Consumer Behavior and Marketing Strategy for Mcommerce

A
Comprehensive Project

On

Effects of Mobile on Consumer Buying Behavior and Marketing Strategies

In partial fulfillment of the requirement of two years full time
Masters of Business Administration (MBA) Programme (2011-2013)
Of Kalol Institute of Management, Kalol

UNDER GUIDANCE OF: PREPARED BY: Ms.______________________ Darshak Modi (KIM-150) Professor Keyur Valand(KIM-) Table of Contents History 3 Products and services available 5 Mobile Money Transfer 5 Mobile ATM 5 Mobile ticketing 6 Mobile vouchers, coupons and loyalty cards 6 Content purchase and delivery 6 Location-based services 6 Information services 7 Mobile banking 7 Mobile StoreFront 7 Mobile brokerage 7 Auctions 7 Mobile Browsing 8 Mobile Purchase 8 Mobile marketing and advertising 8 Influence on youth markets 9

History
The Global Mobile Commerce Forum, which came to include over 100 organizations, had its fully minuted launch in London on 10 November 1997 . It was founded by Logica and Cellnet . The meeting was opened by Dr Mike Short, former chairman of the GSM Association , with forecasts from Kevin Duffey (Group Telecoms Director of Logica) and Tom Alexander (later CEO of Virgin Mobile and then of Orange) . Kevin Duffey was elected elected as the Executive Chairman at the first meeting in November 1997. Over 100 companies joined the Forum within a year, many forming mobile commerce teams of their own, e.g. Mastercard and Motorola .
Mobile commerce was born in 1997 when the first two mobile-phone enabled Coca Cola vending machines were installed in the Helsinki area in Finland. The machines accepted payment via SMStext messages. The first mobile phone-based banking service was launched in 1997 by Merita Bank of Finland, also using SMS.
In 1998, the first sales of digital content as downloads to mobile phones were made possible when the first commercial downloadable ringtones were launched in Finland by Radiolinja (now part ofElisa Oyj).
Two major national commercial platforms for mobile commerce were launched in 1999: Smart Money (http://smart.com.ph/money/ ) in the Philippines, and NTT DoCoMo's i-Mode Internet service in Japan. i-Mode offered a revolutionary revenue-sharing plan where NTT DoCoMo kept 9 percent of the fee users paid for content, and returned 91 percent to the content owner.
Mobile-commerce-related services spread rapidly in early 2000. Norway launched mobile parking payments. Austria offered train ticketing via mobile device. Japan offered mobile purchases of airline tickets.
In April 2002, building on the work of the Global Mobile Commerce Forum (GMCF), the European Telecommunications Standards Institute (ETSI) appointed Joachim Hoffmann of Motorola to develop official standards for mobile commerce. In appointing Mr Hoffman, ETSI quoted industry analysts as predicting "that m-commerce is poised for such an exponential growth over the next few years that could reach US$200 billion by 2004 ".
The first book to cover mobile commerce was Tomi Ahonen's M-profits in 2002.
The first university short course to discuss mobile commerce was held at the University of Oxford in 2003, with Tomi Ahonen and Steve Jones lecturing. As of 2008, UCL Computer Science andPeter J. Bentley demonstrated the potential for medical applications on mobile devices.[2]
PDAs and cellular phones have become so popular that many businesses[specify] are beginning to use mobile commerce as a more efficient way to communicate with their customers.
In order to exploit the potential mobile commerce market, mobile phone manufacturers such as Nokia, Ericsson, Motorola, and Qualcomm are working with carriers such as AT&T Wireless and Sprint to develop WAP-enabled smartphones. Smartphones offer fax, e-mail, and phone capabilities.
"Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Burchett.[who?] Perennial early adopters, such as the youth market, which are the least price sensitive, as well as more open to premium mobile content and applications, must also be a key target for device vendors.
Since the launch of the iPhone, mobile commerce has moved away from SMS systems and into actual applications. SMS has significant security vulnerabilities and congestion problems, even though it is widely available and accessible. In addition, improvements in the capabilities of modern mobile devices make it prudent to place more of the resource burden on the mobile device.
More recently, brick and mortar business owners, and big-box retailers in particular, have made an effort to take advantage of mobile commerce by utilizing a number of mobile capabilities such aslocation based services, barcode scanning, and push notifications to improve the customer experience of shopping in physical stores. By creating what is referred to as a 'bricks & clicks' environment, physical retailers can allow customers to access the common benefits of shopping online (such as product reviews, information, and coupons) while still shopping in the physical store. This is seen as a bridge between the gap created by e-commerce and in-store shopping, and is being utilized by physical retailers as a way to compete with the lower prices typically seen through online retailers.
The Google Wallet Mobile App launched in September 2011 and the m-Commerce joint venture formed in June 2011 between Vodafone, O2, Orange and T-Mobile are recent developments of note. Reflecting the importance of m-Commerce, in April 2012 the Competition Commissioner of the European Commission ordered an in-depth investigation of the m-Commerce joint venture between Vodafone, O2, Orange and T-Mobile.

Products and services available

Mobile Money Transfer
In Kenya money transfer is mainly done through the use of mobile phones. This was an initiative of Safaricom, a multimillion shillings company in Kenya. Mobile money transfer services in Kenya are now provided by Safaricom (M-PESA) an Airtel (ZAP). M-PESA being the oldest has genericised and is now generally used to refer to mobile money transfer services even by other companies other than Safaricom
Mobile ATM
With the introduction of mobile money services for the unbanked, operators are now looking for efficient ways to roll out and manage distribution networks that can support cash-in and cash-out. Unlike traditional ATM, sicap Mobile ATM have been specially engineered to connect to mobile money platforms and provide bank grade ATM quality. In Hungary, Vodafone allows cash or bank card payments of monthly phone bills.[3] The Hungarian market is one where direct debits are not standard practice, so the facility eases the burden of queuing for the postpaid half of Vodafone’s subscriber base in Hungary.
Mobile ticketing
Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use their tickets immediately, by presenting their
Mobile vouchers, coupons and loyalty cards
Mobile ticketing technology can also be used for the distribution of vouchers, coupons, and loyalty cards. These items are represented by a virtual token that is sent to the mobile phone. A customer presenting a mobile phone with one of these tokens at the point of sale receives the same benefits as if they had the traditional token. Stores may send coupons to customers usinglocation-based services to determine when the customer is nearby.
Content purchase and delivery
Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones, wallpapers, and games for mobile phones. The convergence of mobile phones, portable audio players, and video players into a single device is increasing the purchase and delivery of full-length music tracks and video. The download speeds available with 4G networks make it possible to buy a movie on a mobile device in a couple of seconds.
Location-based services
The location of the mobile phone user is an important piece of information used during mobile commerce or m-commerce transactions. Knowing the location of the user allows for location-based services such as: * Local discount offers * Local weather * Tracking and monitoring of people

Information services
A wide variety of information services can be delivered to mobile phone users in much the same way as it is delivered to PCs. These services include: * News * Stock quotes * Sports scores * Financial records * Traffic reporting
Customized traffic information, based on a user's actual travel patterns, can be sent to a mobile device. This customized data is more useful than a generic traffic-report broadcast, but was impractical before the invention of modern mobile devices due to the bandwidth requirements.
Mobile banking
Banks and other financial institutions use mobile commerce to allow their customers to access account information and make transactions, such as purchasing stocks, remitting money. This service is often referred to as Mobile Banking, or M-Banking.
Mobile StoreFront
The reinvention of the mobile phone as a touch sensitive handheld computer has for the first time made mobile commerce practically feasible. 'According to ABI Research, mobile is going to get a lot bigger in the ecommerce market. The research firm is predicting that in 2015, $119bn worth of goods and services will be purchased via a mobile phone.'
Mobile brokerage
Stock market services offered via mobile devices have also become more popular and are known as Mobile Brokerage. They allow the subscriber to react to market developments in a timely fashion and irrespective of their physical location.
Auctions
Over the past three years mobile reverse auction solutions have grown in popularity. Unlike traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone each time they place a bid. Many mobile SMS commerce solutions rely on a one-time purchase or one-time subscription; however, reverse auctions offer a high return for the mobile vendor as they require the consumer to make multiple transactions over a long period of time.
Mobile Browsing
Using a mobile browser—a World Wide Web browser on a mobile device—customers can shop online without having to be at their personal computer.
Mobile Purchase
Catalog merchants can accept orders from customers electronically, via the customer's mobile device. In some cases, the merchant may even deliver the catalog electronically, rather than mailing a paper catalog to the customer. Some merchants provide mobile websites that are customized for the smaller screen and limited user interface of a mobile device.
Mobile marketing and advertising
In the context of mobile commerce, mobile marketing refers to marketing sent to mobile devices. Companies have reported that they see better response from mobile marketing campaigns than from traditional campaigns. Mobile campaigns must be based on the global Content Generationor what is called Generation C and four other 'C's: Creativity, Casual Collapse, Control, and Celebrity. A brief introduction... Creativity: let's face it, we're all creatives, if not artists! (Notice we didn't mean talented artists ;-). And as creativity normally leads to content, the link with GENERATION C is obvious. Which then brings us to Casual Collapse: the ongoing demise of many beliefs, rituals, formal requirements and laws modern societies have held dear, which continue to 'collapse' without causing the apocalyptic aftermath often predicted by conservative minds. From women's rights to gay marriage to not wearing a tie to work if you don't feel like it
Research demonstrates that consumers of mobile and wireline markets represent two distinct groups who are driven by different values and behaviors, and who exhibit dissimilar psychographic and demographic profiles.[5] As a result, successful mobile commerce requires the development of marketing campaigns targeted to this particular market segment.
Influence on youth markets
Mobile media is a rapidly changing field. New technologies, such as WiMax, act to accelerate innovation in mobile commerce. Early pioneers in mobile advertising include Vodafone, Orange, and SK Telecom.
Mobile devices are heavily used in South Korea to conduct mobile commerce. Mobile companies in South Korea believed that mobile technology would become synonymous with youth life style, based on their experience with previous generations of South Koreans. "Profitability for device vendors and carriers hinges on high-end mobile devices and the accompanying killer applications," said Gibran Burchett.
Memetic research
Leveious Rolando, John Sokol and Gibran Burchett are memetic researchers who pioneered mobile advertising with their early experimentation of DVB-H in 1999 with Sony BMG recording artist Wu-Tang Clan.
On a 2007 trip to South Korea, Rolando created a Venn-diagram model of rapidly evolving youth lifestyle trends. The diagram explained vital aspects of mobile adoption and sales of mobile global products and services. Rolando and his colleagues performed an experiment in which viral marketing, in the form of mobile commercials (or "mobisodes"), was used to attract and retain an audience. The two tested a theory of rapid memetic dissemination. They observed the youth cultural styles and trends, combined with the rate at which the test subjects passed on particular information to others. One group of subjects were given words and phrases to be used regularly in conversation. The control group was not given such a list This experiment measured the rate at which ideas and phrases were typically transmitted.
Rolando conducted other experiments in Europe, South Korea, and Japan involving viral mobile direct-marketing campaigns delivering products and coupons with instant savings to mobile devices. These studies were commissioned by top mobile providers like Deutsche Telekom (operator of T-Mobile) and Orange. The experiments used disc jockeys and mobile youth street teams to drive instant purchases of event-ticket sales, and the sales of three different viable youth products to over 200,000 end-users in eight days. This demonstrated how the global youth mobile market can react autonomously and create trends. It also showed how products take on new life because of the mindset of the young, who tend to be early adopters of any form of social technology services.
These researchers, along with others, developed methods deployed globally through concerts and events involving any form of youth culture in 2008, in partnership with leading mobile software and network providers. Leveious and others members of Trendwatching.com defined Content Generation a description of those born of the digital age of content and how their brains were re wired to think in real time content exchange. The Term is now globally The GENERATION C phenomenon captures the an avalanche of consumer generated 'content' that is building on the Web, adding tera-peta bytes of new text, images, audio and video on an ongoing basis. The two main drivers fuelling this trend? (1) The creative urges each consumer undeniably possesses. We're all artists, but until now we neither had the guts nor the means to go all out. (2) The manufacturers of content-creating tools, who relentlessly push us to unleash that creativity, using—of course—their ever cheaper, ever more powerful gadgets and gizmos. Instead of asking consumers to watch, to listen, to play, to passively consume, the race is on to get them to create, to produce, and to participate.

Mobile shopping is undoubtedly on the rise, and today comScore isreleasing new data reinforcing this continuing trend. According to the data research and analysis firm, 38 percent of smartphone owners have used their phone to make a purchase at least once in the course of their device ownership.
The most popular products purchased on smartphones during the month of September included digital goods, clothing/accessories, tickets and daily deals. In September, two-thirds of all smartphone owners performed some sort of shopping activity on their phones, including comparing products and prices, searching for coupons, taking product pictures or locating a retail store.
In September, digital content purchases, such as music, eBooks, TV episodes and movies, were the most popular mobile purchases with 47 percent the share; 37 percent purchased clothing or accessories directly from retailer, and 35 percent of purchasers bought event tickets. Slightly more than one in three mobile purchasers bought daily deals and gift certificates on their device in September.
In terms of where shoppers were when they purchase items via their phone, 56 percent did so while at home, whereas 42 percent of consumers made purchases while out of home or at work. And 37 percent of the shopper who made remote purchases did so while traveling or commuting. Slightly more than one in three purchasers used their smartphone to make a purchase while in a store.
The fact that over 30 percent of purchasers used their smartphone to buy a product while in a store is interesting, considering that many are probably using their phones as a tool for real-time price and product comparisons. This holiday shopping season is expected to be the year of mobile, so we’ll see if consumers use their phones for retail purchases in record amounts.