THE internet ENCYCLOPEDIA 1 volume 3 phần 10 pps

P1: 211 Zarki WL040/Bidgolio-Vol I WL040-Sample.cls September 15, 2003 8:55 Char Count= 0 WIRELESS INTERNET848 Intersymbol interference (ISI) Distortion of the re- ceived signal due to temporal spreading and interfer- ence of the transmitted pulses. Medium access control (MAC) A protocol for ensuring that the common wireline/wireless medium is shared nicely among many potential users. Node A device on the network, such as a workstation or a router. Roaming The ability to establish and maintain wireless connection outside the home area of the user. Router A device that performs routing. Routing The process of moving packets from the source to the destination in a network. Routing table A list in the router that matches the des- tination IP addresses to the physical ports that lead to the optimal path to the destination. Short messaging service (SMS) A service available on many cellular networks that enables near real-time transmission of short text message among the sub- scribers. SIP A signaling protocol used to set up and control in- teractive applications over the Internet. Tunneling The process of transporting encapsulated data packets through foreign networks that may be us- ing different network protocols. Voice over IP (VoIP) A service that delivers voice com- munication over the Internet using IP. World Wide Web (WWW) A large group of servers on the Internet that uses HTTP to transport files and doc- uments, often formatted using HTML. CROSS REFERENCES See Mobile Commerce; TCP/IP Suite; Voice over Internet Protocol (IP); Wireless Application Protocol (WAP). REFERENCES 3GPP TS 23.040. (2002, April). Technical realization of the short message service (SMS), version 4.6.0. 3GPP TS 23.140. (2002, April). Multimedia messaging service (MMS); functional description; stage 2, version 4.5.0. Aboba, B., & Simon, D. (1999, October). PPP EAP TLS authentication protocol (RFC 2716). Bakre, A., & Badrinath, B. (1995, May). I-TCP: Indirect TCP for mobile hosts. In Proceedings of the 15th IEEE International Conference on Distributed Computing Sys- tems (pp. 136–143). New York: IEEE., Balakrishnan, H., Seshan, S., & Katz, R.H. (1995, Decem- ber). Improving reliable transport and handoff perfor- mance in cellular wireless networks. ACM Wireless Net- works, 1(4), 469–481. Bender, P., Black, P., Grob, M., Padovani, R., Sind- hushayana, N., & Viterbi, A. (2000, July). CDMA/HDR: A bandwidth efficient high speed wireless data service for nomadic users. IEEE Communications Magazine, 38(7), 70–77. Bingham, J. A. C. (1990, May). Multicarrier modulation for data transmission: An idea whose time has come. IEEE Communication Magazine, 28(5), 5–14. Black, U. (1997). ISDN and SS7: Architecture for digi- tal signaling networks. Englewood Cliffs, NJ: Prentice Hall. Blake, S., Black, D., Carlson, M., Davies, E., Wang, Z., & Weiss, W. (1998, December). An architecture for differ- entiated service (RFC 2475). Borisov, N., Goldberg, I., & Wagner., D. (2001, July). In- tercepting mobile communications: The insecurity of 802.11. In Proceedings of the 7th International Confer- ence on Mobile Computing and Networking (pp. 180– 189). New York: ACM SIGMOBILE. Braden, R., Clark, D., & Shenker, S. (1994, July). Integrated services in the Internet architecture: An overview (RFC 1633). Brady, P. T. (1971, January). Effects of transmission de- lay on conversational behavior on echo-free telephone circuits. Bell Technical Journal, 50(1), 115–134. Brewer, E. A., Katz, R. H., Chawathe, Y., Gribble, S. D., Hodes, T., Nguyen, G., et al. (1998, October). A network architecture for heterogeneous mobile computing. IEEE Personal Communications Magazine, 5(5), 8– 24. Brown, K., & Singh, S. (1997, October). M-TCP: TCP for mobile cellular networks. ACM Computer Communica- tion Review, 27(5), 19–43. Caceres, R., & Iftode, L. (1995, June). Improving the performance of reliable transport protocols in mobile computing environments. IEEE Journal on Selected Ar- eas in Communications, 13(5), 850–857. Cai, J., & Goodman, D. J. (1997, October). General packet radio service in GSM. IEEE Communications Maga- zine, 35(10), 122–131. Deering, S., & Hinden, R. (1998, December). Internet pro- tocol, version 6 (IPv6) (RFC 2460). De Vriendt, J., Lain´e, P., Lerouge, C., & Xu, X. (2002, April). Mobile network evolution: A revolution on the move. IEEE Communications Magazine, 40(4), 104– 111. Diersk, T., & Allen, C. (1999, January). The TLS protocol (RFC 2246). Doyle, J. (1998). Routing TCP/IP (Vol. I). Sebastopol, CA: Cisco Press. Fielding, R., Gettys, J., Mogul, J., Frystyk, H., & Berners- Lee, T. (1997, January). Hypertext transfer protocol— HTTP/1.1 (RFC 2068). GSM Association. Retrieved April 8, 2003, from http:// www.gsworld.com Haartsen, J. (1998). Bluetooth—The universal radio inter- face for ad hoc, wireless connectivity. Ericsson Review, 75(3), 110–117. Hedrick, C. (1988, June). Routing information protocol (RFC 1058). Heijenk, G., Karagiannis, G., Rexhepi, V., & Westberg, L. (2001, September). DiffServ resource management in IP-based radio access networks. Paper presented at the 4th International Symposium on Wireless Personal Multimedia Communications, Aalborg, Denmark. Hinden, R. (1993, September). Applicability statement for the implementation of classless inter-domain routing (CIDR) (RFC 1517). Honkasalo, H., Pehkonen, K., Niemi, M. T., & Leino, A. T. (2002, April). WCDMA and WLAN for 3G and beyond. IEEE Wireless, 9(2), 14–18. P1: 211 Zarki WL040/Bidgolio-Vol I WL040-Sample.cls September 15, 2003 8:55 Char Count= 0 REFERENCES 849 How to make money on mobile services (2002). Strand Consult Publications. Retrieved May 13, 2003, from http://www.strandreports.com/sw494.asp Huitema, C. (2000). Routing in the Internet (2nd ed.). En- glewood Cliffs, NJ: Prentice Hall. Instant messaging more popular than ever at work (n.d.). Retrieved May 13, 2003, from http://www.instant- messangers.com/site/news/im more popular than ever. htm Institute of Electrical and Electronics Engineers. (1999). Wireless LAN medium access control (MAC) and physi- cal layer (PHY) specifications, IEEE 802.11. Institute of Electrical and Electronics Engineers. (2001). IEEE 802.1X—Port based network access control. ITU-T Recommendation Q.1701. (1999). Framework for IMT-2000 networks. Jakes, W. C. (1993). Microwave mobile communications. New York: IEEE Press. Lu, W. W. (Ed.). (2002, March). Fourth-generation mo- bile initiatives and technologies. IEEE Communica- tions Magazine, 40(3), 104–145. Lu, W. W., & Berezdivin, R. (Eds.). (2002, April). Tech- nologies on fourth generation mobile communications [Special Issue]. IEEE Wireless Communications, 9(2). Mahonen, P., & Polyzos, G. C. (2001, December). Eu- ropean R&D on fourth-generation mobile and wire- less IP networks. IEEE Personal Communications, 8(6), 6–64. Mathis, M., Mahdavi, J., Floyd, S., & Romanow, A. (1996, October). TCP selective acknowledgement options (RFC 2018). Mills, D. L. (1984, April). Exterior gateway protocol formal specification (RFC 904). Mobile Application Part (MAP) Specification. (1997). ETS 300 599 (GSM 09.02), ETSI recommendation. Mouly, M., & Pautet, M. B. (1992). The GSM system for mobile communications, Palaiseau, France: Cell & Sys. Moy, J. (1998a). OSPF anatomy of an Internet routing pro- tocol. Reading, MA: Addison-Wesley. Moy, J. (1998b, April). OSPF Version 2 (RFC 2328). Nielsen/NetRatings First Quarter 2002 Global Internet Trends report (2002). Retrieved May 9, 2002, from http://www.nielsen-netratings.com/pr/pr 020509 eratings.pdf Perkins, C. (1996, October). IP mobility support (RFP 2002). Perkins, C. (1997). Mobile IP: Design principles and prac- tice. Reading, MA: Addison Wesley. Postel, J. (1980, August). User datagram protocol (RFC 768). Postel, J. (1981a, September). Internet protocol (RFC 791). Postel, J. (1981b, September). Transmission control proto- col (RFC 793). Postel, J., & Reynolds, J. (1985, October). File transfer pro- tocol (FTP) (RFC 765). Raggett, D., Le Hors, A., & Jacobs, I. (1999). HTML 4.01 specification, W3C recommendation. Rekhter, Y., & Li, T. (1993, September). An architecture for IP address allocation with CIDR (RFC 1518). Rekhter, Y., & Li, T. (1994, July). A border gateway protocol 4 (BGP-4) (RFC 1654). Rosen, E., Viswanathan, A., & Callon, R. (2001, January). Multiprotocol label switching architecture (RFC 3031). Schulzrinne, H., Casner, S., Frederick, R., & Jacobson, V. (1996, January). RTP: A transport protocol for real-time applications (RFC 1889). Simpson, W. (1994, July). The point-to-point protocol (PPP) (RFC 1661). Sklower, K., Lloyd, B., McGregor, G., Carr, D., & Coradetti, T. (1996, August). The PPP multilink protocol (MP) (RFC 1990). Telecommunications Industries Association. (1991). Cel- lular radio-telecommunications intersystem opera- tions, TIA/EIA/IS-41B. Telecommunications Industries Association. (1993). Mobile-station base station compatibility standard for dual-mode wideband spread spectrum cellular system, IS-95. Telecommunications Industries Association. (1996). 800 MHz TDMA cellular radio interface mobile station base station compatibility, IS-136A. Telecommunications Industries Association. (2001). Physical layer standard for CDMA2000 spread spec- trum systems, TIA/EIA/IS-2000. Viterbi, A. J. (1995). CDMA principles of spread spectrum communications. Reading, MA: Addison-Wesley. Walker, J. R. (2000, October 27). Unsafe at any key size: An analysis of the WEP encapsulation (802.11-00/ 362). Wireless World Research Forum. (2001, December). The book of visions 2001—Visions of the wireless world, Ver- sion 1.0. Yacoub, M. D. (1993). Foundations of mobile radio engi- neering. Boca Raton, FL: CRC Press. Zhang, L., Deering, S., Estrin, D., Shenker, S., & Zappala, D. (1993, September). RSVP: A new resource reserva- tion protocol. IEEE Network, 7(5), 8–18. Zorn, G. (1999, January). PPP LCP internationalization configuration option (RFC 2484). P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 Wireless Marketing Wireless Marketing Pamela M. H. Kwok, Hong Kong Polytechnic University, China Introduction 850 Wireless Technologies and Wireless Marketing 850 What Is Wireless Marketing? 850 Major Services Are Provided by Third-Generation Technologies 851 Factors Influencing Adoption of Wireless (or Mobile) Internet 851 Mobile Penetration in the United States and Europe 851 Marketing Opportunities and Wireless (or Mobile) Internet 851 Will Wireless (or Mobile) Substitute Fixed-Line Internet? 853 M-commerce and Marketing 853 What Industries Benefit Most From M-commerce? 853 M-commerce and Information Services 853 Database Marketing in M-commerce 853 What Must Marketers Do to Be a Successful M-marketer? 853 Merits of Reconfiguring the Value Chain 854 Wireless Consumer Behavior 854 Key Impact of Mobile Number Portability (MNP) or Wireless Number Portability (WNP) on Customer Loyalty 854 Brand Community and Customers’ Loyalty 854 Consumer Decision-Making Process for Wireless 855 Segmentation Variables for Wireless Consumer Markets 855 Permission Marketing and Customer Relationship 855 Participation Marketing and Customer Relationship 855 Ethical and Privacy Issues in Wireless Marketing 855 Consumer Protection 856 Marketing Mix for Wireless 856 Product 856 Price 856 Distribution or Sale Channels 857 Promotion 857 Real-Time Impacts of the Wireless Internet on the Four Ps of Marketing 858 Wireless Marketing and Examples of Business Models 858 Measurment of Marketing Performance 859 Performance-Measurement Management 859 Marketing Effectiveness and Efficiency Measures 859 Looking at Future 859 Glossary 860 Cross References 860 References 860 Further Reading 861 INTRODUCTION Wireless technology began its growth in the 1980s and the rapid development of wireless products such as mo- bile phone, pagers, and other handheld devices has trans- formed the ways that people conduct business (Lamont, 2001). Surfing the Web or online services is another way to get product information and order merchandise from catalogs. Firms can quickly update information at min- imum “costs” (Boone & Kurtz, 2001, p. 25). During the mid-1990s, the Internet became the main online direct-marketing channel that allows users to send e-mail and access public news, product information, and online shopping activities, among other things (Kotler & Armstrong, 2001). Nowadays, the development of high- speed wireless Internet, Web-enabled mobile phone hand- sets, and other wireless technologies has further sustained the application direct-marketing or one-to-one marketing in the wireless business world. WIRELESS TECHNOLOGIES AND WIRELESS MARKETING Advancement in wireless technology such as WAP, iMode, GSM, GPRS, UMTS, wireless LAN, WCDMA (see Table 1 for details) has enabled marketers to develop more effective and specific marketing (or one-to-one marketing) programs tailored to the needs of individual customers. To fully utilize these technologies, marketers must learn how to work with their customers to develop long-term mutual benefit relationships. Obviously, wireless mar- keting offers new business opportunities and threats to m-marketers. Marketers must understand the key dy- namic developments in the wireless world to capitalize on business opportunities at the right time and take proactive strategies to eliminate potential risks. What Is Wireless Marketing? Wireless is defined as “radio communications” or a “radio receiver or transmitter” (Oxford Advanced Learner’s English–Chinese Dictionary, 4th Edition, 1994). Microsoft Dictionary (1998, available on CD-ROM) defined wireless as “pertaining to, or characteristics that take place with- out the use of interconnecting wires or cables, such as by radio, microwave, or infrared.” Marketing is regarded as “a social and managerial process whereby individuals and groups obtained what they need and want through creating and exchanging products and value with others (Kotler & Armstrong, 2001, p. 6). So wireless marketing 850 P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 MOBILE PENETRATION IN THE UNITED STATES AND EUROPE 851 Table 1 Summary of Key Wireless Technologies WAP Wireless application protocol i-Mode A wireless service launched in Japan in spring 1999 by NTT DoCoMo. The service is accessed by a wireless packet network (PDC-P), and the contents are described in a subset of the hypertext markup language. GSM Global system for mobile communication GPRS General packet radio service UMTS Universal mobile telephone system (third-generation telecommunications system based on wideband code division multiple access) Wireless LAN Wireless local access network WCDMA Wideband code division multiple access Source: Nokia (http://www.nokia.com). refers to the exchange process (i.e., buying and selling) that is carried out by wireless means (e.g., mobile phone, m-commerce, wireless Internet, or any handheld wireless devices). Major Services Are Provided by Third-Generation Technologies The advancement in third-generation (3G) technology brings additional benefits to consumers. Multimedia func- tions of 3G consist of several media components which allow wireless delivery of video clips, still images, and music. It can be “interactive and distributional” (i.e., users may have subscribed to certain distributional ap- plications, and receive only those subscribed services). The maximum speeds of GPRS can reach up to 171.2 Kbps faster data transmission speed or download time. So GPRS enables interactive visual display (i.e., MMS [multimedia message service]) and enhancing com- munications quality. Besides these benefits, 3G technologies deliver the fol- lowing value-added wireless services as well: 1. Internet access (e.g., users can download ring-tones, music, cartoon characters, real-time events) 2. Location-based application (e.g. users can send promo- tional messages to specific groups of customers) 3. Simple games (e.g., users can play card games and crosswords) Factors Influencing Adoption of Wireless (or Mobile) Internet The decision-making process is complex, and there is no perfect formula to explain customers’ purchase behavior. An industry report published by the International Tele- communication Union (ITU, 2002a) in September 2002 reported that the adoption of mobile Internet service might be due to the following factors: r Application of mobile multimedia services such as video clips or still images, video, and music through 3G tech- nologies r Availability of Internet-enabled handsets with affordable prices r “Unrestricted and nonproprietary” mobile Internet con- tent r Simple billing systems or models for both voice and data transmission services Mobile communication and Internet access have been the key drivers for consumer telecommunications services in recent years. In 2002, the ITU (2002b) indicated the top 20 mobile and Internet markets worldwide (Table 2). MOBILE PENETRATION IN THE UNITED STATES AND EUROPE e-Marketer reported the interactive survey conducted by Telephia and Harris (Figure 1). The survey indicates that Greenville had the highest mobile phone’s penetration (i.e., 71%) among 35 major U.S. cities by December 2002. It is closely followed by St. Louis (69%). Forrester Research study in March 2002 reported that Finland, Norway, Sweden, and Italy have highest mobile penetra- tion (Figure 2). Marketing Opportunities and Wireless (or Mobile) Internet An analysis of Internet usage and projections covering more than 50 countries, carried out by Computer Indus- try Almanac in March 2002, reported that there would be 1.12 billion Internet users worldwide by the end of 2005, and wireless Internet users will reach 48%. “The wireless Internet will take off when always-on service and useful content for the small displays of wireless devices are available,” predicts Dr. Egil Juliussen, author of the report (Computer Industry Almanac, 2002). Access to the Internet through personal digital assistants (PDAs) with multiple functions (e.g., built-in Internet access, digital camera, music player, and scanner) is expected to increase in developed countries. Interestingly, these wireless devices are expected to be considered the primary devices for Internet access in countries with low Internet penetration rates. The report suggests that 41.5% of the worldwide population will use the wireless Internet by 2004. In some developing markets such as the Philippines, the penetration rate of mobile phone services was three times higher than fixed-line penetration at the end of 2001. P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 WIRELESS MARKETING852 Table 2 Top 20 Mobile and Internet Index Rankings, Worldwide MOBILE/INTERNET ECONOMY SCORE (per 100) RANKING Hong Kong, China 65.88 1 Denmark 65.61 2 Sweden 65.42 3 Switzerland 65.10 4 United States 65.04 5 Norway 64.67 6 Korea, Rep. of 63.42 7 United Kingdom 63.00 8 Netherlands 62.25 9 Iceland 62.03 10 Canada 61.97 11 Finland 61.22 12 Singapore 60.58 13 Luxembourg 58.58 14 Belgium 57.80 15 Austria 57.7 16 Germany 55.53 17 Australia 55.40 18 Portugal 55.13 19 Japan 54.94 20 Note: From the International Telecommunications Union Mobile/Internet Index included in the Internet for a Mobile Generation Report. The index measures how each economy is performing in terms of information and communication technologies (ICTs) and captures how poised the country is to take advantage of future ICT advancements. The index covers 26 variables sorted into three groups: infrastructure, usage, and market structure. These three components combine for a score between a low of 0 and a high of 100. The table is taken from the Statistical Annex to the Report, which provides comprehensive data on network and service development for more than 200 economies. c International Telecommunications Union (ITU), 2002. Reprinted with permission. Richter and Mar (2002, p. 128) reported a recent IDC forecast that the estimated average growth of global spending on information technology (IT) would be about 10 to 11% between 2002 and 2005. The forecast report showed that the Asia Pacific region has the highest growth Figure 1: U.S. cities with the highest mobile phone penetra- tion rates, December 2002. Source: Telephia/Harris Interac- tive, February 2003. c 2003 eMarketer, Inc. Figure 2: Mobile phone penetration in selected countries in Europe, fourth quarter 2001. Source: Forrester Research, March 2002. c 2002 eMarketer, Inc. potential for IT spending (i.e., 11%) compared with other regions. Moreover, according to the forecast, extraordi- nary growth of about 30% is expected in countries such as India, China, Turkey, Egypt, and the Philippines. For example, the penetration of value-added services of short message service (SMS) is popular and success- ful in the Philippines. Although that country has about 10 millions subscribers, 100 millions SMS messages are sent every day. In fact, making e-jokes through SMS has become part of Filipino culture. The subscribers enjoy circulating e-jokes among themselves. In addi- tion, the second-generation handsets are widely avail- able and supported by a competitive pricing strategy (about 2c / U.S. per SMS message) and a simple billing system (Ritcher & Mar, 2002). SMS is simple to adopt and adaptable for low-bandwidth services (i.e., always online). E-entertainment (i.e., e-music, e-video, interactive TV, e-gambling, etc.) has been regarded as the main driver behind wireless technologies. The demand for e-entertainment service has led to new business oppor- tunities for hardware manufacturers (e.g., mobile phone and components suppliers), service operators, and soft- ware and network suppliers. Another emerging market is China, where mobile phone service subscribers are expected to exceed fixed- line subscribers by March 2003. Furthermore, China’s cur- rent 5-year plan indicates that telecom service revenues will increase at twice the rate of the gross domestic product. This implies the growing importance of wireless Inter- net services, particularly in those countries with a low In- ternet penetration rate. On the other hand, marketers can make use of this opportunity to develop creative wireless P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 M-COMMERCE AND MARKETING 853 marketing strategies to foster customer relationships and cultivate new business opportunities—at the right time, in the right place. Will Wireless (or Mobile) Substitute Fixed-Line Internet? Mobile Internet will not be treated as a substitute for the fixed-line Internet (ITU, 2002a, p. 3), although 3G is con- sidered a global wireless medium. This is because mobile Internet services can be supported by different wireless technologies such as wireless local area networks (LANs), short-range connectivity technologies, fixed broadband networks, and so on. From the user’s perspective, the fol- lowing issues should be taken into considerations: r Display quality is limited by the screen size of mobile devices. r Functions provided by a keyboard are superior to those of a mobile device keypad. r Fixed-line broadband has brought speedy connection benefits at reasonable prices. Nowadays, the majority of display screens provided by wireless devices (e.g., PDAs and Web-enabled mobile phones) are too small for viewing long documents such as a contract or a book chapter. In addition, more and more consumers in developed countries have adopted fixed-line broadband Internet access services at home. For exam- ple, going online through fixed-line broadband Internet services at home has become part of the daily lives of Hong Kong residents. Although mobile messages through SMS and multimedia messaging service (MMS) provide “instant” and “interactive” benefits, they may not be able to substitute for land-line access at this time; nonetheless, they offer other benefits. M-COMMERCE AND MARKETING What Industries Benefit Most From M-commerce? A new market space has been created by Web-enabled mo- bile phone services. The interactive features, always-on connections, and tailor-made contents benefit following industries (Lamont, 2001): r M-banking (e.g., online stock trading—making en- quiries and money transfer transactions): M-banking offers convenient and “instant” benefits through both voice and data communications. It allows customers to use their mobile phone services for online stock trading, checking balances, making money transfer, and so on anytime and anywhere. Security issues have been a key obstacle for influencing consumers’ adoption of mobile- banking services. r M-entertainment services (e.g., real-time sports, games, live-entertainment events, entertainment on Internet and music): The unique benefit of “real-time” enables subscribers to enjoy different types of live-entertain- ment services anytime and anywhere. M-commerce and Information Services M-commerce is the word used to describe the consump- tion of Internet services or the purchase of goods via a wireless link (Korhonen, 2001, p. 433). M-commerce is expected to grow continuously in the coming years. Fur- thermore, “everything available via the fixed Internet will also be available via the wireless Internet” (Korhonen, 2001, pp. 434–435). Wireless technologies allow speedy and real-time data transmission benefits. As a result, information services in m-commerce may apply to the following: 1. Real-time broadcasting services (e.g., on television, radio) 2. Location-based advertisement (e.g., a list of restaurants offering special discounts in a particular location tar- geting specific customers); it is suggested that the list should cover only those restaurants located within half a kilometer of the location of the handset 3. Purchase of consumer goods through mobile phone handsets 4. Paying for parking through SMS notices (e.g., sending reminders) 5. Conducting transactions with the parking meter thro- ugh Bluetooth technology Database Marketing in M-commerce Database marketing can be applied to m-commerce in the following areas (adapted from Kotler & Armstrong, 2001, p. 626): 1. Identify business prospects: Information obtained from enquiries (e.g., through counter services, the In- ternet, e-mail, or mobile phone) and business reply cards enable companies to identify potential customers as well as business opportunities 2. Deciding which customers should receive a particular offer: Companies can tailor an offer (e.g., sending an e-coupon to a customer through mobile phone) accord- ing to the customer’s preferences and needs. 3. Deepening customer loyalty: Companies can make use of database information to identify customers’ interest by discovering their preferences and purchasing pat- terns. Furthermore, marketers can please customers by sending small gifts on special days. For example, a company could send an SMS birthday greeting, a birthday ring-tone download, or a discount e-voucher through mobile phone services before or on the cus- tomer’s birthday. 4. Reactivating customer purchases: A database enables marketers to stimulate sales from potential customers such as replacement of a mobile phone handset, up- grading of a service plan, or purchase of a package or of complementary mobile phone products or services. What Must Marketers Do to Be a Successful M-marketer? Lamont (2001) proposed several criteria (Table 3) for being a successful m-marketer. In sum, m-commerce P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 WIRELESS MARKETING854 Table 3 Criteria for Being a Successful M-marketer M-MARKETING STRATEGIES DETAILS Product Introduce miniature information appliances with unique interactive content to m-commerce customers Price Offer both commodity and higher value for money as marketing managers divide m-commerce customers into those who do virtually everything online and those who prefer personal services from telecom, content, and financial service providers. Promotion Provide customers with value-added intangible product attributes that are included as part of their smart handheld devices. For example, e-discount couples and free ring tone downloads Segmentation Divide like groups of people across national frontiers into those who have the income, are the correct age, live in the right neighborhoods, and belong to modernizing ethnic groups as candidates for the purchase of miniature information appliances, third-generation telecom services, and interactive Internet content. Targeting Assemble smaller like groups of people who are bound together by profession, skills, or personal tastes, habits, or values. Positioning Match possible online Internet products with probable customers; the former offers the latter enhanced customer relationships to try out m-commerce and the mobile Internet. From Conquering the Wireless World—the Age of M-Commerce, by Douglas Lamont, p. 279. Oxford, UK: Capstone, 2001. c  Captsone Publishing Limited (A Wiley Company). UK, 2001. Reprinted with permission. operators must offer unique, personalized services to their customers that offer value for the money. More important, m-commerce requires marketers to adopt a proactive ap- proach and be sensitive to their marketing environment to pursue new business opportunities in the changing wire- less world. M-marketers have to recognize that the prod- uct life cycle of portable wireless devices (e.g., PDAs and mobile phone handsets) is much shorter than it is for other consumer durables in technology sector. Merits of Reconfiguring the Value Chain The term “wireless world” implies global business per- spectives and death of physical distance, and it offers con- venience benefits to the services subscribers. “Businesses now have to compete on the basis that the world is a sin- gle market. Under such circumstances, the two keywords that are expected to lead corporations to a stable growth are “efficiency” and “creativity” (Richter & Mar, 2002, pp.142–143). Consequently, marketers need to “create new value through the wireless Internet services (Lamont, 2001, p. 55). Lamont summarized three merits of recon- figuring the value chain: 1. Firms can recognize and identify decision opportuni- ties across the industrial world for wireless telecom services. 2. Firms can create better alternatives for making good decisions either through alliances and partnerships or through direct investments (or both). 3. Firms can establish a set of competitive principles for the firm as they seek to conquer the wireless world in the age of m-commerce. WIRELESS CONSUMER BEHAVIOR Key Impact of Mobile Number Portability (MNP) or Wireless Number Portability (WNP) on Customer Loyalty The policies of MNP or WNP allow subscribers to carry their existing mobile telephone numbers to other network service providers. It enables subscribers to switch service provider more easily. Mobile phone subscribers are price sensitive and tend to keep on seeking service packages of- fering better value for money. This has had a significant impact on customer loyalty and churn rate. Marketers have to put more effort into cultivating customer loyalty and building long-term customer relationship to prevent high churn rate. Obviously, it costs companies more to acquire new customers than to keep their existing ones. Unfortunately, MNP may disrupt subscribers’ privacy when telemarketing calls are received through mobile phones. As a result, m-marketers need to consider per- mission marketing seriously and develop a strategy for pursuing consistent branding image to establish a brand community for fostering customer loyalty and reinforcing customer relationship. Brand Community and Customers’ Loyalty Brand community exists because “brands connect con- sumers to brands, and consumer to consumer” (Muniz & O’Guinn (2001, p. 418). These social groups have a high propensity to be reasonably stable and devoted to the brand. Furthermore, members of a brand com- munity tend to be “committed,” “conscientious,” and “passionate” toward the brand (Gruen & Ferguson, 1994). P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 WIRELESS CONSUMER BEHAVIOR 855 Consequently, it facilitates marketers to strengthen their branding strategies because the Web enable firms to communicate instantly with each customer. Consumer Decision-Making Process for Wireless Adoption of wireless services can be divided into five stages (Steuernagel, 1999): 1. Awareness stage—information obtained from televi- sion advertisement, mass media, observation of users. 2. Interest stage—attention and interest are stimulated by multiple exposures to users and ads. 3. Evaluation stage—perceived benefits (e.g., job or lifestyle, emergency, security), making enquiries for different models of handsets. 4. Trial stage—through friends or promotional demon- strations. 5. Adoption stage—customer adopts wireless service and continues tracking the cost—benefit relationship of the adoption. Segmentation Variables for Wireless Consumer Markets Three major segmentation variables have been identified for wireless consumer markets (Lamont, 2001): 1. Demographic—generation (e.g., Generation Y), in- come groups (e.g., high disposable income groups who can afford to pay for the wireless services), occupation (e.g., professional athletes). 2. Psychographic—lifestyle (e.g., high mobility, enjoying high-tech life, people who prefer to do everything on- line), personality (e.g., personal value). 3. Behavioral—benefits (e.g., seeking speed, convenient services, etc.), loyalty (through brand community). Permission Marketing and Customer Relationship Godin and Peppers (1999) indicated the merit of per- mission marketing is that it allows both parties to en- joy “mutually beneficial dialogue” without worrying about the privacy and legal issues. “Permission Marketing has been around forever (or at least as long as dating), but it takes advantage of new technology better than other forms of marketing. The Internet is the greatest direct mail medium of all time, and the low cost of frequent interac- tion makes it ideal for Permission Marketing” (Godin & Peppers, p. 51). Wells, Burneet, and Moriarty (2003, p. 23) documented that this concept because many advertising messages are regarded as interruptive. As a result, per- mission marketing should be taken seriously as a means to foster good customer relationships and “mutually bene- ficial dialogue.” This concept includes the following three principles: 1. The consumers (or audience) are in charge of the process. 2. The consumers (or audience) have agreed to receive promotional messages. 3. The consumers willfully sign up (i.e., willingness to participate). Because consents are obtained from customers before sending promotional messages, the perception of invasion of personal privacy can be reduced. More important, cus- tomers are given an opportunity to control the process of marketing communication activities such as accepting or rejecting an SMS promotional message. This is an effec- tive and efficient way to attract customers’ attention and acceptance to the advertising messages. It also enables marketers to foster good customer relationships without invasion of personal privacy or sending offensive SMSs. Participation Marketing and Customer Relationship This concept goes beyond permission marketing, accord- ing to Alan Rosenspan (2000), an expert in direct market- ing. It covers the following five principles (as cited in Wells et al., 2003, p. 24): 1. You really understand your customers (i.e., needs and preferences), for example, by collecting feedback from customers through marketing research, internal sales team, enquires, and customers’ complaints. 2. You provide feedback at every opportunity (i.e., to show your concern and customer care), for example, by mak- ing a call to seek subscribers’ opinions of new value- added services. 3. You involve customer and prospects as much as pos- sible (i.e., stimulate customers’ participation to build loyal customers, e.g., inviting customers to participate into charity events or public relations activities. 4. You market on customers’ schedules, for example, by making promotional offers, such as sending coupons or e-gifts (e.g., free download services) on customers’ birthdays. 5. You make customers feel vested in your success. Ethical and Privacy Issues in Wireless Marketing Similar to wired marketing (i.e. marketing activities con- ducted through fixed telephone lines), wireless marketing can annoy and interrupt customer’s privacy. Ethical and privacy issues (e.g., irritation, fraud, invasion of personal privacy) should be taken into consideration when develop- ing the marketing strategies to foster long-term customer relationships. Some examples of ethical and privacy issues that can arise in the mobile environment are as follows: 1. Irritation—sending out too many, too long SMS promo- tional or advertising messages to potential customers for pursuing location marketing strategies. 2. Fraud—making false claims such as “today is the last day for the special offer” when it actually isn’t, over- charging customers on their bills, giving “misleading” P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 WIRELESS MARKETING856 or “unclear” product information to potential cus- tomers. 3. Invasion of personal privacy—conducting telemarket- ing activities too early in the morning or too late at night, disclosing personal data to a third party for com- mercial or fundraising purposes. Consequently, the concept of permission marketing should be encouraged and cultivated throughout the or- ganization. In fact, companies need to set good practices and an effective system to monitor these consumer issues. Consumer Protection Wireless technologies have gone through a significant development period; however, the legal protection for m-commerce is still in its infancy. From an e-commerce perspective, OECD’s (Organization for Economic Co- operation and Development) Consumer Protection Guide- lines for e-Consumers (December, 1999) has indicated clearly about the possible consumer legal protection for e-commerce. The guidelines attempt to draw government, business bodies and consumer groups’ attention for devel- oping national and global awareness of consumer protec- tion laws. An ITU report (2002a), published in September 2002, proposed the creation of special legal protection for mobile consumers for the following reasons (OECD’s guidelines can be regarded as a foundation for the legal protection of m-commerce): 1. Mobile devices are classified as high-speed terminals. 2. Users of mobile devices are numerous and always have limited usage experience. 3. Users usually have limited technical and legal knowl- edge of m-commerce. 4. The display screen for display on mobile devices is limited (it is difficult to display contract details). 5. Mobile devices have limited keypad functions (e.g., absence of “cancel” or “undo” keys) for making cor- rections. MARKETING MIX FOR WIRELESS Product Product Characteristics Lamont (2001) suggested that marketers should make use of brand name to differentiate themselves from their com- petitors. He also has identified the following product or service characteristics for wireless industry: r Effective mobile devices should have interactive and instant features with unique content through wireless Internet. This content should be created for a particular mobile device (e.g., PDA or mobile phone). r SMS (the “killer application” for mobile phones), MMS services, m-sports, m-commerce, m-entertainment, and m-banking are expected to be the major value-added services for mobile devices. r New products develop on mini handsets and handheld mobile devices such as Web-based phones, WCDMA, and GPRS (“always on connection”). New Product Attributes in M-commerce Dynamic wireless technology has changed the ways that people conducting their business, it also influences con- sumers’ daily lives and their consumption behavior. The following summary of new product attributes for the wire- less products and services is adapted from Lamont (2001, p. 48–49). Wireless devices can or soon will be able to r find a parking space for your car, r search for the best bargains for your family (e.g., where to eat and shop), r transfer medical records to your physician, r permit mothers to breast-feed their babies on time and at work, r scan inventory and close a sale, r download music recommended by your friends, r chat with your friends, r read your e-mail, r pay bills while you commute to the city, r transfer funds from your checking to your savings account, r arrange travel and other services, r conduct banking services (e.g., enquiries, transfer pay- ment), r watch entertainment programs (e.g., sports), r take photos, and r listen to the radio. Price In the early days of widespread Internet use, an initial pricing strategy for the fixed-lined Internet was charged according to time spent online. Later, flat-rate schemes or plans for different user groups were offered. Pricing for mobile (or wireless) Internet use is expected to follow the pattern of the fixed-line Internet (ITU, 2002a). Today subscribers are charged according to their rate of con- sumption (i.e., per minute) to browse the wireless Inter- net. Unfortunately, the wireless industry is competitive, and marketers cannot control their prices. Customers play a more active role in influencing the pricing strategies of wireless industry because of a high level of transparency in the wireless business world. Pricing 3G There are different types of services provided by 3G mo- bile devices, such as data services and real-time Internet game applications, so the billing system is more complex than it was 2G devices. It is expected that different tariffs will be adopted because some wireless services such as e-mail can accept delay, but other services such as Inter- net game applications cannot. As a result, managers need to consider what happens if a real-time Internet game ap- plication suffers from lower service quality because of net congestion, for example. A billing system must be able to solve this kind of problem automatically (Korhonen, 2001). Above all, Lamont (2001) indicated that customers needed to be educated about the merits of the wireless Internet (e.g., anytime, anywhere, voice and data com- munications) to ensure that potential customers of 3G are P1: B-13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14, 2003 18:9 Char Count= 0 MARKETING MIX FOR WIRELESS 857 willing to pay for different service rates and a smart billing systems is developed to solve some basic technical prob- lems of Internet surfing (e.g. net congestion). Prepaid Versus Postpaid A prepaid concept is defined as customers who do not have subscriptions with a mobile operator but buy air- time for their SIM (Subscriber Identity Module) cards in advance and then use the phone as long as there is credit in their accounts. When their airtime runs out, they pur- chase more (Korhornen, 2001). SIM card is a small chip card kept inside a mobile phone. It serves as a network ac- cess card and it is similar to a tiny computer. It provides storing capacity for phone numbers, text messages, and value-added services. The advantages of prepaid service for the provider are as follows: r There is no need to carry out a credit check on new customers. r Customers with imperfect credit information can adopt mobile phone service under the prepaid scheme. r There is no need to bill prepaid customers. r Customers may never uses the services they pay for. The advantages of prepaid service for users are as follows: r Users remain anonymous in prepaid (hardware and soft- ware operators). r Users have more freedom to decide where to buy a hand- set and SIM. r There is no contract arrangement, and customers have more freedom to switch network operators. r There is no monthly subscription charge, so light users can be attracted (e.g., keeping a mobile device for emer- gency purpose only). r It is an efficient way for customers to control costs (automatically limits their phone service usage). Disadvantages of prepaid service for the provider are the following: r From the operators’ perspective, there are security prob- lems, because it is difficult to identify fraudulent users. r The anonymous nature of prepaid service does not allow marketers to employ data mining or database marketing techniques (cannot identify their needs and characteris- tics). The disadvantages of prepaid service for the customer are the following: r Prepaid calls are more expensive than postpaid SIMs. r Prepaid service may have an expiration date (unused airtime cannot be carried forwarded). In Finland, the network usage is relatively inexpen- sive, and thus the prepaid with no monthly fee would not offer any particular benefit. Consequently, the demand for the prepaid is limited in that country. In Italy and Portugal, however, some operators have more than 80 prepaid scheme customers. Distribution or Sale Channels As discussed earlier, the wireless Internet is not going to replace fixed-line Internet in the immediate future, so the wireless distribution channel is regarded as a supplemen- tary to existing sales channels (e.g., it could be applied to internal direct sales force, dealers, retailers, and direct marketing, etc.). Direct marketing is covered in more de- tail in the Promotion section. Internal Sales Force—Telemarketing The internal sales team of service providers can pursue telemarketing to individual potential customers. Suffi- cient training and retraining programs must be provided to all sales people to carry out effective telemarketing ac- tivities, however. In addition, motivation programs (e.g., incentives, commission, or bonus schemes) for rewarding outstanding salespeople and employees should be consid- ered and integrated into the company’s policies. Middleman (e.g., Dealer, Retailers) Service providers use middleman to attain a wider cover- age of the marketplace. The middlemen play an important role in facilitating business transactions for both business and consumer markets. Good channel relationship management is a key is- sue for pursuing success in channel management. To eliminate channel conflicts, however, the m-channel (mo- bile channel) should only be considered a supplementary mode to the traditional channel of distribution. Generally speaking, the channel of distribution can be divided into intensive, exclusive, and selective distribution. Because mobile phone service is perceived as a commodity, inten- sive distribution (i.e., as many outlets as possible; Kotler & Armstrong, 2001) should be considered. Promotion There are several promotional mix tools used in marketing strategy. With respect to m-commerce, advertising, public relations, and direct marketing are recommended. SMS Advertising SMS refers to the short message services provided by mobile network providers. SMS allows m-marketers to send electronic coupons and customized promotional messages to individual customers. Advisor.com (2002, Document No. 09546) reported a recent global study by HPI Research Group (marketing specialists) on the be- half of Nokia showing that a majority (88%) of customers like this mobile advertising method (i.e., sending advertis- ing messages or e-coupons via SMS). The study covered 11 countries including Brazil, Denmark, Germany, Italy, Japan, Korea, Singapore, Spain, Sweden, the United Kingdom, and the United States. Public Relations Service providers can use public relations to build brand or corporate image. Public relations is defined as “build- ing good relations with the company’s various publics [...]... schemaLocation="http://www.xbrl.org/us/gaap/ci/2000-07- 31 / us-gaap-ci-2000-07 31 . xsd" 07: period="2000 -12 - 31 " 08: scaleFactor= "3" 09: precision="9" 10 : type="statements" APPENDIX A: CREATING AN XBRL DOCUMENT 11 : 12 : 13 : 14 : 15 : 16 : 17 : 18 : 19 : 20: 21: 22: 23: 24: 25: 26: 27: 28: 29: 30 : 31 : 32 : 33 : 34 : 35 : 36 : 37 : 38 : 39 : 40: 41: 42: 43: 44: 45: 46: 47: 877 unit="ISO4 217 :USD" decimalPattern="#.#"> ... border-bottom-width: 3" BORDERCOLOR="#000000"> 17 : 2000 18 : 880 19 : 20: 21: 22: 23: 24: 25: 26: 27: 28: 29: 30 : 31 : 32 : 33 : 34 : 35 : 36 : 37 : 38 : 39 : 40: 41: 42: 43: 44: 45: 46: 47: 48: 49: 50: 51: 52: XBRL (EXTENSIBLE BUSINESS REPORTING LANGUAGE): BUSINESS REPORTING WITH XML ... period="2000 -12 - 31 " >18 000 15 000 Accounts receivable, net 12 000 5000 Total assets 30 000... period= "19 99 -12 - 31 " >20000 Accounts payable 10 000 5000 Common stock 20000... period="2000 -12 - 31 " >20000 15 000 Total liabilities and stockholders' equity 30 000 20000 The first line is the XML declaration: ... 5,000 15 ,000 Total liabilities and stockholders’ equity 30 ,000 20,000 01: 02: 03: 04: Balance Sheet 10 : Waterloo Inc. 11 : 12 : 13 : 14 : (Dollars in thousands) 15 : 16 : . 62. 03 10 Canada 61. 97 11 Finland 61. 22 12 Singapore 60.58 13 Luxembourg 58.58 14 Belgium 57.80 15 Austria 57.7 16 Germany 55. 53 17 Australia 55.40 18 Portugal 55 . 13 19 Japan 54.94 20 Note: From the. pp. 14 –20. P1: B - 13 Kwok WL040/Bidgoli-Vol III-Ch-68 August 14 , 20 03 18 :9 Char Count= 0 862 P1: IML/FFX P2: IML/FFX QC: IML/FFX T1: IML WL040A-09 WL040/Bidgoli-Vol III-Ch-69 August 14 , 20 03 18 :12 . Communications, 13 (5), 850–857. Cai, J., & Goodman, D. J. (19 97, October). General packet radio service in GSM. IEEE Communications Maga- zine, 35 (10 ), 12 2 13 1. Deering, S., & Hinden, R. (19 98,