The Use of Mobile Phones in Marketing - Coursework Example

?Use of Mobile Phones in Marketing Introduction A mobile phone or mobile, also called cell phone or hand phone, is an electronic device used for mobile telecommunications over a cellular network of specialized base stations. The use of mobile phones in marketing helps to grow business by means of marketing using communications technology. Thus, as one example, small business owners can use the short messaging service (SMS) on their mobile phones to effectively advertise their products. Indeed, the growing popularity of mobile phones has spread through all walks of life so that today, as many as 45 million text messages or more are sent in the UK every day. A majority of these text messages are personal. However, businesses – particularly small businesses – can use SMS to their advantage. However, the mobile is increasingly more versatile and afros diverse ways in which it can be used by business enterprises 2. Using SMS to Advertise If you have a new product, service, offer, announcement, etc, you can effectively target your customers by sending them a SMS. Most of the latest mobile phones allow you to send a single text message to multiple recipients. The only disadvantage is that many of these phones have a maximum recipient number of around 10 (at the very most). However, in older mobile phones sets, the message has to be sent to multiple customers by choosing and sending them one by one, which takes much time. However, messages can also be sent using the personal computer just as it can be done using a handy mobile phone. The messages can be sent simultaneously to multiple recipients by using software that is available freely n the internet. In this respect, this is similar to sending email messages by accounts like Yahoo or Google. This is particularly useful in case the mailing list is large. Essentially, the software acts similar to an email account allowing recipients to reply to you (this can even be delivered in the style of an email if required). 3. Mobile marketing Mobile marketing is a term used to refer to any one of two distinct categories of ways of adopting marketing suing mobile technology. Thus, one is the relatively new, yet common utility of mobile phones for marketing purposes. Here, there is a so called horizontal telecommunication convergence where the mobile phone plays a key role in garnering clientele or business for the enterprise. Another way that the term mobile marketing is used is actually as a more traditional utility and in this case, marketing is affected in a moving fashion; for example, technology road shows or moving billboards. However, although there are various definitions for mobile marketing, no commonly accepted definition exists. Mobile marketing is broadly defined as "the use of the mobile medium as a means of marketing communication" or "distribution of any kind of promotional or advertising messages to customers through wireless networks" (http://www.a1vm.com). A more specific definition would be the definition of mobile marketing as the use of interactive and wireless media so as to provide customers with time and location sensitive, as well as personalized information that can promotes goods and services or even ideas, for creating value for all stakeholders of the business (Blackett, 2011). As recently as in November 2009, the Mobile Marketing Association updated its definition of Mobile Marketing as follows: Mobile Marketing is a set of practices that enables organizations to communicate and engage with their audience in an interactive and relevant manner through any mobile device or network (Mobile Marketing Association, 2009). Commonly, mobile marketing is also known as wireless marketing. However the term does not imply that it is necessarily mobile. For instance, a consumer’s communications with a website from a desktop computer at home, with signals carried over a wireless local area network (WLAN) or over a satellite network would qualify as wireless but would not be termed as mobile communications. Again, the increase in use of smart mobile phones and mobile internet access have enabled marketers to design market campaigns that are highly targeted and can use similar interactive tools that are commonly applied in traditional internet content created for computer users. By knowing the identity or even the user profile of the cell phone owner one can well use the information for choosing time, place, method or occasion to decide when a specific advertising message is to be delivered. Actually, mobile phones may be used for guerrilla marketing purposes in so many different ways by the aid of different kind of technologies and processes. Again, a literature review was conducted using secondary research which actually revealed the following methods of usage of mobile phones by sending of business-related marketing messages or text that are very much relevant to the methods of online guerrilla marketing: a. Bluetooth proximity marketing b. Using Short Messaging Service or SMS and MMS for sending vouchers and discounts c. Mobile photos in internet competitions, which is also another example of mobile marketing These techniques need further explanation which the following paragraphs will try and do. a. Bluetooth Proximity Marketing Bluetooth proximity marketing (BPM) is a tool which allows for direct communications with consumers as they pass within a cca.100-foot radius of a store, event or booth, according to Kellogg (2007). BPM instantly engages the consumers in any particular campaign. Such marketing campaigns can be more effective and user-friendly than billboards or other large-scale advertising tools and also bring the element of a surprise that such unknown communications provide and which makes such marketing very effective. b. Using SMS, MMS for sending vouchers and discounts Short Message Services (SMS) and Multimedia Messaging Services (MMS) can be used for business purposes relevant to internet marketing as a tool for increasing loyalty of the customers by giving them something for free. Using mobile phones for storing or transmitting important information is both convenient since the phone is always available with the owner, and this also provides the marketer ample scope for effective customer relationship management and customer service marketing campaigns. Thus, for example, SMS or MMS may be sent to the cellular phone number of a probable customer at the time a the customer visits a website and fills in contact information in the space for the same provided on the webpage of the internet service provider. In this way, the business gets valuable information about the customer and the customer can be sent a message containing a voucher for a 25% discount on the charges payable for a service whereas similar services when rendered using traditional brick and mortar model of business structures may not be as effective. Technology based marketing, which mobile marketing obviously is, is inherently cheap, simple and even technically not particularly demanding on the customer. However, this type of marketing suffers from some disadvantages since, it cannot be clearly stated that this kind of marketing campaign can fully duplicate successful and sudden marketing promotions using guerrilla marketing methods. The most obvious disadvantage is the lack of surprise and the drastic nature of such campaigns.? c. Mobile photo usage in internet competitions There is another kind of mobile marketing like the case of Image 24 Mobile phones which used techniques related to Guerrilla Marketing. In this campaign, invitations were sent out to mobile phones, which were actually designed by Vit Horky, and who also graphically edited the photos by I-stock-photo. It is thus possible to use the mobile phone by tapping modern mobile technology for business objectives. The usage of mobile phone with a camera for online competitions was actually taken advantage of Bata, the international shoe stores. Bata is arguably one of the world's leading footwear retailers and manufacturers with operations spanning five continents, according to the Bata international website. The Bata shoe often organizes a new competition for its customers with a business objective to increase sales and also learn about customer views on the variety of Bata products on offer. The key process of the competition is using Image 25 Using mobile phones in Guerrilla marketing online. The campaign includes principles of the guerrilla marketing by using unexpected technological process and motivates people to join a community of active Bata customers who are competing to win some reward. The objectives of the campaign are to increase the attractiveness of the brand, increase attention on the products and increase sales. The campaign uses principles of presence marketing to stimulate the target audience to learn about the differences between Bata products and products of other manufacturers. Limitations of the campaign can be identified in the technical demands for having in place a comprehensive system for managing all relevant data and the promotion of such campaign also necessitates an increased budget for marketing activities of the company. 4. A real life example of successful marketing using mobile phones There are several case studies that could be searched out from the internet. However, one case concerning the Young Professionals Forum stood out. The Young Professionals Forum (YPF) is a networking organization devoted to providing young professionals with the skills, contacts, and opportunities to help them succeed and become active members of the business community in Prague. There is an opportunity for YPF to increase the loyalty of the members by giving them invitation for upcoming events free of charge within the particular events categories. Additionally, any invitations that have been sent are automatically registered in the online Enterprise Resource Planning (ERP) system for easy project management and accounting purposes. Using a Bluetooth technology for automated sending of invitations to mobile phones of those guests interested in the YPF events clearly increases the attractiveness of the events and it also decreases the cost of printing and sending invitations with unique numbers registered on the guest list. Similar campaigns using Bluetooth technology may be applied to different industries as well, for example sending a vouchers for free coffee cup next time the customer come to the coffee shop, and so on. This example thus denotes a marketing campaign having the characteristics of so-called presence marketing which uses the Internet as a medium for managing the content, target audience database and feedback received from the mobile users. Again, by using such untraditional tools for communicating with the target audience increase of attention, desire and conversion (action) is expected and given as a desired outcome. However, this campaign should be resorted only when proper and prior research has been carried out and the target audience and their possibilities and skills of using mobile phones for this type of activity requiring particular technical experience and positive attitude to such activities have been determined. Other examples of marketing using mobile phones Example 1 – Using Mobile Phones in Business The scenario is a motor repairing garage that employs mechanics who need to travel out to repair vehicles 24 hours a day. In this case, the mechanics are provided mobile phones so that these mobile phones allow the mechanics to communicate with the garage and the garage knows where they are and can pass new customer information on to them. The phones also allow the mechanics to communicate with customers. Although the garage and mechanics call each other on the same network, the calls to customers are on different networks. The total time for outgoing calls is approximately around 1500 minutes between them each month. Here, the need has been to purchase at least 1500 minutes of Anytime and Any Network inclusive minutes, which are then split between all of the mechanics phones, and used for communication between the garage and customers. The cost of purchasing the free minutes works out much less than that of a large number of cross-network and peak rate calls. But, a package with a flat rate would be far cheaper than a package offering peak and off-peak rates. If the mechanics communicate only with the garage and other mechanics on landlines and the same network, it will also be cheaper to purchase anytime minutes for just that network. Example 2 – Using Mobile Phones in Business The scenario consists of three managers who travel between offices and the phone calls are to be made to company landlines as well as to the manager’s phones on the same network so that meetings can be arranged and problems can be solved. The total outgoing calls will be around 2000 minutes each per month ideally, the business would need around 8000 or more anytime minutes to landlines and the same network, to be split between the managers’ phones. As no calls will be to other mobile networks, there is no need to pay extra for cross-network minutes. The cost of the free minutes will be less than the cost of peak rate call charges. A package with a flat rate would be cheaper than a package with peak and off-peak rates. Example 3 – Using Mobile Phones in Business The scenario is a shop whose owner who occasionally travels to visit suppliers and uses the phone as a backup for the landline, and for emergency contact when out of the office. Most of the calls will be incoming, with total outgoing calls only at around 50 minutes per month. Also, the firm needs to use a pre-pay mobile phone or basic contract package. It will almost certainly be cheaper to pre-pay for the calls than to pay each month for inclusive minutes and reduced rates that will be of no benefit because so few of the calls are outgoing. 5. Mobile phone content advertising Mobile phone content advertising is the promotion of ring tones, games and other mobile phone services. Such services are usually subscription-based and use the short message service (SMS) system to join up to the services. Another method is broadcasting messages to the mobile phone's idle-screen, thereby enabling the mobile operators or advertisers to reach millions of customers in real-time. The advertising and sales of ring tones, in particular, has seen a massive growth in recent years, with some commercial breaks, particularly on music television channels and in motor racing (especially NASCAR, with Sprint Nextel as the series sponsor), being dominated by such adverts. Advertising in newspapers and magazines has also become popular. 6. History of mobile telephones The first easily-customizable aspects of the mobile phone were the operator logos – small, monochrome images that show the logo of the mobile network operator (such as Vodafone) by default. These were often replaced by a person's name or a small symbol. Again, as handset manufacturers introduced better ring tones and audio capabilities, the ring tones became the most common method of customizing the phone. Soon, websites containing ring tones of popular songs and tunes started appearing, with many of them providing the service free of charge and with little or no advertising at all; again, their popularity grew mainly through word of mouth. However, these sites soon started charging a small fee for the privilege. The next step was to advertise these services. Some companies started large mass media campaigns to advertise the fact that they had the latest tunes and largest collections of ring tones. One of the biggest advertisers is the German company Jamba! (known as Jamster! in some countries), known for the Sweety the Chick and Crazy Frog ring tone characters. After months of public complaints, the British Advertising Standards Authority (ASA) ruled on 21 September 2005 that many of the advertisements must be shown only after 9 p.m. The primary intention of this was to prevent the company from targeting young people in its campaigns. Again, Mobile Advertising was one of the main themes at the "3GSM World Congress" held in Barcelona, Spain in February 2007. The Mobile Entertainment Summit held there discussed whether Mobile Advertising Can Fund New Content Businesses and Resurrect Advertising. One of the first operators to implement brand advertising campaigns was "AIS" from Thailand, where Honda has become one of the first global advertisers to use the phone's idle screen as a medium for mobile advertising. The AIS - Honda advertising campaign broadcast motorcycle and road driving safety tips and targeted millions of AIS mobile subscribers, offering a Honda moped as a prize in return for registering. The campaign utilized Live Screen Media, a mobile advertising medium by Celltick Technologies, a leading provider of innovative mobile marketing solutions for the idle screen. 7. New Trends A new trend in mobile phone content advertising is the "ad-supported" mobile phone service model. MVNO's such as Virgin Mobile USA, Xerox Mobile, and Blyk offer, or plan to offer, free or subsidized mobile phone service in exchange for subscribers viewing a number of targeted advertisements that are relevant to the subscriber. These MVNO's utilize a "one person per presentation" model. The relevancy of any given advertisement is based on user demographics, questionnaires, and the like. Leap Wireless International Inc. holds a patent (Owensby 6,647,257)that allows a subscriber to subsidize his/her calls by viewing advertising, and utilizes a number of subscriber centric factors. In 2006, the Mobile Entertainment Forum (MEF) carried out a survey of its members in 2006 where 81% of respondents expected successful advertising models to cut prices or fund the consumption of entertainment content on mobile phones. But, while advertising via a mobile phone is still relatively new, inventors have developed ways to use a mobile phone to present advertising to persons standing near a mobile phone user while the user speaks in a non-hands-free mode. Bayne's invention (Bayne, U.S. Patent Application Nos. 20050239448 & 20050239495) teaches providing a mobile phone user with incentives (e.g. discounted talk time, free content, etc.) for allowing the phone to be used as a mini-billboard by manipulating the main screen to face outward to present advertising (in an alternate embodiment the invention uses the rear facing screen). This invention differs from the conventional approach of "one person per presentation", and is based on the observation that "birds of a feather flock together" to give the advertiser multiple views per presentation and a demographic that is the same, or similar to, the subscriber. Inventor Okawa (U.S. Patent Application 20040259599) teaches a similar invention for presenting advertising to unspecified persons near a mobile phone user, using the rear screen, while the user speaks on a mobile phone. Presentation to persons other than the user will likely be used to increase market share in low-income/high-population areas, as well as provide a line extension for ad-supported MVNO's. Again, a new approach to mobile content advertising is the use of viral marketing. Through specially designed programmes, users can send recommendations for mobile content they like to their contact lists. One example is the Passa Parola, the Italian version of Meyou, which has reached a total of 8lakh registered users, by the use of viral marketing alone (Green, 2007). In 2006, the Guardian reported how advertising on mobile phones was expected to boom over the next five years, creating a market worth more than $11.3bn (?6bn) annually, with consumers persuaded to accept adverts on their handsets by the offer of free content such as TV channels, games and so on (Wray, 2006). With mobile phone ownership already outstripping PC use across the world, online advertising players such as Google and Yahoo! are moving their search engine products on to mobile phones. But one research by industry experts Informa Telecoms and Media shows that advertising-backed content services such as mobile TV can also be a big draw for advertisers. However, the move from demanding that customers pay when they download music or videos to free services backed by advertising represents a challenge to mobile phone operators. They had been hoping to charge for content and levy monthly subscription fees for mobile TV. According to their version, if they cannot persuade broadcasters or music firms to cut them in on advertising-backed services, they obviously risk becoming little more than access providers. Again, Informa estimates that the mobile advertising market, forecast to be worth $871m in beginning 2011, will rocket to $11.35 billion by end 2011. While this is a small percentage of the global advertising market, growth is expected to be fast. Mobile search advertising and display advertisements on mobile web pages will account for about $3.1 billion by 2011, with text and picture messaging advertising raking in $2.7bn, it says. But Informa also observes that advertising over mobile TV will be most lucrative, worth almost $4.4bn by end 2011. Also, mobile TV is expected to become free, paid for by advertising. During the World Cup, mobile phone operators even offered a free downloadable video magazine show paid for by Canon with advertising when it was reported that the campaign had 61% recall. 8. The Five Ps of Marketing What is important is the 5 Ps of marketing that is the fundamental mantra of any marketing strategy. Thus, the five Ps, namely Product, Place, Price, Promotion and Partnerships are essential for driving mobile marketing campaigns successfully. Indeed, it is the same fundamental principles behind marketing science that companies are using to promote their goods or services, albeit using highly advanced technology as mobile phones use. The new age designs and state-of-the art technologies incorporating such things like android, or cloud computing do mean that there will be still more radical changes in the field of mobile marketing. Again, the biggest areas for growth in mobile marketing appear to be the developing nations like India, and China which have greater mobile growth than even the USA (Sabharwal, 2008). However, whatever the growth of different countries, mobile marketing as a concept has really caught on as never before. 9. Conclusion Mobile marketing has taken off gradually over the years. It denotes a trend for companies to undertake such promotional campaigns by leveraging technology. Technology is capital intensive but at the same time, in the long term, operational expenses are cheaper. Mobile marketing is convenient, easy of utilizing, readily accesses the customers through availability of mobile sets at all times with them. Again, mobile marketing is not only done through SMS and MMS but also by means of in-game mobile marketing, mobile web marketing, mobile marketing using Bluetooth or via Infrared technology, mobile marketing via proximity based systems and location based services. Such technology driven marketing using mobiles are a common feature of promotional campaigns commonly adopted by companies spanning industries like manufacturing, trading, banking, financial concerns, service concerns, or even non-profit concerns is a commonly encountered phenomenon nowadays. The amount of expenditure incurred by the companies is also very high and this is only increasing day by day. Hence, mobile marketing appears to be deeply embedded in the marketing promotions and business strategy of modern business enterprises and seems here to stay. References Blackett, B., (2011), ‘Understanding local media marketing’, Retrieved from the World Wide Web, April 27, 2011 © 2011 EzineArticles.com; http://ezinearticles.com/?expert=Barb_Blackett Green, T., (2007), ‘MoConDi has the viral say’, Article dated Sept 18, 2007, Copyright © Intent Media 2011. Retrieved from the World Wide Web April 27, 2011; http://www.mobile-ent.biz/news/read/mocondi-has-the-viral-say Kellogg, J., (2007), ‘Successful Sales for Meeting Suppliers: Bluetooth Proximity Marketing’, Column: Supply Side, The Meeting Professional, Vol. 27, No.9, Sept 2007. Mobile Marketing Association, (2009), ‘MMA Updates Definition of Mobile Marketing; Definition updated on Nov 17, 2009; Retrieved from the World wide Web April 27, 2011; http://mmaglobal.com/news/mma-updates-definition-mobile-marketing Sabharwal, G., (2008), The Global Mobile Market, Tanla Mobile Marketing and Advertising Guide, Copyright @2008 tanlamobile.com Wray, R., (2006), ‘Advertisers look to mobile phones as users seek free TV’, The Guardian, London, Sept 7, 2006, Retrieved from the World Wide Web April, 27. 2011, guardian.co.uk © Guardian News and Media Limited 2011; http://www.guardian.co.uk/media/2006/sep/07/business.newmedia Read More