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A smartphone is an advanced mobile phone that integrates the functions of multiple devices such as a personal computer (e.g. operating systems), a video/photo camera, a global positioning system (GPS), a music player, and some others. In 2017, more than 32 percent of the global population was found to be using a smartphone. India’s smartphone user base overtook the US in 2019 to become the world’s second largest smartphone market with more than 502.2 million smartphone users as of December 2019 (techARC report, 2020). The market witnessed a 15 percent annual growth in 2018, making it the fastest growing market globally, attracting a large number of players, ranging from Samsung, Apple, Oneplus to Chinese brands like Oppo, Vivo and Xiaomi fighting it out with Indian brands such as Micromax.
The severity of competition among these players calls for introspection by managers, for whom nurturing customers' loyal behaviour is becoming a top priority. Brand loyalty is a critical brand performance metric for all firms (Keller, 1993) especially in the emerging devices market like smartphones. With ever-increasing competition, this metric can largely affect firm profitability (Yi and Jeon, 2003) as it drives increased repurchase volume and better acquisition rates through positive word-of-mouth communication. Enhancing brand loyalty has been a challenge for marketers of emerging devices (Lam and Shankar, 2014) like smartphones. This gains greater emphasis in the wake of advancements in technology, with trends like Artificial Intelligence (AI), proliferation of 5G and Internet of Things (IoT) encapsulating the market, bringing about paradigm shifts in the way we connect, communicate, exchange information and conduct our day-to-day lives. All these shifts necessitate a realistic appraisal of value perceptions that differ from consumer-to-consumer with respect to the device, the product level and the brand level; so that robust strategies towards building loyalty could be framed.
Despite the exponential growth of smartphone technology and its rapid adoption by vast numbers of consumers, there is a paucity of in-depth research on the factors that influence brand loyalty of smartphones (Koo et al., 2016). This study attempts to gauge the smartphone user’s value perceptions, since marketing literature suggests that customer value is a significant predictor of consumer continuance and loyalty behavior. Value perceptions often help predict the preferences of consumers of different products and brands in the market. Extant literature maintains that brand value is a multi-dimensional concept (e.g. Chaudhuri and Holbrook, 2001). Many studies divide brand value into ‘cognitive/utilitarian’ and the ‘affective/hedonic’ categories (Babin et al., 1994; Chaudhuri and Holbrook, 2001). Sheth et al. (1991) proposed that value has social, emotional, functional, conditional, and epistemic dimensions. Since the value perceptions vary across consumers, it is imperative that the context relevant dimensions of value be delivered to the customers.
Previous studies indicate the variations in loyalty across different generation cohorts. Few studies maintain that Gen Y are disloyal to brands, and it is difficult to secure continued repeat purchases from them (Wood, 2004). This is unlike generation X consumers who are very loyal and committed to brands (Ritchie, 1995). Many marketing researchers use generational differences (Bolton et al., 2013) to understand customers’ attitudes and behaviors, because generational cohorts often exhibit similar behavioral characteristics, courtesy their similar formative experiences, technologies, and adaptation to cultural and environmental changes. We investigate brand loyalty on a cross-sectional dataset spanning two generation cohorts, gen Z and the Millennials: the motivation being that Gen Z and Millennials are primarily responsible for this surge of smartphone sales. Though the Millennials were considered the first “global” generation with the development of the internet, the Gen Z are being considered the next big ‘disruptors’ (Marcie Merriman, 2015).