Post on 18-Jun-2022
THE EFFECT OF PRODUCT FEATURE, PRICE, BRAND
NAME, SOCIAL INFLUENCE AND AFTER-SALES SERVICE
TOWARD CUSTOMER PURCHASE DECISION OF
SMARTPHONE IN SURAKARTA
Submitted a Partial Fulfillment of the Requirements for Getting
Bachelor Degree of Management Economic in Economic and Business
Faculty
By:
RAKOTOARIZAKA NANDRIANINA LOUIS PIERRE
B10A163013
MANAGEMENT DOUBLE DEGREE
FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITAS MUHAMMADIYAH SURAKARTA
2020
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THE EFFECT OF PRODUCT FEATURE, PRICE, BRAND NAME,
SOCIAL INFLUENCE AND AFTER-SALES SERVICE TOWARD
CUSTOMER PURCHASE DECISION OF SMARTPHONE IN
SURAKARTA
Abstrak
Tujuan dari penelitian ini adalah untuk menganalisis pengaruh fitur produk, harga,
nama merek, pengaruh sosial dan layanan purna jual terhadap keputusan pembelian
pelanggan di Indonesia. Penelitian ini juga bertujuan untuk mengidentifikasi
bagaimana orang-orang dari berbagai latar belakang yang berbeda mempengaruhi
keputusan pembelian konsumen smartphone di Surakarta dan hubungannya dengan
fitur produk, nama merek, harga, pengaruh sosial, dan purna jual. Data
dikumpulkan dengan menggunakan survei berbasis kuesioner yang terdiri dari 30
pertanyaan dan didistribusikan kepada 125 responden termasuk semua pengguna
smartphone di Indonesia, yang diperoleh dari metode convenience sampling.
Metode kuantitatif digunakan untuk menjelaskan data yang diperoleh dari
kuesioner. Model yang digunakan diadaptasi dari Lay-Yee et al. (2013) dan
(Norazah, 2013) untuk menguji pengaruh masing-masing dari lima faktor pada
keputusan pembelian smartphone. Temuan menunjukkan bahwa kualitas produk,
nama merek, dan layanan purna jual memiliki pengaruh yang signifikan terhadap
keputusan pembelian, sedangkan harga dan pengaruh sosial tidak signifikan
terhadap keputusan pembelian. Akhirnya, manajer dapat meningkatkan
pengambilan keputusan pembelian pelanggan mereka melalui fitur produk, merek,
dan layanan purna jual untuk menghasilkan lebih banyak keuntungan.
Kata kunci: fitur produk, harga, nama merek, pengaruh sosial, layanan purna jual,
keputusan pembelian, smartphone, Indonesia
Abstract
The purpose of this study is to analyze the effect of product features, price, brand
name, social influence and after-sales service toward customer purchase decisions
in Indonesia. This study also aims to identify how people of different backgrounds
affect the consumer purchase decisions of smartphones in Surakarta and its relation
with product features, brand name, price, social influence, and after-sales. Data
were collected using a questionnaire-based survey consisting of 30 questions and
distributed to 125 respondents including all smartphone users in Indonesia, which
were obtained from convenience sampling methods. Quantitative methods were
utilized to interpret the data obtained from questionnaires. We Adapted Lay-Yee et
al. (2013) and (Norazah, 2013) model in order to examine the influence of each of
the five factors on a smartphone purchase decision. The findings showed that
product quality, brand name, and after-sales service have a significant effect on
purchasing decision, whereas price and social influence is insignificant toward
purchasing decision. Finally, managers can improve their customer purchase
decision making through product features, brand, and after-sales service to generate
more profits.
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Keywords: product feature, price, brand name, social influence, after-sales
service, purchase decision, smartphone, Indonesia
1. INTRODUCTION
The evolution of telecommunication in Indonesia has been experiencing a rapid
growth since the past five years. Smartphones have been of one the fastest growing
technologies and necessities in Indonesia. In the beginning, the use of mobile
phones were only by certain people who had the ability to buy it, considering at that
time the price of mobile phones were still very expensive. But now, people can
easily have access to cellphones and that is a familiar sight. Smartphones were
introduced in Indonesia a decade ago, and it is turned out to be extremely prominent
among the youthful age.
The recent trends in smartphones premium models have fallen quickly into
revolutionary. The pace of innovation in smartphone have changed the consumer
behavior when buying a smartphone because the numerous smartphone series being
released in a quarter and the development of bigger screens, faster processor release
as well as improved camera.
The emergence of people's behavior makes the demand for smartphones
increased rapidly. The increasing demand to meet the society’s needs for
smartphone attracts the interest of companies in Indonesia as well as foreign
companies to race to satisfy consumer demand. Therefore, each company will
compete competitively in terms of creating and offering various types of new
products with different innovations (Kotler & Keller, 2009).
According to Statista Research Department, 47% percent of Indonesia’s
smartphone users will be expected to increase by the end of 2019. Based on the
report of e-Marketer, active smartphone users in Indonesia is growing from 55
million people from 2015 to 100 Million people in 2018. With that number,
Indonesia has become the fourth largest active smartphone user in the world after
China, India and the United States. Current smartphone users in Indonesia are
dominated by the age of production known as millennial generation (15-35 years)
(kompas.id, 2018)
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1.1 Consumer Behavior
A consumer is a person who identifies a need or desire, makes a purchase, and then
disposes of the product during the three stages of the consumption process. In many
cases, however, different people play a role in this sequence of events. (Solomon,
2017: 28).
According to Solomon, (2017: 29) consumer behavior is the study of the
process involved when individual or group select, purchase, use, or dispose of
products, services, ideas, or experiences to satisfy needs and desires. The consumers
take many forms, ranging from an 8-year-old child who begs her mother for a doll to
an executive in a large corporation who helps to decide on a multimillion-dollar
computer system.
The purchaser and user of a product might not be the same person, as when a
parent picks out clothes for a teenager. In other cases, another person may act as an
influencer when he or she recommends certain products without actually buying or
using them. Finally, consumers may take the form of organizations or group. One or
some person may select products that many will use, as when a purchasing agent orders
a company’s office supplies (Solomon, 2017: 28)
1.2 Product Feature
Features are product characteristics that deliver benefits; we buy products for their
benefits. Stated another way that features are product characteristics such size, color,
functionality, design and so forth. (Mokhlis, 2012).
H1: Product features have influence on consumer’s purchase decision
1.3 Price
Price is the quantity of money that a consumer is willing to exchange for a service or
product (Kotler & Armstrong, 2010). Others have found that price and after sales
customer service plays an important role in consumer satisfaction; but the price of the
device creates more impact than other factors (Hanif et al., 2010).
H2: Product price has significant influence on consumer smartphone purchase
decision.
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1.4 Brand Name
According to Cornelis (2010), brand name is an exclusive and is to indicate product
itself to the market. Besides according to the Khasawneh and Hasouneh, 2010, they
defined the brand as “name, term, symbol, or design, or a combination of them
intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of competition”.
H3: Brand name has significant impact on consumer purchase decision.
1.5 Social Influence
Social influence is referring to as social pressure on consumer from those that important
to them such as peer group (Ibrahim et al., 2013), cultural value (Lay-Yee et al., 2013),
friends and family (Rajagopal, 2010) persuasion conformity (Mothar et al., 2013), friend
on social media (Nguyen Dang, 2013), norms (Vahabzadeh et al., 2014). Social
influence is one of the major potential that emerges as people tend to understand, relate
to each other and being themselves.
H4. Social influence has significant positive influence on consumer smartphone
purchase decision
1.6 After-Sales service
According to Gaiardelli et al., (2007), after-sales service for manufactured goods include
a set of activities that happen after the product is purchased, committed to support
customers in the usage and disposal of goods. In other words, the term of after-sale
service refers to the services that are delivered to the customers after the products/goods
have been purchased (Sigala et al., 2008)
H5: After sales services has significant impact on consumers’ decision to acquire
mobile phones.
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1.7 Conceptual Frameworks
The conceptual framework explains the effect of product feature, price, brand name,
social influence and after-sales service toward customer purchase decision on
smartphone. The model is adapted from from previous study of Lay-Yee et al.
(2013) and (Norazah, 2013) which consisting of five independent variables:
Figure 1 Research Framework
Product
feature (X1)
Price (X2)
Brand Name
(X3)
Social
Influence (X4)
After-sales
service (X5)
Purchase
Decision (Y)
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2. METHOD
This research uses quantitative design method to test a theory which use relation from
each variable (Sekaran & Bougie, 2011), study that include in hypothesis test usually
explain about characteristic of certain relation, or explain differences each community
or individuals, two or more factor in one situation.
The type of this study is exploratory research which name merely aims to explore
specific aspects of the research area. Exploratory research does not aim to provide final
and conclusive answers to research questions. This research is conducted in Surakarta
areas. The population of this study are people who already have smartphone or they
willing to buy new or secondary smartphone.
The research sample is 125 respondents, consist of 67 females (53.6%) and 58
males (46.4%). The sampling method used in this study is non-probability sampling
that each population do not have any chance to fill same questionnaire. With using
convenience sampling technique and the subject were selected because of the
convenient accessibility and proximity of the researcher. This research is using primary
data as data resources through online questionnaire to fill in and physical questionnaire.
3. FINDINGS AND ANALYSIST
3.1 Findings
Demographic questions of the designed survey questionnaire of this study were asking
the respondents’ age, gender, level of education, their income and the smartphone
brands. The frequency and percentage of demographic distribution of 125 respondents
are presented in Table 1.
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Table.1 Demographic Distribution
Items Frequency Percentage
Gender
Male 58 46.4
Female 67 53.6
Age
17 5 4.0
18 11 8.8
19 18 14.4
20 21 16.8
21 29 23.2
22 21 16.8
23 14 11.2
24 4 3.2
25 2 1.6
Level of education
Senior High School 5 4.0
Diploma 2 1.6
Graduate program 93 74.4
Postgraduate
program(Master, Ph.D)
19 15.2
Occupation 6 4.8
Level of income
<1 million 28 22.4
1million - 1.5 million 56 44.8
1.5million – 2million 27 21.6
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2.1million – 2.5 million 10 8.0
>2.5 million 14 3.2
Smartphone brand
Vivo 14 11.2
Oppo 19 15.2
Xiaomi 20 16.0
Apple 34 27.2
Huawei 5 4.0
Honor 3 2.4
Asus 7 5.6
Samsung 20 16.0
Other 3 2.4
Total : 125
To measure the validity, researcher used Confirmatory Factor Analysis (CFA) as
analysis technique and Cronbach Alpha statistical test (α) as reliability test
measurement tool. An indicator is declared valid when the loading value is 0.5 or more
(Hair et al., 2014)
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Table.2 Factor analysis
Components
Brand
name
After
sales
service
Product
features
Purchase
decision
Social
influence Price
Camera specification ,535
Connectivity ,615
Internal storage ,742
Product form ,695
High priced product ,526
Low priced product ,640
Product price ,803
Brand recognition ,787
Brand reliability ,774
Brand loyalty ,743
Brand name decision ,767
Environmental
influence ,722
Feature comparison ,747
Persuasion ,748
Reliable
guarantee/warranty ,552
Guarantee claim ,604
Customers’
complaints ,742
Effective response
for customers’
complaints
,759
Product information
search ,750
Suggestion ,734
Brand consideration ,767
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The results of descriptive analysis and reliability test are presented in Table 3.
Based Sekaran, (2006), the Cronbach Alpha value > 0.60 indicate that the
measurement items are a good items to measure a construct. The means for the
variables range from 3.49 to 4.50
Table.3 Descriptive analysis and reliability test
Variable Mean S.D. No. of items Cronbach’s alpha
Product
feature
4.46 0.546 5 0.666
Price 3.49 1.037 5 0.688
Brand name 4.47 0.655 5 0.624
Social
influence
4.01 1.066 5 0.662
After-sales
service
4.50
0.518
5
0.653
Purchase
decision
4.30 0.687 5 0.638
3.2 Data Analyst
Table 4 represents the coefficient regression model for the analysis presented in this
study. From the coefficient regression table, customers’ purchase decision of
smartphones can be explained by product feature, price, brand name, social influence
and after-sales service. it can be argued that 45.4 percent of variation in smartphone
purchase decision explained with product features, price, brand name, social influence
and after-sales service and the other 54.6 percent can be explained by other variables
that the researcher did not cite in this research.
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Table.4 Coefficient regression
a. Predictors: (Constant), After-Sales Service, Brand Name, Price, Product Feature,
Social Influence
The results of data analysis that has been done with the SPSS statistical
application shown in table 5 obtained the value of F arithmetic of 21.652. It can be
examined that F - test sig. less than 0.05 indicating the model presented in this study is
an appropriate model. The regression model has a value of F- arithmetic greater than
the value of F-table (21,652 > 2,31). When viewed from the significance value, the
significance value is less than 0.05 which means that the research variables can be
accepted or product features, price, brand name, social influence and after-sales service
are appropriate variables toward the customer purchase decision.
Model R R Square
Adjusted
R Square
Std. Error
of the
Estimate Durbin-Watson
1 ,690(a) ,476 ,454 2,170 1,891
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Table.5 Anova
Model
Sum of
Squares df
Mean
Square F Sig.
1 Regression 509,713 5 101,943 21,652 ,000(a)
Residual 560,287 119 4,08
Total 1070,000 124
Table.6 Multiple regression linear
Based on the results, Hypothesis 2 and 4 are rejected because the P-value is .979 and
.342 for the relationship between price, social influence and customer purchase
decision of smartphone. Besides, there is a significant and positive relationship
between product feature and customer’s purchase decision of smartphone (P-value
=.045). Brand name shows a strong significant effect on purchase decision (P-value
Mode
l
Unstandardized
Coefficients
Standardized
Coefficients t Sig.
B
Std.
Error Beta B
Std.
Error
1 (Constant) 3,136 2,396 1,309 ,193
Product Feature ,199 ,099 ,177 2,022 ,045
Price ,003 ,103 ,002 ,026 ,979
Brand Name ,337 ,080 ,368 4,224 ,000
Social Influence ,067 ,070 ,110 ,954 ,342
After-Sales Service ,253 ,099 ,221 2,555 ,012
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=.000). Finally, after-sales services have a significant and positive relationship toward
customer purchase decision of smartphone P-value =.012)
The table of multiple regression linear equation can be structured as follow:
Purchase decision = 3.136 + 0.199 product feature + 0.003 price + 0.337
brand name + 0.067 social influence + 0.253 after-sales service + e
3.3 Discussion
This research was conducted to discuss the influence of product feature, price, brand
name, social influence and after-sales service that affected the consumer purchase
decision of smartphone brand among people living in Surakarta city. Product feature,
price, brand name, social influence and after-sales service simultaneously have a
positive influence on purchase decision.
3.3.1 The Influence of the Product Feature On Purchase Decision
The product feature variable has a positive significance effect on purchase decision.
The regression coefficient indicates that the product feature variable has a positive
effect on purchase decision. Product features can be defined as the attributes of a
product that can satisfy consumers’ preferences through having the product, using and
applying the product (Kotler et al., 2007). From this definition, it can be explained that
features make one product unique and distinguish itself from other product of
competitors.
In this study, the feature of smartphone that the respondents almost agree to all
items was the camera mega pixel, the shape or size of the smartphone, the connectivity
4G/5G and its audio capability. These features had an effect on the consumer purchase
decision. The respondents have changed smartphone a lot before so they knew which
smartphone brand have better camera or which feature must they take into account
before purchasing. These findings confirmed the previous research conducted by (Ding
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et al.2011) and (Suki,2013) that product feature, brand and social influence have
significant influence on purchase decisions.
3.3.2 The Influence of Product Price On Purchase Decision
The product price has a negative and significant effect on purchase decision. The
regression coefficient indicates that the price variable has a negative effect on purchase
decision. According to Sulistyari & Yoestini, (2012), price is an important variable in
marketing, where price can influence consumer in making decision to purchase a
product. Thus, customers buying decision will be mainly based on the perceived price
of a certain products whether it is expensive or come with a reasonable price, they will
likely evaluate the price with the quality then if the quality matches the customer’s
perception on the price, then they will make purchasing.
In this study, price variable did not have any effect on purchase decision as
customers buying decision is mainly based on the price that has set. Anywhere in the
world, price is the most important factor for the customers to purchase goods/services,
it can heavily influence or change a customer behavior whether it comes with an
affordable or expensive price. However, in this case the Indonesian society do not
merely rely on the pricing factors of a product but tend to search for more information
on a product such as its feature, brand image or other factors. Unlike previous
researches like (Djatmiko et al,2016) conducted in Malaysia and (Swani and Yoo,2010)
which both mentioned that price has the most significant influence on consumer
purchase decision on smartphone and other product.
3.3.3 The Influence of Brand Name On Purchase Decision
According to Kotler & Armstrong, (2010) Brands are more than just names and
symbols. It is also the element of relationship between company and customers. “Brand
names are valuable assets that help correspond quality and suggest precise. This shows
that brand name is something special that has a high value that cannot be copied by
other company as it involves a deep understanding of consumer needs and wants, a
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relationship between company and customers. Brand name can be an identity and
exclusivity that represent the organization. Brand name can be as name, term, symbol
and design to differentiate the organization from the competitors.
In this study, brand name has a positive and significant effect on purchase decision.
This could be caused by reasons as Indonesian people prefer to buy an internationally
recognized and trustworthy brand of smartphone and will only consider buying their
favorite brand of smartphone. This finding confirm previous researches such as (Liew,
2012) (Mudondo, 2014) and (Suki, 2013) that brand name also has a strong influence
on purchase decision of smartphone.
3.3.4 Social Influence Effect On Purchase Decision
Social influence has no effect on purchase decision. The regression coefficient
indicates that the social influence variable has a negative effect on purchase decision.
Social influence related to an individual may cause another person to change his or her
feelings, attitudes, and behavior, intentionally or unintentionally (Rashotte, 2007).
Consumers are dependent on their smartphones when they have high continuous use
and are reluctant to be apart from them (Tian et al., 2009). From these definitions, it
can be concluded that a smartphone user might be influenced by a social group, family
and friends when purchasing a smartphone.
However, in this study the social influence has no influence on purchase decision.
Unlike previous research conducted mostly in Malaysia (Ding et al. 2011); (Suki, 2013)
and (Chew, 2012) stated that social influence has a strong influence on purchase
decision. It was not the case especially in Indonesia as university students are still loyal
with their favorite smartphone brands and prefer the prestige more than being
influenced by other person when it comes to purchase a new smartphone. Also, they
might prioritize the brand equity of a product or looking at the value for money
smartphone according to their budget.
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3.3.5 After Sales Service Have Influence On Purchase Decision
After-sales service has a positive significant effect on purchase decision. The
regression coefficient indicates that the after-sales service variable has a negative effect
on purchase decision. According to Gaiardelli et al., (2007), after-sales service for
manufactured goods include a set of activities that happen after the product is
purchased, committed to support customers in the usage and disposal of goods. In other
words, the term of after-sale service refers to the services that are delivered to the
customers after the products/goods have been purchased (Sigala et al., 2008).
In this study, after-sales service has an influence on purchase decision. It could be
caused by opinions on each respondents. As some respondents might prefer having a
reliable guarantee/warranty from their favorite brand or to purchase a smartphone
based on the easy claim of the guarantee, while some just satisfied with the convenience
of a smartphone brand that provide a complementary call centers for customer
complaints and outstanding after-sales service. This result could be justified by the
previous research such as (Subramanyam and Venkateswarlu, 2012); (Pakola et al.,
2010) and (Sata, 2013) conducted in Ethiopia and even though their degree of
correlation is the least as compared to other factor during these researches, it still has
an influence over consumer purchase decision of smartphone in Indonesia.
4. CONCLUSION
Based on the results of analysis and hypothesis testing on people living in Surakarta
and the discussion above, the conclusion is Product feature has a positive and least
significant effect on purchase decision, Price has a negative and no significant effect
on purchase decision, the brand name has a positive and strong significant effect on
purchase decision, social influence has a negative and no significant effect on purchase
decision and after-sales service has a positive and significant effect on purchase
decision.
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Based on the results of data analysis and the discussions above, the limitations of
the study indicate that the coefficient regression results only show 45.4% factors that
affect customer purchase decision, while there are still 54,6% other factors that the
author did not discuss and mention in this research. Moreover, the sample of this
research is only 125 respondents of people living in Surakarta that have different
background but mostly university students. If the research respondent area is wider,
such as the whole Indonesian archipelago it will make the research’s result more
reflecting toward the customer purchase decision. Finally, this research only used five
independent variables and only one dependent variable.
Based on the result of the study, there are two suggestions that can be taken into
account for further research which is to identify other factors that is actually influencing
the purchase decision of smartphone in Indonesia and in accordance to the Indonesian
context such as the marketing gimmick, convenience and dependency of smartphone
in addition to the factors discussed in this study. Besides, further researchers could use
other methods in analyzing buying decision, for instance through direct interviews and
distributing the questionnaire form with the targeted respondents, so that the answer
obtained from them is more accurate, reliable and honest than using online
questionnaire for which the answer is already available and mostly less reliable and
they just need to check list the answer.
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