chapter -1- introduction of marketing, advertising and...
TRANSCRIPT
CHAPTER -1- INTRODUCTION OF MARKETING, ADVERTISING AND SMS ADVERTISING
PhD Thesis PRASHANT AMIN Page Number-0
1.1 Introduction
1.2 Early Implementation of SMS
1.3 SMS in Present Epoch
1.4 Introduction : The Linkage of Marketing and Advertising
1.5 Mobile Advertising / SMS Advertising
1.6 Marketing and Advertising
1.7 The growth of Mobile telephone and SMS
1.8 Seven unique benefits of Mobile
1.9 Smartphone
1.10 Market share of Mobile phones & Smartphone usage
1.11 Growth of online Advertisement
1.12 Foundation of SMS advertisement
1.13 Mobile Marketing Strategies
1.14 Trends of SMS advertisement and M- Commerce
1.15 Growth of M-Commerce in India and Worldwide
1.16 A brief about Indian Economy
1.17 Growth of Services in India
1.18 Major Services and overall performance
1.19 Gujarat- At Glance
1.20 Overview of Telecommunication Sector
1.21 Characteristics : Advantages & Disadvantages of SMS
advertisement
References
CHAPTER-1-Introduction of Marketing, Advertising and SMS
Advertising
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PhD Thesis PRASHANT AMIN Page Number-1
Marketing is communicating the value of a product, service or brand to customers, for the purpose
of promoting or selling that product, service, or brand. Marketing techniques include choosing
target markets through market analysis and market segmentation, as well as understanding
consumer behaviour and advertising a product's value to the customer. From a societal point of
view, marketing is the link between a society's material requirements and its economic patterns of
response. Marketing satisfies these needs and wants through exchange processes and building long-
term relationships.
Marketing has main four pillar which is fundamental foundation block of Marketing namely
Product, Price, Place and Promotion. Marketing communications are messages and related media
used to communicate with a market. Marketing communications is the "promotion" part of the
"marketing mix" or the "four Ps": price, place, promotion, and product. It can also refer to the
strategy used by a company or individual to reach their target market through various types of
communication. There are various marketing communication platform namely Social Media,
Email,In-porduct communication and Branding.
The advent of Mobile phone device create revolution and added another medium of
communication. This device also use as SMS marketing device. Mobile marketing is marketing on
or with a mobile device, such as a smart phone. Mobile marketing can provide customers with time
and location sensitive, personalized information that promotes goods, services and ideas. Short
Message Service (SMS) is a text messaging service component of phone, Web, or mobile
communication systems. It uses standardized communications protocols to allow fixed line or
mobile phone devices to exchange short text messages
The term "SMS" is used for both the user activity and all types of short text messaging in many
parts of the world. SMS is also employed in direct marketing, known as SMS marketing.
1 CHAPTER
Introduction of Marketing,
Advertising and SMS Advertising
CHAPTER -1- INTRODUCTION OF MARKETING, ADVERTISING AND SMS ADVERTISING
PhD Thesis PRASHANT AMIN Page Number-2
1.1. Introduction about SMS
Technology developments have created new marketing communication channels or media such as
email, SMS (Short Messaging Service) and MMS (Multimedia Messaging Service). These digital
media are considered to potentially improve the possibilities to reach consumers by allowing
personalization of the content and context of the message (Forrester Report 2001)1.
As a result, consumers filter out excess visual and aural marketing stimuli (Rumbo 2002)2, which
contributes to the uncertainty of the marketers of obtaining the consumers’ attention. However,
research has indicated that creativity can attract the consumers’ attention. Both the advertising
message and the choice of the advertising medium need to be creative (El-Murad & West 2004)3.
With the emergence of high speed wireless network technologies and the increasing penetration of
the mobile phone, the global interest of the advertising industry in the use of this medium for
marketing purposes, has increased significantly (Bauer et al. 2005)4.
This study aims to investigate the effectiveness of SMS advertising and to determine whether this
new type of advertising is more effective for different kinds of messages for products and services.
Permission-based (i.e. push-based) SMS advertising. Permission-based SMS advertising can be
defined as a message (e.g. SMS and MMS) that has been requested by the consumer as part of an
Opt-in scheme (e.g. a consumer fills in their mobile phone number on a regular customer
registration form and agrees to receive commercial messages and information of interest).
Permission-based advertising messages are powerful because by signing up to an opt-in list, the
consumer is requesting the messages from the advertiser rather than simply being exposed to it.
Besides the permission-based mobile advertising, marketers are increasingly engaging in call-to-
action / direct-response (pull-based) mobile advertising. That is, a customer sending an SMS in
response to a call-to-action, for instance, from TV, radio, on-pack or press (e.g. Trappey III &
Woodside 2005)5.
Short Message Service (SMS) is a text messaging service component of phone, Web, or mobile
communication systems. It uses standardized communications protocols to allow fixed line or
mobile phone devices to exchange short text messages.
(http://edition.cnn.com/2012/12/03/tech/mobile/sms-text-message-20/)1
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SMS was the most widely used data application with an estimated 3.5 billion active users, or
about 80% of all mobile phone subscribers at the end of 2010. (http://communities-
dominate.blogs.com/brands/2011/01/time-to-confirm-some-mobile-user-numbers-sms-mms-
mobile-internet-m-news.html )2
The term "SMS" is used for both the user activity and all types of short text messaging in many
parts of the world. SMS is also employed in direct marketing, known as SMS marketing.
(http://www.wisegeek.com/what-is-sms-marketing.htm) 3
SMS has used on modern handsets originated from radio telegraphy in radio memo pagers using
standardized phone protocols. These were defined in 1985 as part of the Global System for Mobile
Communications (GSM) series of standards as a means of sending messages of up to 160 characters
to and from GSM mobile handsets. ( http://www.3gpp.org/DynaReport/0340.htm)4
1.1.1. History of SMS
The first action plan of the CEPT Group GSMwas approved in December 1982, requesting that,
"The services and facilities offered in the public switched telephone networks and public data
networks ... should be available in the mobile system.[ Adding text messaging functionality to
mobile devices began in the early 1980s. ( http://en.wikipedia.org/wiki/ETSI )5
This plan included the exchange of text messages either directly between mobile stations, or
transmitted via message handling systems in use at that time.
The SMS concept was developed in the Franco-German GSM cooperation in 1984 by Friedhelm
Hillebrand and Bernard Ghillebaert. [Source: See the book Hillebrand, Trosby, Holley, Harris:
SMS the creation of Personal Global Text Messaging, Wiley 2010]6
The GSM is optimized for telephony, since this was identified as its main application. The key idea
for SMS was to use this telephone-optimized system, and to transport messages on the signaling
paths needed to control the telephone traffic during periods when no signaling traffic existed. In
this way, unused resources in the system could be used to transport messages at minimal cost.
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However, it was necessary to limit the length of the messages to 128 bytes (later improved to 160
seven-bit characters) so that the messages could fit into the existing signaling formats. Based on
his personal observations and on analysis of the typical lengths of postcard and Telex messages,
Hillebrand argued that 160 characters was sufficient to express most messages succinctly.
(http://latimesblogs.latimes.com/technology/2009/05/invented-text-messaging.html) 6
SMS could be implemented in every mobile station by updating its software. Hence, a large base
of SMS capable terminals and networks existed when people began to use SMS. A new network
element required was a specialized short message service center, and enhancements were required
to the radio capacity and network transport infrastructure to accommodate growing SMS traffic.
1.1.2. Initial Stages of SMS
The technical development of SMS was a multinational collaboration supporting the framework of
standards bodies. Through these organizations the technology was made freely available to the
whole world [Source Friedhelm Hillebrand "GSM and UMTS, the creation of Global Mobile
Communication", Wiley 2002, chapters 10 and 16, ISBN 0-470-84322-5 ]7
The first proposal which initiated the development of SMS was made by a contribution of Germany
and France into the GSM group meeting in February 1985 in Oslo. This proposal was further
elaborated in GSM subgroup WP1 Services (Chairman Martine Alvernhe, France Telecom) based
on a contribution from Germany. There were also initial discussions in the subgroup WP3 network
aspects chaired by Jan Audestad (Telenor). The result was approved by the main GSM group in a
June '85 document which was distributed to industry. The input documents on SMS had been
prepared by Friedhelm Hillebrand (Deutsche Telekom) with contributions from Bernard
Ghillebaert (France Télécom). The definition that Friedhelm Hillebrand and Bernard Ghillebaert
brought into GSM called for the provision of a message transmission service of alphanumeric
messages to mobile users "with acknowledgement capabilities". The last three words transformed
SMS into something much more useful than the prevailing messaging paging that some in GSM
might have had in mind. (http://www.gsmhistory.com/sms/ )7
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SMS was considered in the main GSM group as a possible service for the new digital cellular
system. In GSM document “Services and Facilities to be provided in the GSM System,” both
mobile-originated and mobile-terminated short messages appear on the table of GSM teleservices.
The discussions on the GSM services were concluded in the recommendation GSM 02.03
“TeleServices supported by a GSM PLMN.” (http://www.3gpp.org/DynaReport/0203.htm )8
Here a rudimentary description of the three services was given:
1. Short message Mobile Terminated (SMS-MT)/ Point-to-Point: the ability of a network to transmit
a Short Message to a mobile phone. The message can be sent by phone or by a software
application.
2. Short message Mobile Originated (SMS-MO)/ Point-to-Point: the ability of a network to transmit
a Short Message sent by a mobile phone. The message can be sent to a phone or to a software
application.
3. Short message Cell Broadcast.
1.2. Early implementation of SMS
The first SMS message (http://news.bbc.co.uk/2/hi/uk_news/2538083.stm)9 was sent over
the Vodafone GSM network in the United Kingdom on 3 December 1992, from Neil
Papworth of Sema Group (now Mavenir Systems) using a personal computer to Richard Jarvis of
Vodafone using an Orbitel 901 handset. The text of the message was “Merry Christmas.
(http://timesofindia.indiatimes.com/world/UK-hails-10th-birthday-of-SMS/articleshow/30216466.cms?)10
The first commercial deployment of a short message service center (SMSC) was by Aldiscon part
of Logica (now part of Acision) with Telia (now TeliaSonera) in Sweden in 1993.[
(https://web.archive.org/web/20080316145401/)11
(http://www.logica.com/history+and+key+milestones/350233679 )12 All first installations of SMS
gateways were for network notifications sent to mobile phones, usually to inform of voice mail
messages. The first commercially sold SMS service was offered to consumers, as a person-to-
person text messaging service by Radiolinja (now part of Elisa) in Finland in 1993. Most early
GSM mobile phone handsets did not support the ability to send SMS text messages, and Nokia was
the only handset manufacturer whose total GSM phone line in 1993 supported user-sending of
SMS text messages.
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Initial growth was slow, with customers, one factor in the slow take up of SMS was that operators
were slow to set up charging systems, especially for prepaid subscribers, and eliminate billing fraud
which was possible by changing SMSC settings on individual handsets to use the SMSCs of other
operators. Initially, networks in the UK only allowed customers to send messages to other users on
the same network, limiting the usefulness of the service. This restriction was lifted in 1999.
[(http://news.bbc.co.uk/2/hi/uk_news/2538083.stm) 13 SMS was originally designed as part of
GSM, but is now available on a wide range of networks, including 3G networks.
1.3. SMS in present epoch
In 2010, 6.1 trillion (6.1 × 1012) SMS text messages were sent.(http://www.itu.int/ITU-
D/ict/material/FactsFigures2010.pdf )14. This translates into an average of 193,000 SMS per
second. (http://www.statista.com/statistics/270298/number-of-sms-sent-per-second-worldwide-
since-2007/)15. SMS has become a huge commercial industry, earning $114.6 billion globally in
2010.(http://www.dailymail.co.uk/news/article-2070892/OMG-Text-messaging-turns-19-Meet-
Neil-Papworth-Brit-thank.html )16
While SMS is still a growing market, traditional SMS is becoming increasingly challenged by
alternative messaging services available on smart phones with data connections, especially in
Western countries where these services are growing in popularity.
(http://www.phonearena.com/news/The-death-of-SMS-has-been-greatly-exaggerated_id19493)17
1.4. INTRODUCTION: The linkage of marketing and
advertising
Marketing is the methodology of communicating the value of a product or service to customers,
for the purpose of selling that product or service.
Marketing techniques include choosing target markets through market analysis and market
segmentation, as well as understanding consumer behavior and advertising a product's value to the
customer. From a societal point of view, marketing is the link between a society's material
requirements and its economic patterns of response. Marketing satisfies these needs and wants
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through exchange processes and building long term relationships. Marketing blends art and applied
science (such as behavioural sciences) and makes use of information technology.
1.5. History of Marketing
The marketing orientation evolved from earlier orientations, namely, the production orientation,
the product orientation and the selling orientation
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Table Number: 1.1 – History of Marketing Concepts
Orientation Profit
driver
Western
European
timeframe
Description
Production Production
methods
until the
1950s
A firm focusing on a production orientation specializes in producing as much as possible of a
given product or service. Thus, this signifies a firm exploiting economies of scale until
the minimum efficient scale is reached. A production orientation may be deployed when a high
demand for a product or service exists, coupled with a good certainty that consumer tastes will
not rapidly alter (similar to the sales orientation).
Product Quality of
the
product
until the
1960s
A firm employing a product orientation is chiefly concerned with the quality of its own product.
A firm would also assume that as long as its product was of a high standard, people would buy
and consume the product.
Selling Selling
methods
1950s and
1960s
A firm using a sales orientation focuses primarily on the selling/promotion of a particular product,
and not determining new consumer desires as such. Consequently, this entails simply selling an
already existing product, and using promotion techniques to attain the highest sales possible.
Such an orientation may suit scenarios in which a firm holds dead stock, or otherwise sells a
product that is in high demand, with little likelihood of changes in consumer tastes that would
diminish demand.
Marketing Needs and
wants of
customers
1970s to the
present day
The 'Customer orientation' is perhaps the most common orientation used in contemporary
marketing. It involves a firm essentially basing its marketing plans around the marketing concept,
and thus supplying products to suit new consumer tastes. As an example, a firm would employ
market research to gauge consumer desires, use R&D (research and development) to develop a
product attuned to the revealed information, and then utilize promotion techniques to ensure
persons know the product exists. R&D companies often parallel customer orientation with R&D
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phases to ensure the desired customer specifications are produced. Customization Maximization
(similar to profit maximization in economics,) is the measurable approach to more efficiently
sustaining specific customer needs, in effort to maximize the customization of the product or
service offered to the customer, by the measure of data relating to responses, feedback, and
elasticity.
Holistic Marketing Everythin
g matters
in
marketing
21st century The holistic marketing concept looks at marketing as a complex activity and acknowledges that
everything matters in marketing - and that a broad and integrated perspective is necessary in
developing, designing and implementing marketing programs and activities. The four
components that characterize holistic marketing are relationship marketing, internal marketing,
integrated marketing, and socially responsive marketing. Market segmentation and positioning
have increased the divergence of society, further segregating and preventing a holistic population.
Holistic Marketing helps converge the segments in an approach to improve the entire market
through social responsibility and convergence. Holistic marketing disengages the political
marketing activities of "divide and conquer", or market segmentation.
.[ Source : Kotler, Philip; Kevin Lane Keller (2009).)8
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1.4.2. Contemporary approaches
Recent approaches in marketing include relationship marketing with focus on the customer, business
marketing or industrial marketing with focus on an organization or institution and social
marketing with focus on benefits to society. New forms of marketing also use the internet and are
therefore called internet marketing or more generally e-marketing, online marketing, "digital
marketing", search engine marketing, or desktop advertising. It attempts to perfect the segmentation
strategy used in traditional marketing. It targets its audience more precisely, and is sometimes called
personalized marketing or one-to-one marketing. Internet marketing is sometimes considered to be
broad in scope, because it not only refers to marketing on the Internet, but also includes marketing
done via e-mail, wireless media as well as driving audience from traditional marketing methods like
radio and billboard to internet properties or landing page.
Table Number–1.2-Contemporary Approaches
Orientation Profit driver Western
European
timeframe
Description
Relationship
marketing /Relationshi
p management
Building and keeping
good customer
relations
1960s to
present day
Emphasis is placed on the whole
relationship between suppliers and
customers. The aim is to provide
the best possible customer service
and build customer loyalty.
Business
marketing /Industrial
marketing
Building and keeping
relationships
between organizations
1980s to
present day
In this context, marketing takes
place
between businesses or organizatio
ns. The product focus lies
on industrial goods or capital rather
than consumer products or end
products. Different forms of
marketing activities, such as
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promotion, advertising and
communication to the customer are
used.
Societal marketing Benefit to society 1990s to
present day
Similar characteristics to
marketing orientation but with the
added proviso that there will be a
curtailment of any harmful
activities to society, in either
product, production, or selling
methods.
Branding Brand value 1980s to
present day
In this context, "branding" refers to
the main company philosophy and
marketing is considered to be an
instrument of branding
philosophy.
Source: Kotler, Philip; Kevin Lane Keller (2009)1. Adcock, Dennis (2001)2"1" Kotler, Philip & Keller, L.
Kevin (2012)3... A Adcock, Dennis; Al Halborg; Caroline Ross (2001)4.
1.4.3 Advertising
Advertising in business is a form of marketing communication used to encourage, persuade, or
manipulate an audience (viewers, readers or listeners; sometimes a specific group) to take or continue
to take some action. Most commonly, the desired result is to drive consumer behavior with respect to
a commercial offering, although political and ideological advertising is also common. This type of
work belongs to a category called affective labor.
In Latin, ad vertere means “ to run toward”
(http://www.perseus.tufts.edu/hopper/morph?l=vertere&la=la)18.
The purpose of advertising may also be to reassure employees or shareholders that a company is viable
or successful. Advertising messages are usually paid for by sponsors and viewed via various old media;
including mass media such as newspaper, magazines, television advertisement, radio advertisement,
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outdoor advertising or direct mail; or new media such as blogs, websites or text messages. Commercial
advertisers often seek to generate increased consumption of their products or services through
"branding", which involves associating a product name or image with certain qualities in the minds of
consumers. Non-commercial advertisers who spend money to advertise items other than a consumer
product or service include political parties, interest groups, religious organizations and governmental
agencies. Nonprofit organizations may rely on free modes of persuasion, such as a public service
announcement (PSA).
Modern advertising was created with the innovative techniques introduced with tobacco advertising in
the 1920s, most significantly with the campaigns of Edward Bernays, which is often considered the
founder of modern, Madison Avenue advertising.( Source :1) Donley T. Studlar (2002) Tobacco
Control: Comparative Politics in the United States and Canada p.55 quotation: "...froms. the early days
advertising has been intimately intertwined with tobacco. The man who is sometimes considered the
founder of modern advertising and Madison Avenue, Edward Bernays, created many of the major
cigarette campaigns of the 1920s, including having women march down the street demanding the right
to smoke." / 2) Donald G. Gifford (2010) Suing the Tobacco and Lead Pigment Industries, p.15
quotation: "...during the early twentieth century, tobacco manufacturers virtually created the modern
advertising and marketing industry as it is known today."/ 3) Stanton Glantz in Mad Men Season 3
Extra – Clearing the Air – The History of Cigarette Advertising, part 1, min 3:38 quotation:
"...development of modern advertising. And it was really the tobacco industry, from the beginning,
that was at the forefront of the development of modern, innovative, advertising techniques.”]
In 2010, spending on advertising was estimated at $143 billion in the United States and $467 billion
worldwide.(http://www.wpp.com/wpp/press/2011/dec/05/groupm-forecasts-global-ad-spending-
to/)19
1.4.4 Advertising Media
Types of Media and Their Characteristics
In terms of overall advertising expenditures, media advertising is still dominated by Press and
television, which are of comparable size (by value of 'sales'). Posters and radio follow some way
behind, with cinema representing a very specialist medium.
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1.4.4.1. Print Out
In the United Kingdom, spending is dominated by the national & regional newspapers, the latter taking
almost all the classified advertising revenue. The magazines and trade or technical journal markets are
about the same size as each other, but are less than half that of the newspaper sectors.
1.4.4.2. Television
This is normally the most expensive medium, and as such is generally only open to the major
advertisers, although some regional contractors offer more affordable packages to their local
advertisers. It offers by far the widest coverage, particularly at peak hours (roughly 7.00–10.30 p.m.)
and especially of family audiences. Offering sight, sound, movement and colour, it has the greatest
impact, especially for those products or services where a 'demonstration' is essential; since it combines
the virtues of both the 'story-teller' and the `demonstrator'. To be effective, these messages must be
simple and able to overcome surrounding family life distractions especially the TV remote.
1.4.4.3. Radio
Radio advertising has increased greatly in recent years, with the granting of many more licenses. It
typically reaches specific audiences at different times of the day—adults at breakfast, housewives
during the day, and commuters during rush hours. It can be a cost-effective way of reaching these
audiences—especially since production costs are much cheaper than for television, though the lack of
visual elements may limit the message. In radio advertising it is important to identify the right timing
to reach specific radio listeners. For instance, many people only listen to the radio when they are stuck
in traffic, whereas other listeners may only listen in the evenings. The 24-hour availability of radio is
helpful to reach a variety of customer sub-segments. In addition, it is a well-established medium to
reach rural areas.
1.4.4.4. Cinema
Though national audience numbers are down, this may be the most effective medium for extending
coverage to younger age groups, since the core audience is 15 to 35.
1.4.4.5. Internet/Web Advertising
This rapidly growing marketing force borrows much from the example of press advertising, but the
most effective use—adopted by search engines—is interactive. Internet marketing is more the matter
of choice. Each day passing, the internet users are increasing. First data available of internet users is
from 1995 which totaled the number at approx. 16 Million. Over the Period of 10 years it increased to
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1018 Million. As of March 2014, the number of internet users across the globe is 2,937
millions.(http://www.internetworldstats.com/emarketing.html )20 The other perspective to look at
these numbers is that 10 years ago, a brand or company could reach out to 1018 million people and
today they have the opportunity to tap 2937 people through internet. World has truly become a Global
Village. Companies have allocated their budgets to the Internet marketing or making their brand visible
on internet. The term is called Search engine optimization (SEO).
1.5. Mobile Advertising / SMS Advertising
Short message service (SMS) marketing is a relatively new marketing technique that focuses on the
use of text messaging to spread a marketing message. The process involves preparing one or more text
messages offering such things as specials, new products, or new information about a product. These
may be done in house or by a professional marketing group. This new media marketing concept is
catching on in a variety of different fields after originating in the wireless industry.
One of the first groups of companies to make use of SMS marketing were the cellular service providers
themselves. These companies had a natural customer base and already had every customer's cell phone
number. Further, the cell company already had the technology and access, making it a very cheap
option to reach customer quickly. Companies could use this tool as a way to promote upcoming
products, such as new phones, or new services over the cellular network.
Often, those involved in SMS marketing already have a pre-existing relationship with the customer,
which is why the phone numbers are easy to get. Despite this, SMS marketing can seem somewhat
invasive to many individuals. That is one reason many companies ask customers if it is acceptable to
contact them via text messaging. Some customers can be especially annoyed by this form of marketing
if they are not asked and their service provider charges for incoming messages.
Although SMS marketing is relatively new, some companies point to several advantages of the
method. First, it is a cheap and quick way to reach many individuals at the same time. Second, often
these customers already know the company and a text message can seem very personal. Third, unlike
mail, which sometimes remains unopened, every recipient will likely open the message at the very
least. These advantages have led to a response rate of 15% to 80%, depending on the industry.
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At the same time, there are some limitations to SMS marketing. Senders can only use a maximum of
160 characters, meaning getting a complete marketing message out can be very difficult. Also, those
who send multiple texts to continue their message may be seen as too aggressive or invasive by the
customer. These limitations often force companies to use SMS marketing as simply the hook that
draws the customer in to seek more information.
To prevent spam advertisement through the use of text messages, some countries have laws very
similar to their spam e-mail laws. The United States law against spam, for example, applies both to e-
mails and messages sent to wireless devices. The same is true in the United Kingdom, where both
forms of communication are regulated under the 2003 Privacy and Electronic Communications
Regulations.
1.6. Marketing and Advertising
Marketing and advertising are fuzzy disciplines to begin with - ask 20 experts what the difference
between the two is, and you'll get 20 diverse responses. Much of the business world stirs marketing
and advertising together in one big bouillabaisse of methods to get products to prospects and clients.
For professionals implementing marketing and advertising initiatives, however, it is important to
understand that the terms are not synonymous.
Advertising is just one component, or subset, of marketing. Public relations, media planning, product
pricing and distribution, sales strategy, customer support, market research and community
involvement are all parts of comprehensive marketing efforts. As you market your company and its
products or services, keep in mind all the facets that work together to constitute marketing.
All marketing elements must work independently, as well as interdependently. Advertising is the
largest expense of most marketing plans, with public relations and market research rounding out the
trinity of cash outlay. Advertising, according to Barron's Dictionary of Marketing Terms, is the "paid
form of a no personal message communicated through various media. [It] is persuasive and
informational and is designed to influence the purchasing behavior and/or thought patterns of the
audience."
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A "media mix" is almost always necessary to get the penetration you need - a mix of radio, SMS,
television and direct mail for examples.
Advertising includes direct mail, newspapers, magazines, television, radio, Mobile, Internet and out
of house (billboards). (http://www.marketingprofs.com/2/mccall5.asp)21
1.7. The growth of mobile telephone and SMS
A mobile phone (also known as a cellular phone, cell phone, hand phone, or simply a phone) is a phone
that can make and receive telephone calls over a radio link while moving around a wide geographic
area. It does so by connecting to a cellular network provided by a mobile phone operator, allowing
access to the public telephone network. By contrast, a cordless telephone is used only within the short
range of a single, private base station.
In addition to telephony, modem mobile phones also support a wide variety of other services such as
text messaging, MMS, email, Internet access, short-range wireless communications ( infrared,
Bluetooth),business applications, gaming, and photography. Mobile phones that offer these and more
general computing capabilities are referred to as smartphones.
(http://en.wikipedia.org/wiki/Mobile_phone)22
The first hand-held cell phone was demonstrated by John F. Mitchell
(http://www.brophy.net/PivotX/?p=john-francis-mitchell-biography)23 and Dr. Martin
Cooper of Motorola in 1973, using a handset weighing around 4.4 pounds (2 kg). In 1983,
the DynaTAC 8000x was the first to be commercially available. From 1983 to 2014, worldwide mobile
phone subscriptions grew from zero to over 7 billion, penetrating 100% of the global population and
reaching the bottom of the economic pyramid. In 2014, the top cell phone manufacturers
were Samsung, Nokia, Apple, and LG. (http://www.topteny.com/top-10-best-selling-mobile-phone-
brands-in-the-world-2014/ )24
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1.8. Seven Unique Benefits of Mobile
With direct response and relatively lower cost of communication, mobile is changing the face of
the marketing and advertising horizon. Tomi Ahonen (Ahonen, 2008)9 has identified seven features
unique to mobile phones, highlighting the unique benefits and challenges of the mobile phone.
1) The mobile phone is personal.
2) The mobile phone is always carried.
3) The mobile phone is always on.
4) The mobile phone has a built-in payment system.
5) The mobile phone is available at the point of creative inspiration.
6) The mobile phone can provide accurate audience measurement.
7) The mobile phone captures the social context of media consumption
(http://www.quirk.biz/resources/mobile101/282/Pros-and-Cons-of-Mobile-Marketing) 25
Table Number –1.3-The Web has plenty of benefits for marketers, but how does it compare to the
mobile?
Web Marketing Mobile Marketing
Cheap Cheaper
Quick, but messages (e.g. email) not always received
instantly
Instantaneous message receipt
Multimedia capabilities Portable multimedia capabilities
Advertising in abundance Advertising relatively novel
Good for building relationships with groups Good for building relationships with
individuals
No standard payment system Built in payment system
(http://www.quirk.biz/resources/mobile101/282/1/Pros-and-Cons-of-Mobile-Marketing)26
1.8.1. Features of Mobile telephone
1) Text messaging [ SMS ]
2) SIM Card
3) Multi-card hybrid phone
Table Number –1.4-Manufacturers of Mobile phones
Top Five Worldwide Total Mobile Phone Vendors, 2013
Rank Manufacturer Gartner[1] IDC[2] 1 Samsung 24.6% 24.5%
2 Nokia 13.9% 13.8%
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3 Apple Inc. 8.3% 8.4%
4 LG 3.8% 3.8%
5 ZTE 3.3% -
5 Huawei - 3.0%
Others 34.0% 46.4%
Source : 1] (http://www.gartner.com/newsroom/id/2665715)27
2] (http://www.idc.com/getdoc.jsp?containerId=prUS24645514)28
Other manufacturers outside the top five include TCL Communication, Lenovo, Sony Mobile
Communications, Motorola. Smaller current and past players include Karbonn Mobile, Audiovox
(now UTStarcom), BenQ-Siemens, BlackBerry, Casio, CECT, Coolpad, Fujitsu, HTC, Just5, Kyocera,
Lumigon, Micromax Mobile, Mitsubishi Electric, Modu, NEC, Neonode, Openmoko, Panasonic,
Palm, Pantech Wireless Inc., Philips, Qualcomm Inc., Sagem, Sanyo, Sharp, Sierra Wireless, SK
Teletech, Soutec, Trium, Toshiba, and Vidalco.
1.8.2. Use of Mobile Phones
Mobile phones are used for a variety of purposes, including keeping in touch with family members,
conducting business, and having access to a telephone in the event of an emergency. Some people
carry more than one cell phone for different purposes, such as for business and personal use. Multiple
SIM cards may also be used to take advantage of the benefits of different calling plans—a particular
plan might provide cheaper local calls, long-distance calls, international calls, or roaming. The mobile
phone has also been used in a variety of diverse contexts in society, for example:
a) The advent of widespread text messaging has resulted in the cell phone novel; the first literary
genre to emerge from the cellular age via text messaging to a website that collects the novels as
a whole.
b) Mobile telephony also facilitates activism and public journalism being explored by Reuters and
Yahoo!and small independent news companies such as Jasmine News in Sri Lanka.
c) The United Nations reported that mobile phones have spread faster than any other technology
and can improve the livelihood of the poorest people in developing countries by providing access
to information in places where landlines or the Internet are not available, especially in the least
developed countries. Use of mobile phones also spawns a wealth of micro-enterprises, by
providing work, such as selling airtime on the streets and repairing or
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Refurbishing handsets.(http://www.reuters.com/assets/print?aid=USTRE69D4XA20101014)29
d) In Mali and other African countries, people used to travel from village to village to let friends
and relatives know about weddings, births and other events, which are now avoided within
mobile phone coverage areas, which is usually greater than land line penetration.
1.9. Smartphones
A smartphone (or smart phone) is a mobile phone with more advanced computing capability and
connectivity than basic feature phones. Smartphones typically include the features of a phone with
those of another popular consumer device, such as a personal digital assistant, a media player, a digital
camera, and/or a GPS navigation unit. Later smartphones include all of those plus the features of
a touchscreen computer, including web browsing, Wi-Fi, 3rd-party apps, motion sensor, mobile
payment and 3G.
1.10. Market share of Mobile phones & Smartphone usage
In the third quarter of 2012, one billion smartphones were in use worldwide.
[Source : http://www.cnet.com/news/worldwide-smartphone-user-base-hits-1-billion/]30.
Global smartphone sales surpassed the sales figures for features phones in early 2013.Also 65 percent
U.S. mobile consumers own smartphones
(http://www.engadget.com/2014/02/11/two-thirds-of-americans-now-have-smartphones/)31
The European mobile device market as of 2013 is 860 million.
Table Number-1.5- Historical sales figures (in millions of units) Year Android
(Google)
iOS
(Apple)
Windows
Mobile/Phone
(Microsoft)
BlackBerry
(former
RIM)
Symbian
(Nokia)
Palm/
Web
OS
(Palm
/HP)
Bada
(Samsung) Other
2007 3.3 14.7 11.77 77.68 1.76
2008 11.42 16.5 23.15 72.93 2.51
2009 6.8 24.89 15.03 34.35 80.88 1.19
2010 67.22 46.6 12.38 47.45 111.58
2011 219.52 89.26 8.77 51.54 93.41 9.6 14.24
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2012 451.62 130.13 16.94 34.21 15.9 47.2
2013 758.72 150.79 30.84 18.61 8.82
2014 229 43.7 6.2 3.4 0.3
2014 255 7.4
Source: (http://www.telecomsmarketresearch.com/resources/Mobile_Market_Europe.shtml)32
1) Gartner Says Worldwide Smartphone Sales Reached Its Lowest Growth Rate With 3.7 Per Cent
Increase in Fourth Quarter of 2008. Gartner.com. Retrieved on 2012-08-09.
2) Gartner Says Worldwide Mobile Phone Sales to End Users Grew 8 Per Cent in Fourth Quarter 2009;
Market Remained Flat in 2009. Gartner.com. Retrieved on 2012-08-09.
3) Gartner Says Worldwide Mobile Device Sales to End Users Reached 1.6 Billion Units in 2010;
Smartphone Sales Grew 72 Percent in 2010. Gartner.com. Retrieved on 2012-08-09.
4) "Quarterly Device Sales In 2011" (Infographic). Mobile Statistics. Mobile Statistics. 2013.
Retrieved 25 July 2013.
5) Gartner Says Annual Smartphone Sales Surpassed Sales of Feature Phones for the First Time in 2013.
Gartner.com. Retrieved on 2014-07-24.
6) (http://communities-dominate.blogs.com/brands/2014/06/final-q1-smartphone-market-shares-top-10-
brands-os-platforms-and-installed-base.html)33
7) (http://www.idc.com/prodserv/smartphone-os-market-share.jsp)34
1.11. Growth of Online advertisement
1.11.1. History of Online advertisement
In early days of the Internet, online advertising wasn't allowed. For example, two of the predecessor
networks to the Internet, ARPANET and NSFNet, had "acceptable use policies" that banned network
"use for commercial activities by for-profit institutions". The NSFNet began phasing out its
commercial use ban in 1991.
Email. The first widely publicized example of online advertising was conducted via electronic mail.
On 3 May 1978, a marketer from DEC (Digital Equipment Corporation), Gary Thuerk, sent an email
to most of the ARPANET's American west coast users, advertising an open house for a new model of
a DEC computer. Despite the prevailing acceptable use policies, electronic mail marketing rapidly
expanded[1and eventually became known as “spam.”
Search Ads. GoTo.com (renamed Overture in 2001, and acquired by Yahoo! in 2003) created the first
search advertising keyword auction in 1998. Display Ads. Online banner advertising began in the early
1990s as page owners sought additional revenue streams to support their content. Commercial online
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service Prodigy displayed banners at the bottom of the screen to promote Sears products. The first
clickable web ad was sold by Global Network Navigator in 1993 to a Silicon Valley law firm. In 1994,
web banner advertising became mainstream when HotWired, the online component of Wired
Magazine, sold banner ads to AT&T and other companies. The first AT&T ad on HotWired had a 44%
click-through rate, and instead of directing clickers to AT&T's website, the ad linked to an online tour
of seven of the Google launched its "AdWords" search advertising program in 2000and introduced
quality-based ranking allocation in 2002, which sorts search advertisements by a combination of bid
price and searchers' likeliness to click on the ads.
Recent Trends. More recently, companies have sought to merge their advertising messages into
editorial content or valuable services. Examples include Red Bull's Red Bull Media House
streaming Felix Baumgartner's jump from space online, Coca-Cola's online magazines, and Nike's free
applications for performance tracking. Advertisers are also embracing social media and mobile
advertising; mobile ad spending has grown 90% each year from 2010 to 2013.
( http://iamai.in/events/8thIndiaDigitalSummit/)35
1.11.2. Types of Online advertising
1) Web banner advertising
Banner ad is a graphic image used on web sites which come into views on all sorts of web pages and
differ significantly in appearance and subject matter. Most of user that’s why attracted and clicks on
it which takes them to the main website of that product.
Here, 3 examples of web banner advertising:
I. Floating Ads
It is a kind of advertisement in which an ad moves across the screen or float above certain
contents. Users may click the ad and visit the company website(Source: Ibid).
II. Wallpaper advertisement
This is popular type of online advertisement. An ad appears and changed the background of
the website(Source: Ibid).
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III. Pop – up ads
In pop -up ads, a new window opens in front of existing window. The newly opened window
displays the entire advertisement (Source: Ibid).
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2) Pixel Advertising
Pixel advertising is one of the newest and most talked about advertising. The cost of an advertisement
is calculated based on the number of pixels it occupies and it can be an inexpensive way to market
your site (Source: Ibid)
3) Blog advertising
Nowadays most of internet user have personal blogs, through this they try to advertise their products
to make profit out of it. Yes this strategy works if you can handle and produce something different
with your blog which can attract users. Blog advertising is especially appropriate for new
launches, new products, and newsmakers (Source: Ibid).
4) Mobile Advertising
Mobile advertising is an indispensable column of a successful online marketing strategy as mobile
internet users are growing rapidly (Source: Ibid).
5) Promotional advertising
Promotional advertising is a tool used to dwell the buyer with the idea of buying the product. There
are so many ways of promotional advertising like giving freebies, discount coupons, Flyers,
Contests etc. ( http://iamai.in/events/8thIndiaDigitalSummit/)35
1.12. Foundation of SMS advertisement
Due to the high and increasing growth of short messaging services (SMS), the concept of mobile
advertising has emerged very significantly in the last decade. According to Yunos and Gao, (2002,
p.2)10, Mobile marketing refers to market the activities by using a wireless network or mobile
advertising solutions to build awareness about the brand or to promote the sale of goods and services
by delivering advertisements. Royall (2003)11 conducted a research about mobile advertising in
Australia and states that more than 10 million text messages are send by the Australians daily. IBIS
world report recorded that due the above mentioned activity, the Australians are approximately
generating an annual turnover of $75 million for the industry players. The consumption level and the
adoption by the consumers are by far couple of the largest attributes for the growth of Short Messaging
Services because of which Turchetti, (2003)12 has touted SMS as the most up-to-date communication
medium of the century. Simpson (2003)13 has observed that mobile phones are amazingly essential to
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many young consumers’ everyday lives more than ever due to its texting capabilities. But, according
to Barwise and Strong (2002)14, mobile advertising, surprisingly, has received scarce attention from
the field of academics. By providing direct line of two way communication and offering business a
impartially reliable, effective and economic way for communicating with employees and customers
alike can help in building the relationship between the brand and the consumers if SMS is used wisely
(Barbieri, 2002)15. According to Barnes (2002)16 and Doyle (2001)17, at the time of building customer
relationship, the most important factor for success is developing a relevant, timely and related service.
Possible mediators for maintaining the effectiveness in advertising also were investigated by Anderson
and Nilsson (2000)18, while campaigning for SMS advertising by exploring the effectiveness of SMS
advertising. It was observed that for the service delivered through SMS for finance advertising news,
a huge number of participants signed up. A positive impact on Consumer Brand Awareness and
Purchase Intention due to the campaign but not for Brand Attitude was indicated by these investigators.
The results suggested the enhancement by the mobile phone to “extent end user’s pay attention to the
message, remember them and respond to them by searching for more information on the advertised
product” (p.46). Anderson and Nilsson, (2000)19 concluded that the activity to be authorization based,
the message to be entertaining, valuable and relevant, the consumers should receive in exchange for
advertising, something of value. For reaching young adults through an experiment, Barwise and Strong
(2002)20 in particular, explored as a way, the effectiveness of text messaging. Particularly for
campaigns aiming at the young generation, mobile marketing has potential as an advertising medium
is suggested by the findings. High level of message readership, responses with direct behaviour and
stronger attitudes of the brands were observed in addition.
The consent of nearly every visitor can be found by any online organization using the correct
permutation of question framing and default response.
For understanding the attitude of the consumers towards mobile advertising, two theories for the
formation of the attitude were taken into study.
1) Theory of Reasoned Behaviour (TRA); and
2) Theory of Planned Behaviour (TPB)
Fishbein and Ajzen in 1975 originally proposed the theory of reasoned behavior (TRA) that will help
in understanding the behavior and also in predicting the outcomes. The theory of reasoned behavior
stands in a main assumption that before deciding to engage or not in a certain behavior, the implications
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of the action that the consumer decides to engage in is taken into consideration by the consumer. It
also posits that behavior intent is the main determinant of a person’s behavior. The attitude towards
performing the behavior in question and the behavior of the person due to the social pressure on him
or her (subjective way) are the significant factors on which a person’s intention is contingent for
behaving in a certain way. Putting forward, it can be said that according to the person involved and
behavioral context, the attitude of the consumer and the subjective norms differ. According to (Ajzen
and Fishbein ,1980)21, a person’s insight about the anticipated consequences of performing the
behaviour and the judgments of those consequences are the factors for determining a person’s attitude.
(Fishbein& Manfredo,1992)22 state that there is a huge anticipation that the behaviour will be in point
of fact executed by the person if his intent is strong. As a result, to make out the basic factors
accountable for the formation and change of behavioural intent is the most important anxiety.
Perceived behavioural control, another factor that affects behavioural purpose is introduced by a theory
called Theory of Planned Behaviour (TPB) which is an additional room to Theory of Reasoned
Behaviour. The main elements of perceive behavioural control are perceived power and control beliefs.
Therefore, according to Mackenzie and Jurs (1993)23, there is a strong expectation that people will
have a high perceived control over that behaviour if they have a strong control belief about the survival
of factors that might smooth the progress of behaviour.
Another theory that can be used for increasing the purchase intention which is taken as the dependent
variable is AIDA model that is get Attention, hold Interest, arouse Desire, obtain Action (Groucutt,
2004)24. The AIDA model of consumer response to marketing communications is used to measure the
extent of influence of the advertisement on the subject. This model implies that the promoted messages
which are designed to acquire consumers’ attention will gain interest and will eventually generate the
desire to act in a certain manner (Blythe, 2000)25.
In the following section, based on the above explained theory, the following five factors are identified
and explained in detail as determinants of mobile advertising, which helped to identify the attitude of
the consumers towards mobile advertising.
(http://www.ukessays.com/essays/marketing/the-foundations-of-mobile-and-sms-advertising-
marketing-essay.php#ixzz3KZdzDURh)36
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1.12.1. SMS advertisement part of Mobile Marketing
The growth of the market, the profusion of new technologies and their convergence has opened many
new opportunities for marketing promotions and advertisements. One of those new modes of
advertising is via SMS (Short Messages Service) to handheld devices, notably mobile phones. SMS,
known as text messaging, is a store-and-forward communication system for the mobile phone. Recent
variants, such as MMS (Multimedia Message Service) have added multimedia capabilities. According
to the GSM Association, cell phone users send more than 10 billion SMS messages each month,
making SMS the most popular mobile data service (Dickinger et al., 2004)26.
1.11.2. Pull and Push model of SMS Advertising & Mobile Marketing
According to Chaffey (2004, p. 318)27 “the achievement of marketing objectives through the use of
electronic communications technology” is referred to as Electronic marketing (e-marketing) which is
often used as a tool for direct marketing. That is, marketing through media advertising interacting
directly with the consumers, generally calling for a response to be made directly by the consumers
(Kotler, 2002, p.784)28. A subset of electronic marketing is mobile marketing or SMS marketing or
wireless marketing and is defined by Dickinger et al. (2005)26 as a wireless medium providing
consumers with location-and-time-sensitive, personalized information promoting goods, services and
ideas, thereby benefiting all stakeholders. Mobile marketing is defined by Ververidis and Polyzos
(2002)29 as the use of mobile phones as a device for communicating with the customers for providing
them with the provision of the information of their products and services as well as to promote the
selling of their products and services. According to Barnes (2002)16, push and pull strategies of
marketing are the two models in which a mobile phone can be categorised. While campaigning the
push-model, messages are sent to the customers by the initiative taken by the marketer. Whereas, in
the pull-model campaign, the customer request for the information and the marketer send the
information as required by the customer. Since the contact and communication is initiated by the
market, the former model includes a large amount of SMS advertising and also raises the concern of
authorization by the consumers. According to Tezinde et al. (2002)30, asking of consumers’ consent
for receiving commercial messages by giving each and every one an opportunity to stop receiving the
messages at any time is referred to as Permission marketing. privacy concern of the individuals can be
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by a long way reduced by adopting this approach and for successfully controlling more and more
information; it can act as a substitute trust-building (Milne et al., 1999)31. But unfortunately, for getting
the consumers’ consent, cognitive laziness and inattention of the consumers are manipulated by some
marketers.
SMS campaigns are proliferating around the world. In an empirical study of the state of interactive
marketing in five large developed markets (United States, Japan, Germany, UK, and France) and two
key emerging markets (China and Brazil), Barwise and Farley (2005)32 found that 19% of the
participant firms were already using text messaging either as a direct response or as a “push” channel.
Nevertheless, the academic literature is short of empirical studies investigating the importance of the
factors that determine SMS advertising effectiveness.
In line with efforts to identify determinants Robinson (2002)33 define mobile marketing as “the
distribution of any kind of message or promotion that adds value to the customer while enhancing
revenue for the firm”. From a traditional marketing management perspective, this is a description of
only one of the 4P’s in marketing; namely marketing communication and not of all of them. Moreover,
the term mobile commerce is sometimes used when referring to message distribution, although
commerce generally refers to all the actions of doing business. Secondly, advertising as one-way
communication from the marketer to the customer seems to be much more restricted than what the use
of mobile phones enables advertisers to do. The receiver of the message can react by phoning the
marketer, sending the company a text message, or connecting her/himself to the company’s web pages
(if fitted to the mobile in se). Thus, mobile advertising is much more interactive and personal than
traditional advertising. In spite of this, the personal and interactive nature of the phenomenon is not
present in the conceptualizations or descriptions of mobile advertising.
What is more, the use of the term ‘advertising’ influences the practitioners’ thinking and actions. This
can be seen in the mobile ads that are being designed and delivered when e.g. retailers try new mobile
advertising services (e.g. Salo & Tähtinen 2005, Komulainen et al, 2005)34. The m-ads more closely
resemble newspaper advertising to unknown masses than interactive and personal mobile commercial
communication with potential and/or loyal customers. This may lead to a vicious circle of advertisers
setting goals according to mass media (e.g. reaching a high number of potential customers), and ad
agencies or advertisers designing m-ads for mass audiences without personalisation and interactivity,
which annoys many customers, leading to a failure of the campaign. Finally, after such a failure, both
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the marketer and the agency may decide that mobile advertising does not work, although the poor
knowledge of the essential features of mobile commercial communication was the real reason for the
failure of the campaign.
1.13. Mobile Marketing Strategies 1.13.1. Mobile marketing
Although it is beyond of this article to provide an exhaustive review and analysis of mobile marketing
literature, a short commentary should be made on divergent conceptualizations and development of
mobile marketing. Leppäniemi et al. (2006)35, in their detailed review of mobile marketing research,
observed that marketing communications in mobile media has, implicitly or explicitly, been
conceptualized as (1) mobile marketing, (2) mobile advertising, (3) wireless marketing, and (4)
wireless advertising. Overall, their literature review yielded 21 distinct definitions or meanings of
marketing communications in mobile media. In addition, Leppäniemi et al. noted that most of the
definitions are deeply embedded in technology, and therefore there is a tendency to mistake the
technologies for the concept itself. In fact, it seems that the same conceptual disagreement appears to
be involved in all mobile commerce related discussions. For instance, Balasubramanian et al. (2002,
p. 349)36 noted that “…no formal conceptualization of m-commerce currently exists. Conceptual
agreement is necessary to promote a shared understanding of m-commerce, one that encourages clarity
of communication and convergence in thinking.” There is, however, a growing consensus as to the
most appropriate way in which mobile marketing should be defined. In a recent commentary, Mobile
Marketing Association (2006, p. 22)37 defined mobile marketing as “the use of wireless media as an
integrated content delivery and direct-response vehicle within a cross-media marketing
communications program.” We adopt their definition in this article and highlight its emphasis on two-
way communications and integration of mobile media into a cross-media marketing communications
program.
1.13.2. Marketing strategy
Unfortunately, mobile marketing is too often implemented at ad hoc basis and the link between
companies’ marketing communications strategy and individual mobile marketing campaign is very
weak or perhaps even missing completely. Hence, to effectively demarcate mobile marketing domain,
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it is critical to establish how mobile marketing relates to a firm’s marketing communications strategy.
However, it is first necessary to emphasize that a marketing strategy is a cornerstone of firm’s all
marketing activities.
Since 1960s the marketing mix approach has been the dominant design for marketing strategy building
and development. Broadly speaking, the marketing mix is the set of controllable tactical marketing
tools that the firm combines to produce the desired response among the target audience (e.g. Kotler et
al. 2005)38. The concept of marketing mix was introduced by Borden (1964)39, but McCarthy’s
(1960)404Ps classification – product, price, place, and promotion – has been the basic guideline for
marketing research and practical endeavors. Although the marketing mix approach is not without its
critics (see e.g. van Waterschoot et al. 1992; Grönroos 1996, 1997)41, the adopted checklist approach
still provides a usable device for understanding the complex and interrelated nature of marketing
activities. In this study, we focus on marketing communications or promotion mix in the context of
mobile marketing, and therefore, the other elements of marketing mix – product, price, and place - are
beyond the scope of this article. Specifically, marketing communications mix consists of the specific
combination of advertising, personal selling, sales promotion, public relations, and direct marketing
tools that a marketer uses to pursue its marketing communications and overall marketing objectives.
1.14. Trends of SMS advertisement and M-Commerce
1.14.1. 2013 Mobile Trends and Prediction (http://www.themobilists.com/2013/01/22/2013-mobile-predictions/) 44
1) Big data is actually an overused term. Big data truly involves millions of billions of data points.
Semantics aside, big data helps marketers and businesses focus on knowing their customer better.
There is a problem that we’re running into. The fact is that there is a shortage of data scientists. It has
been THE catch phrase of 2012, but it’s just numbers unless it is put to use. 2013 is the year that we
see significant measures taken to convert the data into actionable data. Mobile provides us with more
data points than we could ever hope to have.
2) Kenya and other countries are using it to track malaria and other illnesses. Ford and State Farm have
combined to gather data direct from the vehicle. Utilizing geodata from mobile apps and text analytics,
government agencies and emergency services gain greater access to information allowing them to serve
and protect people. Companies will use the data to yield individualized experiences, proactive service
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issues and personal shopping concierge services delivered to the customer’s smartphone or sales
associate’s tablet selling device.2013 goes beyond big data. 2013 is about actionable data
1.14.2. Mobile Payments/Commerce
1) This has certainly been a hotbed of discussion. Much has been made surrounding Google Wallet, NFC
and Isis. However, mobile commerce is much more than that and its rise will not be helped by any of the
three things I just mentioned. Mobile commerce includes in-app purchases, purchase made while you’re
shopping on your smartphone or tablet, mobile POS, Square and more. Mcommerce is expected to reach
$37.44 billion in 2013 compared to $23.72 billion last year according to the new eMarketer report “Retail
Mobile Commerce Forecast: Shoppers Turn to Smartphones First.”
2) Starbucks sees this and has been on the cutting edge of mobile payments since their branded mobile app
with more than 1 million customers already using it. They announced late last year they were switching
to Square for mobile payments. The original app worked like a gift card that you reload when it gets to
zero. Square at Starbucks is the equivalent to swiping your credit or debit card. Now 7,000 Starbucks are
utilizing Square.
3) The advantage to marketers is to tie their loyalty and purchase information together to give them
actionable insight into the customer and deliver personalized service. Companies need to build the
relationship with the customer at an intimate level that no other form of communication can give.
4) What we won’t see is credit cards or cash going away anytime soon. Consumers don’t trust it and
companies like VeriFone are having difficulty making money doing micropayments. This could lead to
an entirely new breed of financial companies that can figure out how to make money doing this. It’s going
to be companies that bridge the payment services to coupons and loyalty and thus analytics that are going
to make it. Apple Passbook is actually well positioned to make noise if Apple decides to get into the race.
5) Google Wallet isn’t doing well in this arena either. For them to play in the NFC tap space, it’s going to
have to partner up with the rival Isis consortium of Verizon Wireless, AT&T and T-Mobile to
access the secure element of the phones. This may prove difficult, if not impossible, thus making
Sprint their only link to customers using their service.
6) The other deterrent for mass mobile commerce acceptance is the fact that the consumer must
own a smartphone.
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1.14.3. Shopping is everywhere
Virtual pop-up stores are growing in number. While many of the early ones were PR stunts, they have
shown success and expect to see more QR code and NFC-based virtual stores over the next year. These
can be placed anywhere at any time. China’s online supermarket Yihaodian is opening up 1,000 virtual
stores. Each store will be around 1,200 sq. meters and focused where smartphones are heavily used.
Consumers will browse the store then using the app, use GPS to pinpoint what they have bought and
process payments. Tesco is opening a virtual grocery store at Gatwick Airport.
Experience is becoming the new king. Look for new and novel channels for shopping utilizing mobile
technologies like AR and apps as well. Adidas has an interactive shopping window that you can
control, connect to your phone and place things into your virtual shopping bag.
Deloitte’s report “The Dawn of Mobile Influence” found that nearly half of all U.S. consumers
already own a smartphone and that number is rising fast.
a) Roughly 58% of consumers who own a smartphone have used it for store-related shopping.
b) Among smartphone shoppers, the percentage who use their phone for shopping varies by store
category, from 49% in electronics and appliance stores to 19% in convenience stores and gas stations.
c) Once consumers start using their smartphones for shopping they tend to use them a lot — typically for
50-60% of their store shopping trips, depending on the store category.
There is a growing fear of show rooming. However, bricks-and-mortars have to get on board and figured out
ways to utilize this to their advantage. In-store Wi-Fi is, thankfully, on the rise. Apps must be improved,
strengthened and refocused to benefit from this. Same for mobile-friendly web sites. Unfortunately, as of April
2012, 6 out of 10 of Google’s top advertisers didn’t have mobile-friendly web sites. This wears the customer’s
patience thin and shifts them quickly to the competitor’s site. Look for geofencing to be the biggest technology
used to combat show rooming this year.
Location-based services should both increase. However, it won’t be the same LBS as before. It will mature
become more diverse. I’m not saying Foursquare is going away but look for another player to make big news
this year.
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1) Privacy
This is certainly the double edge sword of the year. While we are wanting more personalized services and want
companies to know us better, we are also pushing back about the information companies have on us. We are
revolting against anyone profiting from our lives/privacy/content ownership.
Look for more “digital jammer” tools like “incognito mode” in Chrome to start making some noise in the app
markets. Also, keep an eye on legislation. Stalking apps could be banned in the U.S. this year. The Location
Privacy Protection Act has been introduced and may put restrictions on location tracking via mobile devices
like spy software. These apps record and email all smartphone activities – including GPS locations – to the
software owner while invisible to the user of the phone.
2) SMS
Let’s start by taking a global look at text messaging. First, Europe, Middle East and Africa, a supposedly mature
market, saw an increase of 29 percent in year-over-year SMS volumes. It grew more than 120 percent in Asia-
Pacific.
While there have been many new messaging apps, mainly used by the under-25 group, it hasn’t overtaken
standard text messaging and won’t. Juniper Research has predicted that the business-to-consumer SMS market
will overtake the person-to-person texting by 2016. Brands and enterprises who want a reliable way to connect
to their customers are increasingly turning to SMS. This will continue for the foreseeable future.
What other ways can you send communications that are read within three minutes of receipt by 90 percent of
your customers? The rate of SMS spam is low due to stronger regulation and more governing bodies than email
has.
1.15. Growth of M-commerce in India and Worldwide
Goldman Sachs: m-commerce sales forecast to hit $626 billion by 2018.By 2018, m-commerce sales
will almost equal total global e-commerce sales generated in 2013. According to new forecasts by
Goldman Sachs, global mobile commerce sales will reach $626 billion by 2018, which is just shy of
equaling total global e-commerce sales for 2013 of $638 billion.
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Goldman Sachs released an updated forecast on March 5, 2014, estimating that global m-commerce
sales reached $133 billion in 2013, and that this number will reach $626 billion in 2018. In the US, m-
commerce will more than triple by 2018, representing $131 billion, or 32% of American e-commerce
sales. Therefore, US m-commerce sales alone in 2018 will be equal to 2013 global m-commerce sales,
and all of this growth will be driven by tablets.
The report also forecast global e-commerce growth to accelerate through 2014. Global e-commerce
growth slowed in 2013 to 17.1% yoy, down from 18.8% in 2012, but is expected to increase to 17.9%
in 2014 , driven by North America (2% increase on average), China (14%) and Western Europe (10%).
In the US, growth is expected to accelerate to 16.1%, up from 15.9% in 2013 to $241 billion, which is
ahead of forecasts made by Euromonitor, Forrester and eMarketer.
Amazon and eBay will be the two e-retailers who will benefit the most from opportunities in e-
commerce. The report points out that Amazon has the ecosystem, infrastructure and technology to
keep growing, while eBay has the benefits of category share and its ability to enable commerce for
small merchants. Mobile will also drive this growth, as more than half of Amazon’s consumers
shopped via a mobile device in Q4 2013, while PayPal saw 115% growth in total payment volume on
Thanksgiving and Black Friday.
Growth in developing markets will also largely benefit Amazon and eBay through their strong
positions in these regions. In 2013, eBay predicted that 25% of its users and 12% of its revenue will
come from BRIC and other emerging markets by 2015, with particular focus in Russia, where GMV
was $400 million in 2012 and users grew 75% yoy.
Meanwhile, Goldman Sachs predicts a shift away from multi-brand e-commerce sites to brand led
curated marketplaces like Zulily, Asos, Yoox and VIPshops as well as Etsy, Zalando and
OneKingsLane. Sites like these enable shoppers to discover small vendors, and drive regular
engagement and improved purchase frequency. “Well-curated, entertainment like experiences that
leverage mobile are serving as a further catalyst for e-commerce as retailers seek to differentiate
themselves from Amazon and eBay,” reads the report.
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Traditional retail brands that will benefit from e-commerce growth and omni-channel retail include
Carter’s, Nordstrom, PVH Corp., Ralph Lauren and Urban Outfitters. Vulnerable retailers include Bed
Bath & Beyond, Genesco and Kohl’s.
The Goldman Sachs Group, Inc. is an American multinational investment banking firm that engages
in global investment banking, securities, investment management, and other financial
services primarily with institutional clients.
(http://evigo.com/12038-goldman-sachs-m-commerce-sales-forecast-hit-626-billion-2018/ )37
How does the global mobile commerce growth affect the retail industry? Our new info graphic focuses
on the latest global growth of mobile commerce, inspired by the recent projection from Goldman Sachs
that 535 million consumers worldwide will make a purchase this year on a mobile device.
Mobile commerce has continued to grow year-over-year for over a decade around the world and is
projected to continue to see strong growth in the years to come. With mobile sales worldwide
projected to be $626 billion by 2018, the sales from mobile devices alone in 2018 could almost
eclipse sales from all eCommerce devices in 2013 ($638 bn). (http://www.pfsweb.com/blog/global-
mobile-commerce-growth-infographic/)38
2014 PFC Web Inc. has publish data on Mobile Commerce. Data shows following statistics across
parts of world.
1) Projected mobile sales will be rocket from $204 billion in 2013 to $626 billion in 2018. All e
commerce sales $638 billion in 2013.
2) 535 million consumers worldwide will make a purchase this year via mobile.
3) Based on projection from United Nations, in 2018,14.4% of 7.56 billion people on earth will
make at least one from mobile phones.
% of Smartphone users that engage in M Commerce
Sr No Country Smartphone Users %
1 Mexico 39%
2 United States of America 46%
3 United Kingdom 38%
4 China 73%
5 Japan 44%
6 Brazil 30%
7 Argentina 25%
8 S. Arabia 31%
9 India 54%
10 Australia 41%
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The researcher made attempt to outline brief about Gujarat State. Since, survey has been carried out
in major cities of Gujarat.
1.16. A brief Profile of an INDIAN ECONOMY
In 2014-15, the Indian economy is poised to overcome the sub-5 per cent growth of gross domestic
product (GDP) witnessed over the last two years. The growth slowdown in the last two years was
broad based, affecting in particular the industry sector. Inflation too declined during this period, but
continued to be above the comfort zone, owing primarily to the elevated level of food inflation. Yet,
the developments on the macro stabilization front, particularly the dramatic improvement in the
external economic situation with the current account deficit (CAD) declining to manageable levels
after two years of worryingly high levels was the redeeming feature of 2013-14. The fiscal deficit of
the Centre as a proportion of GDP also declined for the second year in a row as per the announced
medium term policy stance. Reflecting the above and the expectations of a change for the better,
financial markets have surged. Moderation in inflation would help ease the monetary policy stance
and revive the confidence of investors, and with the global economy expected to recover moderately,
particularly on account of performance in some advanced economies, the economy can look forward
to better growth prospects in 2014-15 and beyond.(Economic Survey 2013-14)1
After achieving unprecedented growth of over 9 per cent for three successive years between 2005-06
and 2007-08 and recovering swiftly from the global financial crisis of 2008-09, the Indian economy
has been going through challenging times that culminated in lower than 5 per cent growth of GDP at
factor cost at constant prices for two consecutive years, i.e. 2012-13 and 2013- 14. Sub-5 per cent GDP
growth for two years in succession was last witnessed a quarter of a century ago in 1986-87 and 1987-
88. Persistent uncertainty in the global outlook, caused by the crisis in the Euro area and general
slowdown in the global economy, compounded by domestic structural constraints and inflationary
pressures, resulted in a protracted slowdown. The slowdown is broadly in sync with trends in other
emerging economies, but relatively deeper. India’s growth declined from an average of 8.3 per cent
per annum during 2004-05 to 2011-12 to an average of 4.6 per cent in 2012-13 and 2013-14. Average
growth in the emerging markets and developing economies including China declined from 6.8 per cent
to 4.9 per cent in this period (calendar-year basis). What is particularly worrisome is the slowdown in
manufacturing growth that averaged 0.2 per cent per annum in 2012-13 and 2013-14.
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In addition to the growth slowdown, inflation continued to pose significant challenges. Although
average wholesale price index (WPI) inflation declined in 2013-14 to 6.0 per cent vis- à-vis 8.9 per
cent in 2011-12 and 7.4 per cent in 2012-13, it is still above comfort levels. Moreover, WPI inflation
in food articles that averaged 12.2 per cent annually in the five years ending 2013-14, was significantly
higher than non-food inflation. Fortunately, the upward trend of inflation that played a part in
slowdown in growth, savings, investment, and consumption, appears to have subsided. Fortunately,
increase in economic parameter mobile and smartphone usage has been growing at very faster rate.
(Source: Ibid Economic Survey 2013-14)
1.17. Growth of services in INDIA
India’s services sector that remained resilient even during and immediately after the global f inancial
crisis buckled under the pressure of continued global and domestic slowdown, resulting in sub-normal
growth in the last two years. However, early shoots of revival are visible in 2014-15 with signs of
improvement in world GDP growth and trade also reflected in pick-up in some key services like IT,
aviation, transport logistics, and retail trading. Different indices and estimates also indicate an
expansion in India’s services business.
The services sector with an around 57 per cent contribution to the gross domestic product (GDP), has
made rapid strides in the last few years and emerged as the largest and fastest-growing sector of the
economy. Besides being the dominant sector in India’s GDP, it has also contributed substantially to
foreign investment flows, exports, and employment. India’s services sector covers a wide variety of
activities that have different features and dimensions. Some services like IT and telecommunications
are very sophisticated, involving high technology and expertise, while some are simple like those of
barbers and plumbers. Some services like transport have high linkages with the industrial sector and
some like tourism have high employment linkages. Some services like railways and port fall under the
definition of infrastructure, while some like construction fall under the definition of industry. Thus
there are many borderline inclusions and exclusions. This chapter not only focuses on different aspects
of services but also covers many important services. Services in India are emerging as a prominent
sector in terms of contribution to national and states’ incomes, trade flows, FDI inflows, and
employment. In 2013-14 the growth rate of the services sector at 6.8 per cent is marginally lower than
in 2012-13. This is due to deceleration in the growth rate of the combined category of trade, hotels,
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and restaurants and transport, storage, and communications to 3.0 per cent from 5.1 per cent in 2012-
13, despite robust growth of financing, insurance, real estate, and business services at 12.9 per cent.
Construction, a borderline services inclusion which has not been performing well since 2012-13, grew
by only 1.6 per cent in 2013-14.
1.18. Major services and overall performance
Some available indicators of the different services in India for 2013-14 show reasonably good
performance of tourism; a pickup in telecom and aviation after the fall in 2012-13; and poor
performance of shipping and railways due to the slowdown in trade and industrial activity . Estimates
of the Centre for Monitoring Indian Economy (CMIE), derived from limited firm level data, show
subdued performance of sectors such as transport logistics, aviation, hotels, and telecom in 2012-13.
Some sectors like transport logistics and retail trading are estimated to have performed well in 2013-
14. In the coming year most of the sectors are projected to perform better. As per Markit-HSBC’s
Services PMI (Purchasing Managers Index), India’s services sector expanded for the first time in
nearly a year during May on a rebound in new business orders, with the index rising to 50.2 in May
from 48.5 in April and pointing to the first expansion of output in 11 months. A reading above 50
shows that the sector is expanding, while a reading below 50 shows that output in the sector is
contracting.
1.19. GUJARAT at a glance
Gujarat – The Land of the Legends, stands bordered by Pakistan and Rajasthan in the north east,
Madhya Pradesh in the east, and Maharashtra and the Union territories of Diu, Daman, Dadra and
Nagar Haveli in the south. The Arabian Sea borders the state both to the west and the south west. The
State took its name from the Gujjars, who ruled the area during the 700’s and 800’s. Stone Age
settlements around Sabarmati and Mahi rivers indicate the same time as that of the Indus Valley
Civilization while Harappan centres are also found at Lothal, Rampur, Amri and other places. Rock
Inscriptions in the Girnar Hills show that the Maurya Emperor Ashoka, extended his domain into
Gujarat in about 250 BC. With it’s fall, the control of the region came under the Sakas or Scythians.
During the 900’s the Solanki Dynasty came to power and Gujarat reached it’s greatest extent. hen
followed a long period of Muslim rule. Ahmed I, the first independent Muslim ruler of Gujarat, found
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Ahmedabad in 1411. The Mughal Emperor Akbar conquered Malwa and Gujarat in 1570s. The British
East India Company set its first footsteps in Surat in 1818 and the State came in control of their rule.
In 1600’s, the Dutch, French, English and Portuguese had all established bases along the coast of the
region. Gujarat was divided into princely states. After the Indian Independence in 1947, all of Gujarat
except Saurashtra and Kutchh became part of Bombay State until May 1, 1960, when the Government
split Bombay state into the States of Maharashtra and Gujarat. Ahmedabad became the chief city of
the new State and housed the State Government Offices. They remained there until they were
transferred to Gandhinagar in 1970. (http://www.gujaratindia.com/)2
1.19.1. Major cities & places
Gujarat is a home to incredible diversity due to its geographic and strategic location. Ahmedabad,
Surat, Vadodara, Rajkot are some major cities of Gujarat which have been located to have the best of
tradition, history, architecture, culture and philosophy of Gujarat in an atmosphere of luxury, beauty
and comfort.(Source : Ibid)
1.19.2. Demographic Indicators
As per Official Census, Population of India has reached 1.21 Billion (121 Crore) in 2011 which is an
increase of 17% from the earlier figure of 103 Crore of 2001. Although population growth rate has
decreased but actual population continue to rise. As per estimates, it is expected that India would be
most populous country by 2025 overtaking china.
Gujarat Population Census Data shows that it has Total Population of 6.03 Crore which is
approximately 4.99% of total Indian Population. Literacy rate in Gujarat has seen upward trend and is
79.31% as per 2011 population census. Of that, male literacy stands at 87.23% while female literacy
is at 70.73%.
Urban Population of the State is 42.6%, which used to be at 37.4% in 2001. Rural population in the
state in 2011 fell to 57.4% from 62.6% in 2001.
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Ahmedabad is the most populated District in the State, with 7.20 million people, up 11.94% from
2001, followed by Surat with 6.07 million people, up 10.07%, as per Gujarat’s Directorate of census
operations.
Table Number 1.6: POPULATION DATA – GUJARAT-CENSUS 2011
POPULATION DATA – GUJARAT-CENSUS 2011
Description 2011 Description 2011
Estimated Population 6.03 Crore Female 28,901,346
Actual Population 60,383,628 Sex Ratio 918
Population Growth 19.17% Percentage of total Population 4.99%
Area km2 196,024 Literacy 79.31
Area mi2 75,685 Male Literacy 87.23
Density/km2 308 Female Literacy 70.73
Density/mi2 798 Total Literate 41,948,677
Male Literate 23,995,500
Female Literate 17,953,177
Source : www.gujaratindia.com39
1.19.3. Economy of GUJARAT
Gujarat, the most urbanized state of India, is situated on the western coast of India having the coastline
of 1600 km. Government of Gujarat has touched upon almost all the key sectors covering Industry,
Power, Ports, Roads, Agriculture and Mineral. It is one of India’s most prosperous state, having per
capita GDP significantly above India’s average. Looking at the demographic profile, Gujarat is the
state having more than 60% of the population in between age group of 15-59. Gujarat’s State Domestic
Product (SDP) had been rising at an average growth rate of 10.1% since 2005 to 2013, this is more
than the national average. Best infrastructure coupled with skilled workforce supported by best
industrial policies makes the state to drive the Country’s growth. It contributes more than 7.5% to
India’s GDP and 18% to India’s fixed capital. 28% of GSDP contribution comes from manufacturing
sector and accounts more than 10% factories in India. During past 4 years the state government has
brought down the fiscal deficit from 3.54% of GSDP to 2.57% of GSDP in 2013-14. Therefore public
debt is being utilized for developmental and infrastructural investment which can be seen strong
economic growth and tax revenues. In spite of decline in global economic meltdown, Gujarat achieved
an annual growth rate of 9.51% during 11th plan. It is estimated that it will be continued by Gujarat’s
development vision emphasizing human development and inclusive growth. There would be
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harmonious balanced development in agriculture, manufacturing and services which increases
livelihood opportunities. Focusing on agriculture economy, it can be said total crop area is more than
one half of the total land area. Gujarat produces cotton, groundnuts, dates, sugarcane, milk and milk
products. At the same time, Gujarat is also one of the most industrialized states in many of the industry
sectors such as textile, engineering, chemicals, petrochemicals, drugs and pharmaceuticals , dairy,
cement and ceramics, gems and jewellery to name a few, have been flourished. 91% of India’s required
soda ash has been produced by Gujarat and 66% of India’s requirement of salt has been produced by
the State. Chemical Industries in Gujarat count for more than 35% of Indian Chemical production.
Moreover, Gujarat is considered as the petro capital of the nation as Kalol, Khambhat and Ankleshwar
are known for their oil and natural gas production. Private sector has been highly entertained by
Gujarat. It is involving integrated development of areas like SIRs, PCPIR and DMIC to reform the
industrial sector in the state. State based SEZ contributed more than 66% of overall export by national
SEZs. Gujarat has provided new opportunities under global financial services GIFT in Gandhinagar.(
Source : Socio-Economic Review, Gujarat State, 2013-14 )42
1.19.4. Key Socio Economic indicator of GUJARAT STATE
1. Population :
The population of Gujarat at 0.00 hours as on 1st March 2011 is 6.04 crore comprising 3.15 crore
males and 2.89 crore females. Of this, the rural population stands at 3.47 crore and the urban population
2.57 crore. Gujarat retains the 10th rank as in 2001 amongst the States in the country in respect of
population and 7th rank in respect of area. In terms of percentage, Gujarat accounts 5.97% of the area
of India and 4.99% of the population of India. The three districts viz. Ahmadabad, Surat and Vadodara
are contributing 29% of the population of Gujarat. Nearly 50% of the State’s population resides in the
7 districts viz. Ahmadabad, Surat,Vadodara, Rajkot, Banaskantha, Bhavnagar and Junagadh.
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Table Number-1.7- POPULATION AND DECADAL GROWTH RATE BY RESIDENCE, 2011
Sr.
No.
India/Gujarat/
District
Population Percentage Decadal Growth,
2001-2011
Total Rural Urban Total Rural Urban
India 1210569573 833463448 377106125 17.7 12.3 31.8
Gujarat 60439692 34694609 25745083 19.3 9.3 36
Source : Office of Registrar General & Census Commissioner, GoI.www.GOI.in5
2. Growth Rate :
Population of Gujarat was 5.07 crore in the beginning of the 21st Century. Since then arrival of people
has been continuing in Gujarat due to large scale migration from other states. As per Census 2011,
Gujarat has population of 6.04 crore persons showing a decadal growth rate of 19.28% as compared
to all India growth rate of 17.68%. The growth rate of population in rural and urban areas was 9.3%
and 36.0% respectively. The growth rate of 2001-2011 for Gujarat state is decreased by 3.4% than the
corresponding rate of growth during 1991-2001 which was at 22.7%.
3. Density of Population (persons per sq.km.):
Population density (persons per sq.km.) in census 2011 works out to be 308 showing an increase of 49
points from census 2001 and at 14th rank (excluding UTs) amongst the States in the country. However,
the population density of Gujarat is below the National average of 368 persons per sq.km.
4. Proportion of Population:
In percentage terms, the rural population constitutes 57.4% (decrease of 5.2% during the decade) of
the total population and the urban population consisting 42.6% (increase of 5.2% during the decade).
5. Child Sex Ratio (0-6 years):
At national level, Census 2011 shows a decrease of 8 points in child sex ratio in the age group of 0-6
years and has reached to 919 from 927 in 2001 and shown decline in all the last five decades. While
in the state the child sex ratio has increased for the first time in the last five decades to 890 in 2011
from 883 in 2001.
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6. Literacy Rate:
In census concept, a person is treated as literate if one can read and write with understanding in any
language. However, the children below the age of 7 years have not been treated as literate, even if they
may be able to read and write with understanding. The literacy rate in state as per the census 2011
works out to 78.03% (Rural-71.71%, Urban-86.31). The literacy rate of the state is higher than the
national literacy rate of 72.99% (Rural-67.77%, Urban 84.11%, Male-80.89%, Female-64.64%).
There has been an increase of 8.9 percentage points in the literacy rate (10.4 percentage points in rural
areas and 4.5 percentage points in urban areas) during the last decade. The male literacy rate which is
85.75% (Rural- 81.61%, urban-90.98%) is higher than the female literacy rate of 69.68% (Rural-
61.36%, Urban-81.03%). The increase in
Female literacy rate is significantly higher in all areas i.e. total (11.9 percentage points), rural (13.6
percentage points) and urban (6.5 percentage points) in comparison to corresponding male literacy
rates – total (6.1 percentage points), rural (7.5 percentage points) and urban (2.7 percentage points)
over the decade. It is significant to note that the gap in literacy rate among males and females has
reduced to 16.1 in 2011 from 21.9 in 2001. The gap is 20.2 points in rural areas and 10.0 points in
urban areas.
7. Workers :
In Gujarat, As per Population Census 2011, the total number of workers (who have worked for at least
one day during the reference year) is 247.68 lakhs. Of this, 180.01 lakh workers are males and 67.67
lakhs are females. Out of the increase of 35.12 lakh workers during the decade 2001- 2011, male
workers have accounted for 35.02 lakhs while female workers have decreased of 0.11 lakhs. The
workers have registered a growth of 16.5 per cent during the decade. 155.7 lakh workers are in the
rural areas and 92.0 lakh workers are in the urban areas. The female workers in rural and urban areas
are 54.0 lakhs and 13.7 lakhs respectively.
8. Work Participation Rates :
The Work Participation Rate (WPR) for the Gujarat works out to 41.0 per cent, which is higher than
the national average. This is marginally lower than the corresponding WPR of 41.9 per cent in Census
2001. The WPR for males has increased to 57.2 per cent in 2011 in comparison to 54.9 per cent in
Census 2001. The female WPR has reduced to 23.4 per cent in 2011 from 27.9 per cent in Census
2001.
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9. Main and Marginal Workers:
For the first time in Census 2011, the marginal workers, i.e. workers who worked for less than six
months in the reference year, have been subdivided in two categories, namely, those working for less
than 3 months and those who worked for 3 months or more but less than six months. Amongst the
119.3 million marginal workers, around 97 million worked for 3 to 6 months whereas only 22.3 million
worked for less than 3 months, accounting to 81.3 per cent and 18.7 per cent respectively in the
country. In Gujarat, out of 247.7 lakh total workers, 203.7 lakh are main workers and the remaining
44.0 lakhs are marginal workers. The percentage of main workers among the total workers in Census
2011, is 82.2 per cent against 80.1 per cent in Census 2001. The percentage of main workers among
the male workers is 92.0 percent and female workers 56.1 per cent. The percentage of male main
workers has marginally reduced from 93.1 per cent to 92.0 per cent in Census 2011. On the other hand,
the percentage of female main workers has increased from 52.3 per cent to 56.1 in Census 2011.
10. Categories of Economic Activities of the Workers :
The broad categories of economic activities, also known as a fourfold classification of the workers,
are, Cultivators (CL), Agricultural Labourers (AL), working in Household Industries (HHI) and Other
Workers (OW). The cultivators and agricultural labourers broadly show the workers engaged in the
agricultural sector, except those engaged in plantation activities, which, over the Censuses, have been
considered as a part of ‘other workers’. In Gujarat, out of 247.7 lakh total
workers 54.5 lakh are cultivators and another 68.4 lakh are agricultural labourers. Thus, nearly 50 per
cent of the workers are engaged in agricultural activities compared to 52 per cent in Census 2001. Of
the remaining workers, 3.4 lakh are in household industries and 121.4 lakh are other workers. During
the decade 2001-2011, the Census results show a fall of about 3.55 lakhs in cultivators and an increase
of 16.78 lakhs in agricultural labourers. The household industries have shown a decrease of 0.86 lakhs
and other workers have increased by 22.75 lakhs.bizzare
1.19.5. State domestic product
The State economy has been measured in terms of the Gross State Domestic Product (GSDP) at factor
cost at constant prices as well as at Current prices. This is the most important single economic indicator
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used to measure the growth and to study the structural changes taking place in the economy. SDP
estimates over a period of time reveal the extent and direction of the changes in the level of economic
development. Sectorial Composition of SDP gives an idea about the relative position of different
sectors in the economy over a period of time, which not only indicates the real structural changes
taking place in the economic, but also facilitates in formulation of the plans for overall economic
development. The present base year for GSDP estimation at constant prices is 2004-05. 2.15 As per
the Quick Estimates, the Gross State Domestic Product (GSDP) at factor cost at constant (2004-05)
prices in 2012-13 has been estimated at Rs. 427219 crore as against Rs. 395738 crore in 2011-12,
registering a growth of 8.0 percent during the year. Gross State Domestic Product at factor cost at
current prices in 2012-13 has been estimated at Rs. 670016 crore as against Rs. 594563 crore in 2011-
12, registering a growth of 12.7 percent during the year 2.16 The share of primary, secondary and
tertiary sectors has been reported at 17.9 percent, 35.1 percent and 47.0 percent respectively to the
total GSDP (Rs. 670016 crore) in 2012-13 at current prices.
1. Per Capita Income :
The Per Capita Net State Domestic Product, also known has Per Capita Income is used to determine
both the absolute and relative performance of the state economy. It is also considered as an important
tool to measure the regional disparities. The Per Capita Income at current prices has been estimated at
Rs. 96976 in 2012-13 as against Rs. 87175 in 2011-12, showing an increase of 11.2 percent during the
year. (Source: Ibid)
Table Number -1.8- GROSS STATE DOMESTIC PRODUCT BY INDUSTRY GROUPS AT CURRENT PRICES Sr.
No.
Industry Group Unit 2004-
05
2007-
08
2008-
09
2009-10 2010-11
(P)
2011-
12 (P)
2012-13
(Q)
1 Agriculture, forestry and
logging, fishing, mining &
quarrying
Rs.
Crore
39732 66770 68506 77232 114244 124474 120264
% 19.5 20.3 18.6 17.9 21.9 20.9 17.9
1.1 Of which, Agriculture including
Animal Husbandry
Rs.
Crore
26746 51077 51088 58707 94014 103075 97692
% 13.2 15.5 13.9 13.6 18 17.3 14.6
2 Manufacturing, electricity, gas
and water supply, construction
Rs.
Crore
74320 122837 137575 170522 184770 206419 234987
% 36.5 37.3 37.4 39.5 35.4 34.7 35.1
2.1 Of which manufacturing Rs.
Crore
55443 90498 100043 126937 135028 150559 168770
% 27.3 27.5 27.2 29.4 25.9 25.3 25.2
3 Rs.
Crore
48016 78809 92121 103433 125811 151608 182457
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Trade,hotels and restaurants,
transport, storage and
communication
% 23.6 23.9 25 24 24.1 25.5 27.2
4 Banking and insurance, real
estate, ownership of dwellings
and business services
Rs.
Crore
24717 36222 41838 45634 55897 65795 77733
% 12.2 11 11.4 10.6 10.7 11.1 11.6
5 Public administration and other
services
Rs.
Crore
16588 24647 27872 34441 40797 46267 54574
% 8.2 7.5 7.6 8 7.8 7.8 8.1
6 Sub Total :
Tertiary (3 + 4 + 5)
Rs.
Crore
89321 139678 161831 183508 222505 263670 314765
% 44 42.4 44 42.6 42.7 44.4 47
7 Total Gross State Domestic
Product
Rs.
Crore
203373 329285 367912 431262 521519 594563 670016
% 100 100 100 100 100 100 100
8 Percentage change over
previous year in GSDP
% - 16.1 11.7 17.2 20.9 14 12.7
9 Per Capita Gross State
Domestic Product
Rs. 37803 58490 64423 74471 88842 99952 111189
10 Percentage change over
previous year in per capita
GSDP
% - 14.4 10.1 15.6 19.3 12.5 11.2
(P) = Provisional, (Q) = Quick estimates
Note: (1) The figures in second line show per cent share in the total GSDP
(2) Figures may not tally due to rounding off.
(Page S-48 Socio-Economic Review, Gujarat State, 2013-14)44
2. INFRASTRUCTURE :
Gujarat has an impressive infrastructure supported by best industrial policies. As of December
2011, the state had 834,250 broadband subscribers. According to Telecom Regulatory
Authority of India (TRAI), Gujarat had 54.5 million wireless connections and 1.7 million wire-
line subscribers as of May 2014. All district headquarters are provided with back-up support
of transportable V-SAT terminals. The state has the SDRN – a database of disaster
management-related inventory. The BISAG has satellite communication facilities with a
dedicated bandwidth
3. EDUCATION :
1) Primary Education :
The number of educational institutions imparting primary education in the State were 43176 in 2013-
14 as against 42447 in 2012-13. The number of pupils enrolled in these schools were 92.29 lakh in
2013-14 as against 91.76 lakh in the previous year. 2.54 The process of improving retention and
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decreasing dropout rate for elementary level (Std. I - V) is encouraging. The dropout rate for
elementary section has decreased substantially from 22.30 percent in 1999-00 to 2.00 percent in 2013-
14. Similarly the dropout rate for the standard I to VII has also decreased from 41.48 percent in 1999-
00 to 6.91 percent in 2013-14.
2) Secondary and Higher Secondary Education :
The institutions imparting secondary and higher secondary education has increased from 9878 in 2011-
12 to 10406 in 2012-13. Whereas, in case of students, it has decreased from 29.97 lakh in 2011-12 to
26.01 lakh in 2012-13 due to merger of 8th Std. into primary education since 2011-12 as per pattern
of Government of India.
3) Higher Education :
The state has good educational infrastructure with premier institutes in management, fashion design,
infrastructure, planning and pharmaceuticals. There were 1626 institutions in the state imparting
higher education during the year 2011-12, which has also increased to 1857 in 2012-13. The number
of students in these institutions has also increased from 7.82 lakh in the year 2011-12 to 10.13 lakh in
2012-13. The number of girls in these institutions has increased from 3.28 lakh in the year 2011-12 to
3.86 lakh in the year 2012-13, whereas the number of teachers in these institutions has been increased
from 23889 in 2011-12 to 25816 in the year 2012-13.
4) Technical Education :
At the end of academic year 2012-13, the total intake capacity was 53773 seats in degree engineering,
1020 seats in degree architecture course and 5005 seats in degree pharmacy course, which have
increased to 62961, 1140 and decreased to 4825 respectively during the academic year 2013-14(P).
2.58 At the end of academic year 2012-13, total intake capacity for MBA and MCA courses were
12585 and 7090 respectively, which have decreased during the academic year 2013-14(P), to 12405
seats and 7090 seats respectively.
4. PLANNING
1) Twelfth Five Year Plan - 2012-2017 :
The 57th meeting of the National Development Council was held under the Chairmanship of
Hon”ble Prime Minister, on 27th December, 2012, to consider the 12th five year plan document. In
the meeting Planning Commission has estimated target of 8% for 12th Five Year Plan for the nation.
Planning Commission has recommended the plan size of Rs. 283623 crore for 12th Plan period
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against the 11th five year plan size of Rs. 128500 crore, which is 120.72 percent more than the 11th
Five Year Plan.
2) Annual Plan 2012-13 :
The annual plan for the year 2012-13 has been fixed at Rs.51000.00 crore which is 17.98 percent of
the total outlay (Rs.283623.00 crore) fixed for the Twelth Five year plan (2012-17). An amount of Rs.
48514.59 crore was spent during the year 2012-13 which is 95.13 percent of the outlay of Rs.51000.00
crore fixed for the year 2012-13.
3) Annual Plan 2013-14 :
The agreed outlay for the annual plan 2013-14 has been fixed at Rs.59000.00 crore.
4) Decentralised District Planning:
Gujarat is a pioneer State to implement the programme of Decentralised District Planning in the true
sense. Under this programme, about 20 percent of the grant of the district level provision is put at
discretion of District Planning Boards to formulate and implement development schemes of local
importance. Under this scheme, an amount of Rs. 50 lakh is provided every year to each Member of
Legislative Assembly to undertake various development works for his/ her constituency. With a view
to incorporating a qualitative change in the planning process in the year of Gujarat’s golden jubilee
the government announced the new decentralized district planning policy, with each of the 225 talukas
in Gujarat as a unit. As per the new policy, each taluka will get a minimum of Rs. 1.00 crore grant for
the urgent works. They have been divided into three categories as per the number of villages in each
taluka. The talukas having less than 50 villages. each will get Rs. 1.00 crore, talukas with 51 to 100
villages will get Rs. 1.25 crore each and with over 100 villages will get Rs. 1.50 crore each.
5) Aapno Taluko Vikas Yojna: (Aapno Taluko Vibrant Taluko) :
This Scheme will be implemented at the Taluka Level. The scheme would provide basic amenities at
the village level viz., internal village roads, sewage disposal system, drinking water and solid waste
disposal system. For this purpose, Government has made provision of Rs. 402 crore for the year 2012-
13 and Rs. 402 crore for the year of 2013-14.
1.20. Overview of Telecommunication sector
1.20.1. Introduction
Telecommunication services are globally recognised as one of the driving forces for overall economic
development in a nation. They are also one of the prime support services needed for rapid growth and
modernisation of various sectors of the economy. The Government of India recognises this fact and
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hence, has taken several major initiatives to provide a business friendly environment for companies in
this sector.
Driven by 3G and 4G services, it is expected that there will be huge machine-to-machine (M2M)
growth in India in 2016-17, according to UST Global. There is also a lot of scope for growth of M2M
services in the government's ambitious Rs 7,000 crore (US$ 1.1 billion) 'Smart City' program The
rapid strides in the telecom sector have been facilitated by liberal policies of the Government of India
that provide easy market access for telecom equipment and a fair regulatory framework for offering
telecom services at affordable prices. According to a study by GSMA, it has been expected that
smartphones will account for two out of every three mobile connections globally by 2020 and India is
all set to become the fourth largest smartphone market.
1.20.2. Market Size
India saw the fastest growth in new mobile-phone connections with 18 million net additions in the
third quarter of 2014, according to a report by Swedish mobile network equipment maker Ericsson.
The number of smartphones, which account for just 37 per cent of all mobile-phone subscriptions, will
reach 2,700 million by 2014, and growing at 15 per cent compounded annual growth rate, will cross
6,100 by 2020. The falling cost of handsets, coupled with improved usability and increasing network
coverage, are factors that are making mobile technology a popular phenomenon in the country.
The broadband services user-base in India is expected to grow to 250 million connections by 2017,
according to GSMA. It also expects to see increased mobile broadband penetration in India, with
over 250 million on either 3G /4G by 2017.
According to the GSMA’s broadband services report card, the month-on-month (m-o-m) broadband
growth rate in India was at 4.95 per cent, with 60.87 million subscribers as of March 2014. State-
owned Bharat Sanchar Nigam Ltd (BSNL) leads the combined wired and wireless broadband market
with 27.54 per cent share.
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1.20.3. Investments
With daily increasing subscriber base, there have been a lot of investments and developments in the
sector. Some of the major developments in the recent past are:
1) Bharti Infratel has planned to take over the telecom towers of Vodafone and Idea Cellular in
India at a valuation of Rs 5,000 crore (US$ 785.82 million). The company is also scouting for
telecom tower acquisition opportunities in Sri Lanka and Bangladesh.
2) Japanese telecom company SoftBank has planned to invest around US$ 10 billion in India’s
IT sector over the next few years.
3) Ericsson has won Rs 60 crore (US$ 9.42 million) three-year operations support systems
(OSS) deal from Mukesh Ambani-headed Reliance Jio Infocomm, the only pan-India 4G
license holder in the country. Under the deal Ericsson will provide the telecom unit of
Reliance Industries its service fulfilment software solutions comprising nine suites.
4) Reliance Jio Infocomm Ltd has signed an agreement to share telecom towers of GTL
Infrastructure Ltd. This is the seventh tower-sharing agreement that Reliance Jio has forged
with telecom tower owners in India. This is the seventh tower-sharing agreement that
Reliance Jio Infocomm has forged with telecom tower owners in India.
5) ISUN is the latest Indian brand in mobile phones and tablet personal computers. The
Chennai-based Exotic Global Trades Pvt Ltd launched its telecom products under the ISUN
brand that will be bundled with various BSNL schemes.
6) Reliance Jio Infocomm has planned to raise US$ 1.5 billion from more than two dozen overseas
banks to refinance the loans taken in the year 2010. A total of 26 banks participated in the deal,
including 15 mandated lead arrangers and book runners (MLABs).
1.20.4. Government Initiatives
1) The government has fast-tracked reforms in the telecom sector and plans to clear the proposal
allowing spectrum trading and sharing ahead of the year-end deadline as it wants to lift the
business sentiment for the forthcoming airwave auction. Some of the other initiatives taken by
the government are:
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2) The department of telecommunications (DoT) has agreed to the defence ministry’s demands
for a defence band and a so-called defence interest zone (DIZ). This move will free up 3G
telecom spectrum for at least three new carriers.
3) The Government of India has asked telecom firms to implement full mobile number portability
by May 2015, a move that will enable subscribers to retain their numbers when they shift to
other states or licensed service areas.
4) DoT has planned to frame a separate exit policy for the country’s telecom sector that will allow
companies to leave the business without losing out on the value of the assets. The move is
being seen as part of Government of India’s endeavour to make the country’s telecom sector
investor-friendly and enhance the ease of doing business in India.
5) The telecom department is examining a proposal from the National Manufacturing
Competitiveness Council to float a US$ 1 billion government-sponsored fund to seed 'Made in
India' technologies to boost local gear manufacturing. The proposed telecom manufacturing
fund will infuse equity in start-ups promoted by technocrats and scientists of Indian origin on
condition that product development and manufacturing happens in India.
1.20.5. Road Ahead
1) India will emerge as a leading player in the virtual world by having 700 million internet users
of the 4.7 billion global users by 2025, as per a Microsoft report.
2) With the government’s favourable regulation policies and 4G services hitting the market,
rapid growth is expected in the Indian telecommunication sector in the next few years. Also,
with developments in this sector, services such as security and surveillance, remote
monitoring of ATM machines, home automation, traffic management, retail, logistics and
grid energy could eventually facilitate optimisation of resources. Exchange Rate Used: INR 1
= US$ 0.0157 as on December 26, 2014
[References: Media Reports and Press Releases, Cellular Operators Authority of India (COAI), Telecom
Regulatory Authority of India (TRAI), Department of Telecommunication (DoT), Department of Industrial
Policy and Promotion (DIPP)]43
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Table Number -1.9- TELEPHONE CONNECTION AND TELEDENSITY (at the end March)
TELEPHONE CONNECTION AND TELEDENSITY (at the end March)
TELEPHONE CONNECTION AND TELEDENSITY (at the end March)
Sr.No YEAR 2012 2013 2014
1 Total Telephone (In million) 951.35 898.02 933.02
2 Rural Teledensity (per cent) 39.26 41.05 44.01
3 Urban Teledensity(per cent) 169.17 146.64 145.46
4 Overall Teledensity per cent 78.66 73.32 75.23
5 Growth in Total Telephones
(Over Previous year ) ( per cent )
12.41 -5.61 3.9
Source : Department of Telecommunication , Manorama Yearbook 2015 ( PP-867)44
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Attractive opportunities
Telecom penetration in the nation’s
rural market is expected to increase to
70 per cent by 2017 from 41.0 per cent
as of March 2013
India is expected to become the
Second-largest internet market
In 2014
Figure Number – 1.3- ADVANTAGE INDIA
Source: BMI (Business Monitor international) Report, Aranca Research, Internet & Mobile Association Of India(IAMAI)45
Notes: * figure for 2014 is up to March 2014; MNP - Mobile Number Portability; E - Estimates (2016E - Estimates for 2016)
FY 16E
Number of
Subscriber:
1.2 billion
2014*
Number of
subscriber:
933 million
ADVANTAGE
INDIA
High ratings
The country has a strong
Telecommunication
infrastructure
In terms of telecommunication
ratings, India ranks ahead of its
peers in the West and Asia
Policy support
The government has been proactive in
its efforts to transform India into a
global telecommunication hub;
prudent regulatory support has also
helped
National Telecom Policy 2012
proposes unified licensing, full MNP
and free roaming
Robust demand
India is the world’s second-largest
telecommunications market, with 933
million subscribers as of March 2014
With 70 per cent of the population staying
in rural areas, the rural market would be a
key growth driver in the coming years
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PHYSICAL INFRASTURCTURE – TELECOM AND IT
1) As of December 2011, the state had 834,250 broadband subscribers.
2) According to Telecom Regulatory Authority of India (TRAI), Gujarat had 54.5 million wireless
connections and 1.7 million wire-line subscribers as of May 2014.
3) All district headquarters are provided with back-up support of transportable V-SAT terminals.
4) The state has the SDRN – a database of disaster management-related inventory.
5) The BISAG has satellite communication facilities with a dedicated bandwidth
(SDRN - State Disaster Resource Network BISAG - Bhaskaracharya Institute for Space Applications and Geo-
informatics)
Telecom infrastructure (May 2014)
Wireless connections 545,46,183
Wire-line connections 16,59,853
Broadband subscribers 834,250*
Post offices 8,938**
Telephone exchanges 2,983*
Tele-density (in per cent) 90.5
Source: Telecom Regulatory Authority of India Report May 2014 , Department of Telecommunications, Annual Report 2012-13,
Ministry of Communications and Information Technology, India Post46,
*As of December 2011
**As of June 2014
1) GSWAN, one of the largest IP-based WANs, connects 26 districts, 225 talukas and over 5,070
government offices in Gujarat.
2) The state has the SICN with over 7,400 voice connections.
3) There is a facility for online redressing of citizen‟s grievances through the SWAGAT.
4) IWDMS streamlines documentation in government offices.
5) Google is planning to help 50,000 SMEs in Gujarat go online by the end of 2014.
6) Tata Consultancy Services launched a software development facility, Garima Park, in Gandhinagar in
November 2013. The facility will serve global customers across industry segments.
7) In February 2014, the state government launched the e-nagar WiFi project under the „Digital Gujarat‟
scheme providing WiFi facilities in eight localities of Ahmedabad and gradually to be extended to fifty
three cities of the state.
Table number : 1 .10-Telecom Infrastructure [ May 2014 ]
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Major telecom operators in Gujarat
Vodafone Essar
IDEA Cellular
Bharti Airtel
Bharat Sanchar Nigam Limited (BSNL)
Reliance Communications
Aircel Limited
Tata Teleservices
Uninor
Source: Telecom Regulatory Authority of India (TRAI) GSWAN - Gujarat State Wide Area Network SICN - Sachivalaya Integrated
Communication Network SWAGAT - State Wide Attention on Grievances with Application of Technology IWDMS - Integrated
Workflow and Document Management System47
1.21. Characteristic –advantage and Limitations of SMS
advertisement
1.21.1. Advantages of SMS
In today's competitive world, differentiation is a significant factor in the success of the service
provider. Once the basic services, such as voice telephony, are deployed, SMS provides a powerful
vehicle for service differentiation. If the market allows for it, SMS can also represent an additional
source of revenue for the service provider.
1) The benefits of SMS to subscribers centre around convenience, flexibility, and seamless
integration of messaging services and data access. From this perspective, the primary benefit
is the ability to use the handset as an extension of the computer. SMS also eliminates the need
for separate devices for messaging because services can be integrated into a single wireless
device- the mobile terminal. These benefits normally depend on the applications that the
service provider offers.
2) At a minimum, SMS benefits include the following:
3) Delivery of notifications and alerts
4) Guaranteed message delivery
5) Reliable, low-cost communication mechanism for concise information
6) Ability to screen messages and return calls in a selective way
7) Increased subscriber productivity
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8) More sophisticated functionality provides the following enhanced subscriber benefits:
a) Delivery of messages to multiple subscribers at a time
b) Ability to receive diverse information
c) E-mail generation
d) Creation of user groups
e) Integration with other data and Internet-based applications
9) The benefits of SMS to the Service Provider are as follows:
10) Ability to increment average revenue per user (due to increased number of calls on wireless
and wire line networks by leveraging the notification capabilities of SMS)
11) An alternative to alphanumeric paging services, which may replace or complement an existing
paging offer
12) Ability to enable wireless data access for corporate users
13) New revenue streams resulting from addition of value-added services such as e-mail, voice
mail, fax, and Web-based application integration, reminder service, stock and currency quotes,
and airline schedules
14) Provision of key administrative services such as advice of charge, over-the-air downloading,
and over the-air service provisioning
15) Protection of important network resources (such as voice channels), due to SMS’ sparing use
of the control and traffic channels
16) Notification mechanisms for newer services such as those utilizing wireless application
protocol (WAP)
17) All of these benefits are attainable quickly, with modest incremental cost and short payback
periods, which make SMS an attractive investment for service providers.
(http://www.itk.ilstu.edu/staff/drathke/277web/WebContent/reading/SMSoverview2.pdf)40
18) Enables truly personalized communication with customers
19) You are able to market to customers on a one-to-one basis, thus giving them the feel of
individual treatment via the SMS sent to their mobile phones
20) Shortens your time to market considerably
21) You can reach groups of people who are interested in knowing about your products and
services instantly.
22) Allows the transmission of time-sensitive information
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23) You may, for example, wish to reach your customers just before lunch hour (if you have a
restaurant) and you want to promote daily specials particularly on slow days of the week.
24) Includes customization capabilities
25) With our platform you can :
26) Change your message with a few simple mouse clicks
27) Choose to deliver your message instantly
28) Schedule future delivery of your message at a precise time
29) Not in front of your computer? No problem. Our platform even enables you to reach your
clients directly from your cell phone!
30) Ensures text message delivery
31) Delivery of your message is ALWAYS ensured thanks to the reliability of mobile technologies
that SMS Marketing is built upon.
32) Guarantees that your marketing messages are always welcome
33) Your marketing campaign is permission-based (opt-in) so your messages are sent only to those
who have requested them. According to industry studies, over 80% of cell phone users are
willing to receive opt-in text messages. This greatly increases ROI and provides the foundation
for a successful campaign.
34) Enables you to effectively target both new and existing customers
o Your new customers opt-in easily and existing customers will always embrace the opportunity
to receive more personalized treatment. As a result, customer loyalty is increased through a
variety of specials, coupons and other offers. This improves your bottom line!
35) Maximizes cost-effectiveness and returns
o Our leading edge platform allows you to increase sales of existing products as well as introduce
new ones. A properly designed and executed SMS Marketing campaign can produce response
rates of up to 20%! Text messaging has been estimated to be 10 times more effective than
newspaper advertising and 5 times more effective than direct mail. With text messaging, each
customer contact costs 12 cents and your message is welcomed. With print media and direct mail,
ads are not targeted and as a result are largely disregarded.
Text messaging can help to breathe new life into your existing print advertising and/or direct mail
campaigns! By simply placing your KEYWORD in your existing ads (TV, RADIO,
NEWSPAPER, MAGAZINES, DIRECT MAIL, BILLBOARDS) you add a level of interactivity
that will be sure to attract new customers and capture market share.
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36) It is GREEN!
o No more wasting paper! Every day we throw out countless envelopes and inserts that we never
read. Not only does text message marketing reduce waste, your message is also stored on the
recipient's phone! By transitioning to SMS mobile marketing, you will be saving the planet while
actually helping your company!
( http://www.mobilesmsmarketing.com/benefits.php)41
1.21.2. Disadvantages of Mobile Marketing:
Few standards: Mobile phones are even less standard than PCs. Not only do phone models present a
myriad of screen sizes, there are also several operating systems and browsers that are used by mobile
phones.
Privacy and Permission: Privacy is always in question on any network or device. Savvy marketers
must be aware of the connection that users feel with their mobile phone, and offer clear instructions
for opting out of marketing communications.
Questionable Navigation: The mobile phone is small. This means that it has a small screen and a small
keypad. While some phones have a full QWERTY keypad, many have the standard numeric keypad.
When it comes to the mobile web, consider that phones do not have a mouse. There are a few models
that have touch screens, but, for the most part, navigation of the mobile web is through the keypad or
scroll buttons on the phone- making mobile more of an objective based exercise for the user, rather
than casual browsing.
Education: The use of more advanced features of phones can require an extensive education process.
While mobile phones have a host of features, these devices are for the most part under-used.
What are the Limitations?
Short and sweet - With a lot of SMS messages being limited to around 160 characters, it is often
difficult to create an effective message within such short character limits. Additionally, in order for a
business to successfully promote their product, marketers have to be aware of the various differences
among today's smartphones, such as operating systems, navigation, and mobile screen sizes. One
example of an SMS marketing campaign that was unsuccessful due to mobile phone's operating
systems was from iLoop. The company sent an SMS message with a hyperlink that was unable to be
recognized by mobile phones. Companies should always send a test message before sending out their
SMS campaign to their target audience.
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Opt-in Lists - Companies must follow strict opt-in/opt-out participation guidelines. One of America's
favorite pizza chains, Papa John's, was accused of sending 500,000 SMS messages to its
consumers without their permission. Their direct marketing campaign, that was meant to be simple
and efficient, violated state and federal law. Papa John's was ultimately faced with a $250 million class
action lawsuit that was taken very seriously. SMS recipients must always be given the choice to stop
receiving a company's messages at any time. Furthermore, it would be unethical of your company to
send a promotional SMS to any mobile numbers that are registered with a Do Not Call Registry.
Spam messages - SMS marketing must be controlled for system abuse. While consumers are
accustomed to receiving a certain amount of spam messages on their e-mails, a mobile phone is very
personal and therefore spam is not tolerated. Ford's SMS marketing campaign several months ago,
sent to recipients who had opted-in to SMS marketing from the company, was accused of spamming.
Recipients claimed to receive multiple text messages that were not only vague, but also lacked a call-
to-action. Due to consumers being unable to learn more about Ford's products and receiving multiple
pointless SMS messages, consumers began ignoring the messages. It can be tempting to companies to
send too much, too often, ultimately, leading to negative attitudes developed by the SMS recipients
towards the company.
Delivery Failure - Unfortunately with bulk SMS marketing, service interruption occasionally occurs.
Thus results in delivery failure. SMS is simply not as reliable as email yet, regardless of the provider.
Privacy Issues - Lastly, privacy issues are an area of concern for SMS marketers. If SMS marketers
are obtaining the location of or sending an SMS message to their recipients, then they need to first
acquire permission from them. Many customers are more hesitant to give out their phone number than
their email address. Mobile marketers need to understand and respect recipients' privacy; otherwise
their companies could be prosecuted.
(http://www.ezanga.com/articles/the-disadvantages-of-sms-marketing)42
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1.22. Privacy issues in SMS advertisement
Privacy is defined as “the right of an individual to control the information held about them by third parties”
(Chaffey 2004, p.146)48. Dickinger et al. (2005)44 observed that: “The mobile phone cannot distinguish between
spam and genuine communication automatically”. They also found that consumers fear registration on SMS-
based information services because of privacy concerns. Permission-based mobile advertising (PBMA) is
considered to be the easiest way to tackle the privacy issue (Godin, 1999)49. In a study of 16 to 30 year-olds in
the US, evidence suggests that 51% of respondents were ‘very satisfied’ and 42% were ‘fairly satisfied’ by
PBMA. Some 72% agreed that PBMA was relevant to them and 84% were willing to recommend it (Barwise
and Strong, 2002)50. On the other hand, there is a negative relationship between the volume of ads received and
the attitude towards direct marketing. If the consumer is interrupted during his or her daily activities this can
severely damage brand image. Petty (2000)51 describes this cost as an involuntary cost borne by the consumer
who faces an unselected exposure. The major privacy violations in term of information capture are
demographics and purchase data disclosure without consumers’ consent, click stream patterns and browsing
history, and physical location and purchase context (for example, via GPS – the global positioning system). For
this reason, the notion of control over the wireless service provider is pertinent (Barnes and Scornavacca,
2003)52. In the UK, under Privacy and Electronic Communication Regulations, permission is a requirement of
SMS ads, as is opt-out and data protection from misuse and inaccuracy. Similar legislation is found in other
parts of the EU; for example, in the Nordic countries you cannot approach clientele with SMS in any way before
obtaining permission and so other media must be used to attract attention.
Consumer Control, Permission and Privacy.
Even though SMS offers myriad marketing possibilities, there are practical limitations. Sending high
loads of data via text messaging is time consuming. Content restrictions – i.e., messages may not
exceed 160 characters – might inhibit consumers from signing up for SMS. Web-based information
systems, by contrast, offer easier registration. Their display devices’ bigger screens and higher
resolutions offer more convenient access to privacy policies and legal frameworks such as
MindMatics’ Red- Alertz (http://www.redalertz.co.uk/)43.
A simple registration process also helps gain permission. Without consent, clients will refuse to accept
messages. Permission, a relatively new marketing term but actually an old concept, has come of age
thanks to e-mail. Both the customer and the company benefit from permission marketing. While
marketers get an audience interested in their message, customers receive fewer and more relevant
messages. Research on permission marketing via email is emerging. A study that investigated
permission campaigns across media found that a print campaign yielded opt-in e-mail addresses,
CHAPTER -1- INTRODUCTION OF MARKETING, ADVERTISING AND SMS ADVERTISING
PhD Thesis PRASHANT AMIN Page Number-58
especially with hand-addressed envelopes. Against expectations, a luxury hotel’s permission e-mail
campaign showed that personalized messages had poorer results than standardized messages. This
may have stemmed from using email addresses collected at check-in and failing to establish an e-mail
relationship. The advertiser must have permission before sending advertisements to consumers.
Unwanted messages, commonly known as spam, annoy the consumer and no matter which medium
(e.g., telephone, fax, electronic mail, mobile communication, etc.) are illegal in some countries.
Frequent spams stifle user acceptance; this argument may be even stronger with mobile marketing. All
15 experts cited fear of spam as the strongest negative influence on customer attitudes towards SMS
advertising. Dread of unwanted messages and privacy fears may prevent consumers from registering
for SMS ads. Unlike changing one’s email address hosted by free Web-based services such as Yahoo!
or Hotmail, changing one’s cell phone number is far more difficult.
CHAPTER -1- INTRODUCTION OF MARKETING, ADVERTISING AND SMS ADVERTISING
PhD Thesis PRASHANT AMIN Page Number-59
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Books
1. Kotler, Philip; Kevin Lane Keller (2009). "1". A Framework for Marketing Management(4th ed.). Pearson
Prentice Hall. ISBN 0-13-602660-5.
2. Adcock, Dennis; Al Halborg, Caroline Ross (2001). "Introduction". Marketing: principles and practice (4th
ed.). Xavier thomas. p. 15. ISBN 9780273646778.
3. Kotler, Philip & Keller, L. Kevin (2012). Marketing Management 14e. Pearson Education Limited 2012
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p. 16. ISBN 9780273646778.