Research Proposal on “The

Consumer Behavior On MP3

Players”
INTRODUCTION

The growth of electronic technologies has brought many changes to the

society. Every country can feel the effects of the digital revolution. One of the

things that digitalization has changed is the way people listen to music.

Cassettes became obsolete and have been replaced by compact discs where

music tracks are compressed into digital files. Then, the world witnessed the shift

of music into mp3s. Music tracks are no longer stuck into copyrighted album CDs

but are now downloadable from many mp3 websites across the internet.

According to an International Federation Phonographic Industry (IFPI) 2006

report, some 420 million single tracks were downloaded in 2005 alone, an

exclamation that the digital music industry is a force to be reckoned with in the

global economy (IFPI, 2006). Of course, the digital music industry also grows toe

to toe with the digital audio player or mp3 player industry. The IFPI (2006) report

stated that in 2005, consumers bought over 60 million portable digital music

players (worth an estimated $US 9 billion). With this growth of an industry after

its development and introduction to the market a few years ago, it is interesting to

determine how consumers perceive these new technologies, especially the

medium (mp3 players) where digital music tracks are played. One example of a

successful digital portable player brand is Apple's iPod. Today, the iPod does not
stand alone as competitors gradually increase. Apple now has a wide range of

competitors including Creative (Zen product range), Rio (Karma, Carbon), Sony

(Network Walkman) and others (IFPI, 2005).

PROBLEM STATEMENT

Today, almost every youth uses portable digital players to listen to their

favorite tunes. With the growth of digital portable player manufacturers and

licensed brands, consumers have a wide variety of options. One downside

however is there are still those who are pessimistic about the idea of music

digitalization. The IFPI (2005) 2005 report mentioned that European survey

shows increasing awareness of, use of, and intentions to use, legal download

services. This is a hint that consumer attitude on digital music and portable

player devices are still mixed because there are other options and alternatives.

Thus, investigating customer behavior on digital portable player may open the

door to the consumer's perceptions on digital portable devices – on how they see

it, their preference to it, how much are they willing to pay for it, is it their first

music medium choice, and so on and so forth.

RESEARCH OBJECTIVES

The aim of this study is to investigate the behavior of consumers on digital

music and mp3 players. Consumers will be asked about different factors that

affects their purchase of digital portable audio players or mp3 players.

 The following are the objectives of this study:

1. To determine the preferences of consumers when purchasing

digital portable audio players.

2. To know if the attitude of consumers to digital products have

changed.

3. To determine if the purchase of mp3 players depends on buyer's

attitude on digital music.

4. To develop a suggestion on how mp3 players can be effectively

marketed to the modern consumers.

LITERATURE REVIEW

Mp3s

Mp3, also known as MPEG-1 audio layer 3, is a popular digital audio

encoding and compression format invented and standardized in 1991 by a team

of engineers directed by the Fraunhofer Society in Germany (Wikipedia, 2006a).

The purpose of the mp3 is to greatly reduce the amount of data required to

represent audio, yet still sound like a faithful reproduction of the original

uncompressed audio to most listeners (Wikipedia, 2006a). This is similar to

zipping a sound file but also removes any sound information that could not be

heard by the human ear (Murphy, 2001). This greatly reduces the size of file, with
a normal stereo CD being some 650MB and 74 minutes, whereas in MP3 format

this is usually about 60MB (Murphy, 2001, Brandenburg, 2000).

Today, mp3s have gone a long way. It has developed into a potential

mass-market distribution format for music media (Fontenay et al, 1999). IFPI

(2006) reported that there are now at least two million tracks and 165,000 albums

available on the major services in the web. Digital music expanded rapidly to the

globe, as there are now over 335 legal online music services, up from 50 two

years ago (IFPI, 2006).

The UK is one of the only three countries (Germany and France) in

Europe that sees growth in the mp3 market. It is the fastest-growing online music

market in Europe as major retail stores such as Virgin and HMV launched online

and existing services like Napster and iTunes are marketing their brand heavily

(IFPI, 2006). IFPI (2006) also reported that the UK saw sales of 26 million single

tracks downloads during the year – a four-fold increase on 2004. Furthermore,

downloads have been successfully merged into the singles charts, giving digital

sales greater media and public exposure (IFPI, 2006).

Mp3 Players

The growth of the mp3 provided a manufacturing idea for information

technology companies – the mp3 player or portable digital audio player. Mp3

players were launched in 1998, and during that time, most consumers are not
familiar with digital or mp3 music (Market Research, 2004). Mp3 player, also

know as Digital Audio Player (DAP), is a device that stores, organizes and plays

digital music files (Wikipedia, 2006b). Mp3 players are portable so it can be

carried by the user anywhere. It is also capable of storing over a hundred mp3

music tracks. This shows that advantage that MP3 players have over traditional

compact disc, or CD, and cassette players. Other advantages include the ability

to better manage music content and longer battery life. These advantages and

the availability of digital audio and media files on the Internet may in sometime

lead to the replacement of traditional CD and cassette players with MP3 players.

Its advantages show that mp3s are far superior to CDs and MDs (Mini Disks)

because mp3s can be networked and shared, and can be compiled or stored in

large quantities (Otsuka, 2000).

Kawamura (2006) stated that the worldwide market for all MP3 players is

expected to grow from 36.8 million units in 2004 to 132.0 million units in 2009,

representing a compound annual growth rate, or CAGR, of 29%. Wang (2005) of

Parks and Associates found in his research the consumer interest on mp3

players on several countries as shown in the table below:

 Figure 1: Mp3 Player Purchase Intentions by Country (Wang, 2005).

The figure shows that France and China has the highest potential of

consumer purchase intentions. However, UK may also potentially increase its

mp3 sales. It can be seen on the graph above that those who consider

purchasing mp3 players are those who already own one. Obviously, they are

already exposed and well-informed and acquainted with the advantages of mp3
players. This hints that efforts in marketing and promoting mp3 and digital music

should be increased with those who do not own mp3 players yet as the specific

targets.

According to Coco et al (2005), there are three dimensions that are

relevant in the market performance of mp3 players: music fidelity, selection, and

robustness. Consumers of mp3 players look for the performance of the mp3

players in terms of its sound quality when playing mp3s. Coco et al (2005) stated

that consumers often compare the sound of mp3 players with the sound of CD

players. Before, most consumers agree that mp3 players were inferior to CD

players in terms of music fidelity. However, today, consumers are starting to

agree the fidelity of mp3 players are 'fair enough' (Coco et al, 2005).

Selection is also a concern for consumers and in this part, mp3s are

definitely superior to any music medium (Coco et al, 2005). Coco et al (2005)

explained that with large capacity MP3 players, the music is with the owner at all

times (like a large collections of CDs) and easily accessible through innovative

interfaces. Music collections can be easily stored within the mp3 player and a

large selection of music is readily available for the user to enjoy.

Finally, robustness of a music player is another issue for consumers.

Again, mp3 players have the edge in this dimension simply because they have

no moving parts to wear out (at least in flash based versions), and no risk of

skipping unlike CD or MD players (Coco et al, 2005).

 According to the research of Coco et al (2005), the market profitability of

mp3 players are not too high but still on the medium level. The buyer power is

moderately in the medium level because there are lots of big retailers to deal with

but some direct-web sales. Supplier is also medium because the value from hard

drives, processors and other key technologies pass largely to suppliers. On the

other hand, one of its advantages is its low barrier to entry mainly because of the

online retail (Coco et al, 2005).

One of the problems in mp3 players are that there are numbers of

substitutes that buyer can decide for. These are: FM Radio, CD players, cell

phone games, books, portable TV (Coco et al, 2005). Furthermore, competition is

high among mp3 player companies. Rivalry is not necessarily price-based but

most often feature-based (Coco et al, 2005).

Coco et al (2005) also stated that there are many industry dynamics that

mp3 player companies can take advantage of. Basically, there is a high

heterogeneity of demand, high consumer emotional involvement, and high

product spillovers. Brands must also emphasize a certain touch of uniqueness,

for instance, how it can be differentiated from an IPod or a walkman (Coco et al,

2005).

The IPod: A Good Example of a Successful Mp3 Player Brand

Sulmers (2004) reported in Newsweek that the iPod has been such a hit

that one university professor stated the ratio of iPod owners in their university is 2
to 3. According Sulmers (2004), those who actually create music and those who

love music are among the biggest fans of the iPod.

According to Sawhney (2004), when IPod was released by Apple in 2001,

it was not the first in the business. However, the key to the IPod's success was

that Apple was the first to take into consideration what consumers really want.

Based on Apple's research, they found that people want to take all their music

with them, but they want personal music players to be unobtrusive. So, IPod was

made as small as a deck of playing cards and build it to hold 1,000 songs. Added

with its other unique design and traditional Mac color, IPod became an instant

blockbuster (Sawhney, 2004).

The Importance of Customer Behavior

The success of IPod is basically an example of how important it is to have

knowledge about consumer behavior. Several consumer behavior researches

testified to this. Wong (2000) argued that a customer evaluates a product or a

service. Such action is based on the customer's reaction from the using the

product or service, which means that the product or service should leave a good

perception to the customer to consider him or her satisfied (Wong, 2000).

Frederick and Salter (1995) explained that it can be ensured that a customer is

satisfied by taking into importance the customer value package, which includes:

price, product quality, service quality, innovation, and corporate image. Others

also stated the importance of maintaining or establishing a uniqueness of the

product, while also understanding customers and what pleases them (Denton,
1993). Customers should also understand the product and be allowed to set their

own standards in order to be satisfied (Frederick and Salter, 1995). Furthermore,

customers also like their requests to be processed quickly or taken into

consideration (Frederick and Salter, 1995).

Consumer behavior is defined as: "The activities that people engage in

when selecting, purchasing, and using products and services so as to satisfy

needs and desires…" (Wilkie, 1990). Wilkie (1990) continued: "…such activities

involve mental and emotional processes, in addition to physical actions". There

are many factors that determine these activities, and the product is just one of

them. There are some frameworks that helps explain customer behavior are

brand orientation model, and integrated framework for cross-cultural consumer

behavior. Others, on the other hand, are expressed through demographic

research, such as the relationship of gender on consumer behavior. These

models and studies are not only applicable to fashion retail but also to consumer

behavior in general products.

RESEARCH STRATEGY AND METHOD

This research adopted the research philosophy of positivism because the

aim of the study is to answer several research questions, which are mentioned

earlier in this paper. This research philosophy allows the study to revolve with an

observable social reality in order to come up with law-like generalisations similar

to those produced by the physical and natural scientists (Remenyi et al, 1998),
and in this tradition, the researcher becomes an objective analyst, coolly making

detached interpretations about those data that have been collected in an

apparently value-free manner (Saunders et al, 2003).

Design

The research design is exploratory because it intends to explore the

behavior of consumers to mp3 player products through survey. This research is

also cross-sectional because of limited time. This research is a study of a

particular phenomenon (or phenomena) at a particular time. (Saunders et al,

2003) Accordingly, cross-sectional studies often employ the survey strategy, and

they may be seeking to describe the incidence of a phenomenon or to compare

factors in different organizations.

The study can also be considered descriptive because the objective is to

portray an accurate profile of persons, events or situations, and may be an

extension or a forerunner to a piece of exploratory research, a research that tries

to establish causal relationship between variables. (Robson, 2002; Saunders et

al, 2003) Accordingly, with the descriptive research, it is necessary to have a

clear picture of the phenomena on which a researcher wishes to collect data prior

to the collection of the data. (Saunders et al, 2003). In this study, the

phenomenon to be investigated is the customer behavior on mp3 players.

On the other hand, Saunders et al (2003) said project tutors are often

wary or work that is too descriptive, and they will want a researcher to go further
and draw conclusions from the data gathered; nevertheless, description in

management and business research has a very clear place, although, it should

not be thought of as an end in itself, but only as a means to an end. (Saunders et

al, 2003).

The survey method, on the other hand, will be used for data collection.

Surveys are conducted to gather data from the field in order to generalize results

from a sample to a larger population. (Commonwealth of Learning, 2000) The

primary purpose and advantage of surveys is generalization of the results

(Commonwealth of Learning, 2000). Usually, surveys are interested in gathering

data from many than in obtaining intensive, detailed information from a few

individuals; therefore, it is seldom for a survey to consist of one or very few

individuals (Commonwealth of Learning, 2000).

The study will be based on quantitative research. This is chosen because

it can provide statistical evidences of data that can be used to generalize

consumer behaviors specifically. Quantitative method basically allows the

research problems to be conducted in a very specific and set terms (Frankfort-

Nachmias & Nachmias, 1992). This will basically make analysis of data easier

and faster. A quantitative research also specifies both the independent and the

dependent variables under investigation (Matveev, 2002). In the case of this

study, the independent variable is the consumers of mp3 players while the

dependent variable is their behavior when buying or purchasing mp3 players.

Administration of the Questionnaire

 A pre-test of the questionnaires will be conducted to 10 samples so as to

validate if its contents are okay and can actually answer the research questions

of the study. If ever the questionnaire is not suitable as the pre-analysis show, it

will be immediately modified. The suggestions of the 10 pre-test samples will also

be considered in the modification. The pre-test samples will not be included in

the actual set of respondents.

The questionnaires will be administered to respondents through email or

personal contact. The questionnaires will contain an introduction that explains

clearly the purpose of the study. The questionnaire also contains clear

instructions so as the respondents are well-guided throughout their encounter

with it.

Survey Instrument

A self-administered structured questionnaire, or the type of questionnaire

that is usually completed by respondents (Saunders et al, 2003) will be used in

the study. This questionnaire will have two sections: the first part intended to

acquire the demographic profile of the respondents, and the other section

comprised of a set of attitude statements that intends to determine the level of

agreement or disagreement using a five-point Likert scale. The equivalent

weights for the answers were:

Range Interpretation
 0.00 – 1.49 Strongly Agree

1.50 – 2.49 Agree

2.50 – 3.49 Undecided

3.50 – 4.00 Disagree

4.50 – 5.00 Strongly Disagree

In the Likert technique, the degree of agreement or disagreement) is given

a numerical value ranging from one to five, thus a total numerical value can be

calculated from all the responses (Underwood, 2004).

The questionnaire design to be used is semi-structured. Accordingly,

semi-structured interviews provide the researcher the opportunity to 'probe'

answers, which can be done in instances where there is a need or want for the

interviewees to explain further or build on their responses, and this is important if

one is adopting a phenomenological approach, where the researcher is

concerned to understand the meanings that respondents attribute to various

phenomena, as interviewees may use words or ideas in a particular way, and the

opportunity to probe these meanings will add significance and depth to the data

obtained and may also lead the discussion into areas that had not been

previously considered but which are significant for understanding and may help

in addressing research questions and objectives (Saunders et al, 2003).

Samples

This study will survey ordinary people who are music enthusiasts or those

who refer listening to music as one of their hobbies. Samples will be collected
through convenience sampling. Convenience sampling is chosen because the

general music enthusiast population is broad and difficult to identify.

Convenience sampling will make data sampling faster and easier.

The target population is 1500 music enthusiasts. The plan is to spot

potential respondents on record stores or on musical concerts. The search for

respondents will take place within London, specifically on record stores and

music bars or music hotspots.

Data Analysis

The responses to questions will be analyzed by determining their

corresponding frequency, percentage and weighted mean. The following

statistical formulas will be used:

1. Percentage – to determine the magnitude of the responses to the

questionnaire.
n
% = -------- x 100 ; n – number of responses
N N – total number of respondents

2. Weighted Mean
f1x1 + f2x2 + f3x3 + f4x4 + f5x5
x = --------------------------------------------- ;
xt
where: f – weight given to each response
x – number of responses
xt – total number of responses
TIMETABLE

April May June July Aug Sep Oct Nov Dec Jan Feb Mar

1 2 3 4 5 6 7 8 9 10 11 12

Problem
Identification
Literature
Review
Research
Design
Choice of
Methodology
Data
Sources
Data
Collection
Data
Analysis
Writing up
Draft
Editing
Final
Document
Binding of
Document

Table 1: Gantt Chart