Anda di halaman 1dari 24

MKTG 6900 INDIVIDUAL STUDY - Sarah Scarbrough-Wilner

Mobile Marketing
Using Location-based Marketing Strategies to Inuence Purchase Decisions
Ebube Anizor (209347741) 12/18/2009

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

The mobile phone has long been lauded as the marketing channel of the future. With the number mobile phones in use globally exceeding 3 billion - far surpassing the number of televisions and computers in use - it is quite understandable why marketers are excited (McCarthy, 2008). In its earlier forms mobile marketing consisted primarily of text based messaging or interaction; however with the groundbreaking 2007 launch of the Apple iPhone and the bevy of well equipped Smartphones that have followed, richer forms of marketing communications are now possible. The maturing of mobile devices has been integral in making mobile internet use commonplace (McCarthy, 2008) and consequently the ability for marketers to reach consumers has signicantly improved. For marketers a much needed perfect storm involving ubiquitous internet access, fully-featured phones, and the increasing centrality / dependence of mobile devices in daily lives has occurred in the mobile space at a time where audiences are fragmented and eeing from traditional mediums. The broad advantages of the mobile marketing channel for marketers when compared to traditional channels like print, television and radio lies in its: Consumer accessibility: the phone is always available (Ye, 2007) Channel availability: the lines of communication, literally, are always available (Ye, 2007). Relevance: because of location-features consumers can be tied to a context Specicity: data mining allows messages to be targeted to specic consumers; further increasing relevance Interactivity: communication between a marketer and consumer can be dynamic and in real time

The bottom-line challenge for marketers is how to effectively utilize mobile marketing to increase the likelihood of consumer purchase. This report discusses broad considerations in mobile marketing but specically examines key variables in effective location-based marketing (LBM), outlining issues of note for managers interested in succeeding in the increasingly important mobile marketplace.

Mobile Marketing: Denition


For purposes of clarity, mobile marketing as used in this paper is dened as: the legitimate marketing activities (e.g. product, promotion, and price) that involve the use of wireless devices and networks (Ye, 2007). It excludes direct voice promotions but includes prominent means such as text message (single or bi-directional), pop up and display ads

2 | Page

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

(see Shopper IQ in Appendix C), and functionality/utility provided by marketers and delivered via mobile applications (see Kraft in Appendix B).

3 | Page

Location-based Marketing

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Reaching a consumer at the point, place and time of purchase can be an effective means of inuencing buying decisions. Retailers have understood this for decades and have used several methods including product displays, in-store yers, shelf displays, and pricing labels to inuence purchase decisions. Grocery industry research indicates that 60% to 70% of grocery purchases are impulsive (Underhill, 2000) prompting grocers to invest much attention in in-store aspects of the consumers shopping experience. Bell, Corsten, and Knox (2008) hold an opposing school of thought; they challenge the above assertion claiming that unplanned purchases are closer to 20%. Their research indicates that the tendency to make unplanned purchases is inuenced by many factors including demographics and long term shopping behaviour. The ndings most salient to the topic at hand are summarized here 1: Unplanned purchasing goes up by 44% if the shopper goes to the store by car instead of on foot Young, unmarried adult households with higher incomes do 45% more unplanned buying Unplanned purchasing goes up by 23% if the shopping trip itself is unplanned, but it goes down by 13% if it's a major or weekly trip Households led by an older person and those that have larger families do 31% to 65% less spontaneous purchasing

The Grocery Manufacturers Association (GMA) (2009) reports that the 77% of shoppers enter stores without detailed shopping lists. Rather, most shoppers have only rough or mental lists that are malleable and indicative of brand consideration setsthey evolve as shoppers experience additional stimuli at home, on the go, and in the store. Taken in aggregate these ndings establish the vast opportunity that LBM presents to marketers in inuencing consumer decisions. They also illustrate the need to target and contextualize these marketing communications to a consumer base that is more likely to respond to in-store marketing positively. Given the realities of consumer behaviour it is simple to understand why marketers, specically brick-and-mortar retailers, are intrigued by the location data that the mobile platform uniquely provides. LBM offers the valuable attribute of context (task congruence) to marketing communications. Unlike the early e-Commerce days where the Internet was deemed to have overall negative effects on local retailers, LBM makes the most sense for

1 Not on the List? The Truth about Impulse Purchases. Knowledge@Wharton

4 | Page

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

brick-and-mortar businesses because consumers are likely to frequently visit or pass by these establishments in their daily activities (Bruner II & Kumar, 2007). The value of the mobile medium is further strengthed by the possiblilty of satisying the growing appetite consumers have for product information as they travel the path to purchase and look for guidance in making the nal purchase decision. Juxtaposing the views on the impulsive nature of purchasing as stated earlier and the particular characteristics of the mobile medium, Bell indicates that one thing is very clear: "the amount of unplanned buying that takes place is more about person-to-person variance than about the store environment itself." This is where mobile marketing offers a unique value proposition. Because this report focuses on the effectiveness of location-based marketing knowing whether a shopping trip is planned or unplanned is integral to the strategies and therefore effectiveness of in-store versus pre-store advertising in the general case and mobile marketing in the specic. While the report primarily presents guidelines that are more effective where purchases are unplanned it also offers strategies to inuence product purchase in the case where planning or brand loyalty exists. It is within the context of mobile marketing as earlier dened, consumer behaviour considerations and best practices of marketing in the mobile space that this paper both examines the opportunities in LBM and offers recommendations.

Purchase Drivers
Because purchase drivers can exhibit wide variation across industry segments, for purposes of pragmatism this report is framed in the North American Consumer Packaged Goods (CPG) context. In the CPG segment there are several purchase drivers that are of signicance to shoppers (across both planned and unplanned purchases) according to the most recent data from the GMA (2009). Listed in order of importance they are (see Appendix A):

Brand loyalty / preference Price Recommendations from friends and family Advertising (in-and-out of store) Available product information / media content

5 | Page

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

The primary focus for this report will be brand loyalty, price, friends and family, and available information. Advertising as noted is a signicant driver and will be incorporated into the analysis of the other drivers under discussion.

Consumer Packaged Goods


For product purchases that are considered low involvement the consumer is in auto-pilot mode and makes purchases simply based on habit, familiarity, or the promise of gratication - albeit eeting. High involvement purchases tend towards higher priced purchases or those decisions with longer term consequences2 . Consumable products by denition require more frequent replacing or replenishing where durable products are purchased less frequently. Due to the infrequency of purchase, consumer behaviour for durable products can be considered high involvement, whereas consumables are likely to fall into the low involvement category. LBM strategies can be effective in situations where consumers need information to make a decision for a higher priced item. This goes beyond simply offering a discount; but deeper product information to help drive favourable purchase decisions. For items that consumer purchase in auto-pilot, well-timed LBM can encourage a pause in the decision making process, potentially breaking the consumers pattern of purchase and thereby giving different products an opportunity for consideration. 3 CPG manufacturers have not yet aligned marketing initiatives along the purchase path - at home, on the go, and in the store leading to disconnected marketing messages, wasted spending and missed opportunities (GMA, Booz, She Speaks, 2009). Mobile marketing and LBM strategies can address marketing challenges to consumers on the go and in store.

Brand Loyalty
Long-standing brand preferences are built up over time through product experience and a cumulative effect of the other factors that drive purchases including media content, advertising, and recommendations from friends and family (GMA, Booz, She Speaks, 2009). Purchases that tend to be lower in involvement present marketers with the more difficult challenge of gaining the consumers attention. Discount offers top the oft-deployed strategies that marketers use to gain trial in hopes of inducing the switch. The most commonly deployed LBM tactic is presenting consumers with offers when they are within or near a particular store.

2 3

Consumer Involvement Theory: http://www.adcracker.com/involvement/index.htm Ibid

6 | Page

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Here LBM strategies could end up being unwelcomed because brand preferences are strong and attempt to sway purchase decisions could therefore be viewed negatively and reduce the effectiveness of future marketing communications.

Price
Prior to the recent recession the drive towards value was strong (Times and Trends, 2008). Naturally the pressure on prices has only been intensied during the recession. Price could be viewed broadly and account for the total cost of ownership; especially for high involvement durable purchases. For our purposes however price simply refers to the net price of a product after all discounts are applied. To date LBM has been most valued or even arguably best suited to communicate pricing discounts or incentives with the intent of reaching those consumers that tend to make unplanned purchases as they are more likely to be positively inuenced by discount offers (Bell, Corsten, & Knox, 2008).

Friends, Family and the Community


Recommendations or product experiences from trusted sources have signicant weight in product purchases (Appendix A). It is difficult to nd an application of LBM to address this driver. However if the general value that friends and family provide is trust and product experience then at least the latter can be provided from the broad user community via product reviews available on the Internet.

Information / Media Content


One notable product of the digital revolution has been the accessibility and depth of data available. Data transparency is becoming the norm as the information that consumers seek product, price, or otherwise is now instantly available. In the context of purchase decisions, consumers now consult a variety of sources before spending their money. Amongst the many are social media sites, emails, blogs, e-newsletters, product reviews, ads, articles and in-store video displays. LBM helps to address the challenge of making the right information, available to the right person, at the right time. Of course the other side of the challenge lies is mining the mounds of data a presenting the most relevant set to the user. The answer could be as simple as returning a search engine-like result set to a keyword search; but in the ideal would be more narrow and relevant (Vatanparast & Asil, 2007).

7 | Page

Examination of Key Purchase Drivers


Product

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

As mentioned earlier, different product categories or types have their own associated consumer purchasing behaviour. As such the marketing challenge is not monolithic and therefore the use of mobile LBM strategies have to be adjusted accordingly.

High Involvement / Rational


Generally speaking products in this category encompass major purchases such as appliances, homes, and cars. While not absolute, most CPG products do not tend to fall into this category. Nonetheless strategies for marketing to these types of purchasers tend to be copy driven, with clear explanations of features and benets.4 LBM can effectively ll this need. Through the use of the mobile internet, product information can be researched on the spot. A more advanced approach would be the use of a customized application that retrieves product info (description, ratings, source, etc.) via scanning of a UPC or similar product code (see Appendix C). The latter approach gives the marketer better control of the user experience and more effectively guides the consumer towards a purchase decision by helping them get better information easily (Kleijnen, de Ruyter, & Wetzels, 2006).
Lower Cost Decisions

LBM can aid shoppers who have strong information needs even if their purchases are lower cost. When consumers are buying products that they are unfamiliar with or need guidance in reaching particular goals (e.g. watching their diet, losing weight) purchases tend to be more high involvement; but not necessarily involve large dollar amounts. Here the need is for information and guidance. LBM can meet the need of the consumer by delivering the required information and the marketer by providing ad serving or product promotion opportunities. Appendix C details the application of an LBM strategy that addresses the former. The Kraft example shared below details a strategy that addresses the latter.

High Involvement / Emotional


Purchases in this category also typically exclude CPG products. Common purchases are jewellery, weddings and holidays. Strategies for inuencing this type of purchase include advertisements that feature audio, visual and emotional appeal. 5

4 5

Consumer Involvement Theory: http://www.adcracker.com/involvement/index.htm Ibid

8 | Page

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

In-store displays or food-sampling stations can appeal to a consumers senses or invoke emotional appeal. A vivid, although non-CPG, example is the home-theatre section in a typical electronics store like Best Buy. There is usually a mock home theatre with leather sofas, large-screen TV, surround sound and a sci- movie setup to invoke the consumers (i.e. mans) imagination and create a desire to re-create the experience in their own home. It works. So how can LBM strategies in the CPG marketing invoke this sort of emotional appeal? The Kraft iFood Assistant is a good example of how sound and images in a mobile context can be used to appeal to a consumers aspirations to prepare simple but satisfying meals (see Appendix B). With the application consumers can plan meals and easily build shopping lists to accomplish the end goal. The images and video provide obvious appeal allowing the consumer to see the nal product and the steps required to get there while still in the store. The iFood application obviously promotes several Kraft products and is therefore a valuable marketing vehicle; not to mention the applicaton itself costs 99 cents.6 The tool provides consumers with clear utility, a key component in generating positive perceptions of mobile marketing (Jun & Lee, 2007), generates revenue for Kraft and grows its brand equity. This example illustrates that effective LBM in the mobile space is not limited to advertising in the traditional sense or just offering coupons and other incentives but can include more engaging approaches.

LBM and High Involvement Purchases


The general assumption from consumers is that mobile service delivery will provide timerelated gains (Kleijnen, de Ruyter, & Wetzels, 2006). With this in mind quality mobile service and application design is key to the acceptance of the mobile channel; especially in the context where a product (such as iFood) is part of the marketing mix as opposed to just basic advertising and coupon offers. Simply put if the mobile service does not provide a simple and effective use experience marketers may push consumers away rather than attract them. So even in categories where consumers are willing to invest time in the purchase decision if greater cognitive effort is required, then a decrease in the use of the mobile channel will follow and the the effectiveness of the medium will diminish (Kleijnen, de Ruyter, & Wetzels, 2006).

Low Involvement / Rational


See Brand Loyalty below.

iFood Assistant. http://www.kraftfoods.com/kf/iFood.aspx

9 | Page

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Low Involvement / Emotional


Effecting purchases of this type is difficult. The gratication consumers get from these types of purchase is emotional (even sensual) and eeting. Not much time is spent thinking about these purchases (e.g. movies, candies, magazines) so the advertising tactic involves the promise of pleasure or gratication. Strong positioning, especially in a crowded category, can also be effective. 7 According to Sajdeh and Jones the days of consumers walking into a store and making a cold-decision (i.e. unaided) are ebbing. Awareness could be achieved via the radio or television, research done online, info provided via yer and then nal investigation and decision made in store. Their research references a Forrester Research report that predicts that nearly 50% of transactions will involve consumers crossing channels; representing a notable shift in the manner in which people shop. Well-established, low involvement, routine and unplanned purchases primarily take place in-store. Limited channels to purchase also restrict multichannel shopping. If packaged-goods marketers want to engage multichannel shoppers, they must create more opportunities for shopper involvement through more engaging experiences in alternative channels. (Sajdeh & Jones) As difficult as it may be LBM can help to positively inuence this type of purchase. What Sajdeh and Jones suggest is that its use should be considered as only a link in chain of a multi-channel marketing strategy that as a whole engages shoppers. Its effectiveness (i.e. getting a consumer to try or switch to a new product) is achieved over a longer period of time.

Brand Loyalty
Where loyalty is strong pricing offers often make no difference in changing consumer behaviour. Where loyalty is weak (i.e. a brand is preferred, but not absolutely) then other factors including promotion can inuence purchase decisions. The goal for advertisers in this context is to get consumers to sample or switch in an effort to break the automatic habit of spending their money with the competitor.8 The most common strategy to invoke a switch is to offer coupons and other incentives. This is explored further in Price below. Another strategy is to differentiate or re-position a product. Traditionally speaking re-positioning a product is an activity done pre-shopping
7 8

Consumer Involvement Theory: http://www.adcracker.com/involvement/index.htm Consumer Involvement Theory: http://www.adcracker.com/involvement/index.htm

10 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

experience; in the aisle efforts to attract consumers from competitive products tend to be price based or if fortunate through in-store displays. With LBM if consumers have opted to receive marketing communications or have initiated the communication by seeking specic product information marketers have an avenue to communicate the unique attributes of their product within the store. The options are numerous and could include something as simple as a product info pop-up as a consumer walks down an aisle, a notice of a limited time free sample giveaway, or an entertaining commercial. Here the challenge will be engaging the consumer and getting them to listen. Banerjee & Dholakia (2008) emphasize the need for consumers to both like and nd useful the advertisements they are sent even if they are location-relevant. Merisavo, Kajalo, and Karjaluoto (2007) present a similar conclusion indicating that usefulness is already assumed to be a part of the mobile value proposition, as a result enjoyment becomes a strong driver of mobile advertising acceptance. So obviously creative content still matters in the mobile medium and may even be the required ante to have any relevance in reaching brand loyal consumers. One advantage of having strong brand loyalty is the ability to charge higher than average prices. However the prolonged recession has not only created pricing pressures on marketers but also on consumers, causing the latter to trade down. Nonetheless consumers want to buy the brands they love, so as one aspect of an LBM strategy, coupons and promotions can be effectively used to help consumers rationalize decisions (GMA, Booz, She Speaks, 2009) to buy premium products during harder times.

Price
What comes to most marketers minds when LBM is considered is the timely offering of coupons, discounts, or other incentives to consumers while in or nearby a shop. This is likely where most of the concentration in LBM will stand, at least in the early days because its familiar and relatively straight forward to implement

Opt-In
Given the importance of price as a driver and the high likelihood that marketers will only send communications to consumers that have opted-in, it would behove marketers to distinguish between communications that are price-centred and communications that are not in their opt-in process. By doing so marketers can likely increase receptivity to mobile ads because control (Vatanparast & Asil, 2007) is given to consumers and the likelihood of receiving relevant marketing messages improved.

11 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

As important as offering price incentives is to inuencing purchase decisions, other factors that can considerably alter the effectiveness of discounts also need to be considered.

Relevance of Promotions and Incentives


Related to the price and discount offered on products is the deferred reward often associated with loyalty programs which ultimately promise future savings or free product (related or unrelated to retailer context). As Kivetz (2005) argues marketing promotions and incentives can be a double edged sword. On the one hand consumers may be enticed by the proffered benets and rewards; yet on the other hand perceive the offer as an attempt to limit their brand choice. This perceived threat arouses promotion reactance a reduced likelihood of purchase. Consumers are cogniscent of the marketers intent to inuence purchases when promotions and rewards are offered (Friestad, 1994, cited in Kivets, 2005). So given the marketers transparent motive, taking advantage of the opportuntiy in the mobile marketing space then lies in providing the appropriate incentive at the appropriate time. How could this look in practice? Again Kivets research indicates that consumers have a preference for rewards that align with their efforts. This implies that immediate discounts or future rewards should be tied to the original context (shopping in this case) but perhaps even more narrowly to the product being purchased. Take for example a mobile application that provides product data when the UPC code is scanned. If the mobile application is also used as a platform to serve ads or offers then they should be related to that product or product category as to best inuence the purchase decisions. Displaying a discount offer on batteries while a conumer is seeking product info for soup may not be effective ad placement. This speaks to congruence on a more granular level than Banerjee and Dholakia (2008) discuss (further examined below).

Timing of Promotions and Incentives


The earlier a consumer is in his/her shopping experience (whether prior to heading out on a

shopping, just entering a store, or already in-store progressing in the shopping trip) the less concrete purchase decisions are; thereby making a shopper more likely to respond to couponing or incentives because his/her goals are more malleable. Conversely shoppers can be resistant to change at later stages in the shopping experience regardless of the attractiveness of the offer (Lee & Ariely, 2006). The location-based properties of mobile phones then offers the unique ability to time and target promotions knowing that offers are more likely to be acted on if received when 12 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

entering a store versus partly through the trip or even after searching down a particular shopping aisle. Could it then be argued that sending pricing incentives long before a shopping trip is then the best practice? Well decades of coupons being redeemed from yers prove that there is certain effectiveness to that method. But given the lack of preparedness that both Underhill (2000) and the GMA (2009) posit that consumers exhibit, offering the coupon in store may produce higher sale conversions. This aligns with the notion that task congruence is essential when considering timing of messages. When consumers are shopping receiving consumption related ads (e.g. receive 10% off when you buy product X) is received more positively than if the same ad was sent during non-related tasks, such as work (Banerjee & Dholakia, 2008).

Risk of Price-Focus
While the core of LBM may in the short term focus on price incentives; history has shown that industries focussed simply on price competition end up shrinking collective margins and risk being lost in the clutter. So if marketers reduce the mobile marketing space to one of competing coupon offers they arguably end up adding little value to customers and certainly themselves in the long run. Marketers will need to think about how they can creatively leverage the mobile marketing channel (again see iFood) and differentiate themselves in this space. If marketers dont go beyond price, they risk creating consumer fatigue and simply underutilizing the potential of the medium.

Friends, Family & Community


Incorporating the recommendations of friends and family into the LBM context is difficult in a manner that can precisely identify them and apply or present there opinions. However, it is clear that one signicant outcome for consumers and companies in the current Web 2.0 culture has been the growing value of product ratings, reviews and comments from strangers in inuencing the purchase decisions of others based on actual product experiences (Singh, 2008). LBM strategies may not be able to connect to the opinions of trusted and loved ones during the in-store decision moment; but through the use of the mobile internet it can certainly connect with ratings and opinions of the cyber-community to help guide decisions. The issue of trust cannot be ignored; but arguably if a large enough sample of product reviews are provided then taken in aggregate, reviews can be viewed as relatively trustworthy. Of course because these strangers do not know the particular individual; they cannot provide as informed a recommendation as in the traditional manner. Where appropriate (or convenient) marketers can also appropriate these community opinions to 13 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

inuence in-store decisions whether in an explicit ad/marketing message or product review.

Information / Media Content


When the Internet went mainstream the initial concern amongst traditional retailers that consumers would abandon shopping at physical locations in favour of online alternatives has not come to fruition. While online sales across the board continue to increase the internet is far more than just another point of purchase. Its biggest impact on buying lies within the awareness and consideration process (Yahoo! & OMD, 2006) not in actual purchase transactions. Consumers use the internet as their primary avenue to learn about new products, do research and narrow down options. 70% of consumers search for CPG product information online before they visit stores (Prospectiv, 2008). Their efforts centre on information hunts (including reading and posting reviews), price comparisons and couponing/rebates linking the off and on-line worlds. That being said much of the information that consumers seek is not being offered to them easily. Despite the investments marketers have made in branded websites that provide consumers with a plethora of data, the sites are not attracting the majority of consumers seeking CPG information. According to the Prospectiv survey the reason is: Consumers don't know about the branded product sites (67 %) Consumers don't nd the branded product sites helpful (17 %) Consumers don't trust the information at the branded product sites (16 %)

Even with these challenges users have clearly embraced the new information sources and shopping channels brought about by advances in technology (Yahoo! & OMD, 2006) but yet still prefer traditional outlets to complete shopping transacations. The mobile channel can give consumers the best of both worlds. The same information resources available to a user through the traditional Internet is available to them via the mobile internet but in the store aisle it is arguably of greater value. Certainly the form factor of the phone limits the amount of data that can be usefully presented to a consumer; but simply reproducing a mobile version of the full form online experience is not a recommended route. A custom mobile experience must be implemented (Vatanparast & Asil, 2007) . This brings us to the challenges with the branded sites. LBM cannot fully address the largest problem: awareness. As one example, in particular circumstances consumers that have opted in to receiving marketing communicaitons can be informed of an available 14 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

branded application or a mobile-appropriate website when they are in a shopping area. This helps to somewhat address issues of awareness. While its is not clear why consumers nds the information on branded website unhelpful; those sites are likely the best source of data. The issues of trust is not one of technology but rather consumer perception. LBM provides the consumer with the ability to cross reference company data with other formal (e.g. expert research) and informal (e.g. blogs, reviews) sources. Thereby helping them to make more comfortable decisions. As a warning, even though consumers are signalling that they want information to help drive decisions the danger of data fatigue looms. While mobile technology can certainly provide benet to many shoppers marketers have to be aware of the net effect of introducing what amounts to yet another tool in the shopping toolbox and overwhelming consumers instead of helping. This phenomenon called technology paradox, is generally recognized by consumer and tends to arouse strong and negative feelings (Mick & Fournier, 1998). The strategies that consumers implement to cope are as numerous as there are consumers but more often than not involve distancing themselves from the technology or underutilizing its features; both undesirable paths for marketers. As marketers try, succeed and fail in this burgeoning area adaptability will be part of the required skill set.

Summary
In their research Bruner and Kumar (2007) indicate that consumers attitudes towards prospects of receiving location-based ads skewed negatively. Granted their research was done prior to key shifts in the capabilities of mobile devices, mobile networks and associated software including location features. Consumers feared being bombarded with frequent, irrelevant messages. And even in cases where relevant and contextual marketing was presented that induced a further concern of breach in privacy for consumers (Banerjee & Dholakia, 2008). Marketers are facing a paradox. Consumers desire more relevance in marketing communications; however too much relevance produces privacy concerns. This is where trust with the particular brand (Vatanparast & Asil, 2007) can help push the consumer towards more positive perceptions of their marketing. With LBM, sending the right message to the right person at the right time and place is the holy grail.

15 | P a g e

Other Considerations

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Products in the Mobile Marketplace


It is vital to note that certain products are better pre-disposed to work in an electronic market place and consequently more likely to receive positive responses in from mobile marketing efforts. Yadav and Varadarajan (2005) framework detailing that the higher the interactivity in the eMarketplace the greater the value for both buyers and sellers and therefore the greater the likelihood a product would migrate to the eMarketplace. Contextualized to the mobile space this includes music, movies, books essentially products that can digitized but also includes services such as payments, banking, and investing. While the vast majority of CPG products are not digitizable and therefore cant completely t the framework; there are aspects of the model that can be adapted and in doing so increase the value outcomes for both consumers and sellers of CPGs. The key variables are: Interactivity: via the mobile device consumers and marketers have the ability to exchange dynamically and quickly Purchase frequency: the generally weekly nature of shopping and therefore frequent physical interaction between buyer and seller could be reduced via mobility commerce (just as it has with internet commerce); though not the point of this report nor the desire of retailers per se Information need: the buyers growing info needs in the CPG space make mobile solutions more valuable

Guidelines
Consumer Control and Privacy
Mobile marketing programs must respect the end user and always put the interaction decisions, including choice and control, in the hands of the consumer. For initial marketing interaction this means consumer pull and not marketer push is likely the best course of action (Westlund, 2008). Subsequent interaction must always provide the consumer with control to moderate or eliminate any communication with a marketer. Because mobile phones present marketers with the opportunity to reach consumers anywhere and anytime, privacy is the greatest concern amongst users. The issues also centre on security of data and trust with the marketer. The reluctance to exchange personal data with mobile marketers (i.e. accepting some privacy loss) is however diminished by the utility or benet that a consumer deems is derived from the exchange (Vatanparast & Asil, 2007). 16 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Providing a Clear Value Proposition and Use Experience


Marketing opportunities in the mobile space should focus on providing relevance and value to the consumer (Westlund, 2008). While the concept of value is user specic and broadly dened Vatanparast & Asil (2007) in their conceptual model frame a workable denition around four key areas: Consumer. Understanding the consumers usage purpose and offering appropriately matching advertising Message. Relevance of the message to the consumer and trust of the source (whether friend or a brand) Device. Tailor messages for specic device interfaces and capabilities Media. Provision of clear consumer benet, cheap data access and robust policy (spam, opt-in, data collection)

Summary
While the grocery industry oscillates between declaring unplanned purchases to be in the majority or minority; what seems to be with little dispute is the fact that consumers rarely use shopping lists and to the extent that purchases are unplanned this means that a signicant number of the purchase decisions are made in store. For marketers (retailers and manufacturers) this has always meant deploying tactics to sway consumer behaviour. Mobile marketing in general and LBM specically can be effective weapons in the marketers arsenal to achieve the same end. By being able to target specic users in specic situations with relevant marketing material or provide mobile applications that provide consumers with valuable functionality, marketers are in a position to have greater inuence over the instore decisions of consumers. The LBM strategies presented here are intended to supplement current marketing efforts targeted at the key purchase drivers: brand loyalty, price, family/friends and info/media content. As a whole the strategies stress the importance of: Relevance. Sending messages that appeal and related to targeted users Congruence. The message content should be aligned with the location where an ad is received and by extension the activity being performed at the time Timeliness. Offers should come early in shopping trip while consumers can better be inuenced by marketing messages Low Cognitive Effort. Simplicity in the marketing tool and messages is important to ensure users dont shut down, compensate, and thereby reduce the effectiveness of mobile marketing 17 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Fatigue. Provide needed product info but beware of data fatigue and the technology paradox Control / privacy. Users must always be in control of what is sent to (or received from) their phone

The challenge in using LBM is that reception really boils down to individual customer attitudes; and this of course is dynamic and based on experience over a period of time. So there are situations when LBM should be used and others where it should be avoided or minimized. The challenge for the marketer will be to know when LBM is appropriate; this will require having access to critical data to make those decisions (Bruner II & Kumar, 2007). Marketers will have to get smarter and walk the ne line between informative and timely instead of irrelevant and instrusive. The technology is (or will get) there to allow it; its a question of mining the data and knowing the individual customer being addressed. Not easy, but possible.

Future Research
As discussed throughout the paper, LBM has merits as a standalone marketing practice; but research on how to deploy LBM as part of an integrated market strategy could be useful as multi-channel marketing efforts continue to take shape. To fulll its promise, individual consumer-based mobile marketing must evolve beyond a siloed, tactical practice and become a strategic capability that is better integrated with other major investments across the marketing and media ecosystem (GMA, Booz, She Speaks, 2009). Finally, much of the scholarly work done on mobile marketing and LBM was done prior to the revolutionary launch of the iPhone and the Smartphones, networks and software applications that have since followed. The vast majority of the research available today predated the GPS-like ability that is soon to be commonplace and was studied in the context of purely text-message based applications. Clearly things have changed and the research, especially in terms of consumer attitudes towards mobile marketing and LBM, need to be revisited.

18 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

19 | P a g e

Appendix A - Out of Store Inuencers

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

20 | P a g e

Appendix B Kraft iFood Application

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

21 | P a g e

Appendix C ShopperIQ

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

ShopperIQ was prototype software created to demonstrate the use of mobile software to aid in two separate but related goals. The rst application (ShopperIQ) provides healthy eating guidance based on the NuVal 100 health index of food. NuVal examines over 30 nutritional factors in groceries and returns an index, the higher the score better. The second application (ShopperIQ plus) aims to make recommendations to specic consumers based on previously entered health goals (e.g. low sodium, low calories, low sugar, lose weight). Both systems were intended as tools to be used by shoppers within the store to guide purchase decisions and ease the burden of examining product labels, avoid discredited food guidelines systems (SmartChoice in the U.S., and HealthCheck in Canada) and do so in a simple manner. By scanning the UPC of a product one of the two answers is given, so the user has a quick and simple shopping guide.

22 | P a g e

Bibliography

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

Banerjee, S., & Dholakia, R. R. (2008). Mobile Advertising: Does Location-Based Advertising Work? Internatonal Journal of Mobile Marketing , 69-74. Bell, D. R., Corsten, D., & Knox, G. (2008). Unplanned Category Purchase Incidence: Who Does It, How Often, and Why. Philadelphia: Knowledge@Wharton. Bruner II, G. C., & Kumar, A. (2007). Attitude Toward Location-Based Advertising. Journal of Interactive Advertising , 8-9. Consumer Involvement Theory. (n.d.). Retrieved 12 13, 2009, from AdCracker: http:// www.adcracker.com/involvement/index.htm Francoeur, T. (2008, 1 8). Press Release: Seventy Percent of Consumers Use Internet to Research Consumer Packaged Goods. Retrieved 12 18, 2009, from Prospectiv: http:// www.prospectiv.com/press142.jsp GMA, Booz, She Speaks. (2009). Shopper Marketing 3.0: Unleashing the Next Wave of Value. Retrieved 12 16, 2009, from GMA: http://www.gmaonline.org/publications/ Booz_Ci_GMA_Shopper_Marketing_3.0.FIN_LR.PDF iFood Assistant. (n.d.). Retrieved 12 14, 2009, from Kraft Foods: http:// www.kraftfoods.com/kf/iFood.aspx Jun, J. W., & Lee, S. (2007). Mobile Media Use and Its Impact On Consumer Attitudes Toward Mobile Advertising. International Journal of Mobile Marketing , 53,56. King, P. (2009, 11 7). Shopping Trip to No Frills. (E. Anizor, Interviewer) Kivetz, R. (2005). Promotion Reactance: The Role of Effort-Reward Congruity. Journal of Consumer Research , 725,728,729. Kleijnen, M., de Ruyter, K., & Wetzels, M. (2006). An assessment of value creation in mobile service delivery and the moderating role of time consciousness. Journal of Retailing , 36-43. Lee, L., & Ariely, D. (2006). Shopping Goals, Goal Concreteness, and Conditional Promotions. Journal of Consumer Research , 67. Leggatt, H. (2008, 1 15). Consumers crave online CPG product information. Retrieved 12 15, 2009, from Biz Report: http://www.bizreport.com/2008/01/ consumers_crave_online_cpg_product_information.html (2006). Long and Winding Road:The Route to the Cash Register. Yahoo! and OMD. 23 | P a g e

Ebube Anizor (209347741) Using Location-based Marketing Strategies to Inuence Purchase Decisions

McCarthy, R. (2008, 2 1). Mobile Phones: A Pocketful of Marketing. Retrieved 12 12, 2009, from Inc.: http://www.inc.com/magazine/20080201/a-pocketful-of-marketing.html? partner=newsletter_News Merisavo, M., Kajalo, S., & Karjaluoto, H. (2007). An Empirical Study of the Drivers of Consumer Acceptance of Mobile Advertising. Helsinki: Helsinki School of Economics. Mick, G. M., & Fournier, S. (1998). Paradoxes of Technology: Consumer Cognizance, Emotions, and Coping Strategies. Journal of Consumer Research , 139-140. Not on the List? The Truth about Impulse Purchases. (2009, 1 7). Retrieved 12 12, 2009, from Knowledge@Wharton: http://knowledge.wharton.upenn.edu/articlepdf/2132.pdf? CFID=11859279&CFTOKEN=32507336&jsessionid=a83090148f775e13353f5b4c6b19352f 5b5c Sajdeh, M., & Jones, N. (n.d.). Precision, Passion & Prudence. Retrieved 12 14, 2009, from Hub Magazine: http://www.hubmagazine.com/content/precision-passion-prudence Singh, S. (2008, 04). Web Social Inuence Marketing: Understanding Those Peer Inuencers. Retrieved 12 18, 2009, from Razorsh: http://www.razorsh.com/download/img/content/ Understanding%20those%20Peer%20Inuencers.pdf Thomson, E. S., Laing, A. W., & McKee, L. (2007). Family purchase decision making: Exploring child inuence behaviour. Journal of Consumer Behaviour , 182. Times and Trends. (2008, 1). Retrieved 12 16, 2009, from GMA: http:// www.gmaonline.org/publications/gmairi/2008/january/january.pdf Underhill, P. (2000). Why We Buy: The Science of Shopping. New York: Touchstone. Vatanparast, R., & Asil, M. (2007). Factors Affecting the Use of Mobile Advertising. International Journal of Mobile Marketing , 24-30. Westlund, R. (2008, 11 17). 12 Things You Must Know to Be Successful with Mobile Marketing. Adweek , pp. 13-15. Yadav, M. S., & Varadarajan, P. R. (2005). Undertanding Product Migration to the Electronic Marketplace: A Conceptual Framework. Journal of Retailing , 127. Ye, G. (2007). Mobile Marketing Systems: Framwork and Technology Enabler. International Journal of Mobile Marketing , 44-48.

24 | P a g e