Mobile Marketing: Marketing through Cell Phones - Term Paper Example

Mobile Marketing: Marketing Through Cell Phones Introduction Mobile marketing is a new marketing tool which helps companies to attract large target audiences of consumers. Marketing through cell phones raises different questions and concerns related to its effectiveness and costs, ethical and privacy issues, response rates, etc. Critics (King 229, Chung and Sherman 43) admit that modern consumers do not necessarily desire governmental regulation of business and marketing activity; however, increased intervention will result from unresponsive business policy. King (2008) describes the possibility of increased governmental involvement in the market system as a result of business' delayed response to consumerism. Unfortunately, the time came but business was slow to respond. Consumer needs and wants have been evolving toward safety, health, and self-actualization concerns without many businessmen noticing this. More and more people are concerned with the nutritiousness of their foods, the flammability of their fabrics, the safety of their automobiles, and the pollution quality of their detergents. The Nature of Mobile Marketing Following King (2008): "M-advertising is a form of mobile commerce (also referred to as m-commerce or mobile e-commerce). In m-commerce, wireless devices such as mobile phones, wireless-enabled handheld computers, vehicle-mounted technologies, and personal message paging devices are used to connect to mobile services. M-commerce applications include m-advertising that is directed at or accessed on consumers' mobile phones, such as advertising sent in text messages to consumers" (229). The logical approach to establishing M-marketing appropriations is to determine the marketing tasks required of advertising, and estimate the resources needed to fulfill them. This task-objective method suggests that business start with an attempt to develop an ideal model, recognizing that the ideal cannot be achieved, that relevant factors must be assessed against imperfect information, and that adequate resources may not be available. In conceptualizing advertising-sales-profit relationships, management may use a general model such as the following, which relates responses over time (Barnes, 339). This model focuses attention on the maximum profit level on straight-line increases in advertising outlays, on the decline in profits as advertising expenditures continue beyond a certain level, on the saturation limit of the market, on the sales level without any advertising, and on the level of sales and advertising at which profits occur. Mobile marketing results must be measured in communication terms, not just in sales terms. Determining the effectiveness of advertising requires the measurement of overall advertising impact-the matching of inputs with outputs, which conceptually is very simple. Practically, however, this is quite difficult, since advertising is only one element of the marketing mix in affecting demand. Yet some success has been achieved in measuring the responsiveness of sales and profits to advertising (Shimp 332). Mobile marketing results must be measured in communication terms, not just in sales terms. Determining the effectiveness of Mobile marketing requires the measurement of overall advertising impact-the matching of inputs with outputs, which conceptually is very simple. Practically, however, this is quite difficult, since advertising is only one element of the marketing mix in affecting demand. Yet some success has been achieved in measuring the responsiveness of sales and profits to advertising. Advertising effectiveness itself is a multidimensional concept. It includes the effectiveness of advertising as contrasted with that of other factors in the marketing mix, with the effectiveness of different campaigns, with the effectiveness of various media, and with the effectiveness of different messages, which in turn is based on assessment of appeals, themes, copy, layout, headlines, size, frequency, and timing (Barnes, 339). All researchers agree that effective market communication (including Mobile marketing) requires an integrated promotional system that reaches from primary producer to ultimate consumer. Formal channels, however, do not account for all marketing communications. Publicity, which is an integral part of many promotional campaigns and sometimes precedes the advertising and sales effort, lies outside them. Although it can be important in gaining market acceptance for products and companies, publicity, like word of mouth, is often a relatively low-grade communications channel with a high degree of interference, distortion, and noise. Marketing communications serve four basic management purposes. First, they bridge information gaps existing among manufacturers, middlemen, and customers. Second, they help coordinate the promotional activities of the total marketing system to achieve a coordinated thrust. Third, they help adjust the system to customer and consumer requirements. Fourth, they adjust and help in adjusting the product to customer needs (Shimp 338). Opportunities of Mobile Marketing The task of mobile marketing is to get people or markets to progress from a state of unawareness, or even negative reaction, to one of positive action. The stages in this progression are unawareness, awareness, comprehension, conviction, and action. Opposing the marketing communications in this endeavor are such countervailing forces as competitors' communications, predispositions, noise, brand loyalty, and habit. Mobile messages are meeting increasing competition from a plethora of other ads, from other media, from competitors, and from all the activities that vie for a person's attention. As output swells and communications facilities increase, more claims will be made on consumer time and the cost of marketing communications will skyrocket. Moreover, a saturation plateau may be reached where larger expenditures yield proportionately smaller returns. Another logical approach is to determine the communications functions that must be performed, such as making contact, creating interest, and closing the sale. Then either a predetermined total promotional budget can be allocated among each of these phases, based on executive judgment, or the expenditures on advertising and personal selling necessary to perform them may be estimated. Buyers and consumers need not be the same people. In transactions involving industrial goods, they usually are not. It's important to note that e-commerce achieved 25 percent market penetration in about two years. Firms that defer first or early mover advantage in effect give early adopters, typically the most attractive customers, up to the competition. One market-leading financial services firm has stated that the early adopters have balances 10 times higher and trading volumes five times higher than average customers (Mobile E-Commerce 4). However, by studying consumers as buyers (as individuals and members of groups) and by investigating the forces influencing their purchasing and consumption actions, we can achieve a good base for comprehending both. Actual and potential consumers are the basic component of markets and the hub of marketing action. That the consumer is king or that the consumer guides businesses is a tenet of a market system (Barwise and Strong 22). Mobile marketing endeavors to fuse consumer wants and needs with the operations of a business organization, which to survive and grow in a keenly competitive, everchanging environment, concerns itself with the mechanisms of corporate adjustment. Assuming that the consumer, in essence, is the reason for corporate existence, marketing indicates a corporation's other-directedness rather than inner-directedness. In a free-enterprise economy, consumers are relatively free to purchase what they please, limited, of course, by income, socio-economic status, legal business forces, and geographic setting. Manufacturers, wholesalers, and retailers thus find that ultimately they are governed by consumer reactions in the marketplace. In a sense, consumers "dictate" to the marketing system the goods and services they want, the prices they are willing to pay and how, where, and when they desire to purchase. Over time, profits are tied inextricably to the satisfaction of consumer wants (Barwise and Strong 22). Mobile Marketing and Traditional Marketing Mobile marketing becomes a part of traditional marketing and part of everyday life. Consumers provide the economic rationale for business and marketing activity. The products and services offered for sale, the manner in which they are offered, the distribution channels employed, the methods of advertising and personal selling, and every other factor of marketing are all molded by consumer preferences, opinions, habits, beliefs, wants, needs, and desires. In this way, the total business system attempts to meet the desires of consumers. It is essential, therefore, that we analyze the antecedents of consumer behavior, the behavior itself, and the consequences of consumer reactions. From the corporate point of view, however, the total purpose of a marketing program is to capitalize on existing and potential resources and translate them into profitable marketing ventures. To do so, business attempts to shape, change, and modify consumer behavior in order to bring it into line with corporate objectives and thereby gain competitive. Changes in life styles and market environment have had a direct impact on goods and services produced, expenditures, and the consumption process. For example, the effect of increased leisure time, suburban living, shopping centers, automatic vending machines, automobiles, television, and widespread geographic shifts on consumer wants and needs is pronounced. Mobile marketing represents a separate segment of marketing aimed to meet diverse customers' needs and demands. Competition and pressures to reduce costs are also stimuli. But the development and location of a distribution center itself is a "semipermanent" commitment. Demand characteristics are directly related to physical-distribution systems (Barwise and Strong 22). Weaknesses of Mobile Marketing Many manufacturers have missed this changing psychological orientation of consumers. The market system, according to the theory, is one in which the free interplay of consumer choices will result, over time, in the best product or service winning out in the competitive struggle for the consumer's favor. In this battle, the producer who best meets the needs of the consumer will be rewarded with success, and the producer of inferior goods will lose out. The consumer casts his ballot in the form of his purchases, and the seller woos his vote by improving his products or services by attractive packaging, by offering more value for money. Following King (2008): "Mobile advertising raises several significant consumer privacy concerns First, m-advertising raises privacy concerns associated with mobile phones and other portable wireless communications devices because it often involves the collection, use, or disclosure of consumers' personal data" (229). The other weakness of the mobile marketing is that it is unable to meet unique customers needs and wants. Taste pervades every social and income stratum, and affects the type and quality of goods that will be purchased. Consumers express their personalities and their taste through the symbols with which they are associated, such as houses, furniture, furnishings, clothing, and automobiles. Since consumers are often other-directed, they are concerned with what other group members think of them and their taste. Taste is not an acquired or inherited phenomenon. It is learned. Therefore, opportunity exists for designers, manufacturers, and marketers to upgrade tastes. Learning implies repetition over time. What may be rejected in product design or color today may be viewed approvingly after a second, third, or fourth exposure. In tastes and in taste-making, the marketer is concerned with the question of how consumers learn to like things, and what influence familiarity has on the degree of liking. (Mobile E-Commerce 4). Promotion Effect of Mobile Marketing Consumers seem to be well aware of the necessity of improving tastes and satisfying aesthetic and psychological needs. Perhaps a taste hierarchy exists complementing. Once these functional standards and values are identified and incorporated into products, the symbolic, aesthetic, and cultural dimensions, which are more related to product visibility and symbolism, become important. They are reflected in consumer purchases of good books, records, paintings, flowers, the application of better color sense, good style and design in the home, and a general upgrading of quality. These seem to indicate a "better life" and appreciation for aesthetics. Consumers are flexible, adaptive, and sensitive to change. They are mobiles in geographic and social terms and are optimistic about future income. Psychologically American consumers are geared to expect change. They anticipate and expect changes in automobiles, homes, refrigerators, and clothing very readily. They do not purchase items to last a lifetime, and products with long-lasting functional features do not necessarily represent either the best value or taste. Consumers are willing to discard products to satisfy psychological and sociological needs before the item has been totally consumed. Consumers want items that are currently attractive, but styled and designed to go out of fashion while functional utility is still embodied in the product. Appearance is thus important, and even the most utilitarian items have been redesigned to meet changing tastes. One need only consider the newer designs of industrial and farm products, or of such receptacles as mail boxes and garbage containers as examples (Chung and Sherman 43). Social position depends on how income is derived, education, family lineage, and type of house and dwelling area -- not on money alone. The orientation and life-style outlook of each of the classes differs from members of other strata. Societies engender conformity and shape social character in different ways. Some are tradition directed and others are inner directed, but ours is largely other directed. People pay close attention to the signals received from others -- friends and mass media. Our society also has the permanent traits of innovation, change, mobility, and movement. As a result, the tendency to conformity and massification is tempered by dynamism and change. Marketing analysts should be well aware of the significance of sociological factors; they have been described as socio-graphics. Predictions of them give indications of the dimensions of future markets. As purchasing and consumption systems, households are to some extent similar to small-business organizations. They use budgets, gather and organize information, plan purchases, specialize purchase activity, evaluate benefits received, and make purchases to solve problems. The housewife or individual who performs the buying function becomes specialized and is usually most skillful in this activity. As organized behavior systems, consuming household units have a dual aspect. They are directly concerned with buying activities and decisions, including shopping. They are also concerned with the satisfaction attained by using and consuming the goods and services purchased. To understand consumer behavior, information and theories relevant to both purchasing and consumption activity must be developed. Emergent consumer behavior should be considered in this context, with the household a reference point from which children form tastes and preferences, obtain early experience as buyers, and develop habits that remain. Such early experiences carry over into adult preferences and market reactions. In one sense, ours is an age of mass conformity. Consumers throughout our vast and varied country purchase similar products from similar companies and retail stores in the same manner. They read similar magazines and watch the same television programs. They live in similar types of houses located in similar urban and suburban communities. Their life styles from coast to coast and border to border are much the same. Containing the individual differences of people and their psychological, social, and economic situations, intervenes between the sender and the receiver of marketing information. The impact of a message on consumer behavior, which is governed by intervening variables, determines its marketing effectiveness. Since companies cannot control the personality of recipients, the environment in which messages are relayed, the environments surrounding responses, the group norms, and the relationships of individuals to groups, they have difficulty in assuring effective communications (Chung and Sherman 43). The fulcrum of mobile marketing activity is a unique institution resulting from the willingness of businessmen to establish and observe rules of conduct to facilitate orderly change. Markets are democratic institutions and commonwealths of exchange, providing efficient systems of economic organization. Markets extend beyond economic boundaries of the spectrum from pure competition to monopoly. They are social institutions, the arena within which competition occurs. Psychological, sociological, and cultural dimensions of buyer-seller relationships are significant aspects. Markets are comprised of more than the raw collision of harsh and unbridled economic interests (Chung and Sherman 43). They are nevertheless subjected to numerous contradictory pressures on the part of competing interests. Definitions of marketing vary with their purpose. From a macro perspective, marketing includes all those business activities involved in getting goods from the point of production to the point of consumption. Marketing is thereby justified on the basis of inherent activities that must be performed. As a philosophy of business operation, marketing becomes an orientation for the total business, a way of business life. Customers and consumers are perceived as the reason for business existence and their wants and needs become the bases for designing total systems of action. A narrower conception, which is an extension of the business orientation, is concerned with the basic management activities -- the entrepreneurial functions-that must be performed to manage micro-marketing systems. "Mobile advertising is an important component of this new business environment that is expected to fuel the growth of m-commerce" (King 229). Through marketing, the critical role of consumption is recognized and cultures become reoriented from Producers' to consumers' cultures. This reorientation involves shifts in philosophies and values. Moreover, in abundance, the major determinant of consumption shifts from money to time. Marketing is a phenomenon related to mass systems. Mass production, which is the means of increasing living standards around the world, requires mass distribution. Mass markets do not exist automatically but must be created through marketing (Shimp 339). The basic location decision is, of course, to find the location that maximizes profits for the company. In principle, decisions are made on the basis of expected profits in relation to investments -- a marginal approach to alternative locations. In practice, decisions are generally made on a less-than-optimal basis. Conclusion In spite of limitations and weaknesses of mobile marketing, it is still effective for many retail organizations. It helps to promote a brand and reach diverse target audience of consumers. The fundamental forces that shape mobile marketing in a broad perspective may be grouped into three categories: basic forces, technological systems, and our life-style factors. Basic forces are those that shape the basic values and restrictions governing our marketing system. They include political, religious, economic, military, legal, natural, and physical-resource constraints. Life-style factors such as social class, family forces, social groups, mores, life cycle, leisure, and convenience reflect the climate of the times for consumers, shape their wants, needs, and desires and hence, greatly affect marketing. There is a direct interaction among the basic forces, technological institutions, and life-style factors. These facts suggest that the main task of mobile marketing is to deliver the highest possible standard of promotion and so benefit both consumers and business. Works Cited Barnes, S.J. "Wireless digital advertising: nature and implications", International Journal of Advertising, 21 (2002), 399-420. Barwise, P., Strong, C. "Permission-based mobile advertising", Journal of Interactive Marketing, 16 (2002), 14-24. Chung, S., Sherman, M. Emerging Marketing: Companies Don't Need State-of-the-Art Tools, Huge Volumes of Customer Information, and Armies of Experts to Use Continuous-Relationship Marketing Effectively. The McKinsey Quarterly, (2002), 43. King, N. J., Direct Marketing, Mobile Phones, and Consumer Privacy: Ensuring Adequate Disclosure and Consent Mechanisms for Emerging Mobile Advertising Practices, Federal Communications Law Journal, 60 (2008), 229. Mobile E-Commerce It's on the Move. ABA Banking Journal, 34 (2002), 4. Shimp, T. A. Advertising Promotion and Supplemental Aspects of Integrated Marketing Communications. Dryden Press 2002. Read More