e commerce to m commerce

====================================E-COMMERCE TO M-COMMERCE

The past ten years its seems, have brought a century’s worth of change in the way

humans interact and exchange goods and services. The richest man in the world, bill

gates, once said “ In every one or two decades there comes a technology which changes

the way humans carry out their daily lives forever”. The television that change human

entertainment in the 1950’s forever, the computer in the 1960’s that change humans work

habits and the internet in the late 1970’s that changes the way humans would

communicate, learn, advertise, conduct business and so on. As a result of this, an

important human chore was digitalized, like a number of others, - commerce. Thus, e-

commerce or electronic commerce came into pictures.

The present day is the witness to the wide reliance of man on M-commerce.

Companies can make online catalogs of products and services so that mobile users can

access that catalog from their mobile devices. Mobile commerce is still in its early

stages. It can potentially provide customer satisfaction, help generate business

opportunities, facilitate greater profits, build good relationships with customers and

provide quick access to anywhere. Using m-commerce is an efficient method to reach the

customer. It is used for various services like financial service—mobile banking or m-

banking to access accounts, bill payment and remitting money, brokerage through the

phone or mobile brokerage etc. They follow you wherever you go, making it possible to

access the Internet while walking down the street with friends and family or while

driving, looking for a nearby restaurant or gas station. As the Internet finds its way into

our purses or shirt pockets, the devices we use to access it are becoming more personal

too. Realizing the plethora of opportunities available, organizations are making a radical

shift towards embracing mobile computing in their business practices. Mobile Service

Marketer is an SMS-based marketing service that increases the use of the mobile services

being advertised, thereby raising the revenue they bring in. For the service providers,

Mobile Service Marketer is a useful advertising solution that respects the privacy of the

mobile users. Using the Mobile Service Marketer Service has proved to be an excellent

experience. Mobile text Messaging, or Short Message Service (SMS), as we all know it,

is the ability to send and receive text messages to and from mobile telephones.

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COMMERCE

Commerce is the trading of something of value between two entities. That something

maybe goods services, information, money or anything else the two entities consider to

have value. Commerce is the central mechanism from which capitalism and all other

economic systems are derived. The process of transforming something into a commercial

activity is called commercialization.

Commerce has its origin from the very start of communication is prehistoric times.

Trading was the main facility of prehistoric people, who bartered what they had for goods

& services from each other. Peter Watson dates the history of long- distances commerce

from circa 150000 years ago.

Later, currency was introduced as standardized money to facilitate a wider exchange of

goods & services. Currency solved this problem by allowing values to be assigned to

things so that goods & services can in a way be effectively collected & stored for later

use, or split amount several providers.

Today commerce involves a complex system of companies that try to maximize their

profits by offering products & services to the market, which consists both of individuals

& other companies at the lowest production cost.

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E-commerce

Electronic commerce or e-commerce consist primarily of the distributing, buying salving

marketing, and servicing of products or services over electronic systems such as the

internet and other computer networks. The information technology industry might see it

as an electronic business application aimed at commercial transactions. It can involve

electronic funds transfer, supply change management; e-marketing, on line marketing,

online transaction processing, electronic data interchanged, automated inventory

management systems and automated data collection systems. It typically uses electronic

communications technology such as the internet, extranets, e-mail, e-books, data bases

and mobile phones.

Electronic business or e-business is any business process that is empowered by an

information system. Today this is mostly done with the web-based technologies, the term

e-business’ was coined by Lou Gerstner, CEO of IBM.

Electronic business methods enables companies to link their internal and external

processes more efficiently and flexibly, work more closely with suppliers and partners to

better satisfy the needs and expectations of their costumers.

In practice, this involves the introduction of new revenue streams through the use of e-

commerce, the enhancement of relationships between clients and partners and improving

efficiency from using knowledge management system. E-business can be conducted over

the public internet, through internal internets and over secure private extranets.

It is more than just e-commerce. It covers business processes along the whole value

chain: electronic purchasing (“e-procurement”) & supply chain management, processing

orders electronically, Customer service & corporation with business partners. This

applies to traditional & virtual organization. Special technical standards e-business

facilitates the exchange of data between companies.

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Strength of E-commerce

In many cases, an e-commerce company will survive not only based on its product, but

by having a well-organized business structure and a secure, well designed website. Such

factors include:

1. Providing an easy and secure way for customers to order. Credit cards are the most

popular means of sending payments on the Internet, accounting for 90%of online

purchases. Card numbers are transferred securely between the customer and merchant

through independent payment gateways, such as authorize.net.

2. Providing reliability and security. Parallel servers, hardware redundancy, fail-safe

technology, information encryption, and firewalls can enhance this requirement.

3. Providing a 360-degree view of the customer relationship, defined as ensuring that all

employees, suppliers, and partakers have a complete view, and the same view, of the

customer. However, customers may not appreciate the big brother experience.

4. Constructing a commercially sound business model. If this key success factor had

appeared in the textbook in 2000, many of the dots COM might not have gone bust.

5. Engineering an electronic value chain in which one focuses on a “limited” number of

core competencies the opposite of a one stop shop.(Electronic stores can appear either

specialist or generalist if properly programmed.)

6. Operating on or near the cutting edge of technology and staying there as technology

changes (but remembering that the fundamentals of commerce remain indifferent to

technology.)

7. Setting up an organization of sufficient alertness and agility to respond quickly to any

changes in the economic, social and physical environment.

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Weakness of E-commerce

Even if a provider of e-commerce goods and services rigorously follows these Ten “key

factors” to device an exemplary e-commerce strategy, problems can still arise. Sources of

such problems include:

1. Failure to understand customers, why they buy and how they buy. Even a product

with a sound value proposition can fail if producers and retailers do not understand

customer habits, expectations and motivations. E-commerce could potentially

mitigate this potentially problem with proactive and focused marketing research, just

as traditional retailers may do.

2. Failure to consider the competitive situation. One may have the capability to

construct a viable book e-tailing business model, but lack the will to compete with

Amazon.com.

3. Inability to predict environmental reaction. What will competitors do? Will they

introduce competitive brands or competitive Webster. Will they supplement their

service offerings? Will they try to sabotage a competitor site? Will price wars break

out? What will the government do? Research into competitors, industries and markets

may mitigate some consequences here, just as in non-electronic commerce.

4. Over-estimation of resources competence. Can staff, hardware, software, and process

handled the proposed strategy? Have e-tailers failed to develop employee and

management skills? These issues may call for thorough resources planning and

employee training.

5. Failure to coordinate. If existing reporting and control relationship do not suffice, one

can move towards a flat, accountable, and flexible organizational structure, which

may or may not aid coordination.

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6. Failure to obtain senior man Failure to obtain senior management commitment. This

often results in a failure to gain sufficient corporate resources to accomplish

agreement commitment. This often results in a failure to gain sufficient corporate

resources to accomplish a task. It may help to get top management involved right

from the start.

7 Failure to obtain employee commitment .If planners do not explain their strategy well

to employees, or fail to give employees the whole picture then training and setting up

the incentives for worker to embrace the strategy may assist

8 Under estimation of time requirements. Setting up an e-commerce venture can take

considerable tome and money, and failure to understand the timing and sequencing of

tasks can lead to significant cost overruns. Basic project planning, critical path,

critical chain, or pert analysis may mitigate such failings. Profitability may have to

wait for the achievement of market share.

9 Failure to follow a plan. Poor follow through after the initial planning and sufficient

tracking of progress against a plan can result in problems. One may mitigate such

problems with standards tools benchmarking, milestones, variance tracking and

penalties and rewards for variances.

10. Becoming the victim of organized crime . Many syndicates have caught on to the

potential of the internet as a new revenue stream. Two main methods are as follows:

Using identity theft techniques like pishing to order expensive goods and

bill them to some innocent person, then liquidating the goods for quick

cash;

Extortion by using a network of compromised “zombie” computers to

engage in distributed denial of service attacks against the target website

until it starts paying protection money.

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PRODUCT MARKETING STRATEGIES IN E-COMMERCE

The key parameters to be considered when coming up with our own product or services

are;

What are we interested in?

What are we passionate about?

What subject or topic do we have a lot of knowledge about?

What are people always coming to us for advice about?

Product marketing strategies involved in E-commerce

1. Develop a new product or services by researching potential competitors in the

relevant area of interest to find out what their best selling product is and figure out a

way to improve on it.

2. Check out the newsgroups, discussion boards, and chat rooms where the target market

hangs out. And accordingly ask their opinion about their expectation from a particular

product or services

3 If there is already existing customer base, e-mail survey should be done. Surveys are

not only a great way to improve on any existing product or service we may offer, they

are also a great way to discover fresh product or services idea.

4 Check out consumer review web sites to find out what people like and dislike “about

the competitors product.” Some of the web sites are:

http://www.consumerreview.com

http://www.consumersearch.com

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http://www.consumersearch.com/

http://www.consumerreview.com/


5. Join an affiliate program and promote someone else product for a referral fee.

. Collecting the money

. Packaging the product

. Shipping the product

. Customer service

We just do the promotion and collect our referral fee from the resulting sales.

6. Compile a certain type of information and then package it as an e book.

7. Another really powerful product idea is to locate a problem and then develop a

product or service to solve it or in other words conducting “NICHE MARKETING

ON THE NET”

8. A newsletter is a great way to earn a large income very quickly. In fact, if our

newsletter covers an in demand topic and we build up a large subscriber base, we

could potentially take advantage of numerous streams of revenue including:

. Paid subscriptions

. Advertising

. Product promotion

. Selling our customer database

9. Sell unique or hard to find products on auction web sites.

We can sell some of the antiques, which are available easily in our area but are hard

to find elsewhere and command a good price.

10. Create an online community and sell memberships and advertising.

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MATRIX OF E- COMMERCE

Consumer Business

Consumer C2C

EBay

Auction

C2B

Price line

You name the price

Business B2C

Amazon ( books, etc)

Travelocity ( travel )

B2B

Ford, GM, DC Mfg. To

Suppliers

Internet domains C2C (consumer to consumer)

There is a considerable consumer-to-consumer communication on the web on a whole

range of subject. Parentsoap.com is an online community of more than 200000 parent

who spend time online gathering information, chatting with other parents, and linking to

related sites. On agriculture.com, farmers can find commodity prices, recent farms news,

and chat rooms of all types. The site is attractive as many five million hits per month.

C2C means that online visitors increasingly create product information, not just consume

it. They join internet interest groups to share information, so that “word of web” is

joining “word of mouth” as an important buying influence. Words about good companies

travel fast; and word about bad companies travel even faster.

For example EBay is a person to person trading community with more than 23 million

registered users.

Internet domains C2B (consumer to business)

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Consumer is also findings are easier to communicate with the companies. Companies

often encourage communication by inviting prospects and customer to send in questions,

suggestion, and even complaints wia e mail. Some sites even include a call me button the

consumer click on its and his or her phone rings with a customer representative ready to

answer a question. Smart online marketers will answer quickly, by sending out

newsletter, special product or promotion offers based on purchase histories, reminders of

service requirements or warranty, or announcements of special events.

Internet domains B2C (business to consumers)

The popular press has paid the most attention to consumer to consumer web sites. In 2000

more that 106 million Americans went online with the 80 percent looking for

information, 73 percent researching a product or a service before buying it 68 percent

looking for travel information and 65 percent looking for information on movies, books,

and leisure activity. The most frequent online consumer purchase ( in terms of the

percentages online buyers saying they have purchase in the category ) have been books

(58%), music (50%), software (44%), air tickets (29%), pc peripherals ( 28%) clothing

(26%), videos (24%), hotel reservation (20%), toys (20%), flowers (17%) and consumers

electronic (12%). Individual are also using the internet to search for others to meet or date

on such sites as match.com, Americansingles.com, or virtuallydating.com. Companies

must set up and operate their e- commerce shows.

Internet domains B2B (business to business)

Although the popular press has given the most attention to business to consumer’s web

sites, even more activity is being conducted on business to business sites. The b2b sites

changing the supplier customer’s relationships in profound ways. Forester and Gartner,

major research firms on online commerce, estimates that B2B commerce is 10 to 15

times greater than B2C commerce. Gartner estimated that by 2005 more than 500000

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enterprises will participate in e-markets as buyer, sellers or both. These firms are using

B2B auction sites, spot exchange online product categories barter sites and other online

resources to obtain better prices. Many major enterprises, including Chevron, Ford motor

Company, GE and Merck, have invested millions in web procurement system. The results

invoices that used to cost $100 to process now cost as little as $20.

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COLLABORATIVE COMMERCE

Collaborative Commerce (C-Commerce) is the name given to commercial relationships

carried out over a collaborative framework to integrate enterprises’ business processes,

share customer relationships and manage knowledge across enterprise boundaries. The

ultimate aims of C-Commerce initiatives are to maximize return on intellectual capital

investment, business agility and the quality of the customer experience. C-Commerce is

far more crucial than basic B2B e-commerce that is designed to construct a virtual link

for a pre-defined community of trading partners to buy or sell goods and services. Even

after the fall of the dot-com era, corporate strategists and venture capitalists are

embracing C-Commerce as the next generation of e-commerce and an evolution of the

traditional supply chain process.

How Web Services Redefine Collaborative Commerce

So far, we are in a very early stage in the evolution of web business. We have been able

to overcome the issue of the standardization of enterprise application programming

interfaces around the web, and have managed to undertake tremendous business-to-

business exchange transactions over the web, albeit with high integration costs. Web

Services promise to revolutionize this process.

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In the figure above, we can see the three stages of c-commerce, from bottom-left to top-

right:

First stage of C-Commerce - web enabled c-commerce, a one dimensional,

single e-enabled business process that allows certain internal data to be visible to

external trading partners, and vice versa. Typically, this meant implementing a

web presentation of the data, and allowing partners access to it. This is a limited

form of c-commerce, with very limited value, saving only labor cost. Typical

applications would be displaying demand for production materials, showing sales

forecasts to suppliers, or presenting bills electronically.

Second stage of C-Commerce - B2B exchanges in markets such as steel, auto

parts, chemicals or airline equipment. Buyers, sellers and suppliers are integrated

through a web portal. In this stage, each enterprise can reconfigure its supply

chain through the marketplace to leverage aggregated buying power and eliminate

brokerage fees and middlemen.

The first two stages of C-Commerce have never reached the critical mass required

for mass adoption by all industries, because of the cost of integration.

Third stage of C-Commerce - will be built on Web Service as a core integration

engine to deliver seamless process integration, seamless customer satisfaction

integration and seamless product design integration. It is a plug and play sort of

C-Commerce rather than a hard-wired, integration driven effort.

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MOBILE COMMERCE

What is Mobile Commerce (m-commerce)?

E-commerce will coming soon become Mobile Commerce (m-commerce) because

mobile devices are more user friendly than computer. Peoples checking movies details

and many other useful information on their mobile devices. Many companies accepting

payment by SMS payment system. In future Mobile Commerce (m-commerce) will be

sales and marketing showcase, educational application for companies.

Why Mobile Commerce (m-commerce)?

Companies can use Mobile Commerce (m-commerce) to increase sales of their products

and services. Mobile commerce can bring huge buyers for companies.

Benefits of Mobile Commerce (m-commerce)

Buyers can access products catalog on their mobile devices.

Companies can do promotions

Companies can show products.

Customers can price details from any place.

How Mobile Commerce (m-commerce) can help Companies?

Companies can make websites for mobile devices, which is popularly known as WAP or

Wireless Application Protocol. Companies can make online catalogs of products and

services so that mobile users can access that catalog from their mobile devices.

Does the technology have any limitations?

Mobile commerce is still in its early stages. It can potentially provide customer

satisfaction, help generate business opportunities, facilitate greater profits, build good

relationships with customers and provide quick access to anywhere. There are limitations

such as small screen, lesser processing power vis-a-vis PCs, circuit switching technology

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on older cellular networks that increases the cost and causes inconvenience for the

subscribers to obtain data on a mobile phone. This will change, as GPRS and 3G have

started to move into the mainstream.

Have any industries been affected by m-commerce?

Using m-commerce is an efficient method to reach the customer. It is used for various

services like financial service—mobile banking or m-banking to access accounts, bill

payment and remitting money, brokerage through the phone or mobile brokerage etc.

Access to stock quotes and trading is possible through phone. In telecommunication

services, users can make bill payments and review accounts. Services or retail consumers

have the facility to place and pay for orders on-the-fly. Users can also have the access to

information like delivery of financial news, sports figures etc. IBM and few other

companies are developing speech recognition software to ensure secure m-commerce

transactions.

What are the kind of transactions that commonly take place via m-commerce?

In m-commerce there are three types of transactions. The first is carrier-based service.

Users can use carrier billing to purchase something through their wireless device. They

bill their purchases to their monthly carrier bill or it’s deducted from their pre-paid

deposit. The second option is to use a credit card over a wireless network connection.

Users have the facility to store their credit card data on a mobile phone using their cell

phone as a surrogate or a card. Thirdly, financial services can transfer money between

accounts and pay bills through wireless transactions.

What’s the technology used in m-commerce?

Numerous technologies are used in m-commerce like GSM (Global System for Mobile

Communication) and HSCD High Speed Circuit Switched–data protocol based on GSM

uses four channels to provide four times the radio transmission rates or 57.6 kbps. This

technology is outdated due to the introduction of GPRS(General packet Radio Service).

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GPRS–wireless service based on GSM, EDGE (Enhanced Data rate for Global

Evolution), UMTS (Universal Mobile Television System), microbrowsers,

Mobile Commerce, or m-Commerce, is about the explosion of applications and services

that are becoming accessible from Internet-enabled mobile devices. It involves new

technologies, services and business models. It is quite different from traditional e-

Commerce. Mobile phones or PDAs impose very different constraints than desktop

computers. But they also open the door to a slew of new applications and services. They

follow you wherever you go, making it possible to access the Internet while walking

down the street with friends and family or while driving, looking for a nearby restaurant

or gas station.

As the Internet finds its way into our purses or shirt pockets, the devices we use to access

it are becoming more personal too. Already today, mobile phones and PDAs know the

phone numbers of our friends and colleagues. They are starting to track our location.

Tomorrow, they will replace our wallets and credit cards. One day, they may very well

turn into intelligent assistants capable of anticipating many of our wishes and needs, such

as automatically arranging for taxis to come and pick us up after business meetings or

providing us with summaries of relevant news and messages left by colleagues. But, for

all these changes to happen, key issues of interoperability, usability, security, and privacy

still need to be addressed

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WHY MOBILE SMS/TEXT MESSAGING?

Mobile text Messaging, or Short Message Service (SMS), as we all know it, is the ability

to send and receive text messages to and from mobile telephones. The text can comprise

words or numbers or an alphanumeric combination. SMS was created as part of the GSM

Phase 1 standard. The first short message is believed to have been sent in December 1992

from a Personal Computer (PC) to a mobile phone on the Vodafone GSM network in the

UK. Each short message can be up to 160 characters is length when Latin alphabets are

used.

Customer Usage and Market Growth

There is no doubting the success of the Short Message Service - the market in India alone

has reached over one billion messages despite little proactive marketing by network

operators and phone manufacturers. Key market drivers over the next two years such as

the access of cheaper mobile technology to the masses will continue this growth path.

Mobile Messaging: How can your business benefit?

Enterprise Messaging

Enterprise uptake of mobile applications is set for phenomenal growth. By 2005, Gartner

anticipates that 65 percent of enterprises will be harnessing the power of wireless

applications to efficiently automate the existing business processes and use wireless

connectivity for one or more user groups.

Statistics are already showing a considerable growth in the enterprise messaging, within

the last seven quarters.

Where does enterprise messaging fit into your business

No matter what the nature or model of your business is, you can effectively exploit the

potential of Mobile Messaging. Following are some examples of the application areas

where Mobile Messaging is excelling:

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1. B2B Messaging

Mobile terminated and mobile originated SMS and MMS via UCP, XML and PHP

interface

Benefits: Using industry standard protocols provide easy integration with existing

systems as well as a robust and scalable model for future technologies.

2. B2B Campaigns and list processing

Permission-based mobile marketing campaign of consumer goods, advertisement

campaign, promotions etc.

Benefits: Mobile marketing provides unparallel advantage of effectively targeting

specific audience level.

3. B2B Applications

Customized mobile applications conforming to a business rule and addressing a specific

target audience. Example: MIS reports to mobile sales force, critical data to mobile

technical work force. The possibilities are unlimited and the flexibility is enormous!

How to choose a high quality and reliable service provider for SMS/Text Messaging for

your enterprise messaging needs?

The first option that comes to one's mind is mobile operators. However, though they have

complete control over network infrastructure, they are generally not too keen to service

customer for meeting their messaging needs. The prime reasons for this are:

Enterprise messaging involves complex integration with backend

database/applications

The volume of messages is typically not high (except in large B2C companies)

The criticality of message delivery is extremely high

Operators largely cross subsidise 'voice' with 'data' services.

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It a specific network is down, then the service suffers.

The service need extra attention in terms of providing high service levels

There are many independent providers of mobile data services focussed in the domain of

enterprise messaging that provide end-to-end SMS/text messaging service. There are

several advantages of working with an operator neutral service provider:

Easy and quick integration with back-end application/databases

Connections with multiple operators ensure better service quality (i.e. service is

continued even if the network of a specific operator fails)

Single entry point into the mobile networks.

Uniform application access ? no duplicate efforts required

Reliability and timeliness - Acknowledged mobile messaging with guaranteed

message delivery information available

Integrated payment ? one stop shop for all billing aspects and

Seamless and secure messaging environment.

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RETAIL MARKETING IN INDIA GOES CELLULAR

"As marketers see a critical mass developing in the mobile subscriber base, brands are

opening up to the idea of marketing through the mobile," says Raj Singh, executive

director, Active Media Technology India.

Marketers are waking up to the power of the mobile handset like never before. With SMS

and short codes becoming passé, the ubiquitous handset is offering new opportunities for

brands to make inroads into the consumer's mind space.

Mobile coupons, location specific services, mobile portals and advertising on the mobile

are just few of the tools being deployed by marketers to reach the 90 million strong

mobile subscribers base in India.

In what could be termed as the second generation of mobile marketing, subscribers can

look forward to an array of segmented marketing and advertising initiatives on their

mobile screens.

Mobile Coupons

Wireless marketing technology provider Active media Technologies has partnered with

mobile operator Hutchison Essar to deliver m-coupons, which can be cashed across 40

retail outlets such as Barista, Domino's Pizza, Lifestyle and Kaya Skin Clinic.

Similarly, Airtel has joined with Enpocket, a global leader in intelligent mobile

marketing, to give advertisers a convenient, effective way to reach a major cross-section

of the country's population. Also, mobile2win is in talks with mobile operators to start

location-based services that will enable marketers to reach out to the prospective

customer while he is in the vicinity of the outlet by giving various incentives and offers.

With richer capability handsets enabled with GPRS and WAP invading the Indian

market, it's becoming easier for marketers to reach out to consumers.

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"As marketers see a critical mass developing in the mobile subscriber base, brands are

opening up to the idea of marketing through the mobile," says Raj Singh, executive

director, ActiveMedia Technology India. ActiveMedia Technology is working with

Hutchison Essar to deliver the "Hutch Tuesday" program, wherein Hutch subscribers

have exclusive access to offers across retail partners being test marketed in Mumbai.

Hutchison Essar hopes to add more partners to the existing 300 as they go along with the

scheme. "We intend to give more offers and privileges to our subscribers in the future

through these electronic coupons," says company's operations director Harit Nagpal.

Pepsi Reaching Consumers

Pepsi is also getting into the action. It has recently launched a mobile portal called "Pepsi

Globe Smart Client."

"Mobile marketing for us is about delivering to our consumers engaging and interactive

content rather than using it as a reach building device," says Vipul Prakash, executive

vice president, marketing, PepsiCo India.

Differentiated content from the mainline media is also a key in making mobile campaigns

work. Pepsi would be undertaking big cricket campaigns in the future and expects to

spend 5 percent of its overall ad spends on mobile and wireless. "Mobile marketing is not

a spend intensive industry but a content intesive one," adds Prakash. In the first month,

the Pepsi mobile zone has gotten 55,000 downloads, although it is still in the test run

stage.

Location-Based Services

Location-based services is another marketing tool being explored by content providers

such as mobile2win. "We have the technology ready for location based services. It's the

mobile operators who have to give the go-ahead," says Rajiv Hiranandani, country head,

mobile2win.

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This service will enable marketers to reach out to the prospective customer while he is in

the vicinity of the outlet by giving various incentives and offers."

With forecasts of mobile marketing revenues reaching US$3 billion globally, according

to RBC Capital markets, Indian mobile operators are also upping their ante to latch on to

this revenue generating stream.

Airtel recently appointed Enpocket, a global mobile marketing solutions provider, to

provide ad serving technology for mobile Internet via the Enpocket marketing engine.

The Enpocket solution will enable Airtel to offer mobile advertising opportunities to

brands and companies. Worldwide, Enpocket provides mobile marketing technology to

Vodafone, Sprint, Alltel, Singtel, Nokia, Samsung, Panasonic, BenQ-Siemens, Trinity

Mirror, TNT, Pepsi and Nike.

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THE BIG CHALLENGE THE BUSINESS USERS

Surprisingly, businesses have often failed to create centralized purchasing for mobile

devices and operator contracts. This has led to individual departments buying mobile

services, rather than this coming under the remit of the IT or telecommunications

department. It has also led to the perception of mobile devices as a 'nice-to-have' rather

than business-critical tool.

The hyping of mobile business solutions has not helped. Enthusiasts have attached an 'M'

to existing IT solutions, and foresee a world of M-CRM, M-SCM and so on. However,

CIOs need to be clearly convinced of the benefits. Their view of mobile applications is

usually based on the current limitations of mobile devices and networks. Hence, they are

extremely wary of such offerings. They are also unwilling to pay high premiums as early-

adopters -- a Gartner study of European CIOs found that only 24% would pay extra for

3G.

However, the same study found that 82% of CIOs see mobile devices as very important

to their businesses, and expect their company's usage to grow substantially in the next

three years. The three main benefits were seen as improved customer satisfaction, cost

savings and new business opportunities.

Thus, the pent-up demand is there if businesses can be convinced of the benefits. They

also need to be reassured on implementation issues with security typically being the main

worry. They need support in integrating mobile applications into existing business

systems, managing new devices and infrastructure, and developing and deploying

business applications over wireless links. Their concerns also include softer issues such

as training and management issues, asset allocations, virus scanning, and application

updates.

These issues are now being addressed by the operators, consultancies, systems integrators

and outsourcers in supporting enterprise usage of mobile applications. The business

community is now perceived as vital to their success. We will start to see far more

enterprise-wide agreements to support this. For example, Vodafone and KPMG signed a

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deal in August for Vodafone to provide mobile services to the 30,000 employees of the

KPMG European Anchor Practice. This will provide such benefits as centralized

management and billing, short code dialing and using the same access codes regardless of

location.

Some businesses will be surprisingly innovative in using mobile solutions. Such

examples of less obvious early adopting vertical markets will include:

Retailers -- particularly supermarkets or those dealing with the youth market. The

supermarkets have been closely involved in the success of mobile in Europe, as

aggressive distributors. A number have already become virtual operators, and others have

been assessing the establishment of WLANs in their stores. Internally, mobile scanning

devices and workforce management will become widespread.

Banks -- are not renowned for their innovation, but they have reacted to the competitive

interest shown by mobile operators who have implied they will apply for banking

licenses. Despite its problems, they have been among the early adopters of WAP in

offering banking services, and using mobile services as an enhanced package to their

customers.

Utilities -- see clear advantages in reduced costs and improved services in mobile data

offerings. For example, in using mobile links for remote monitoring of meters and remote

diagnostics. They are also often involved as investors in mobile consortia in Europe.

Auto -- with 70% of US mobile calls believed to be made in cars, there has always been a

strong relationship between the two industries. NTT DoCoMo believe more than 100

million Japanese cars will be equipped with mobile multimedia devices by 2010. Car

journeys also provide a lot of the 'idle time' which is perfect for many mobile

applications.

24


Forms and convergence

Internet, mobile telephony and events constitute the bulk of interactive marketing action.

With more than 0.2 million cyber cafes spread across the country, it is no wonder that

nearly two-thirds of India's internet users access the web through cyber cafés. But the

spread of broadband into households through cable is also well under way, and at

affordable monthly charges of about 10 US dollars.

There is no dearth of portals dedicated to online games and contests. Interactive

advertisements in rich media, with hyperlinked clicks leading to audio-visual commercial

messages, are quite common on popular websites. Most of the leading Indian media

portals have their hands full in keeping up with the demand for ad space on their web

pages.

Said Yahoo India's Country General Manager Neville Taraporevalla in a presentation,

"Ad inventory is in short supply." As highlighted in the beginning of this article,

ecommerce is also growing at a rapid pace in India.

More than two-thirds of the mobile subscriber base is youth, with a strong penchant for

SMS. Marketers of financial services were among the first in using cell phones to serve

their customers. Many banks facilitate balance checks of customers' accounts through

SMS messages. ABN Amro and Kelloggs are two of the MNCs to promote their

products/services through mobile phones. To further exploit the full potential of SMS in a

country with 18 officially recognized languages, Nokia launched many handsets at

affordable prices that enable SMS in the most spoken language, Hindi. Both automated

and real-time voice calls are also extensively used, in varied contexts of CRM.

Media convergence is in full swing, with mobile, TV and internet being complementarily

used by marketers. Reality shows on leading TV channels in India thrive on interactive

responses from viewers through SMS messages. These either enable participation on the

shows or decide the winners on the reality programs telecast. KBC2, the second edition

of the Indian equivalent of "Who Wants to be a Millionaire", elicited 1.6 million phone

calls/SMSes for the first three episodes telecast on Rupert Murdoch owned Star TV in

25


August 2005. In early 2006, viewers cast as many as 55 million votes through

SMS/telephone/internet to decide the winner of a singing contest "Sa Re Ga Ma Pa

Challenge 2005" on a TV channel. For brand promotion and creating buzz, marketers and

advertising agencies regularly use contest websites such as contests2win and Hungama.

Sometimes even print and radio media are used in tandem with other media, for cross-

promotion.

Direct marketing, sales promotion and events are also a regular part of leading Indian

marketers' strategies, across different product categories. Almost all of the major

advertising agencies have exclusive units to cater to the interactive communication needs

of their clients. Ogilvy & Mather and Euro RSCG, for example, have their wings O&M

Interactive and Euro RSCG Interactive.

Recent initiatives

The following table lists some of the recent Indian interactive campaigns:

Marketer

Product

Category Brief Description

Lufthansa Airline

Mobile auction of a few tickets

between New Delhi and New

York

Kelloggs Cereals

SMS-based contest, to

promote Iron Shakti ingredient

in its cornflakes

Sony

Entertainment

Television

Media

Identification of a tune

(program titled Kuch Kehti

Hai Ye Dhun) played on TV,

through SMS responses

Wrigleys Chewing gum Question/answer SMS contest,

to promote its Meetha Fresh

26

http://www.hungama.com/

http://www.c2w.com/


flavor of chewing gum

SmirnoffAlcoholic

Beverage

SMS-based contest to create

buzz around a theme party

(Smirnoff Experience)

Coca-Cola Soft drinkInteractive SMS promotion to

promote Vanilla Coke

Dominos PizzaConvenience

food

Interactive SMS-based

promotion to create hype

around its new product

Cinnastix

Nestle Beverage

Online advergame, to promote

its instant coffee brand

Nescafe

Yamaha AutomotiveOnline game, to promote its

bikes

As is evident from the table, across different product categories marketers are treading

the interactive path to consumers' hearts and minds. To elicit proper responses to the

contests, marketers dole out attractive prizes, such as mobile phones, T-shirts, CDs,

vouchers redeemable at department stores, audio systems, TVs, et cetera.

27


ENTRY BARRIERS TO MOBILE APPLICATIONS

While the mobile market is progressing at a rapid stride, the major components - devices,

wireless networks and applications - are constantly evolving at varying speeds.

Devices

The wireless market is developing with a myriad of pervasive devices and it becomes a

Herculean task to deploy mobile applications that allow communication between multiple

devices. This calls for the development of user-profiles performing intelligent routing

capabilities, which help in determining the device configurations and communicate

accordingly.

The following characteristics are to be determined while designing mobile applications:

Form factor or giving area size

Browser capabilities, languages supported.

Available input methods.

Text coverage graphics support etc.

Expandability, option and slot

Push technology support.

Ruggedness.

Information storage capability.

Device performance calculation and logic.

Networks

Wireless networks have their own standards in terms of connectivity and functionality

aspects. These include gateways, towers and access links that are dependent on an

organization's use of network protocols, application logic and device access.

The characteristics for wireless networks are defined in terms of:

Support to open internet standers and protocol

28


Extent of wireless network coverage.

Cost factor.

Uniform/forty coverage.

Data transmission, speed security concern

Time taken to service request.

Applications

While the wireless device market is constantly evolving in areas of field service and sales

force automation, vendors are extending their applications to support these new devices.

In this scenario, mobile application architecture confined to a single standard or device

will experience difficulty in adapting to new technology advancements.

Essentially, the mobile application architecture should be robust and flexible in providing

user-friendly mobile solutions that are secure, reliable, scalable and manageable. The

different characteristics to be considered for mobile applications are:

Support interoperable standards; adapt to new technology advances

Address bandwidth constraints.

Coverage fluctuations, also known as spotty coverage

Rapid development of mobile applications

Extent of separation between presentation and business logic in delivering

wireless data access

Continuous growth. Demanding agility in the applications space, the market is maturing

from generic middleware into a new generation of multi-channel middleware paradigm.

Application vendors are finding means to diversify access to multiple devices and

networks with intermittent connectivity.

29


EXPLORING MOBILE APPLICATIONS TECHNOLOGY

The first wave of Mobile Application Framework surfaced mainly to support Web

applications. The framework handled only a Web browser-processing HTML through a

thin-client device. Realizing the need for multi-channel access with rich user-interface

capabilities, the current wave extends into product architectures to support multi-client

devices.

Presently, most application framework vendors are turning to provide wireless

application gateways (WAGs) and other mobile-enabling features such as

synchronization, event notification etc.

A typical mobile environment scenario, wherein, middleware plays a key role involves:

* Optimized Communication: Operates through a common set of APIs making it easy to

develop and deploy mobile applications that optimize communication over IP-based

networks.

* Security: Encryption/decryption functionalities using PKI technologies guarantee

secure data exchange over wireless networks.

* Bandwidth: Features such as compression and transport optimization help in effective

data transmission.

* Industry-standard protocols: Optimal utilization of TCP/IP protocol to reduce airtime

expenses, and to support wireless communications.

* Compatibility: Offers compatibility between industry-standard TCP/IP protocols and all

wireless networks through its common set of APIs.

* Spotty coverage: Automatically adjusts to spotty/fluctuating coverage by minimizing

connection loss (possible by slowing down and speeding up), as and when required.

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* Offline capability: One of the key features of middleware is its ability to support offline

functions. Here, the middleware assigns some of the processing capabilities on the

wireless device so that the user can be connected for a shorter amount of time and

manipulate the data on the wireless device while offline.

* "Push" Technology: The core functionality to mobile applications is its ability to

"Push" data to mobile users' devices as they operate in disconnected and out of coverage

modes. This is possible in different ways such as connected, disconnected and prior

filtering process capabilities.

* Device agnosticism: Allows multiple devices to communicate without the need to know

device-specific coding.

* Network Connectivity: Facilitates increased geographic coverage across multiple

mobile devices that are independent of network providers and carrier technologies.

* Personalization: Middleware solutions offer personalization through scripting, markup

language, user-interface etc. This includes message alerts, the look-and-feel aspect,

historical usage patterns etc.

* Application systems integration: Tight integration of traditional databases, legacy

systems and voice systems with mobile applications. XML is proven to be the widely

accepted choice to operate across multiple systems.

* Manageability: As part of the middleware suite, the management software handles

clients (i.e., devices) via multiple networks, by updating and synchronizing information

from enterprise back-end systems.

* Session management: Maintains session integrity across multiple devices and channels

by embracing the concept of mobility, transporting a session from one device to another

etc.

* Database Synchronization: Offers connectivity from any back-end system / database to

any device that executes only those specified data transfers. Connectivity is also extended

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within existing enterprise applications like SCM, ERP etc. Apart from this, the wireless

communication component in middleware provides access to other peripheral devices

like camera, POS, GPS, barcode scanners, fax etc.

* Business Rules: Applying business logic and rules, middleware leverages the existing

work and code that simplifies workflow, eliminates duplication effort, and saves time and

money.

SMSMAP - TECHNOLOGY FOR MOBILE ADVERTISING

SMS Mobile Advertising Platform™(SMSMAP) is a carrier grade advertisement server.

With SMSMAP network operators and service providers can offer a new mobile media to

advertisers creating substantial new revenue from their subscriber base and increasing

messaging traffic.

SMSMAP makes possible to provide service to customer companies mobile campaigns to

send advertisements, information and sponsored content to mobile handsets. With

SMSMAP, it is quick and easy to create customizable services from off-the-shelf

campaigns. Several different campaigns of several customers can be run and managed

simultaneously on SMSMAP.

The solution incorporates permission marketing support, mobile user profiling and

personalisation, precise targeting mechanism, push and pull mobile messaging, advanced

reporting, and billing. The advanced SW technology used in SMSMAP enables

functionality expansion to quickly respond to the evolving needs of mobile advertising

business.

SMSMAP key benefits:

» Enabler for a new revenue stream

» Fast campaign

» Expandable library of mobile campaigns

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» Mobile e-commerce and secure payment solutions integration

» Numerous mechanisms for high-precision advertisement targeting

» Spamming prevention through personal bandwidth management

» Advanced campaign monitoring and statistics

» Comprehensive set of platform management features

» Permission marketing support

33


MOBILE ADVERTISING, THE NEXT BIG WAVE IN INDIA AS

THE MARKET MATURES

Hyderabad, August, 2003: OneTele has officially launched Mobile Ad Robot, the Smart

Mobile Advertisement Server for wireless network operators and service providers. The

product is the first to be publicly released from OneTele's line of robust and scalable

back-end software platforms for mobile e-commerce.

Mobile Internet analysts predict the revenues from mobile advertising and marketing to

top $1 Billion already next year, due to the fact that there are 350 Million existing "ad-

enabled" mobile handset users out there and the number of WAP-devices is increasing

rapidly, too. By 2003, mobile advertising will surpass online advertising revenues.

"Mobile Advertising market will grow extremely fast within the next 18 months. It will

do to value-added services what the web did to the Internet" comments Dr.Venkatesh,

Executive Vice President of OneTele. "We are proud to launch Mobile Ad Robot in the

series of out Robot wares at this point of time, when the market has not yet taken off as

analysts except. We are ready for the heat when it hits us. We are making pioneering

efforts in intelligent and self intuitive wares for business applications and advanced

research in artificial intelligence" said Group Chairman Dr P.V.Majeed while dedicating

the product.

One Tele's Mobile Ad Robot is a carrier grade solution enabling operators and service

providers to send advertisements to mobile handsets in their network. Mobile Ad Robot

supports direct advertisements or sponsored content and rich media such as ring tones as

the mobile media. The solution incorporates push and pulls technology, advanced

reporting and campaign management. With Mobile Ad Robot operator or service

provider can ensure advertisers to reach their target audience.

One Tele Communications develops and sells mobile commerce and mobile CRM

software technology and related value-added services enabling smart mobile advertising

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and customer communication. The company develops mobile applications for next

generation automation technologies for insurance, banking and financial services in

workforce automation and customer contact automation. The company founders have

professional backgrounds in mobile service development, wireless technology and

technology marketing and entertainment. OneTele's strategy is to become market leader

and increase our network of partners both in the India, Asia and Europe

35


SWOT ANALYSIS OF CELLULAR MOBILE INDUSTRY

Strengths

Huge wireless subscriber potential.

Fastest growing mobile market in the world.

Consumers are ready to pay for cutting edge services.

India possesses cheap labor to attract foreign investments.

Telecom software, telecom professionals, telecom infrastructure and telecom

services are the key players in shaping today’s economy.

Revenue sharing strategies are leading to mergers and acquisitions, helping

companies to enter new business opportunities, and generate employment,

boosting the countries economy.

Government has started relaxing rules for foreign participants

Lowest tariff rates in the world

Weakness

Market strongly regulated by government body the telecom regulatory

authority of India.

Existence of entry barriers for private companies.

High cost of service provision.

Low income countries like India can not afford to replicate expensive telecom

infrastructure.

Opportunities

India has Asia’s third largest economy is adding at least one million new

mobile phone users every month

Mobile phone user’s base hitting a saturation point in big cities.

Income levels in the rural areas rising due to robust agricultural output.

Share of the rural market in the country’s mobile population is, however, less

than 15%

Cellular phone now being viewed as a common mans phone

36


Rapid growth expected in the telecom and related services

Foreign investment in form of equity or technology

Increased availability of bandwidth has open doors to new schemes making

efficient usage, providing value added services and generating profits.

Threats

High level of risk uncertainty and cost associated with the cellular sector

Weak intellectual property right protection

Software and digital content piracy

Political instability

Cost of handset also deters a lot of buyers from opting for the service

Threat from WLL service providers and also from satellite phones

37


CONTRIBUTION OF THE CELLULAR INDUSTRY TO THE INDIAN ECONOMY

1. World class infrastructure : - the Indian industry has been instrumental in bringing

to the Indian consumer a world class telecom infrastructure. The industry would have

invested over rs 25000 crores to:

set up 69 networks

Serve over one crore subscribe as of December 2002.

Offer services in over 1575 cities and towns and

Cover 14000 villages

2. Reputed Indians business houses and international telecom major

The privatization of Indian cellular brought into the arena some of the most reputed

business houses of the country as also biggest names in the international

telecommunication industry. Included Reputed Indian business houses – Birla BPL escort

Essar, Reliance, RPG, Tata, and Thapar

International telecom majors: single tel, Asia tech, AT&T, Bell Italia NYEX, Millicom

first pacific Hutchison Whampoa, telecom Italia, new york life, telecom investment

Telesystems, international wire less, cell net and others. Institutional investors – AIG,

Commonwealth Development Corporation, EMP, Asian infrastructure fund and others

3. Increased connectivity

There are presently 42 networks operating in the country covering over 1350 cities and

towns and directly serving over 6.7 million subscriber nation wide. Importantly the

connectivity benefits also extend to over 33.5 million PSTN subscriber of BSNL and

MTNL who can now reach the cellular subscriber “any time and any where”

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in addition to the cellular radio waves cover over 28000 villages, where connectivity can

be provided at a very short notice at a normal incremental cost.

4. Employment generation

As the 3rd and the 4th cellular Licenses would start their operations and with 77 networks

(42 presently and 35 new networks) on air the employment generated down the supply

chain comprising vendors, infrastructure supplier, contractors, dealers, etc. it is estimated

that the total employment generated by the cellular industry would be in the tune of few

lakhs once the new networks are rolled in.

5. Increased in FDI flows

The telecom sector is the largest attractor of foreign direct investment in the country,

accounting for almost a fifth of FDI approvals since 1991.

6. Heavy investments in infrastructure

The cellular industry responsible for the single largest chunk of investment by any

individual industry. The industry has already invested over Rs 20000 crores and is

expected to invest even more in the years to come.

7. Revenue generation for the government of India

The cumulative revenues that have flowed to the government are already about Rs 10000

crore from license fee and service tax alone

39


SMS USERS ARE OPEN TO BRAND MARKETING

From conveying simple need-based messages to friends and loved ones to going all the

way to downloading pictures and tunes and mails… we all have seen the role of SMS

evolve to reach a dynamic position. Today as consumers, we experience the emerging

usage of SMS for brand communication, in the most personalised manner possible. As an

advertiser, I am posed with a sea of questions… Where does SMS stand in the

consumer's perspective as a medium of brand communication?… What is the profile of

those consumers who are ready to learn about my product by means of a single message

on their phone? How do I, as an advertiser, reach out to them using SMS?

Intellect, the Research and Technologies Unit of Lintas Media Services in association

with Interactions, Lintas Media Services, has conducted an extensive research that probes

the psyche and the demographics of the SMS marketing consumers. "We continuously

need to explore the relationships of the consumers with these emerging media. We also

need to develop aids for the advertisers to target and reach these consumers."

The study, conducted in February 2004 covered the SEC A segment of Students and

Working Executives/ Businessmen in the top 4 metros - Mumbai, Delhi, Kolkata &

Chennai. This study is a sequel to a recent study by Intellect titled 'Selling Made

Smarter' which investigated the growth of advertising through SMS.

The aim remains to provide the advertiser with a constructive understanding of his

consumer's thought process, experiences, expectations and acceptance of SMS as a

medium of brand communication. From here on, we shall see the answers shaping up an

insight into the mind of the consumer.

To what extent is my consumer exposed to Brand Marketing SMS?

A huge potential exists as far as communicating consumers via marketing is concerned

and this is evident from the fact that only 14% of the respondents have been exposed to

advertising through SMS. An untouched 86% have yet to experience a brand

communication on their cell phones. Of the ones that have been exposed to such a

40


communication, about 97% have read the actual message before deleting it, A favourable

36% also acted on the message after reading it. This depicts the readiness of the

respondents to be a part of the entire communication process.

How open is my consumer to the idea of receiving Brand Marketing SMS on her cell

phone?

Probing their openness to the idea of accepting brand communication on their cell

phones, the respondents portrayed a very positive picture. 66% are willing to accept

advertising through SMS on their cell phones.

The willingness is more amongst students and the younger age group i. e 15-24 years

than that amongst working executives and those in the higher age group. Males are more

willing to receive marketing SMS than females.

Avoidance of SMS (termed as deleting the SMS without reading it carefully) is much

lower for this medium compared to the conventional media. 32% are in the habit of

reading every SMS that they receive; another 53% hardly ever or only sometimes delete

the SMS without reading carefully. In a scenario where television, print, cinema, etc all

have high ad-avoidance, this is a very critical media.

One more noteworthy fact stays that apart from E-mail, SMS is the only medium that

allows Permission Marketing. While the students are open to receiving advertisements

through SMS anytime there is a promotion; male working executives/ businessmen

between the group 35-44 are open to receiving advertising through SMS but only with

prior permission being given.

Will the consumer of my product be ready to accept communication by me via

SMS?

While it is quite exciting to know that today's consumer is welcome to the idea of being

exposed to brand communication via SMS, we still need to advertise only certain

41


categories using the SMS medium. We need to know the product categories that interest

the consumer through SMS.

The most preferred categories by the consumers were found to be

Music/Entertainment/Gifting/Toys, Personal Products, Publications/ Books, and Local

Hotels/Cinemas/Discs/Events.

Not only the product category, but also the nature of information demanded by the

respondents regarding a particular category holds considerable importance.

Students are more inclined towards being informed on 'offers and promotions' for Music/

Gifting (60%), Cars, (56%), Utilities (56%), Stationary (55%), Book & Publications

(53%) and Impulse Foods (50%). Working Executives/ Businessmen show a higher

affinity towards 'offer and promotion' information for Household FMCGs (83%), Kitchen

Foods (83%), House Fittings (78%), Durables (73%), Pharma (63%), Personal Products

(54%), Local Entertainment (51%) and Impulse Foods (50%)

While most students prefer 'detailed information' on Music/ Gifts/ Toys; Working

Executives demand detailed information on Personal Products

Of the information seekers, the male skew is more towards Durables (85%), Impulse

foods (80%), Cars (79%), Stationary (68%), Household FMCGs (67%), Utilities (67%),

Local Entertainment (66%), Pharma (63%), Books & Publications (62%), Music and

Gifting (60%), Personal Products (58%), House Fittings (50%).

Females are keener to know about offers and promotions on Kitchen Foods (58%) and

House Fittings (50%).

When do I reach my consumer?

The timing and frequency of reaching a consumer is very important for any

communication planning and the study has explored these areas. About 30% are open to

receiving advertisements through SMS anytime there's a promotion. 34% prefer being

42


asked before they are sent advertisements through SMS while 34% prefer it not very

frequently.

While, 17% are open to receiving advertisements through SMS more than 3-4 times a

week, on the whole, 86% are open to the idea of receiving brand marketing SMS once a

month and more.

There is no specific pattern to the timing desired by the consumers. Anytime between

morning to evening is acceptable. This is so since finally, the choice of opening the actual

message lies with the consumer. Over 66% feel that they do not have to see or answer an

SMS immediately when it is received.

In a nutshell…

SMS comes across as a medium which makes the consumer reachable at all times, is

personal, allows permission marketing and is interactive. Most importantly it is

acceptable to the consumer as a means to communicate information on various products

and services.

Besides this the study also uncovers the cell phone usage behavior of the segments. The

study also covers information on the services used by cell users, billing information;

share of SMS in the monthly cell phone spends. It has also established the affinity of

consumers to using SMS and the reasons for this affinity.

Overall, the study is a wealth of data available for targeting consumers using SMS.

When marketers at Doordarshan decide that it is time to embrace this technology, you

know it has already made its impact on marketers everywhere else. The magic four digits,

which are changing the way brands talk to their audiences have forced Doordarshan out

of its slumber and into relationship building exercise with their viewers.

You see them everywhere — in print advertisements, on hoardings, on your TV screen,

on truck backs. The 4-digit numbers that you call from your mobile phone, sometimes,

43


forming a word on your key pad (7827 – STAR or 6388 – NDTV); and sometimes, just

easy to remember (8888 – India times). These short code numbers are now the rage,

allowing companies to easily build relationships with consumers in a super-cluttered

media environment Marketers have never had it so good. As understanding of the

medium increases and as consumers embrace this new form of targeting, the ubiquitous

mobile phone has emerged as the super salesman, the saviour. SMS marketing is

hardworking, efficient, measurable and unobtrusive. SMS is now a source of unprojected

revenue for a number of services and businesses, especially media and telecom

companies. For media companies, SMS is a new distribution channel and a consequent

revenue source. For telecom companies, SMS Value Added Services yield higher.

margins than simple voice and data products.

As mobile phone instrument and usage costs plummet — resulting in higher penetration

and acceptance — SMS, as a primary component of marketing and sales strategies, will

continue to grow. These low costs are aided by the fact that technology is freely available

and the entry barriers low.

44


COMPARISON OF E-COMMERCE TO M-COMMERCE

M-Commerce versus E-Commerce

Frequently m-commerce is represented as a "subset of all e-commerce" thus implying

that any e-commerce site could and should be made available from a wireless device. We

believe that such conclusions are missing leading. M-commerce should be recognized as

a unique business opportunity with its own unique characteristics and functions, not just

an extension of an organization’s Internet-based e-commerce channel. Of course there are

similarities between e-commerce and m-commerce from being able to purchase a product

or service in a "virtual" vs. a build and mortar environment.

Technology E-Commerce M-Commerce

Device PC Smart phones, pagers, PDAs,

Operating

System

Windows, Unix,

Linux

Symbian (EPOC), PalmOS, Pocket PC,

proprietary platforms.

Presentation

StandardsHTML HTML, WML, HDML, i-Mode

BrowserMicrosoft Explorer,

Netscape

Phone.com UP Browser, Nokia browser, MS

Mobile Explorer and other micro browsers

Bearer NetworksTCP/IP & Fixed

Wire line Internet

GSM, GSM/GPRS, TDMA, CDMA, CDPD,

paging networks

Key Issues

Evolution: Technology and Business models are constantly evolving which will

demand flexibility and patience on part of all players.

Customer loyalty: Who will ‘own’ the customer? Partnerships among players

from various industries will be necessary for most, if not all, m-commerce

45


initiatives, and, in turn, will alter the nature of any one company to own their own

customers.

Cross-sector knowledge gulf, where the different parties will need to learn about

the functions and limitations of the services provided by the other players, for

example, operators will need to know about content and applications.

Moving up the value chain: To respond to market opportunities some companies

have develop subsidiaries in order to react more rapidly to market challenges. For

example, Sonera has developed Sonera Zed, to provide portal and application

management services such as location based mobile yellow pages as well Smart

Trust, to develop secure solution for m-commerce transactions. And Citicorp has

established e-Citi to develop a wireless access gateway strategy for financial

service providers.

What is Driving M-Commerce?

Exponential growth of consumer interest and adoption of the Internet and e-

commerce.

Tremendous growth in mobile telephony; however, voice has become a

commodity and will no longer fuel revenue growth for operators.

Development of real-time transfer of data over 2.5G and 3G networks will enable

faster data transmission and ‘always-on’ connectivity.

The evolution of the handheld devices incorporating WAP and now GPRS.

Mobile e—commerce market is worth $3.5 billion in 2000 and will grow to over

$200 billion by 2005 (Ovum).

Cost of entry into mobile e-commerce is low for most entrants; for example, a

bank can implement a sophisticated m-banking solution in under six months for

around $1 million.

The unique features of the mobile device such as its compactness for convenience

and personalized functions; subsequently, people have become quite attached to

their devices.

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Attracting players from all economic sectors from technology, finance, retail, media, all

anticipating that m-commerce will increase customer acquisition and retention and

generate new revenue opportunities.

Products, Services & Applications Suited for M-Commerce

The criteria for m-commerce services or products

Limited but precise choice

Predictable availability

Does not require lengthy and in-depth decision making (appeal to impulsive

buying behavior)

Convenience

Examples:

The New York Times bestseller list meets all three criteria. It would be easy to

purchase any of the listed books via a wireless device.

Tickets to popular entertainment events, such as concerts, live theatre, movies,

sports events, trade shows, public forums

Mircro-transactions: purchasing a fast food items, such as a soda pop from a

vending machine;

Payment of bills, banking, restaurant bill

Applications

According to Ovum’s research, there is a lot of uncertainty about which mobile

commerce applications will be successful and make money. The research/consulting firm

classified m-commerce applications into three categories.

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48


MARKETING FOR THE NEW ECONOMY

M commerce opens up new opportunities for marketers

Consumers and businesspeople no longer need to be near a computer to send and receive

information all they need is cellular phone or PDA such as palm while they are on move

they can connect with the internet to check stock price the weather sports scores or send

or receive email message they can place an online order by simply using a phone or PDA

a whole field called telemetric involves placing a wireless internet connected computers

in the dashboards of cars and trucks, and making more home appliances (such as

computer) wireless so that they can be used anywhere in or near the home. Many see a

big future in what is now called m-commerce. According to IDC a technology research

company the market for location based services is forecasted to approach $billion by

2004.Here are some possibilities

Getting a coke by pointing and clicking the phone at a vending machine .The bottle

drops down and an appropriate amt. is deducted from the owner’s bank a/c.

Using the phone to search for the nearby restaurant that meets the customer entered

criteria.

Watching stock prices while sitting in the restaurant and deciding to place a purchase

order.

Clicking the phone to pay the bill for the meal; the cellular phones replaces the credit

card.

Coming home and clicking a combination of keys on the phones to open the door.

Some see positive benefits such as locating people making emergency 911 calls or

checking on the whereabouts of ones children late at night. Others worry about privacy

issues. What if an employer learns that an employee is being treated for AIDS at a local

clinic or a wife finds out her husband is out clubbing? Like so many new technologies,

location based services have potential for good or harm and ultimately they will warrant

public scrutiny and regulation.

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MOBILE BANKING

The last time that technology had a major impact in helping banks service their customers

was with the introduction of the Internet banking. Internet Banking helped give the

customer's anytime access to their banks. Customer's could check out their account

details, get their bank statements, perform transactions like transferring money to other

accounts and pay their bills sitting in the comfort of their homes and offices.

However the biggest limitation of Internet banking is the requirement of a PC with an

Internet connection, not a big obstacle if we look at the US and the European countries,

but definitely a big barrier if we consider most of the developing countries of Asia like

China and India. Mobile banking addresses this fundamental limitation of Internet

Banking, as it reduces the customer requirement to just a mobile phone.

Mobile usage has seen an explosive growth in most of the Asian economies like India,

China and Korea. In fact Korea boasts about a 70% mobile penetration rate and with its

tech-savvy populace has seen one of the most aggressive rollouts of mobile banking

services.

Still, the main reason that Mobile Banking scores over Internet Banking is that it enables

‘Anywhere Banking'. Customers now don't need access to a computer terminal to access

their banks, they can now do so on the go – when they are waiting for their bus to work,

when they are traveling or when they are waiting for their orders to come through in a

restaurant.

The scale at which Mobile banking has the potential to grow can be gauged by looking at

the pace users are getting mobile in these big Asian economies. According to the Cellular

Operators' Association of India (COAI) the mobile subscriber base in India hit 40.6

million in the August 2004. In September 2004 it added about 1.85 million more. The

explosion as most analysts say, is yet to come as India has about one of the biggest

untapped markets. China, which already witnessed the mobile boom, is expected to have

about 300 million mobile users by the end of 2004. South Korea is targeted to reach

about 42 million mobile users by the end of 2005. All three of these countries have seen

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gradual roll-out of mobile banking services, the most aggressive being Korea which is

now witnessing the roll-out of some of the most advanced services like using mobile

phones to pay bills in shops and restaurants.

MOBILE BANKING SERVICES

Banks offering mobile access are mostly supporting some or all of the following services:

1. Account Balance Enquiry

2. Account Statement Enquiries.

3. Cheque Status Enquiry.

4. Cheque Book Requests.

5. Fund Transfer between Accounts.

6. Credit/Debit Alerts.

7. Minimum Balance Alerts.

8. Bill Payment Alerts.

9. Bill Payment.

10. Recent Transaction History Requests.

11. Information Requests like Interest Rates/Exchange Rates.

One way to classify these services depending on the originator of a service session is the

‘Push/Pull' nature. ‘Push' is when the bank sends out information based upon an agreed

set of rules, for example your banks sends out an alert when your account balance goes

below a threshold level. ‘Pull' is when the customer explicitly requests a service or

information from the bank, so a request for your last five transactions statement is a Pull

based offering. .

The other way to categorize the mobile banking services, by the nature of the service,

gives us two kind of services – Transaction based and Enquiry Based. So a request for

your bank statement is an enquiry based service and a request for your fund's transfer to

some other account is a transaction-based service. Transaction based services are also

differentiated from enquiry based services in the sense that they require additional

security across the channel from the mobile phone to the banks data servers.

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Based upon the above classifications, we arrive at the following taxonomy of the services

listed before.

Push Based Pull Based

Transaction

Based

Fund Transfer

Bill Payment

Other financial services like

share trading.

Enquiry Based Credit/Debit Alerts.

Minimum Balance

Alerts

Bill Payment Alerts

Account Balance Enquiry

Account Statement Enquiry.

Cheque Status Enquiry.

Cheque Book Requests.

Recent Transaction History.

Technologies enabling Mobile Banking

Technically speaking most of these services can be deployed using more than one

channel. Presently, Mobile Banking is being deployed using mobile applications

developed on one of the following four channels.

1. IVR (Interactive Voice Response)

2. SMS (Short Messaging Service)

3. WAP (Wireless Access Protocol)

4. Standalone Mobile Application Clients

Advantages of Mobile Banking

The biggest advantage that mobile banking offers to banks is that it drastically cuts down

the costs of providing service to the customers. For example an average teller or phone

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transaction costs about $2.36 each, whereas an electronic transaction costs only about

$0.10 each. Additionally, this new channel gives the bank ability to cross-sell up-sell

their other complex banking products and services such as vehicle loans, credit cards etc.

For service providers, Mobile banking offers the next surest way to achieve growth.

Countries like Korea where mobile penetration is nearing saturation, mobile banking is

helping service providers increase revenues from the now static subscriber base. Also

service providers are increasingly using the complexity of their supported mobile banking

services to attract new customers and retain old ones.

Marketing for Mobile Banking

Mobile banking is poised to become the big killer mobile application arena. However,

Banks going mobile the first time need to tread the path cautiously. The biggest decision

that Banks need to make is the channel that they will support their services on.

Mobile banking through an SMS based service would require the lowest amount of effort,

in terms of cost and time, but will not be able to support the full breath of transaction-

based services. However, in markets like India where a bulk of the mobile population

users' phones can only support SMS based services, this might be the only option left.

On the other hand a market heavily segmented by the type and complexity of mobile

phone usage might be good place to roll of WAP based mobile applications. A WAP

based service can let go of the need to customize usability to the profile of each mobile

phone, the trade-off being that it cannot take advantage of the full breadth of features that

a mobile phone might offer.

Mobile application standalone clients bring along the burden of supporting multiple

mobile device profiles. According to the Gartner Group, a leading wireless computing

consulting organization, mobile banking services will have to support a minimum of 50

different device profiles in the near future. However, currently the best user experience,

depending on the capabilities of a mobile phone, is possible only by using a Standalone

client.

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Mobile banking has the potential to do to the mobile phone what E-mail did to the

Internet. Mobile Application based banking is poised to be a big m-commerce feature,

and if South Korea's foray into mass mobile banking is any indication, mobile banking

could well be the driving factor to increase sales of high-end mobile phones.

Nevertheless, Bank's need to take a hard and deep look into the mobile usage patterns

among their target customers and enable their mobile services on a technology with

reaches out to the majority of their customers.

SMS – Short Messaging Service

SMS uses the popular text-messaging standard to enable mobile application based

banking. The way this works is that the customer requests for information by sending an

SMS containing a service command to a pre-specified number. The bank responds with a

reply SMS containing the specific information.

For example, customers of the HDFC Bank in India can get their account balance details

by sending the keyword ‘HDFCBAL' and receive their balance information again by

SMS. Most of the services rolled out by major banks using SMS have been limited to the

Enquiry based ones.

However there have been few instances where even transaction-based services have been

made available to customer using SMS. For instance, customers of the Bank of Punjab

can make fund transfer by sending the SMS ‘ TRN(A/c No)(PIN No)(Amount)'.

One of the major reasons that transaction based services have not taken of on SMS is

because of concerns about security and because SMS doesn't enable the banks to deliver a

custom user interface to make it convenient for customers to access more complex

services such as transactions.

The main advantage of deploying mobile applications over SMS is that almost all mobile

phones, including the low end, cheaper one's, which are most popular in countries like

India and China are SMS enabled.

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http://bankofpunjab.com/mobilebanking_center.htm

http://www.hdfcbank.com/ri/RI-EAGE-MobileBanking-withSMS.htm


An SMS based service is hosted on a SMS gateway that further connects to the Mobile

service providers SMS Centre. There are a couple of hosted IP based SMS gateways

available in the market and also some open source ones like Kannel .

Case studies

LG Telecom, South Korea

In terms of the evolution of services being offered on mobile applications, South Korea is

showing the way.

The big push came when LG Telecom Ltd., the smallest of Korea's three mobile service

providers teamed up with the Kookmin bank to launch the ‘Bank on' service. Under this

scheme mobile users were able to use smart chips embedded in cell phones for accessing

all of the transaction and enquiry based services. The chip-based service automated the

authentication of users when they accessed their bank's financial services to make the

whole process much faster and convenient. The icing on the cake came with the ability of

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http://www.kannel.org/


these chip enabled cell phones to be used simultaneously as cash cards.By October 2004

there were already about 100,000 infrared readers adapted to take payment directly from

mobile phone handsets in Korea.

Users can now use their cell phones to pay for everything, from restaurant bills, travel

tickets, merchandise and even haircuts.

Reliance Infocomm, India

When Reliance Infocomm, India rolled out its CDMA network, (at the time the mobile

market in India was still in its infancy, and data services were almost never heard off) it

made sure that all handsets supported Java.The Reliance application platform, also

known as R-World brought Java compatibility even to the lower end phones.

Reliance used a novel way to overcome the memory limitations of lower-end mobile

phones, which hampered deploying of multiple standalone J2ME based clients. Instead of

storing applications statically on their cell phones, users access a single menu based

application called R-World, which connects them to the Reliance servers. Using the menu

based user interface, mobile users select the application, which they want to run and

download them over-the-air to their cell phones. These applications are then executed

locally on the mobiles.

From mid-2004 Reliance tied up with two of the popular private sector banks, HDFC and

ICICI, to provide a host of their enquiry and transaction based mobile banking services

through its R-World environment.

Are you banking more on your mobile?

Imagine being stuck in a traffic jam, unable to reach your bank and get details of the last

three transactions. Actually, you needn't worry. You can now 'bank' on your mobile. Send

an SMS to your bank's customer service number and within a few seconds get the details.

All you need is a mobile phone and a PIN from your bank.

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But there's more to mobile banking than making a query. You can go much beyond

that."Shop on your mobiles and pay through your bank account from it," says Jyotsna

Sekhri of customer services, ABN Amro. "Tell the merchant that you want to pay with

Mpower of ABM Amro

Could we see mobiles replace debit/credit cards then?

"Mobile banking, a symbiosis of technology and financial services, is the hottest area of

development in the banking sector and is expected to replace the debit/credit card system

in future," says Anurag Gupta, convener, Zero-Mass Consortium, a project supported by

HPCL and ICICI banks to deliver smart card retail service

"In the past two years, the number of people using mobiles has increased three times, as

compared to the use of debit/credit card holders. And, 85 per cent -90 per cent of mobile

users do not own credit cards,” say Gupta.

Banks like ABN Amro plan to capitalise on this gap to increase penetration. There are 47

million mobile users, with 2 million being added every month. Despite such potential for

convenience and business opportunity, few people use mobiles even for simple banking

queries.

But people have their reasons for not yet lapping up the opportunity. They find many

features complex to handle. That apart, there is the issue of sensitising customers. There

have been cases where help-desks at banks have not been able to offer much to willing

users.

"I feel banks have underplayed various features. I have never found a way to details. So, I

don't use such services on my own for the fear of making a mess of my account," says

Sutapa Majumdar, a social worker.

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Agrees S Menon of Citibank India: "Mobiles have become ubiquitous, and using them

for banking is the logical step. But in order for banks to explore full potential, increasing

awareness is essential.

But there are bigger barriers. Interoperability, fraud and security are other major

concerns. To secure interoperability and enhanced usability, versatile chips are a must,

which can connect several banks and carriers simultaneously. Mobile banking might take

off in India if banks initially offer some services for free.

"Banks and service providers need to work closely to streamline customer interfacing

systems and enhance user experience," says Atul Bindal, CMO & director, Bharti Tele-

Ventures.

From users' perspective, technology is on its way to aid growth. Koreans, known to be

tech-savvy, use mobile banking in a big way. Some of them already avail of double-slot

mobiles that have two SIM cards a regular one and another that's a credit/debit card SIM.

About 3.3 million transactions were reported by Bank of Korea in 2004.

Mobile Banking - The world in the palm of your hand

Want to be able to conduct business or make payments in a world where there is no

physical infrastructure to do so? Ever needed to make an emergency payment but can’t

get to the bank before closing time

How To Use

Mobile Banking will enable you to carry out your Banking Transaction on your Mobile

Phone.

AirTel/ Essar

Configuring SMS (Short Messaging System)

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Mobile Banking operates through Short Messages. So you will first need to activate this

function on your mobile phone. If you already activated the Mobile Messaging service,

you do not need to do this again. This is a one time activity & has to be done only while

activating this service. For more details contact your Cellular Service Provider.

How to Send a Transaction

Key in the key words for the transaction you want using your Mobile Phone and send it

to a number designated by Cellular Service Provider. Prefer using upper cases while

punching the message. With in a matter seconds, you will get the reply of your

transaction on your mobile phone screen as a text messages.

How to Read Replies

In a few seconds after sending message you will hear a beep on your mobile phone, it

means that the information you want has arrived. To read the information, go through the

menu & select the "Read Messages" option. The message will then appear on your

Mobile Phone screen.

Different types of Transactions

Transaction

Type Brief Description

SMS/Keyword to

be sent

Balance Inquiry

Will give you the available balance in the

default/operative accounts that are linked to your

customer identification number up to a maximum of

five accounts.

BOPBAL

Costs

Transactions

Will give you information on the last five

debits/credits made to your account.BOPTXN

Bill PaymentPayment of Bills of Companies you have registered

for with the Bank.BOPPAY

Change Primary You have the option of changing your primary BOPNEW

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Accountaccount and carrying out your transaction on this

new account number.

Cheque Book

Request

A cheque book will be mailed to your address on

records with the bank.BOPCHQ

HelpThis will give you the transaction codes for the

various types of transactionsBOPHLP

Mobile Banking

A Strategic Analysis of Opportunities in the Banking Sector

Mobile Banking is generally defined as carrying out bank transactions and other related

activities via mobile (hand-held) devices. The spectrum of offerable services is listed

below:

a) Account operation (bill payments, money transfers etc.)

b) Account administration (access administration, cheque book requests etc.)

c) Account information (balance inquiries, statements of account)

d) Financial information (interest- and exchange rates etc.)

The services are generally based on technologies offered by “Short Messaging Service”

(SMS), or by “Wireless Application Protocol” (WAP). Some banks, particularly many

in Japan, also offer services based on i-mode. Most of the services can be accessed via

several types of mobile (hand-held) devices including cellular phones and “Personal

Digital Assistants” (PDA). Additionally client-based applications - that work similar to

other Home Banking applications - are reported to be gaining popularity - particularly in

Germany. The client (usually a Java MIDlet) can be installed on the mobile device, e.g.

a mobile phone or a PDA.

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If the information available on the web pages of respective banks is an indicator, then

Germany seems to be coming out rapidly of its till-now somewhat lukewarm response to

the opportunities offered by Mobile Banking. Many German banks that just a few

months ago seemed to be content with providing account and market information on

mobile hand-held devices, if at all, are entering into collaboration with network carriers

and software providers to offer client-based Mobile Banking applications, usually called

PDA Banking.

The term "PDA Banking" is however not really appropriate to describe client-based

applications as a PDA can also be employed for browser-based Mobile Banking, e.g.

WAP Banking.

If you are a busy person on-the-go, here is another great banking service to add greater

banking convenience to your banking needs – Hong Leong Mobile Banking.

With SMS service, on your Mobile Phone, you can perform simple banking transaction

fast and conveniently at your fingertips.

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The rapidly changing technology has revolutionized many aspects of modern life.

Mobile commerce is witnessing phenomenal growth as new wireless technologies

offering improved bandwidth, rapid transmission and cost effective mobile devices hit the

market place. It is no longer the voice telephonic that appeals the consumer features like

SMS, mobile banking, mobile commerce, astrology, news, live cricket scores, internet

and email access through mobile telephones.

As competitions in the telecom arena intensify service providers took new

initiatives to attract customers. The most important consumer segments in the mobile

industry are the youth segments and the business class segments. Business are using

technology to provide their employee with more mobility because makes them more

productive. Internet service providers are on a price war and the manifold increase in

internet usage is a certainty that can work wonders for cellular operators.

It will eventually end the rat race in mobile telephony because the worst thing in a

rat race is even if you win it you are still a rat.

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MARKETING MANAGEMENT: - PHILIP KOTLER

PRINCIPLE OF MANAGEMENT: - HAROLD KOONTZ

ECONOMIC TIMES

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