Download A Value and Risk Model of Consumers` Mobile

A Value and Risk Model of Consumers’ Mobile
Marketing Acceptance: An Exploratory Study
Fareena Sultan
Professor
[email protected]
Tao (Tony) Gao
Assistant Professor
[email protected]
Northeastern University, Boston, MA
Andrew J. Rohm
Associate Professor
[email protected]
Loyola Marymount University, Los Angeles, CA
Jiao Wang
Beijing Institute of International Economics and Trade
DMEF Marketing Research Summit, October 14, 2012, Las Vegas
Mobile Marketing
• 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 (MMA 2009).
• Brand in the Hand – the convergence of mobile handsets
and the Internet has created new opportunities for
m-commerce and interactive marketing and points to the
potential for branding, advertising, and m-commerce to be
delivered right to our hand (Sultan and Rohm 2005).
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Examples of Our Research in Mobile Marketing

Study 1: “Brand in the Hand” mobile case study with Adidas International in
the Netherlands starting in 2004
 Euro 2004 Football Championships vs. U.S. Missy Elliot
(Ivey/NU Case Series, Sultan and Rohm, 2005)

Study 2: Managerial study, early mobile efforts by brands such as Adidas
International (SMR, Sultan and Rohm, 2005)

Study 3: Mobile portal initiatives by Adidas FIFA 2006 World Cup Soccer
case study (Ivey/NU Case Series, Rohm and Sultan, 2007)

Study 4: Youth acceptance of mobile marketing practices in Established vs.
Emerging Market: U.S. and Pakistan, U.S. and China,
(IJMM 2006, SMR 2008), (JIM, Sultan, Rohm and Gao, 2009), (JCM, Gao,
Sultan, and Rohm 2010), (TIBR, Gao, Sultan, Rohm, and Huang 2011) , (BH,
Rohm, Gao, Sultan, and Pagani 2012), (JBR under review, Sultan, Rohm,
Gao, Pagani, 2012).
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Key Research Questions
• What factors affect consumers’ adoption of
mobile marketing?
• How do consumer perceptions of value and risk
affect mobile marketing acceptance?
• Focus: Emerging markets
– China
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It’s a Mobile World!
• Over six billion mobile phones in use
worldwide (NY Times, January 5, 2012)
• Mobile advertising revenues increased
150% to $1.6 billion in 2011 in the U.S.
alone (Interactive Advertising Bureau, 2012)
• 40% of smartphone users access the
mobile Internet before getting out of bed
in the morning! (Ericsson, 2011)
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Mobile Penetration
Growth is Greatest in Emerging Markets
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China’s Going Mobile…Fast
China’s mobile phone users reached 1.02 billion in
April 2012
China’s mobile penetration will exceed 100% by
2015
Currently, 450 million 3G/4G users in China
(Chinese Ministry of Industry & IT, As of May 2012)
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Theoretical Background
• Perceived Value was found to be an important adoption
determinant and segmentation criterion for mobile services (Pagani
2007; Pura 2007; Gao et al. 2012). We conceptualize perceived
value as distinct from perceived utility.
• Perceived Risk is a key construct in innovation adoption research
(Collier and Bienstock 2006; Gao, et al. 2012; Lee 2009;
Parasuraman et al. 2005; Walker and Johnson 2006) and in the
mobile marketing literature (e.g., Shankar, Venkatesh, and Hofacker
2010).
• Mobile Marketing Acceptance refers to the extent to which
consumers engage in mobile marketing activities using their phones
for purchases and downloads (Sultan, Rohm and Gao 2009)
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Research Contributions
• We propose that both perceived value and perceived
risk influence mobile marketing activity.
• We operationalize perceived value to be the worthiness of an
action considering the cost and benefits of that action.
• Perceived risk is the likelihood of the occurrence of negative
consequences, such as unsolicited texts.
• Few studies have examined consumers’ assessment of both risk
(as a negative consequence) and value (as a positive consequence)
in mobile marketing acceptance.
• We also propose that value and risk mediate the influence of
location-based usefulness, ease of use, compatibility,
innovativeness, and trust on mobile marketing activity.
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Theoretical Background
•
Location-Based Usefulness: Perceived utility is a key reason why consumers
engage in mobile marketing (Karjaluoto et al. 2008; Zhang and Mao 2008; Bauer et
al. 2005). Increasingly, location-based usefulness has become a key construct in
mobile marketing adoption (Xu, et. al. 2009).
•
Perceived Ease of Use influences consumer acceptance of information technologies
(e.g. Davis et al. 1989; Szajna 1996; Hendrickson and Collins 1996; Chau 1996).
•
Innovativeness was found to be an important adoption determinant, and
consequently also segmentation criterion for mobile services (Pagani 2007; Hofacker
and Goldsmith 1991).
•
Compatibility refers to the extent to which consumers view mobile marketing
adoption as suitable to their lifestyle (Muk & Babin 2006; Sultan, Rohm and Gao
2009).
•
Trust has been shown to be an antecedent of acceptance of, and behavioral intent
towards, new technology (Gefen et al. 2003; Pagani 2007; Bart et. al. 2005).
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A Parsimonious Conceptual Model
Location-Based
Usefulness
+
+
Perceived
Ease of Use
Perceived
Value
+
+
+
Mobile Marketing
Activities
Compatibility
-
+
Mobile
Innovativeness
Perceived
Risk
+
Trust
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Respondent Profile
Data: Collected Fall 2011 in China
Survey respondents: 317 youth consumers
(215 undergraduate students and 102 graduate
students at a university in Beijing)
Gender: 51.4% Female
3G Phone Usage: 49.5% of sample
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Examples of Construct Measures
Mobile
Marketing
Activities
Activities consumers engage in using their cell phone such as:
Purchasing products or services/Downloading music/Downloading
brand specific mobile apps/Downloading non-commercial apps
Compared to the fee (e.g., application fee, registration fee) I need to
pay, the use of mobile marketing offers value for money.
If I used my mobile phone to access information, it would increase
Perceived Risk
the possibility that I would receive unwanted texts.
Location-Based I receive timely location-based information (e.g., the news what
Usefulness
happened in my city) on my mobile phone.
It is easy to use my mobile phone to find information related to my
Ease of Use
specific location. (e.g., restaurants in my vicinity).
Using my mobile phone to download games or other mobile
Compatibility
applications fits well with my needs. (e.g., away from internet)
Perceived Value
Mobile
Innovativeness
If I heard about a new mobile application (games, other mobile
applications), I would like to experiment with it.
Trust
I would trust my telecommunications operator to provide secure
data connections to conduct mobile marketing.
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Model Testing
Used confirmatory factor analysis (CFA) to
validate scales.
Used SEM to test all hypotheses.
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Results of the SEM Model
Hypotheses
Path Coefficients
.20***
Location-Based Usefulness Perceived Value
.07
Ease of Use  Perceived Value
.11
Compatibility  Perceived Value
.24**
Mobile Innovativeness  Perceived Value
.60***
Trust  Perceived Value
.40***
Location-Based Usefulness  Perceived Risk
-.27***
Trust  Perceived Risk
.34***
Perceived Value  Mobile Marketing Activities
-.20**
Perceived Risk  Mobile Marketing Activities
Fit Indices: 2=864.02, df=415, p<.001, RMSEA=.07, CFI=.94.
Note: * - Significant at .05. ** - Significant at .01. *** - Significant at .001.
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Results
Location-Based
Usefulness
+
+
Perceived
Ease of Use
Perceived
Value
ns
+
ns
Mobile Marketing
Activities
Compatibility
-
+
Mobile
Innovativeness
Perceived
Risk
+
Trust
-
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Implications
• Value and risk have countervailing effects on modeling
mobile marketing activities.
• Location-based usefulness enhances value but it also
increases risk.
• Trust increases value and reduces risk. Hence, trust can
be used as a lever to reduce risk perceptions.
• Managers must continue to address perceived risk in
terms of privacy concerns such as those related to
location-based offers.
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Thank You!
Q&A
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EXTRA SLIDES
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Full Measures For Value and Risk
Compared to the fee (e.g., application fee, registration fee) I need to pay, the use
of mobile marketing offers value for money.
Perceived Value
Compared to the effort (e.g., learn how to use) I need to put in, the use of mobile
marketing is beneficial to me.
Compared to the time (e.g., searching time) I need to spend, the use of mobile
marketing is worthwhile to me.
If I used my mobile phone to find out what is currently happening in my city
(news), it may not be accurate.
My signing up to receive coupons or other discounts would lead to a loss of my
privacy because my personal information may be used without my permission.
Perceived Risk
If I used my mobile phone to access information, it would increase the possibilities
that I would receive unwanted texts.
If I used my mobile phone to purchase, there would be many possibilities that I
have to spend too much time searching for products.
It would take me lots of time to learn how to find out information related to my
special location on my mobile phone
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Conclusions
• Both Perceived Value and Perceived Risk influence consumers’
Mobile Marketing Activity.
• While Perceived Value enhances Mobile Marketing Activity,
Perceived Risk decreases it.
• Location-Based Usefulness, while increasing consumers’
Perceived Value of mobile marketing activities, also increases
Perceived Risk.
• Trust decreases Perceived Risk and increases Perceived Value.
• Innovativeness in the mobile space enhances consumers’
Perceived Value of mobile marketing.
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Descriptive Statistics of Study Constructs
Constructs
Location-Based Usefulness
Perceived Ease of Use
Compatibility
Mobile Innovativeness
Trust
Perceived Value
Perceived Risk
Mobile Marketing Activities
Mean
Std. Deviation
3.90
0.86
3.78
3.45
3.22
3.33
3.17
3.97
2.45
0.93
0.92
1.03
0.87
0.90
0.79
0.76
Note: All constructs were measured with 5-point scales, with 1 being lowest (or least frequent)
and 5 being highest (or most frequent)
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