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Posted: July 12th, 2021
To exploit the opportunity created by high growth of cellular phones and other wireless devices such as PDA, pagers, Bluetooth, companies around the globe are integrating m-commerce technology in their business model.
Mobile commerce can be define as delivery of electronic commerce (e- commerce) capabilities directly into the consumer’s hands via wireless technology and the placement of a retail outlet into the customer’s hands anywhere. This type of e-commerce makes it possible for businesses to reach end-users directly, irrespective of their location. Through mobile commerce end-users can make purchases, download cash, do banking, and buy ticket through mobile phone. The recent increase of interest in mobile commerce is as a result of high degree of interest shown by consumers on how to access business service and information or to communicate anywhere is also motivated by desire of business community to reach out to end- users at all time and at all places.
Mobile marketing is a very recent, but promising industry created by the emergence and widespread adoption of wireless data networks, which enable the convergence of the Internet, e- business and the wireless world.
Mobile marketing can be defined as the use of mobile channel to provide end-users with location and time sensitive, personalized information that promotes goods, service and ideas, for the benefits of the stakeholders. Some of the mode of delivering mobile marketing includes (Short Message Service) (SMS, Multimedia Message Service (MMS), Wireless Application Protocol (WAP), Java, SyncML and video and audio messaging.
According Marla et al. (2005) there is evidence that interactive marketing such as marketing website, internet advertising, and permission e-mail, mobile and other new media is the fastest growing area within advertising community and companies have long term reasons for adopting it Research suggests that 65 percent of mobile phone subscribers will welcome marketing alerts and promotion by 2008, this figure has been exceeded within the youth market. Mobile devices, as channels for advertising, have many new features and therefore opportunities in comparison with traditional media and many players are looking to benefit from them.
Mobile advertising can be defined as marketing and advertising activities that deliver advertisements to mobile devices using wireless network and mobile advertising solutions to promote goods and services and build brand awareness. Mobile advertising hold strong promises to become the best targeted advertising medium delivering new means of reaching users with message other than traditional channels (e.g. radio, television, print, and mail). M-advertising provides consumers with personalized information based on their location, time of the day and interest. By the year 2008, mobile advertising market is expected to grow from US$ 16 billion to 17 US $ billion and US$ 23 Billion by 2009. There has been rapid growth of m-advertising especially in Europe and Asia.
A key component of marketing communication is advertising which can be: pull or push mode after obtaining customer’s permission. Mobile Marketing Association (MMA, 2005) define Push advertising as any content sent by or on behalf of advertisers and marketers to a wireless mobile device at a time other than when the subscriber requests it. Push Messaging includes audio, short message service (SMS) messages, e-mail, multimedia messaging, cell broadcast, picture messages, surveys, or any other pushed advertising or content. Another mode of mobile advertising is term as called pull advertising which can be define as any content sent to the wireless subscriber upon request shortly thereafter on a one time basis (MMA 2005). In this case advertiser provides a wireless means for customers to respond to advertiser’s message, thus it is kind of advertising that the end-user request for advertisement instead of the company pushing it on the consumer.
Mobile advertising provides end-users with personalized information based on their time of the day, location and interests. As a result various factors need to be considered in mobile advertising concept. Time and location have impact on individual’s behavior and receptiveness to adverts. Knowing the location of the customer enable geographically targeted advertising message via GPS. Sending message at appropriate time increases the success of advertising campaign. Personalization of the content of an advert is possible by tracking personal identity and capturing customer data. Moreover, Advertisers need to be cautious about the content and the information when planning mobile advertisements in order to get end-user’s attention. Mobile adverts should be entertaining, emotional and interactive and provide incentive to customers in order for them to pay attention to the adverts.
In conclusion mobile advertising may be seen as part of mobile commerce and mobile marketing, one basic requirement of mobile advertising is to be permission-based, it can be categorized into push and pull, however in future mobile advertising will be in the form of dialogue campaign. Furthermore, factors such time and location, personal nature of customers and content and information of mobile advertisement should be taking into consideration when delivering mobile advertisement.
Marketers stand to gain more as a result of rise in mobile communication with regards to messaging and other non-voice technologies. The convergence of the mobile phone and the Internet promise to change all our lives forever – the way we work, the way we buy goods, the way in which we communicate with each other. Mobile devices, still used almost exclusively for voice, are on the threshold of a wave of new service opportunities for businesses and for customers. The appeal of the mobile device as a business tool is not hard to understand.
Mobile advertising is still at an early stage and different players are still experimenting with various formats. However research and practice suggest that much can be achieved using simple mobile technology that is already well established (Barwise & Strong, 2002).
According to Haig (2002) marketers see synergy between text messaging and internet most often difficult to resist. One common example where web and SMS compliment each other is when a text message directs recipients to a web site for more information, such a method has a practical purpose since it is impossible and impractical to express much information via text. Furthermore, marketers are able to direct each recipient to a point of purchase on e-commerce site, and it increases the chances of brand recall. Mobile technology together with the Internet and to lesser degree digital television has change the way marketers can get their message across. In the past, advertisers have limited media options such as print, television and radio. Even though newspapers, radio stations and television programs are still in use, targeting audiences through media campaigns are still risky. Evaluating the success of a campaign is mainly guesswork since broadcast media tend to be one way communication (marketer to consumer and not vice versa) and most often cross section of the targeted population is reached.
However, the emergence of new media forms, together with changes in the old ones has given rise to micro-media age which in turn leads to micro-marketing. Theoretically companies can now narrow cast their messages to smaller targeted audience, instead of broadcasting their messages. Additionally marketers can interact with their customers in a manner that was before then impossible. Every message sent can be monitored responses accounted for provided there is call to action. Marketers who failed to acknowledge mobile technology are in effect ignoring one of the most powerful means of actively engaging and reaching customers.
According to Okazaki (2005) companies will consider the following factors when adopting mobile advertising: branding strategy, Location based service and service cost as the most important managerial factors, whilst facilitating condition, cultural barrier and regulatory as environments factors. The predictions of future growth and the benefit of mobile advertising make companies see the need to adopt mobile advertising. In order to adopt mobile advertising it is necessary for the company to look at the factors influencing it.
However because of perceived limitation of mobile terminals and failure of WAP functionality some companies are reluctant to adopt mobile advertising. In addition, cultural issue has been a big obstacle to mobile advertising; therefore any company which fails to adopt appropriate mobile advertising strategy will have negative advertisements response and will have their brand strategy damaged. Also Limitation in mobile infrastructure and cellular phone such as slow deployment of 3G infrastructure, high power consumption require by handset, deficiencies in mobile browsers, shortage and high cost of Third Generation (3G) and General Packet Radio Service (GPRS) handsets among others hinder mobile advertising adoption by companies (Wallage et al., 2005).
According to Cowllet (2002) one thing is assured the youth always have their phone with them and consider SMS as part of their lifestyle because it allows them to stay in touch with peers in a cost-effective and entertainment manner. Because of limitation of mobile device regarding handling, sound and size it is not suitable for stand alone campaigns, instead it should be use to promote the presence of a company or product into additional channels, and companies which decide to depend solely on M-commerce will have much deeper challenge.
According to Will Harris (2004) the personal natures of mobile phones present one of the main challenge and opportunities to mobile advertising companies, because advertising campaigns carried via mobile phones are very sensitive and companies which adopt this type of advertising campaigns need to be careful not to offend users.
According to Haig, (2002) when companies launch a new product or looking for extra revenue from mobile advertising they should considers these types of forms for their campaigns because not every choice available on the mobile advertising tools will be suitable for every brand and business.
Based on the discussion above, the purpose of this study is to gain a better understanding of how organizations are using mobile advertising in electronic Commerce Marketing.
In order to reach the research purpose for this study the following research questions are stated:
RQ 1: How can the factors affecting organization’s mobile advertising adoption are described?
RQ 2: How can organization’s mobile advertising campaigns are characterized?
RQ 3: How can organization’s mobile advertising forms are described?
Branding strategy, Location-based service, Service cost, Facilitating conditions, Cultural barriers and Regulatory control are the independent variables while the Mobile Advertising Adoption is the dependant variable in our study.
H1: Branding strategy has a positive impact on the Mobile Advertising Adoption
H2: Location-based service has a positive impact on the Mobile Advertising Adoption
H3: Service cost has a positive impact on the Mobile Advertising Adoption
H4: Facilitating conditions has a positive impact on the Mobile Advertising Adoption
H5: Cultural barriers has a positive impact on the Mobile Advertising Adoption
H6: Regulatory control has a positive impact on the Mobile Advertising Adoption
This section contains a description of research purpose, the research approach, research strategy and research methods, and then it ends with a discussion concerning the reliability and validity.
According to Yin (2003) there are three kind of research: exploratory, descriptive and explanatory. Exploratory research is used to clarify an understanding of a problem. It has one goal of exploring something and is suitable for when the research problem is difficult to delimit. Exploratory approach should be applied when the researcher is not certain about the right model to use and the kind of relations and characteristics that are more suitable.
Descriptive approach: the objective is to provide description of various phenomenons and is recommended when the intention is not to provide casual relationship and when the problem is clearly structured. The researcher knows what to investigate but the answers are not known by him/her.
There is little empirical research on SMS-based mobile advertising. Therefore, I will be employing the descriptive and exploratory approach to the research questions. This will enable me to have good understanding and description of this study.
The study aims at exploring and describing how SMS-based mobile advertising is use in Electronic commerce Marketing. In this sense the study can be regard as both descriptive and exploratory.
Research approach is often either quantitative or qualitative. Both approaches have their strength and weaknesses and neither approach can be held better than the other. The best research method to use for a study depends on the study’s research purpose and accompanying research questions.
According to Yin (2003), in a qualitative approach emphasis is given to description and discovery based on data in the form of words rather than numbers. In contrary the quantitative approach, is signified by that all variables are measured by statistical methods, since the information mostly is transformed into numerical data.
Qualitative research is conducted through an intense and/or prolong contact with a ‘field’ or a life situation these situations are typically ‘banal’ or normal ones, reflective of the everyday life of individuals, groups, societies, and organizations. (Yin, 1994) pointed out that qualitative methods are normally related to case studies where the goal is to get thorough information and thereby obtain a deep understanding of the research problem.
The type of problem under discussion is an important factor in determining the best approach use based on the discussion, research question and research problem the approach I want to use is qualitative in nature, and I regard qualitative approach to be the right procedure to help me gain a deeper understanding of how mobile advertising is implemented in electronic commerce Marketing.
With the focus at qualitative research as a general approach the focus now turn to the research strategies to collect the data. According to Yin (1994) there are five primary strategies in social science: experiments, survey, archival analysis, history or case study as research strategy. Each strategy had its own advantages and disadvantages depending on three distinct conditions:
1. The type of research question posed
2. The extent of control an investigator has over actual behavior events
3. The degree of focus on contemporary as opposed to behavior events
The purpose of this study is to gain better understanding of mobile advertising in electronic commerce Marketing. Since we do not require control over behavioral events, experiment is rule out. In addition we want to describe organizations mobile advertising adoption decisions, and kinds of mobile advertising campaigns use and the forms that mobile advertising takes in an organization. For this reason surveys, archival analysis and history are inappropriate for this study. This leaves us with case study as our research strategy.
Case study is the most suitable method for our study, since we attempted to study contemporary phenomenon case companies and mobile advertising.
According to Yin (2003), a case study can involve a single and a multiple-case study. The single case study makes an in-depth investigation regarding only one entity, such as an organization or a decision. However, when making a multiple-case study, two or more entities are studied which gives the opportunity of comparisons. The case study approach allows the use of a variety of research methods. More than this, it more or less encourages the use of multiple methods in order to capture the complex reality under scrutiny.
In our research, both within case-analysis and cross-case analysis will be conducted. We will begin by analyzing each case separately and compare with previous theories. Secondly, the two cases will be compared with each other in a cross-case analysis.
According to Yin (1994) there are six sources of evidence for data collection in case studies: documentation, archival records, interviews, direct observation, participation-observations and physical artifacts. Each of these has its own strength and weaknesses. The most appropriate sources of evidence for this study are interviews and documentation.
Data will be collected by interviewing representatives from case companies, I will use telephone interview. The case companies will be briefed about the purpose and nature of the study before the interview. By undertaking the telephone interview we will be able to explain the questions that will be asked. Telephone interview is the best option because of the distance between the interviewers and the respondents.
When conducting research, it is often impossible, impractical, or too expensive to collect data from all the potential units of analysis included in the research problem. Hence, a smaller number of units, a sample, is often chosen to represent the relevant attributes of the whole set of units, the population. Because the samples are not perfectly representative of the population from which they are drawn, the researcher cannot be certain that the conclusions will generalize the entire population.
Sampling techniques provide a range of methods that enable to reduce the amount of data that need to collect by considering only data from a sub group rather than all possible cases or elements. Qualitative researchers generally work with small sample that suitable with purpose of study. Our case will be draw according to the following framework:
According to Yin (2003) data analysis involves examining, categorizing, tabulating or otherwise recombining the collected data. Every investigation should have a general analytical strategy in order to determine what to analyze and why. Two general strategies proposed: either researcher rely on the theoretical propositions and following the selected frame of reference, or developing a case description, that is, use a descriptive way to present data.
There are four analyzing techniques within these strategies:
Pattern matching: comparing empirically based pattern with a predicted one.
Explanation building: A type of pattern matching where the goal is to analyze the case study data by stipulating a set of casual links about it.
Times- series analysis: multiple measures of the dependent variable in order to look at changes over time.
Program logic models: combination of pattern-matching and time-series analysis, where the complex chain of patterns over time is being stipulated.
In this study I will use a frame of reference for the case study research. Also I will use pattern matching strategy to compare the case study with previous theories in the literature review.
According to Miles and Huberman (1994) analysis consists of three flows of activity: data reduction, data display, and conclusion drawing and verification. The data reduction stage of the analysis helps the researcher to make the data sharp, sorted, focused, discarded, and organized in order to be able to draw and verify conclusions. The data display is a way to organize and compress the reduced data so that it will make it easier to draw conclusions. This phase is useful when the researcher studies more than one case, a so-called multiple case. Conclusion drawing and verification involve noting regularities, patterns, explanations, possible configurations, casual flows and propositions.
In this study, I will follow these three steps in order to analyze the empirical data. I will use within-case analysis and cross-case analysis. The data will be reducing through within-case analysis where the cases will compare against the frame of reference. Conclusions from these analyses will be were draw based on the patterns of similarities and differences, which will be discovered in the data reduction and data display.
The following limitations exist in this study:
The validity of attitude scores is dependent on the honesty of participants.
The sample of this study is limited due to the criterion that requires basic computer skills.
The validity of self-assessment tests is limited to the honesty of participants who are assumed to response tests items individually.
The validity and the reliability of academic achievement tests are limited to their own measurement validity and measurement reliability.
According to Okazaki (2005) certain factors can be explained as key determinants of SMS-based mobile advertising adoption. These can be group into two categories managerial (branding strategy, location-based service, and service cost) and environmental (regulatory, facilitating condition and cultural barriers).
According to (Frolick and Chen, 2004) mobile internet provide an effective channel for building customer relationships by means of promotional and direct marketing activities. More specifically wireless e-mail had been regarded as an effective tool to enhance brand awareness, build or test customer loyalty, and develop or enhance demographic database (Mylonopoulus and Doukidis, 2003).
Petersen et al., (2003) argues that traditional use of internet through computer does not allow brands to reach customers wherever they want, even though it is claimed that internet has made it possible for customer to reach the company at their desired time, however customers can only be reached if they are sitting in front of computer, on the contrary mobile devices are always with the user making it possible for brands to reach their customer anytime anywhere. Customers will highly value channels that are time and space flexible. Access to ubiquitous channels is of special importance to customers particularly if the product and services are time critical.
Through mobile devices brands can distribute information about product, innovation, coupon announcements, or/special offers. Customer can also utilize the wireless channel to request about product usage, for example ask about the menu of a restaurant or evening program of television channel thereby increasing the ability of customer to the full benefit of the relevant product or services brands are able to offer. In the same vein brands get feed back from their customers due to two-way communication between brand and customer enabled by mobile device.
Typically wireless devices are use to coordinate social networks. Information received by a member of the network in most cases can be forwarded to other members of the network. Therefore brands information can be delivered on broader level other than the brands own customer database, this is as a result of the social interaction among the members of the customer database. The implication of this is the delivering of brand jingle, logos, and slogans within the social networks this can double the number of end-users exposed to the brands, thereby increase the brand knowledge.
According to Dano (2002) some companies have already tried mobile advertising in their brandy strategy for instance McDonalds together with popular TV song competition in the UK undertook text-messaging campaigns giving out concert ticket and backstage pass. In addition competition was offered to college student who sent text message to a number printed on diet coke can when entering into Coca-Cola Grand Sweepstakes.
The technologies associated with wireless communications requires infrastructure which allows mobile device users to send and receive SMS-based messages. Seeing the need for theoretical base for wireless internet adoption base on the technology acceptance model (Okazaki, 2005) suggest that that facilitating conditions and ease of use of wireless internet is one of the most important determinants of adopting mobile internet.
In the light of this the integration of competing standards and fragmented systems across countries, cross-network support for SMS, and higher connection speeds are all necessary conditions greater transmission of mobile advertising. Furthermore, the availability of web enabled mobile handsets with 2.5G or 3G functionality would significantly affect adoption of Multimedia Media Services (MMS) based advertising campaigns. There must be various type of handset to enable consumers to choose combination of functions and features that best suit their needs (Baldi and Thaung, 2002).
In order to determine a person’s position, different location techniques can be used. The most popular techniques use satellites: i.e. Global Positioning Systems (GPS) which compute the user’s position from the signals transmitted from a satellite constellation. The main advantages of such satellite systems are their global coverage, accuracy and minimum impact on the existing communication networks (Okazaki, 2005).
As a result cellular phone manufacturers and service providers are increasingly attracted by commercial viability of applying the satellite-based global positioning system (GPS) to the wireless service (Okazaki, 2005). Currently the location tracking applications has much more wider implications. for instance on the extended menu of “I-mode” “I-area” includes a various location-based services restaurant guide, weather news, local hotel information, zoomable maps with address finder function, and traffic updates and estimation of travel times. Mobile communication technologies which are always provided on broadband connections in combination with location computation technologies will bring some obvious benefits. The bulk will be commercial services providing specific content targeted at individuals and their context.
According to Murphy et al., (2005) Mobile phones provide two key argument for e-commerce ubiquity and location independent, this has made consumers to demand tailored and location based services thereby increasing the importance of personalized marketing, also virtual communities can be created by properly applied location-based service.
According Barnes (2003) the GPS facilities together with other location based-service will give companies strategic advantage in mobile advertising, the reason being that there is tendency for consumer behavior and receptiveness to advertisement to be influence by location and time, and marketers can persuade the consumer to make impulse purchases by giving the right information at the right time, and at the right place.
Service costs is one of the important factors in wireless advertising adoption, the cost of sending SMS message is comparably lower than other data oriented devices such as WAP. According to Leppaniemi et al., (2005) within a few seconds companies can undertake marketing campaigns targeting tens of thousand of people with a proportion of the costs compared to other direct medium such as telephone and direct mail. Two types of costs calculations are used by advertising industry to evaluate media efficiency: Cost-Per-Thousand impressions (CPM) and Cost-Per-Rating point (CPP). CPP is ratio a ratio based on how much it costs to buy one rating point, or one percent of the population in an area being evaluated. CPM is a ratio based on how much it costs to reach a thousand people. CPM is used in both print and electronic media; previous studies on advertising mainly use CPM calculations. CPM is calculated by multiplying the unit cost of media vehicle by 1000 and dividing the result by audience size of the vehicle.
In addition to the CPM measure in media marketers have to apply several adjustments audience-attention probability, prestige and believability of the media selection. However m-advertising provides a new and innovative ways of promoting goods and services since e-mail is losing its efficiency as an advertising medium.
According Stefan et al., (2003) Looking at CPM one can see that the mobile channel is still more expensive than prime time television but one need to keep mind that the distribution paid by the service provider only takes place if a target customer profile and the situation description of the customer do match. As a result spreading losses are reduced to barest minimum and quality of contact acquired is averagely higher than traditional mass media, which can provide weak customize targeting and allocation mechanisms. In the long run this can lead to a distribution through the mobile channel that is more cost efficient than traditional media.
The main difference between mobile advertising and e-mail advertising is the “opt-in”. According to (Sadeh, 2002) this “opt-in” function is very important in providing end-users full control over the messages they receive, in that end-users demand for highly personalized service need to be reconcile with desire for privacy. Corporate policies need to take into account legalities such as electronic contract, electronic signature and condition for sending SMS message.
According to DeZoysa (2002) European consumers regard SMS as irritating and intrusive in a survey result conducted across Western European countries in 2002, of 3000 mobile users almost all the respondents see any SMS campaigns to their mobile phones as intrusive even if it last for 30 seconds. As many as 46 percent of Europeans agreed to use mobile banking and this raises concern for European lawmakers and require them to enact law which protect consumers financial information, this is because mobile banking users may be highly concern about security concerning their information, the reason being that mobile banking allow consumers to request that their account balance via SMS (Mallet et. al, 2004).
The Mobile Marketing Association has taking steps to establish industry code of conduct for mobile marketers: These Code of Conduct is divided into six categories. (1) Choice; Consumers must opt-in to all mobile messaging programs. Consumers may opt-in to a program by sending a text message, calling a voice response unit, registering on a website, or through some other legitimate paper-based method. (2) Control Consumers must also be allowed to easily terminate — opt-out — their participation in an ongoing mobile messaging program through channels identical to those through which they can opt-in to a given program, (3) Customization As mobile messaging campaigns are most
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