LITERATURE REVIEW MCOMMERCE: RE-DEFINING THE CONCEPT OF PLACE AND PROMOTION IN THE MARKETING MIX Expectedly, todays world

has moved from a person-to-person exchange of value to a person via media to person exchange. And more than anything, at the helm of this transformation are the advancements in information and communication

technology, which have clearly changed the face of interactions (Okafor, 2012). Increasingly since the turn of the millennium, the new media of communication, especially mobile has continued to grow in relevance across all facets of social, economic, political, cultural, and religious life. According to Castells (2004), the mobile and some other related

technologies which come under the category of new media, the Internet, specifically, Web 2.0, has had its influence spread to virtually all aspects of human endeavour, including

marketing for the purposes of this study (Castells, 2004). The use of the new media of communication, especially mobile for several purposes has been studied by a number of scholars who have been interested in its reach, and importantly, the effects of its usage, whether as a communication tool (Binuyo,
1

2011)

or

as

an

information-gathering

tool

(Flew,

2002;

Koltringer, 2009), or for academic research (Jagboro, 2003), or for the purpose of creating and existing in a virtual reality (Kaplan and Michael, 2010).

As a tool for communication, the spread of web and new media of communication, especially mobile applications (popularly on the Web 2.0 platform) has transcended person-to-person communication to include interactions between individuals, between companies, companies and individuals, and between consumers and businesses (as explained in the C2C, B2B, and B2C models), the latter being a function on interactivity provided by Web 2.0 platforms (Spurgeon, 2005; Preston, 2011; Dominick, 2009). Interesting to this study would be the penultimate model (B2C). This is primarily because with the business-to-consumer, the concept of marketing

communication comes into play a situation where the company interacts with the consumer for the purpose of promoting their offerings (goods and/or services) with the ultimate aim of either providing information, inducing positive affective, or effecting patronage (Ray, 1975).
2

The rise of the new media of communication, especially mobile as a communication medium (with an increased capacity for persuasion, having all the qualities of television) has arguably changed the complexion of not only news gathering and disseminating, but also marketing communication. This has even given rise to the concept of social media marketing, which has been defined as integrated marketing communication conducted over the new media of communication, especially mobile, given that majority of people who get on social media actually do so through their mobile phones (Kaplan and Michael, 2010; Mangold and Faulds, 2009). However, before one can actually assess the contributions of new communication technology (mobile telephony) on the marketing mix, there is first the need to properly understanding the marketing paradigm.

The Marketing Mix Kalyanam and McIntyre (2002) render that the marketing mix and also its extension as the retailing mix are conceptions that provide a standard lexis for the marketing community. At
3

first the idea of a marketing mix was somewhat contentious. Many competing classifications were proposed, from a mix of just two elements (the offer and the tools) (Frey 1961), to one with three elements (goods mix, distribution mix and communication mix) (Kelly 1962) to one with 12 elements (Borden, 1965). Ultimately, a 4Ps description of the marketing mix became what today is one of the most standardized and universally accepted aspects of the marketing landscape. Professor E. Jerome McCarthy (1960), in his textbook Basic Marketing: A Managerial Approach , first popularised this particular grouping. The basis for the characterisation of the marketing mix was the very much simpler marketing world of the 1950s when TV was just taking the country by storm as the new marketing medium. It was a time of the masses with mass-marketing capitalizing on mass-communication to move mass-production through mass-distribution and mass-retailing to the swelling masses of the post-world-war-II middle-class. Marketing mix can therefore be said to have originated from the single P (price) of microeconomic theory (Chong, 2003). McCarthy (1964) offered the marketing mix, often referred to

as the 4Ps, as a means of translating marketing planning into practice (Bennett, 1997). Goi (2009) opines that the marketing mix is not a scientific theory, but merely a theoretical charter that recognises three basic decision making managers make in configuring their offerings to suit consumers needs. The tools can be used to develop both long-term strategies and short-term tactical programmes (Palmer, 2004). The proportions in the marketing mix can be altered in the same way and differ from the product to product (Hodder Education, n.d). The marketing mix management paradigm has dominated marketing thought, research and practice (Grnroos, 1994), and as a creator of differentiation (Van Waterschoot, n.d) since it was introduced in 1940s. Kent (1986) refers to the 4Ps of the marketing mix as the holy quadrupleof the marketing faithwritten in tablets of stone. Marketing mix has been extremely influential in informing the development of both marketing theory and practise (Mller, 2006).

The main reasons the marketing mix is a powerful concept are: It makes marketing seem easy to handle, allows the separation
5

of marketing from other activities of the firm and the delegation of marketing tasks to specialists; and - The components of the marketing mix can change a firms competitive position (Grnroos, 1994). The marketing mix concept also has two important benefits. First, it is an important tool used to enable one to see that the marketing managers job is, in a large part, a matter of trading off the benefits of ones competitive strengths in the marketing mix against the benefits of others. The second benefit of the marketing mix is that it helps to reveal another dimension of the marketing managers job. All managers have to allocate available resources among various demands, and the marketing

manager will in turn allocate these available resources among the various competitive devices of the marketing mix. In doing so, this will help to instil the marketing philosophy in the organisation (Low and Tan, 1995).

Elements

of

the

marketing

mix:

product,

price,

place

(distribution) and promotion, have been highlighted severally. And while elements like product, price and promotion has been largely documented, place which is concerned with the
6

distribution of product from point of manufacture to point of purchase may have been overlooked. It can be argued that even if the best possible promotions are undertaken for a product which meets consumers needs and is fittingly priced for the said targeted consumers, if the product is not available for purchase, then marketing would have failed, because consumers needs will still not be met, which is the entire purpose of marketing (Kotler, 2003).

MOBILE TELEPHONY IN THE MARKETING MIX The relationship between the Mobile telephony and marketing efforts cannot be underemphasized, especially since the world is shifting to that platform. In a technological determinist stance, Mangold and Faulds (2009) argue that the Mobile telephony has significantly ushered in a new epoch in IMC having heralded a switch in processes from traditional to new media, in this case, mobile telephony. The impact of the interactions among consumers in the social media space on the development and execution of marketing activities and

strategies is illustrated by the following points:

 Mobile telephony has become a mass media vehicle for consumer-sponsored communications. It is now the topchoice media for consumers at work and the second mostconsulted media at home, in most urban areas in Nigeria, especially with the advent of Internet-enabled phones and most recently, the BlackBerry and other smartphone products such as Android-enabled phones. Consumers are turning away from the traditional sources of advertising: radio, television, magazines, and

newspapers. Consumers also consistently demand more control over their media consumption. They require ondemand and immediate access to information at their own convenience (Rashtchy et al., 2007; Vollmer & Precourt, 2008). Consumers are turning more repeatedly to various mobile telephony searches applications and to to conduct their their information decisions

make

purchasing

(Lempert, 2006; Vollmer & Precourt, 2008). The mobile telephone, and its applications such as social media, is observed by consumers as a more reliable source of information regarding products and services
8

than corporate-sponsored communications transmitted via the traditional elements of the promotion mix (Foux, 2006).

The number of global mobile phone owners in 2003 reached 1.3 billion (Kumar, 2004) with the highest rates of growth occurring in China (Minomo and Masamura, 2004). According to the Nielsen Media Research survey (Hong Kong mobile phone, 2006), the highest mobile phone penetration rate was found in Hong Kong (96%), followed by South Korea (93%), the UK (92%), Singapore (89%), and Australia (87%). The U.S. market for mobile phones included 185 million users (Smith, 2005) and was predicted to reach 75% of the population, or about 236 million users, by 2010 (Wallace, 2005); while in Nigeria, after about 12 years of the introduction of the mobile phone, there are almost as many subscribers as the 160 million Nigerians alive (NCC, 2013). The dramatic increase in mobile phone usage has produced a new avenue for marketing applications and services (Tsang et al., 2004). Pramis (2013) holds that currently, the number of mobile phone users stands at about 6 billion, and that by 2014,
9

there will more mobile phones than there are humans; while the ITU (2013) gives the figures to stand at 6.8 billion. The future of m-commerce has great potential as the mobile phone market remains a great untapped marketing medium (Jackson, 2004). Furthermore, the ITU (2013) posit that mobile-broadband subscriptions have climbed from 268 million in 2007 to 2.1 billion in 2013. This reflects an average annual growth rate of 40%, making mobile broadband the most dynamic ICT market. In developing countries, the number of mobile-broadband subscriptions more than doubled from 2011 to 2013 (from 472 million to 1.16 billion) and surpassed those in developed countries in 2013. Africa is the region with the highest growth rates over the past three years and mobile-broadband

penetration has increased from 2% in 2010 to 11% in 2013. Saidi (2008) argues that despite the fact that increased usage of mobile phones and the rapid developments in mobile communication technologies present a surge for m-commerce, and while m-commerce has been implemented in many countries in both the developed and developing world, it

10

remains an unexploited area in some African countries, for a number of reasons. Mobile commerce (m-commerce) is the involvement of the delivery of products and services via wireless technologies to enable e-commerce activities at any time and location. (Yeo and Huang, 2003). It consists of business and consumer transactions that use mobile phones and can be recognized as a complement to e-commerce (Kumar, 2004). The global mcommerce revenues are expected to increase to 88 billion dollars by 2009 (Mort and Drennan, 2004).

Obe and Balogun (2007) discuss mCommerce in the Nigerian context. They associate the rise in the use of mobile phones as being contributory to the growth and penetration of

mCommerce in the country, adding that with mCommerce, the concept of distribution within the context of marketing has changed considerably. They also make the argument that the development of wireless Internet also served to reinforce the implications that mobile telephony has had, and will continue to have, on the development of communication and its correlated activities including marketing.
11

The mobile world opens up numerous possibilities beyond the typical realm of communication activities (Gorlenko and

Merrick, 2003). Worldwide, mobile users are increasingly accepting phones as multipurpose devices, which can be used to send text messages, take pictures, surf the web, download ring-tones, and play games (Smith, 2005). Some marketers are starting to see the mobile phone as a potential marketing medium and consequently are seeking ways to tap into this burgeoning opportunity. For example, Samsung and Nokia have provided digital video broadcast handheld (DVB-H) by mobile phones which can deliver up to 50 TV channels (Colleen, 2007). British Telecom sent Short Message Service (SMS) text messages to their individual customers announcing a sale at a specific store, which created a mad rush to the store (Swartz, 2001). AOL created a mobile search service that includes yellow pages and a shopping search (AOL Rolls out New AOL Mobile Search Services, 2005). McDonalds and Dunkin Donuts have sent text message coupons to mobile users (Freedman, 2005). Various current applications for m-commerce include ubiquitous communication (e.g. e-mail, short message service), content deliveries (e.g. health-related
12

to

messages,

pill

reminders), entertainment services (e.g. music download, gaming, gambling, sports scores), location-based services (e.g., finding nearby facilities/services, transportation information, tour guides), movie and concert ticketing, sending store and restaurant discount coupons, shipment tracking, comparison shopping, banking, and payments (Palenchar, 2004; Xu and Gutierrex, 2006; Yuan and Zhang, 2003). One of the more popular categories of services currently under heavy demand is location-based services (LBS), which relate spatial and temporal information that describe moving objects (Lee, 2007). It tracks the location information of moving objects per time unit, stores them into databases, and handles users queries based on the stored location information. For example, by utilizing GPS capabilities, the LBS allows customers to find optimal routes to their destinations. They can obtain detailed maps and real-time alerts on traffic conditions, and information about highway services like gas, food, and lodging. (Rao and Minakakis, 2003). Other LBS examples include the E911 service, which allows for tracking the location of mobile users in an emergency (Frenzel, 2006); and Dodgeball and Twitter, social networking systems that send text messages to the
13

mobile users about where their friends are located (DeJean, 2007; Gibbs, 2007). The value customer place on mobile services would increase if customers could retrieve time and location specific information (Mort and Drennan, 2004). The increased use of mobile phones has increased the use of advertisements, especially through short messaging services (SMS). This has come to be known as mobile advertising (Tsang et al., 2004). Procter & Gamble has made an agreement with cell phone carriers such as Cingular, Verizon, Sprint, and TMobile to market their products and develop marketing campaigns for cell phones (Smith, 2005). Companies like Sony, Disney, Coca-Cola, Heineken, and Ford are also beginning to invest in mobile advertising (Kilby, 2006). They are hiring mobile marketing partners to assist in promotion of their products via mobile phones (Britvic plots expansion of mobile marketing activity, 2006). The mobile-assisted shopping application is another growing area in m-commerce. Consumers can obtain marketing

information about different products and their relative costs via their mobile phones in order to make informed decisions in real time (Mort and Drennan, 2002). A report by the Japanese
14

economy, trade, and industry ministry and ECOM found that mshopping is popular among young Japanese women and was worth 5 billion in 2004, a 25% increase from 2003 (McCurry, 2006). Mobile payment services promote m-shopping. For example, mobile users can register their credit card numbers, and these numbers are saved in their mobile phones to be used for purchases (Phone me the money, 2003). In 2005, Mastercard International announced that it would be providing its issuing banks with the technology needed for payment enabled phones, and Motorola conducted a pilot test using Mastercardenabled phones with its employees (Phone payments

advance, 2005). Various other mobile services include mlearning, which uses the mobile phone to facilitate learning for young adults and teens (Mobile phones switch young people on to learning, 2003), and mobile banking, which allows mobile users to make bank payments or withdrawals (Kumar, 2004). Oracle (2011) also agree. They state that The mobile channel continues to grow as a connector of other sales channels among all age groups in the U.S. Consumers are starting to use their mobile devices to comparison shop, seek
15

product ratings and reviews, and to search for coupons. There are also indications that consumers are using their mobile devices more frequently for shopping purposes while standing in a physical store. 48 percent of consumers across all age groups are using their mobile devices to research or browse products and services. This is up from 37 percent in a consumer benchmark survey commissioned by ATG in July 2010, and 27 percent in a consumer cross-channel survey taken in November 2009. Mobile music services are also increasing in popularity, as are single- and multi-player game services (Srivastava, 2005).

Bigne,

Ruiz

and

Sanz

(2005)

highlight

the

increasing

importance of mCommerce when they argue that the increased mobile usage of recent years is a clear example of the systems growth, significance and the opportunities it offers as an independent sales channel and it therefore merits special attention from researchers. While published work on M-commerce applications and

technologies and the different mobile operators and their services is becoming more abundant and representative
16

(Barnes 2002, Buellingen and Woerter 2004; Coursaris and Hassanein 2002; Dholakia and Dholakia 2004; Figge 2004; Gerstheimer and Lupp 2004; Lehrer 2004; Leung and Antypas 2001; Kumar and Zahn 2003), there is a lack of literature on the profile of users who buy products/services through the different mobile operators and on the analysis of the factors which most influence shopping behaviour and the processes of adopting M-commerce (Coursaris and Hassanein, 2002; Luarn and Lin, 2004; NG-Kruelle et al., 2002; Wu and Wang, 2004; Yang, 2005). There is also a dearth of literature on the extent to which this trend has spread in countries which have Internet penetration concerns like Nigeria and other developing

countries; climes where issues such as scepticism and distrust. The few that are available however state that with Nigeria for instance, the major constraints include: economic conditions such as the widespread poverty; low bandwidth and poor data services available; carrier companies lack of interoperability; people apathy and distrust for mCommerce; amongst others.

17

References Kalyanam, K. and McIntyre, S. (2002) The E-Marketing Mix: A Contribution of the E-Tailing Wars being journal article posted online on http://www.pro-edukasi.com/wpretrieved on

content/uploads/E-MARKETING.pdf, 12/08/2013

Goi, C. L. (2009) A Review of Marketing Mix: 4Ps or More? International Journal of Marketing Studies, Vol 1 (1): pp. 1-15 Mller, K. (2006). The Marketing Mix Revisited: Towards the 21st Century Marketing by E. Constantinides. Journal of Marketing Management, Vol. 22 (3); pp. 439-450. McCarthy, E. J. (1964). Basic Marketing, IL: Richard D. Irwin. Van Waterschoot, W. (n.d). Chapter 9: The Marketing Mix as a Creator of Differentiation, Blois: The Oxford Textbook of Marketing, Instructor's Manual, Oxford University Press. [Online] Available:

http://www.oup.com/uk/orc/bin/9780198775768/freelectu rer/manual/imchap09.pdf., retrieved on 12/08/2013 Kotler, P. (2003). Marketing Management (11th ed.). Prentice Hall International Editions.
18

Borden, N. H. (1965). The concept of the marketing mix. In Schwartz, G. (Ed), Science in marketing. New York: John Wiley & Sons Rashtchy, F., Kessler, A. M., Bieber, P. J., Shindler, N. H., & Tzeng, J. C. (2007, February). The user revolution: The new advertising ecosystem and the rise of the Internet as a mass medium. Minneapolis, MN: Piper Jaffray

Investment Research. Lempert, P. (2006). Caught in the Web. Progressive Grocer, 85(12), 18. Foux, G. (2006, May 8). Consumer-generated media: Get your customers involved. Brand Strategy, 3839. Vollmer, C., & Precourt, G. (2008). Always on: Advertising, marketing, and media in an era of consumer control . New York: McGraw-Hill. Hodder Education (n.d). Introduction to the Marketing Mix Pricing. [Online] Available:

http://www.hoddersamplepages.co.uk/pdfs/cceabus6.pdf. Retrieved 10/08/2013 Chong, K. W. (2003). The Role of Pricing in Relationship Marketing - A Study of the Singapore Heavy Equipment
19

Spare Parts Industry, PhD Dissertation, International Graduate School of Management, University of South Australia. Constantinides, E. (2002). The 4S Web-Marketing Mix Model. Electronic Commerce Research and Applications , Vol. 1 (1), pp. 57-76. Kent, R. A. (1986). Faith in the four Ps: An alternative. Journal of Marketing Management, 2, 145-154. Low, S. P. & Tan, M. C. S. (1995). A Convergence of Western Marketing Mix Concepts and Oriental Strategic Thinking. Marketing Intelligence & Planning, 13(2), 36-46. Bennett, A. R. (1997). The Five Vs - A Buyers Perspective of the Marketing Mix. Marketing Intelligence & Planning , Vol. 15 (3), 151-156. Britvic Plots Expansion of Mobile Marketing Activity (2006), Precision Marketing, January 13, 2006, 6. Grnroos, C. (1994). From Marketing Mix to Relationship Marketing: Towards A Paradigm Shift in Marketing. Management Decision Vol. 1 (1) pp. 32(2), 4-20.

20

Srivastava, L. (2005), Mobile Phones and the Evolution of Social Behavior, Behaviour and Information Technology , Vol. 24 (2), 111-129. Nigerian Communications Commission (2013) Subscriber on:

Data

[Online]

Available

http://www.ncc.gov.ng/index.php? option=com_content&view=article&id=125&Itemid=73, retrieved on 11/08/2013 Smith, E.D. (2005), Marketers Go the Mobile Route, KnightRidder Tribune Business News, July 3, 2005. Frenzel, L. E. (2006), Location Tech Gives Us the World, Electronic Design, 54 (27), 40-42. DeJean, D. (2007), Pick Your Presence Tool, Information Week, May 21, 2007, 51-52, 54. AOL Rolls Out New AOL Mobile Search Services (2005), Wireless News, July 27, 2005. Gibbs, C. (2007), What Are You Doing Now? How About Now? RCR Wireless News, 26 (15). Retrieved July 25, 2007 from LexisNexis. International Telecommunications Union (2013) The World in 2013: ICT Facts and Figures Available online at:
21

http://www.itu.int/en/ITUD/Statistics/Documents/facts/ICTFactsFigures2013.pdf, retrieved on 12/08/2013 Oracle (2011) Mobile Trends: Consumer Views of Mobile Shopping and Mobile Service Providers. Being an Oracle White Paper, April 2011 Rao, B., and L. Minakakis (2003), Evolution of Mobile LocationBased Service, Communication of the ACM, 46 (12), 6165 Palenchar, J. (2004), Multipurpose Cellphones Keep

Replacement Cycle Spinning, Twice, December 20, 2004, 90-91. Xu, G., and J.A. Gutierrez (2006), An Exploratory Study of Killer Applications commerce, and Critical of Success Electronic Factors in Min

Journal

Commerce

Organizations, 4 (3), 63-79. Swartz, N. (2001), Hot & Cold: M-commerce Opportunities. Wireless Review, 18 (6), March 15, 2001, 32-38. Yuan, Y., and J.J. Zhang (2003), Towards an Appropriate Business Model for M-commerce, International Journal of Mobile Communications, 1 (1/2), 35-46.
22

Phone Me the Money (2003), Economist, 366 (8315), 90. Phone Payments Advance; Obstacles Remain (2005),

American Banker, 170 (201), 17. Mort, G.S., and J. Drennan (2002), Mobile Digital Technology: Emerging Issues for Marketing, Journal of Database Marketing, 10 (1), 9-23. McCurry, J. (2006), Handset Brings the Mall to You in Japans M-shopping Craze, The Guardian, February 13, 2006, 28. Kilby, N. (2006), Insight Mobile Marketing: A Rich Seam of Opportunity, Marketing Week, 29 (3), January 19, 2006, 34-35. Mort, G.S., and J. Drennan (2004), Marketing M-services: Establishing a Usage Benefit Typology Related to Mobile User Characteristics, Database Marketing and Customer Strategy Management, 12 (4), 327-341.

23