On-the-Go Shopping – A Shopper’s Mobility Paradox

Syagnik (“Sy”) Banerjee, Ph.D.
Associate Professor of Marketing
(Article by Kim Laux)

 

Last year, the United Nations released a startling statistic: Six of the world’s seven billion people have a mobile phone; only 4.5 billion have access to a toilet.

Mobile phones are everywhere (including bathrooms). Their potential to conveniently connect you to anyone, anywhere at anytime have helped them become the fastest adopted consumer technology in the history of the world. So, why is 80 percent of mobile usage still taking place within the home?

This is the question that inspired further research by Syagnik (“Sy”) Banerjee, Ph.D., mobile and interactive marketing professor at UM-Flint, and Ruby Roy Dholakia, Ph.D., director of the Research Institute for Telecommunications and Information Marketing. Their findings were released in the article “Situated or Ubiquitous? A Segmentation of Mobile E-Shoppers,” published in the International Journal of Mobile Communications (Vol. 11, No. 5, 2013).

“The numbers from A.C. Neilsen’s research data show that despite the recent explosion of mobile devices and shopping via mobile devices, more than 80 percent of mobile usage was from inside the home,” said Banerjee. “This indicated a paradox—mobile users seemed to predominantly use the device from fixed, situated locations.

“As I thought more about his, it made me recall experiences I had as marketing manager for a vehicle tracking company that ran along the highways of rural Rajasthan, India. GPS, our strongest competitor, suffered a market entry setback because truck drivers refused to allow these seamless, hassle-free tracking devices to transmit data without their control. It drove home a realization that despite appreciating the benefits of a connected world, individuals could potentially feel discomfort in wireless environments if they felt the devices were transmitting personal information without their consent.

“Taxi drivers in Boston and Washington DC raised some of the same concerns about being tracked by their navigation devices. It’s a complex issue because navigation is a two-way process, involving exchange of information. One cannot provide directions without knowing the exact location of the vehicle. When a window opens, it provides an opportunity for flow both ways—and that causes hesitation and skepticism.”

For this study, Banerjee conducted several focus groups where participants were asked to explain the circumstances under which they searched for information using their mobile phones. He then exposed them to location-based advertisements to draw out their reactions. Based on their responses, he drafted several layers of survey and developed a 13-item scale to identify how situated or ubiquitous (freely moving) a consumer was. The scale measured how physical location, timing, people in the area, and a sense of physical and virtual control impacted mobile behavior when shopping online.

“The study led to several findings,” said Banerjee. “Some customers had no problem searching for information on the go, but they would not make purchases or transactions because of concerns they had about network security. Those who felt more comfortable shopping anytime/anywhere were also more open to receiving ads via mobile devices than situated users. We also found that demographic characteristics like marital status, gender and ethnicity made a lot of difference on how situated or ubiquitous the user was likely to be. Marketers could use these insights to segment and target their mobile customers and campaigns accordingly.”

 

“Breaking the Rules” to Gain a Competitive Advantage

Erin Cavusgil, Ph.D.
Associate Professor of Marketing
(Article by Kim Laux)

 

A business professional’s ability to recognize and respond to the forces at work in the world around you can lead to unprecedented success or an “out of business” sign on your door.

In the article, “A Perspective on Destruction Regeneration in International Marketing,” published in the Journal of the Academy of Marketing Science (2012),

Erin Cavusgil, Ph.D., and her co-author S. Tamer Cavusgil, Ph.D., examine how the global business landscape has changed in recent decades and how this affects companies searching for a leg up on the competition.

“As academics, we need to take a closer look at how our fields have evolved over the years—to better understand the current status and predict future outcomes,” said Cavusgil, a professor of marketing at UM-Flint. “This article identifies the ways the global landscape has changed in recent decades and how these changes impact corporations as they search for competitive advantage.”

Cavusgil’s research highlights four forces that currently define international marketing. The first is volatility and changes in the global economy and social terrain. She gives the example of a shift in prominence from the west to Asia and emerging markets as well as the rising middle class. The second force is turbulence of destructive shocks. This includes the impact of globalization, changes in communications and the importance of corporate social responsibility. The third force involves strategies used to cope with these changing market forces. To be successful, businesses must develop new strategies and ways of thinking in response to their dynamic environment. The fourth force is a new perspective of marketing performance. Companies cannot rely on outdated systems for assessing the effectiveness of their marketing tactics; performance needs to be measured with regard to how these four forces have impacted the field of international marketing.

“The larger business world needs to be cognizant of these forces as well as proactive in responding to them,” said Cavusgil. “As quoted from the article, To succeed in the new normal, MNEs [multinational enterprises] must develop early scanning capabilities; focus on what has changed and what remains basically the same for their customers, companies, and industries; and develop quick response and risk mitigation strategies. (p. 214) Businesses that have been successful in responding to and capitalizing on these environmental forces are known as rule breakers. These are companies like Apple, Amazon and Facebook.”

One of the most valuable lessons from Cavusgil’s research is the need for both academics and business professionals to develop a deeper understanding of foreign markets and how to effectively tap into them.

“Given that the economic welfare of our country is now intricately tied to emerging markets, we need to acquire greater understanding of how to succeed in these high-opportunity yet high-risk environments,” she explained. “Too many international firms still struggle to do well in the rapidly transforming economies.

“To this end, I and several colleagues have been methodically examining what makes these countries attractive for businesses. Specifically, we’ve been examining the rise of middle class households in such countries as Brazil, China, India and Turkey. Based on our data, we developed a quantitative benchmark of how well these economies have performed in terms of building their middle class consumers. We found, for example, South Korea and Taiwan have done exceptionally, whereas South Africa and Brazil have lagged relatively in adding to the ranks of their middle class households.

“In making such assessments, we tracked three indicators at the country level: disposable income, household expenditures and urban population. These factors appear to give a pretty robust indicator of an emerging market’s progress in creating new middle class consumers. We have publications pending on this research.”

In addition to the article published in the Journal of the Academy of Marketing Science, Cavusgil recently co-authored “Managing Global Megaprojects: Complexity and Risk Management,” which appeared in the International Business Review (Dec. 2013, vol. 22, no. 6). A blog highlighting some of the key points from this research can be found here.