% replace due to peer pressure or other unstated reasons.

Only 5% of young mobile phone users compared to 81% of mature phone users stated

their replacement motive is damage or loss of an owned device.

Supporting figure4.3.7 above, two young phone users from the interview sample stated

they replaced in order to own the latest phone, so they couldbenefit from new features:

Furthermore, figure4.3.8below provides justification for findings indicating young mobile

phone users are driven to replace by the desire to own the latest product; as 89% of the

young questionnaire sample said ‘yes’ to the question: ‘Do you consider yourself to

currently own one of the latest mobile phones?’

‘There wasn’t nothing wrong with my old phone, I just wanted the new blackberry because it was touch screen… I gave my old phone to my little brother’

‘Yeah I would say my old phone was in working condition, but I wanted a newer version of the iPhone so I could facetime my friends’

Figure 4.3.7: Replacement motives for young mobile phone users

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The collective results on young consumers and the desire to own the latest device

suggest consumers of a younger age are more susceptible to psychological obsolescence

mechanisms of new product development, which aim to entice frequent replacement.

Therefore, replacement motives for young consumers within this study are

comparableto prior research (Cripps and Meyers, 1994; Grewal et al., 2004), finding

unforced replacement decisions, resultant of product improvements account for the

majority of replacement sales.

4.3.1 Natures of Phone Users influencing Replacement Decisions

The underlying natures of mobile phone users influencing replacement decisions appear

to be varying for different age groups of consumers. For young consumers, it was found

the desire to own one of the latest phones, in order to benefit from new features drove

their replacement decisions. These results challenge previous findings by Coogan and

Kangas (2001) stating mobile phone replacement for young consumers is a result of peer

pressure.

Dissimilarly, it was found mature consumers are primarily driven towards replacement

decisions due to limited functionality of owned devices. These findings reinforce that

functional obsolescence mechanisms resulting in product deterioration lead to decisions

of product replacement(Cooper, 2004). Nonetheless, although differences were found in

determinants driving replacement decisions amongst opposite age groups, price factors

appear to be relevant for all mobile phone users, as selection of a replacement product is

based on low price. This finding echoes the claim by Ellison and Fudenberg (2000) that

consumers make product replacement decisions by conducting cost analysis between

alternative products.

Figure 4.3.8: Young questionnaire sample consideration of owning one of the latest phones

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4.4 Consumer Retention Strategies and Mobile Phone Replacement

The final project objective was toexplore how price and consumer retention strategies

employed by the mobile phone industry further influence consumers’ replacement

decisions.

Questionnaire results specify 94% of mobile phone users on contract service

plansreplace their phone within 2 years or less of device purchase. Contrastingly, only

16% of pay as you go phone users replace their device as frequently as those on

contract, as shown in figure4.4.1. These resultsshow reasonable, but not conclusive

evidence that consumer retention strategies of contract renewals within the mobile

phone industry reinforce the replacement need.

The result above, indicatingthat 0% of mobile phone users on contract replace their

device every 3 years or more,is entirely valid. This finding is a result of Ofcom placing a

ban on lengthy mobile phone contracts which are 36months or more, during 2011 (The

Guardian, 2011).

Nonetheless, it appears this regulation has had no negative impact on the success of

consumer retention strategies by the mobile phone industry; as 75% of phone users who

completed the questionnaire are currently signed to a contractservice plan(shown in

figure4.4.2 below).

Figure 4.4.1: Comparison of Mobile Phone Replacement Rates between consumers on Contract and Pay As You Go

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Moreover, figure4.4.3 displays 35% of the questionnaire sample on contract replace

their device because of a free handset with contract renewal. In addition, 27% of

contract phone users specify promotional or low pricing prompts them to replace.

A combination of the results above, regarding consumer retention strategies,are

consistent with previous literature (Guiltinan, 2009; Miao, 2011; Wilhelm et al.,2011);

stating contract service plans, and free or heavily discounted new handsets when

renewing or signing phone contracts, stimulate frequent product replacement.

Interestingly however, figure4.4.4below identifiesonly 35% of consumers on contract

service plans would renew their contract if an upgraded handset was charged.

Figure 4.4.2: Mobile Phone Service Plans

Figure 4.4.3: Replacement Motives for mobile phone users on contract

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Theremaining 65% of contract phone users stated they would not renew their contract in

the same situation.

In addition, similar findings realised through interviews indicate that phone users are

reluctant to pay for upgrade handsets during contract renewal. Moreover, it appears in

circumstances where handsets are not free as part of contract renewals, consumers

actively seek those handsets which are free before renewing contracts:

Firstly, these findings reiterate the recognition by Heely and Nersesian (1994) that there

is little difference between old and new models. Secondly, the observed negativity

towards price related factors within this study could be connected to recent research by

Ofcom (2011); finding contract phone users are repeatedly hit by high monthly bills. This

has led the communications regulator to request phone service providers to put

measures in place to restrict consumers’ expenditure. Furthermore, as a large number of

contract phone users renew on the basis of a free handset, the success and profitability

of contract service plans appears to be threatened.

Previous consumer retention strategies literature (Balachander and Stock, 2009) argues

limited edition products, further influence replacement behaviour. However, insufficient

evidence was found to support these scholarly claims:

‘I ended up getting the white iPhone instead of the black one…….. Just wanted to be a bit different’

Figure 4.4.4: Chargeable handset at the time of contract renewal

‘The sales person helping me look for a new phone did try offering me the new iPhone4S, but I would have had to pay £50 for the handset…. So I went with the iPhone4…. They aren’t very different…..’

‘When I was due for my upgrade I only looked at the phones that were free’

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These statements produce both supportiveand contrasting results to the claim by Schor

(1998), that the heightened need for consumer uniquenessenables limited edition

products to entice replacement. Therefore, it is difficult to determine if this specific

strategy influences mobile phone users’ replacement decisions.

4.4.1 Consumer Retention Strategies influencing Replacement Decisions

Contract service plans and price related factors appear to be the key influential

determinants of mobile phone users’ replacement decisions. Findings suggest a large

number of phone users are signed to contract deals. Additionally, replacement rates for

contract phone users appear to be shorter in comparison to pay as you go consumers.

These primary research findings strengthen the suggestion by Guiltinan (2009), that

consumer retention strategies of contract renewals influence regular phone

replacement.

Furthermore, consumer reactions to price related factors appear to impact replacement

decisions. The majority of those phone users on contract claim they would not renew

contractsunless a handset was provided free. Moreover, phone users seek handsets

which are priced low; supporting the rational consumer model of durables replacement

decision-making (page18) (Ellison and Fudenberg, 2000), signifying product price is

crucial in the decision to replace.

4.5 Summary

The purpose of conducting this research was to determine the primary drivers

influencing consumerreplacementdecisions through product-specific research.By

considering factors emerging from planned obsolescence, individual natures of

consumer behaviour and industry consumer retention strategies; primary research

findings generally reinforce existing consumer replacement behaviour literature

reviewed in chapter two.

‘My upgrade phone was just the standard black version of the Samsung Galaxy…. Didn’t really want the white one…’

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The primary drivers influencing consumers’ replacement decisions appear to be varying

for different phone users. Younger consumers are driven to make replacement decisions

by psychological obsolescence mechanisms of new product development. These

developments aim to createconsumer desire to own the latest product, even if there are

little differences in newer models.Contrastingly,it was found mature consumers often

resist replacing devices. However, their replacement decisions are driven by functional

obsolescence mechanisms which limit the functionality of owned goods.

Nonetheless, almost all mobile phone users appear to be influenced by price related

factors. When replacing a phone, consumers base decisions on low pricing. Additionally,

those phone users on contract service plans search for handsets which are free with

contract renewals; highlighting price as a primary driver influencing replacement

decisions. Moreover, this research found consumers express a negative view on planned

obsolescence increasing replacement sales. Some mobile phone users conveyed concern

regarding the design strategy’senvironmental impact, whilst others outlined the strategy

exploits excessive consumer expenditure.

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Chapter5-Conclusions and Recommendations

5.1 Conclusion

Product-specific research determining influential factors driving consumer replacement

decisions is limited. Marketing scholars have conducted research into consumer

replacement behaviour, indicating a growing concern about planned obsolescence as a

design strategyshortening product lifespans. Recently,the impact of consumer behaviour

and industry specific strategies on replacement decisions has been recognised.

Therefore, differing views on consumer replacement decisions exist within literature.

Moreover, the primary drivers of product replacement decisions have been described as

unclear. Additionally, product-specific research has been called forto address the

above.As such, this project contributes towards an existing body of consumer

replacement behaviour literature, through conducting product-specific research into

mobile phone replacement decisions, shedding light on the under-researched area. In

total, 157 mobile phone users either completed questionnaires orparticipated in

interviews, which helped reach the project conclusion.

Literature on planned obsolescence suggested alteration of product design, to speed up

product deterioration, led to shortened replacement rates. While this has been found to

be true, it appears that rapid new product development has significant influence in

increasing replacement purchases. Moreover, it was found that many consumers

consider repairbefore replacement of deteriorated products;therefore they analyse costs

of maintenance against replacement in decision-making processes.

Existing literature on consumer behaviour reflected upon why, in the same situations,

different people are driven to replace for different reasons. The results from this study

reveal considerable differences in drivers of replacement decisions between consumer

age groups.Generally, younger consumers want to replace, whilst mature

consumersneed to replace.Young consumers’ replacement decisions are commonly

driven by new product releases into the market which aim to imply product

improvement; thus heightening the desire to own the latest product. Conversely, it was

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found mature consumers often resist replacement; nonetheless, their replacement

decisions are primarily driven by limited functionality of owned devices. Moreover,

significant findings indicate all consumers tend to make logical cost-benefit decisions,

highlighting price as a primary factor influencing replacement decisions.

Recent consumer replacement behaviour literature proposed that industry retention

strategies further influence frequent product replacement. Primary research has

reinforced these findings, particularly in the case of the mobile phone industry; contract

service plans offering free handsets and low pricing encourage replacement decisions.

5.2 Implications for the Mobile Phone Industry

Although consumers are initially driven to replace through varying factors, their ultimate

replacement decisions appear to be determined by price level factors. Moreover, this

study has found consumers want products to last longer, reiterating previous findings for

the need of sustainability in design. Therefore, it is fundamental that the mobile phone

industry take into accountissues of sustainable phone design, which in turn will increase

product lifetimes, therefore reduce consumer expenditure. Nonetheless, it is clear that

current industry strategies aim to persuade frequent phone replacement; favouringsales;

thus questioning how these consumer expectations fit into the mobile phone industry

business model. Hence, any initiatives towards product longevity must include incentives

for manufacturers and providers. Expectations of change from consumers alone appear

insufficient in adapting current industry operations.

5.3Limitations and Scope for Further Research

Limitations to this research project could be addressed by further research. Firstly,

demographics of age specify that the majority of the research sample was between 18-

24 years old. Additionally, findings were restricted to 157 mobile phone users; therefore,

it could be argued the responses obtained from these consumers are not representative

of all mobile phone users. Consequently, furtherresearch in this field involving an

increased sample size would improve the generalisability of findings.Additionally, given

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the age differences within the study sample, significant differences in drivers of phone

replacement were realised between consumer age groups. This presents scope for future

research to use age as a segmentation variable in clarifying the relationship between age

and replacement motives.

Research noticed the potential for product longevity to postpone replacement decisions,

driven by sustainable consumption and consumers wanting to reduce their spending.

Nonetheless, as discussed above in section5.2,the main challenge here is application of

this issue, as the mobile phone industry appears to profit from short-lived products. As

such, this provides marketing scholars the opportunityto identify ways in which the

mobile phone industry would be inclined to adapt current phone design, to increase

product lifetimes.

As mentioned in chapter four, unfortunately little evidence was found to suggest limited

edition strategies influence consumer replacement decisions. Therefore, more research

is needed to better understand how consumer retention strategies of limited edition

productsimpact replacement behaviour.

Finally, research conducted for the purpose of this study could be replicated in future

research to other product-specific areas. Through shifting focus away from mobile

phones into products such as televisions or laptops, this would establish whether the

drivers of consumer replacement decisions, derived from this research are consistent for

various products.

The recommendations above have been suggested to increase the usefulness of

subsequent academic contributions to consumer replacement behaviour literature.

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Appendices

Appendix 1: Pilot Questionnaire

Mobile Phone Replacement

Q1. Please specify your age 18-24 years old [ ] 25-31 years old [ ] 32-38 years old [ ] 39-45 years old [ ] 46 years old or over [ ]

Q2. How many mobile phones have you owned? 0-2 [ ] 3-5 [ ] 6-8 [ ] 9 or more [ ]

Q3. How often do you replace your phone? 1 year or less [ ] 1-2 years [ ] 3-4 years [ ] 4 years or more [ ]

Q4. What MOST prompts you to replace your mobile phone? Physically damaged or un-functional condition of current mobile phone [ ] Lost mobile phone [ ] Benefit of new technology and features from newer versions [ ] Free upgrade with contract renewal [ ] Promotional offer or lower price on a new mobile phone [ ] Desire to keep up-to-date with the latest mobile phone [ ] Peer pressure [ ] Other- please state _____________________________________________________ Q5. When replacing your current mobile phone is it usually in a functioning condition? Yes [ ] No [ ]

Q6. How often do you face a fault or problem with your mobile phone? Always [ ] Frequently [ ] Occasionally [ ] Rarely [ ] Never [ ]

Q7. Is your mobile phone service plan on ‘contract’ or ‘pay as you go’? Contract [ ] Pay as you go [ ]

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Q8. If you are on contract, would you still replace your mobile phone if the upgrade was not free? Yes [ ] No [ ] N/A [ ]

Q9. Would you consider yourself to currently own one of the latest mobile phones? Yes [ ] No [ ]

Q10. How important is having one of the latest mobile phones to you? Very Important [ ] Important [ ] Neither Important nor Unimportant [ ] Of little importance [ ] Unimportant [ ]

Thank you for taking the time to complete this questionnaire, your participation is greatly appreciated.

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Appendix 2: Pilot Interview Guide

Mobile Phone Replacement Decisions

Interview Aim: To get interviewees to re-tell their mobile phone replacement experience, in detail, to highlight all factors that influenced their decision.

- Confirm consent of recording the interview- then start recording - Provide interviewee with the Information Sheet - Confirm the interviewees age and mobile phone replacement in the last 12

months - Outline the purpose of the study - Outline the specific Interview Aim (outlined above)

What were the reasons for deciding to replace your phone?

Once you decided that you wanted/needed to replace your mobile phone what

steps did you take next? Did you experience any further influences during your replacement experiences?

E.g. - Marketing Strategies…. What was the final factor/s that influenced your replacement purchase?

Other Questions: Did you replace your mobile phone instantly or was it a long decision process? When choosing a new phone was there specific features you looked for? Did price influence your decision in any way? Was replacing with one of the latest mobile phones important to you? Were you previously on contract/did you sign a contract when replacing your

mobile phone?

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Appendix 3: Final Questionnaire

Mobile Phone Replacement- This questionnaire forms part of the primary research for my final year project. Your participation is entirely voluntary and anonymous. Information provided will only be used for project purposes.

Q1. Please select your age

18-24 years old [ ] 25-31 years old [ ] 32-38 years old [ ] 39-45 years old [ ] 46 years old or over [ ]

Q2. How many mobile phones have you owned in your lifetime? 0-2 [ ] 3-5 [ ] 6-8 [ ] 9 or more [ ]

Q3. How often do you replace your mobile phone? Every 1 year or less [ ] Every 1-2 years [ ] Every 2-4 years [ ] Every 3 years or more [ ] Q4. How often do you RESIST replacing your mobile phone (even if it is due for an upgrade)? Always [ ] Frequently [ ] Occasionally [ ] Rarely [ ] Never [ ]

Q5.What MOST prompts you to replace your mobile phone? (Please select one)

Physically damaged or un-functional condition of phone [ ] Lost mobile phone [ ] Benefit of new technology and features from newer versions [ ] Free handset with contract renewal [ ] Promotional offer or lower price on a new phone [ ] Desire to keep up-to-date with the latest mobile phone [ ] Peer pressure [ ] Other-please state _________________________ [ ] Q6. When replacing your mobile phone, is it usually in a ‘functioning’ or ‘un-functioning’ condition? Functioning [ ] Un-Functioning [ ]

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Q7. How often do you face a fault or problem with your mobile phone? Always [ ] Frequently [ ] Occasionally [ ] Rarely [ ] Never [ ]

Q8. Is your mobile phone service plan on ‘contract’ or ‘pay as you go’? Contract [ ] Pay as you go [ ] Q9. If you are on contract, would you still upgrade your phone if the upgrade WAS NOT free? Would upgrade [ ] Would not upgrade [ ] N/A [ ]

Q10. Would you consider yourself to currently own one of the latest mobile phones? Yes [ ] No [ ]

Q11. How important is having one of the latest mobile phones to you? Very Important [ ] Important [ ] Neither Important nor Unimportant [ ] Of little importance [ ] Unimportant [ ] Any other comments

Thank you for taking the time to complete this questionnaire, your participation is greatly appreciated.

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Appendix 4: Final Interview Guide

Mobile Phone Replacement Decisions

Interview Aim: To get interviewees to re-tell their mobile phone replacement

experience, in detail, to highlight all factors that influenced their decision.

Interview Focus: Identify the reasoning behind replacement and the process of

decision-making underlying replacement of a mobile phone.

- Welcome & Thanks (for interview participation) - Provide interviewee with the Information Sheet and restate confidentiality

issues/voluntary participation - Confirm the interviewee has replaced their phone in the last 12 months - Outline the purpose of the study - Outline the specific Interview Aim (outlined above) - Confirm consent of interview recording- then start recording

What were the reasons for deciding to replace your phone?(depending on what the

interviewee answers here- Adapt further questions) Once you decided that you wanted/needed to replace your mobile phone what

steps did you take next? Did you experience any further influences during your replacement experiences?

What was the final factor/s that influenced your replacement purchase?

Other Questions: Were you aware of planned obsolescence in product design and what is your

view on this concept? Did you replace your mobile phone instantly or was it a long decision process?

Why was it a short/long decision? When choosing a new phone was there specific features you looked for? Did price influence your decision in any way? Was replacing with one of the latest mobile phones important to you? Were you previously on contract/did you sign a contract when replacing your

mobile phone? Was your phone in a functioning condition when replaced? Did you ever feel as though you resisted replacing your phone?