Mobile marketing is a range of activities that allow the businesses such as the hotel industry to communicate with potential customers through the help of mobile devices, gargets and networks, in a relevant and interactive manner (Aberdeen Group, 2008, p.1). Mobile marketing is the utilization of mobile phones and other wireless gadgets to enable business organizations to wirelessly provide time and location sensitive information. This is enhanced by a heightened level of personalization that can only be achieved using mobile phones.
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This new phenomenon is intensified by globalization that is in turn brought about by radical improvements in technology. The speed of transactions and communication is unprecedented in the history of mankind, making it possible to conduct business on a global scale at the speed of light. Goods, services and ideas can be easily transported from one continent to the next and surprisingly a major part of all these transactions can be controlled from a mobile phone.
The power of global logistics is now at the hands of the consumers. Mobile marketing is usually conducted through the use of short message services (SMS), multimedia services (MMS), in-game mobile marketing, mobile web marketing, mobile applications, Bluetooth, infrared and proximity systems (Mobile Marketing Association, 2009). These new capabilities can be characterized in speed and efficiency of transactions and communication.
Purpose and Objectives
The objective of this study is to find out the impact of mobile marketing to the hotel industry and how it can be used to generate more revenue for those willing to transition from traditional methods of delivering advertising content. Part of the objective of this study is also to find out the constraints that can become roadblocks to success. In order to clarify the purpose and objectives of this study the following prompts must be included in the discussion:
- To understand common guidelines used by business organizations in developing their respective advertising campaigns.
- To find out if the hotel industry can use the same strategies in order to develop an advertising campaign that can help them increase their profitability.
The main question that needed to be answered in this study is this: Is mobile marketing applicable to the hotel industry? This inquiry is further broken down into similar questions as seen below:
- What exactly is mobile marketing?
- Is there evidence to show that mobile marketing can be used in the hotel industry?
- Is there a precedent to the use of mobile marketing in delivering advertising content?
- What are the advantages of using mobile marketing as opposed to traditional use of mass media to deliver advertising messages to the customers?
The following is a review of related literature that would provide information as to the history and current status of mobile marketing in the world today and how it is used in the hotel industry. Emphasis is given to the nature of mobile marketing, how is it similar and different from the traditional marketing techniques used by advertisers.
The following literature review also provides insight into the capability of mobile marketing as well as the problems encountered by those ready to use the new platform of communication. Furthermore, this review of literature focuses on the importance of mobile phones as the cornerstone of mobile marketing.
Definition of mobile marketing
Before going any further it is important to clarify that the science and art of marketing is well known in business circles. A general definition of marketing is as follows: ““Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (Tahtinen, 2006, p.1).
This is a straightforward definition and has made clear the idea that marketing is a deliberate process. Mobile marketing can be fully appreciated if one takes a closer look at mobile messaging and how its capabilities can be utilized to reach a larger share of the market. Thus, mobile messaging in a nutshell can be understood by pointing out that it includes SMS and Multimedia Messaging Service or MMS:
SMS is available to virtually all mobile phone users and does not typically require a data plan or Mobile Web access, making it ideal for reaching most mobile users. While SMS is limited to contain text, MMS can contain images, audio and even video content. Most mobile phones sold over the past few years support MMS, making it an effective way to reach many mobile users” (Mobile Marketing Association, 2009, p.2).
It is said that mobile marketing via short message services began to make a mark in the beginning of the 21st century. This service was perfected in Asia and Europe before it became common in North America (Friedrich, 2008). The standard practice is to develop a database containing phone numbers of the target market and then sending them text messages about a particular product or service.
It quickly became clear that this is the new way to do business. According to Heinonen and Strandvik (2006), there are new marketing communication technologies that can be used to deliver advertising content. These are MMS, SMS, email, among others are by-products of the radical changes occurring in the telecommunication industry.
These communication channels or new forms of media provide new opportunities for reaching out to customers. But there is a great difference in the content and the manner of delivery that contrasts it from traditional methods of developing and broadcasting ads (Heinonen & Strandvik, 2006).
In a survey conducted to delve deeper into the new world of mobile marketing revealed the following results: “consumer experiences in internet and email were more positive compared to consumer experiences in other methods of direct marketing such as door-to-door sales and telemarketing (Heinonen & Strandvik, 2006), p.1).
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This is an encouraging report for those dissatisfied with conventional methods in communicating with potential customers. Another important feature of mobile marketing is that there is big enough room for improvement and innovation.
For example “M-marketing should be considered within the context of m-business and m-commerce in communications technology; m-business represents ‘mobile’ business and refers to the new communications and information delivery model created when telecommunications and the Internet converge” (Mort & Drennan, 2002).
Thus, mobile marketing must not be limited to the use of mobile phones and its connectivity through mobile operators such as AT&T and Sprint. Recent models of smart phones have the capability to access Wi-Fi (Keefe, 2008). In this regard, this type of phones can download content without paying for it.
As long as the user stays within the range of an available Wi-Fi zone then he or she can use the Internet as easily as if connected to a regular personal computer. There may be limitations in screen size and other restrictions but the more important thing is the freedom that it provides to the user.
Furthermore, the impact of the convergence can be creates opportunities for: “reaching customers at multiple locations, for personalizing offerings and services in fresh ways and for making possible new types of services and shopping experiences” (Leppaniemi, 2008). Although there are still considerable challenges and limitations to this technology it can also be said that a significant number of barrieers had been eliminated through the use of mobile technology.
Going into specifics mobile advertising is “a form of advertisign that is communicated to the consumer or target market via a handset. This type of advertisign is most commonly seen as a Mobile Web Banner, Mobile Web poster and full interstitial, which appears while a requested mobile web page is loading.
Other forms of this type of advertising are SMS and MMS ads, mobile gaming ads and mobile video ads” (Mobile Marketing Association, 2008). Another major feature of mobile marketing is the capability of consumers to interact with advertisers. As a result, “the new interactive media or mobile services allow business organizations to interact directly with their customers.
And it has been observed that customers’ attention to marketing communications is influenced by the location and circumstances when the recipient received the advertising message” (Heinonen, K., & Strandvik, T. (2006, p.2). Marketing has reached a new level, making advertising content more personal and interactive.
In mobile advertising, interaction between the customer and different business is not limited by time and place (Sweeney, S., Dorey, E. MacLellan, A. (2006). In addition, mobile advertisements are either custom-made or tailor-made. This is dependent on the target market and the segment that advertisers try to reach.
For example, a company that sells beauty products may have determined women between the age of 40 and 50 to differentiate their products from others. Thus, they will develop a marketing campaign for that age group. On the other hand mobile advertising can be flexible to accommodate a campaign to target a wide market as possible and this is more likely when it comes to promoting a movie that appeals to a wider audience.
It did not take long before advertisers began to exploit this new found capability of bombarding users with their ads (Pearo & Carroll, 2011). It has become important to regulate this practice (Mort & Drennan, 2002). The proponents of mobile marketing as well as respective agencies responsible for its regulations began laying down guidelines in order to protect the privacy of the users as well as their ability to enjoy the use of online services without having to be constantly distracted and annoyed at messages dumped on them.
This new system of rules allowed regulators to pinpoint unwanted messages as SPAM. The restrictions did not dampen the enthusiasm to reach a wider audience. In fact, it prompted many business organizations to improve the process of developing advertising content as well as the mode of delivery (Purdy, 2010).
They also found a way to improve their capability to send personalized messages to their target customers. It has to be pointed out that their ability to send messages can be simplified into different categories such as the use of multimedia messages such as those that contain timed text, audio, video and even downloadable games.
Implications of mobile marketing for the hotel industry
There is so much potential of mobile marketing when it comes to the hotel industry. As mentioned earlier, advertisers point out to the ability of mobile marketing to include advertising content that are specific to the target market.
As a result the remarks of advertisers can be summarized using the following assertion “Marketers believe that they benefit from the ability to personalize communication in digital media; 66% of marketers have noted that the main advantage of mobile marketing is its one-to-one communication ability” (Heinonen & Strandvik, 2006).
It must also be pointed out that mobile advertising can be used to support marketing, branding and service delivery in a number of ways (Pullinger, Beschizza, & Bass, 2009, p.1). The following are the generalized capabilities of mobile marketing:
- To encourage people to sign up to campaigns, by enabling them to respond immediately a campaign attracts their interest;
- To display banner advertising tailored to individual usage habits, including ads generated by proximity to a particular location;
- To send out follow-up advertising to users who have already requested or signed up to a particular service;
- To combine communication and entertainment by using games or networking applications to promote brands or encourage behavior change;
- To deliver transactional services, including payments and receipt of tickets, coupons and vouchers” (Pullinger, Beschizza, & Bass, 2009).
It is important for the hotel industry to embrace mobile marketing. It is the way to the future (Varnali & Toker, 2009). It no longer makes sense to rely on traditional advertising methods that are expensive and less efficient. It has been made clear that conventional methods of delivering advertising content failed to reach the intended audience (Wiedemann, 2007).
Mass media marketing is based on the assumption that the greater the number of people that comes across the message then the greater the number of response. But in a highly mobile society it is no longer practical to use “interruption method” to force the customer to stop what he or she is doing in order to focus on a marketing message.
The power of the mobile phone is linked to the fact that it has become an extension of the person. It is no longer a device for communication but has now become an organizer, a keeper of memories, a camera, a recording device and many more (Pousttich, 2006).
Thus, it has become apparent that the average mobile user does not leave home without their phones and when they are at home the mobile phone is placed nearby and easily accessible (Dushinski, 2009). It is therefore crucial for the hotel industry to develop marketing campaigns having this insights and information in mind.
Benefits of mobile marketing for hotels
In the past advertisers simply go to TV networks and newspapers and provide the advertising content that they assume would be read and examined by their target market (Pullinger, Beschizza & Bass, 2009). However, with the increasing use of mobile phones and the way consumers are using content from website and other multimedia sites it has become clearer that advertisers can no longer force consumers to sit up and listen to what they have to say (Sharl, Dickinger & Murphy, 2005).
More and more media streams are competing for the attention of consumers. The increasing use of mobile media services has led to stiffer competition for customers’ attention. It can also be said that customers are now more informed, individualistic, and independent and involved, making it harder for advertisers to convince them to try out their products and services (Sweeney, Dorey, MacLellan, 2006).
Firms had to allot millions of dollars in order for a TV network to air the commercials. On a relative scale and yet still expensive proposition it is also expensive to go to print media in order to use it as a means to communicate to their target market (Aberdeen Group, 2008). The most frustrating part of it is not only the cost but the efficiency of the advertising model.
It is extremely difficult to personalize the advertising content (Bernhart, 2010). And more importantly there is no way for the customer to interact with the advertisers. The same thing cannot be said about mobile advertising because the advertisers can pinpoint the target market and the potential customers that they want to reach.
The use of technology specifically when it comes to database and other forms of data collection schemes enable them to develop a campaign suited for a particular segment (Brown & Chalmers, 2003). But the most exciting part is the ability to receive feedback from customers (GS1 Mobile Com, 2008). Consider the fact that customers can text back a reply and instantly informing the advertiser that the marketing campaign was effective or not.
Furthermore, the speed of the feedback and the quality of the feedback given to the advertisers enable them to modify the advertising content with a level of promptness that was impossible in the traditional way of doing things. This ensures the capability of continuous communication with the customer (Heinonen & Strandvik, 2006). In the past the advertisers had to rely on a feedback mechanism that is slow and cumbersome.
By the time they determined the impact of the ads a great deal of resources had already been expended while the impact leaves much to be desired. This new technology and new capabilities enable advertisers to create a marketing campaign that can reach a wider audience (Jelassi & Enders, 2004). But not only that, it can create different types of advertising content based on the segmented market and based on the profiles that they have created through their database containing personal information of their target market.
As a result it has become extremely difficult for advertisers t use interruption-based communication strategies to reach out to their existing loyal customers and potential customers. In a way this has affected the hotel industry especially when it comes to expensive marketing campaigns that are not cost-efficient (Leppaniemi, 2008).
On the other hand hoteliers that do not have the budget for expensive marketing gimmicks are still at a loss when it comes to finding a way to communicate to their target market (Quirk eMarketing, 2011). Thus, the emergence of mobile marketing provides a boost to their business because now they can reach their target market at a fraction of a cost.
Constraints for carrying out a successful mobile marketing strategy by hotels
There are limitations to what technology can do. At the same time the mobile phone went through a series of radical changes. It used to be a simple device that can send and receive text messages as well as an ideal phone that can receive and send calls (Tahtinen, 2006). But this time around it became more than a phone.
It has now become a smart phone with an organizer, a camera, and other capabilities that has made it essential for business people, students, and office workers (Reitzin, 2010). It is in fact a boost to mobile marketing but at the same time it erected barriers when it comes to receiving ads. The mobile phone ceases to become just any ordinary electronic equipment such as a calculator or a computer; it has now become an extension of the personality of the owner.
It is not practical to simply create an advertising campaign and then broadcast it via SMS or MMS. It is important to know about operator, country, and device (Keefe, 2008, p.3). This is important based on the insight that it would be more effective if advertisers can identify mobile users based on the country they are from, the network they are getting their service from, and what type of cell phone device they are using.
This is because marketers can use this information to compile an accurate and rich understanding of their target consumer’s profile and “with this data jackpot, marketers can target messages to the right audience in the right geographic location” (Keefe, 2008, p.3).
A review of customer perspectives on mobile advertising and marketing revealed their concerns about privacy (Standing, Benson, & Karjaluoto, 2005, p.1). As a result experts in this field pointed out that it is imperative to include the concept of askign permission before advertising content is delivered straight to the customers mobile phones (Standing, Benson, & Karjaluoto, 2005, p.1).
This has become an important issue when the idea of SPAM became one of the undesirable quaities of information technology and now it has invaded the world of telecommunication. There must be a way to manage SPAM even if there no way to stop it completely (Tsang, Ho, & Liang, 2004). This issue must be tackled and a solution must be made in accordance to the kind of marketing coverage required.
Using a more deliberate view when it comes to asking permission from customers would certainly limite the area of coverage as well as the number of people that be informed regarding a particular product and service but on the other hand it builds goodwill and can help ensure the success of the campaign (Wang, 2007).
It is also important to conside the impact of the following concepts: informativeness; credibility; entertainment; and irritability (Bragge, 2005, p.1). These are interrelated and these concepts are used by the consumers on how they interpret the message sent. The advertising content can therefore be highly informative, it can be credible and entertaining or it can be a source of irritation.
This is what researchers discovered with regards to the attitude of the people receiving mobile ads: “As the empirical data show, the respondents held negative attitudes about receiving mobile ads. This may have been due to the fact that they found mobile adds irritating, given the personal, intimate nature of mobile phones. Their attitudes were favorable, however, if advertisements were sent with permission.
This implies that “permission-based advertising may become a major mechanism in the mobile environment in the future” (Tsang, Ho, & Liang, 2004, p.67). It is crucial to understand SPAM and what it can do. According to researchers, “The benefits of permission marketing have been seen as reducing clutter and search costs for consumers whilst improving targeting precision for marketers.
The problems of SPAM with email have significantly impacted on the potential of the channel for marketing, at least for the time being. There is great concern that if consumers see the same thing happening to mobile marketing, then it will become a damaged marketing channel” (Standing, Benson & Karjaluoto, 2005, p.135).
There is a need to consider the preferences of the user as well as creating a business relationship that can be seen as highly favorable for the user, “This may suggest that as personal involvement increases, responses to free offers and willingness to accept free offers may also be enhanced. This is to say that the content-specific situation may create different perceptions of free offers and change the persistence or resistance persuasion where personal involvement may serve as a moderator” (Wang, 2007, p.35).
The same thing was said in the 38th Hawaii International Conference on System Sciences, “Mobile advertising can provide an array of information that confuses and distracts the recipient as well as overwhelms the consumer with information” (Haghirian, Madlberger & Tanuskova, 2005, p.4). Phones are becoming extensions of the person. According to one observation made by a marketing expert:
Our phones are very personal, intimate things,” says Jim Ryan, VP-consumer data products for Cingular Wireless. We carry them around with us all the time. It’s where we store our addresses, messages. We’ve downloaded our own photos and ringtones. Phones used to be more utilitarian, even disposable. Now if you pick up anyone’s phone, it’s a unique thing” (Liesse, 2006, p.5).
It is important to consider the form and content. According to recent studies made regarding m-commerce has identified that “entertainment value and information value as the strongest drivers of the attitude towards mobile advertising” it must also be said that “informativeness and credibility of the advertising message have the greatest impact on consumers’ attitude” (Varnali & Toker, 2009)
At the same time it is important to take note that “customers will only accept mobile marketing, if they perceive a benefit in receiving advertisement” (Wiedemann, D. (2006, p.3). To underscore this view it has been said that “A single database is important because it provides standardization of customer and prospect profiles and a holistic view of customer behavior across channels (allowing organization to deliver more persuasive marketing messages) (Aberdeen Group, 2008).
One has to determine how easily it is to contact the customers (Jelassi & Enders, 2004, p.3). It is also important to know bandwidth – the amount of information that can be moved; the degree of individual customization of the information; and the possibility communicating bi-directionally (Jelassi & Enders, 2004, p.3).
One has to consider the following:
- Copyright – Don’t violate a copyright that protects an author’s rights in “original works of authorship.” Unless you are 100 percent certain a work is not under copyright, don’t use it;
- Trademark – Watch for violations of company trademarks. Their Words, logos, and trademark images are not available for your use.
- Rights of Publicity and Privacy – Don’t use a person (celebrity or otherwise) to promote your company without that person’s permission. Everyone’s persona is protected from use for commercial gain by unauthorized parties;
- Contractual Rights/Implied – Look for any other contracts (written or implied) that you could be violating;
- Free – When using the word “free,” be clear about what is free and be honest about any conditions that need to be met;
- Headlines – Write truthful headlines. Though it is tempting to use outrageous claims in a headline and tell the truth later, people may make a decision based on the deceptive information in the headline and not bother to read the rest;
- Fine Print – Don’t hide anything in fine print. Tell your potential customers exactly what they will be receiving. People have a right to know what they have signed up for, and you are legally obligated to tell them (Dushinski, 2009, p.45).
It is therefore important to consider that “When your customers agree to receive mobile messages from you, you must identify your business name, let them know they may be charged for receiving these messages, and assure them that they can revoke consent at any time. You also have to provide a method for opting out of your messages.
One way to do this is to tell them the opt-out word to use to stop receiving messages from you. Usually, the word is “Stop” or “Remove.” If they send you a text with that word to any message you send them, you” (Dushinski, 2009, p.46). It is important to realize that different people use different types of phones with different types of capabilities.
Thus, mobile advertising must be created having this in mind. For example, mobile advertisers made a way to automatically resize mobile web banners in order to “match the mobile phone’s screen dimensions and capabilities” (Mobile Marketing Association, 2009, p.1). Although there is tremendous potential when it comes to mobile marketing there are also constraints.
The first major challenge is the fact that there is no uniformity when it comes to the capability of customers to receive the same content and enjoy it in the same manner as other recipients of the message. There are many factors that affect this one is technology that is inherent in different types of mobile phones, the networks, as well as the technical savvy of the user.
Yet even if there are constraints and limitations the emergence of mobile marketing is a boon to those who cannot afford the use of traditional forms of advertising (Quirk eMarketing, 2011). In conventional methods the advertiser had to spend hundreds of thousands of dollars in order to bring the advertising campaign to mass media marketing.
Security must be a top priority. According to recent studies made, “Mobile marketers must implement reasonable technical, administrative and physical procedures to protect user information collected in connection with mobile marketing programs from unauthorized use, alteration, disclosure, distribution, or access” (Mobile Marketing Association, 2009).
According to researchers a successful marketing campaign in accordance to principle of mobile marketing requires the development of a mobile marketing value system (The PhocusWright, 2011). This means developing mobile marketing whose objectives are to increase customer awareness, drive up attendance to events or stores, improve customer loyalty, increase revenue and generate customer data-base (Bragge et al. 2005).
Although mobile advertising shows a lot of promise, it must be made clear that it cannot stand on its own. Thus, different channels must be used in tandem with mobile advertising
Common success models to implement a mobile marketing
It is crucial to remember that “Building on the mobile commerce and integrated marketing communications literature, we emphasize the need for an integration of mobile marketing efforts into a firm’s overall marketing communications planning process. In addition, the proposed framework suggests that mobile marketing includes three of the main promotion tools: advertising, sales promotion and direct marketing” (Leppaniemi & Karjaluoto, 2005).
It is also important that before the enterpreneur pulls the trigger when it comes to his or her advertising campaign, the following questions must first be answered “What are the objectives of the campaign? Which segments of your market are you targeting with the campaign? What are you promoting and how should this product or service be presented to your target market in order to get them to respond to your campaign?” (Sweeney & McLellan, 2006, p.98).
For example, BMW had a campaign called Formula BMW Racing Game 2003 and this particular mobile advertising consisted in the provision of a Java game (Wiedemann, D. (2006). In another example the Coca Cola company created the Festifever 2004 campaign and it consisted of SMS raffle with event tickets as prize” (Wiedemann, D. (2006).
It is therefore important to go understand the power of collaboration “Collaborative efforts can be far improved if they are explicitly designed, structured and professionally managed so as to minimize cognitive load and maximize the focus of purposeful effort” (Bragee et al., 2005, p.2).
It is important to consider the wording of an SMS advertisement (Sharl, Dickinger, & Murphy, 2006, p.166). It crucial to be mindful of the need for personalization based on local time, location and preferences (Sharl, Dickinger, & Murphy, 2005, p.167). When it comes to time SMS is very effective because it is less intrusive than phone calls (Sharl, Dickinger, & Murphy, 2006, p.167).
Thus, the recipients of the message can read the advertisement at their leisure. But when it comes to location, SMS provides the sense of ubiquity. Preference on the other hand increases the effectiveness of the campaign because it plays on the interests of the customers.
This is made possible by the existence of a database containing the information about their interests in music, hobbies etc. (Sharl, Dickinger, & Murphy, 2006, p.167). Experts in viral marketing pointed out at least four standards that can be used in any mobile advertising campaign and these are:
- motivated evangelism;
- signaling use or group membership;
- targeted recommendation;
- awareness creation and benefits signaling (Wiedemann, 2007, p.56).
It is important to develop customer relationship management strategies (Reinhold & Alt, 2009, p.98).
Potential future opportunities in mobile marketing for hotels
Mobile marketing is said to have a very bright future. According to Hein (2008), it is predicted that spending in mobile marketing in United States will increase to $2.8 billion by 2012 from $405 million in 2009 (Bernhart, 2010). This is likely to be propelled by new technological arrivals, innovations and prevalence of personal mobile devices (Bernhart, 2010).
With the need of businesses to do more with fewer resources it has been discovered that mobile marketing will even become more popular (Shuttleworth, 2008). A study by Experian, Acuity Mobile, indicated that in 2008, approximately 89% of major brands in the world were planning to market their products using mobile services.
More than a third of these brands expressed willingness to spend more than 10% of their marketing budget on mobile marketing. This clearly shows that use of mobile marketing is gradually gaining popularity in many businesses today. According to Bernhart (2010), businesses seeking to employ talented mobile marketers in their firms should train their employees on five basic features of mobile marketing.
These include understanding customer behavior, respecting customer’s privacy, maintaining customer-centric focus, communications and motivation skills, and finally on knowing, respecting and responding to data and trends with measurable results (Bernhart, 2010).
It has been made very clear that the future of marketing belongs to the use of Information Technology, specifically mobile advertising through the use of mobile phones. The number of mobile phone users in North America has steadily increased over the years. Today it has reached a critical point wherein Americans prefer it as a primary way to communicate.
On top of that mobile phones are so advanced that it does not even require a network such as AT&T and Sprint to provide connectivity. The built in Wi-Fi capability of new generation smart phones enable users to connect to the Internet virtually for free if there is a Wi-Fi access nearby.
According to a research study made recently, mobile marketing is mostly used in the hotel industry to make reservations. A whitepaper by IBM Business Consulting services entitled, ‘Experience Rules’ envisions a move from traditional hospitality and leisure offerings to more personalized, unique travel experiences.
It is expected that within the next decade, hotel service providers will be able to personalize their services with constant precision to individual customers (Carlsson, Carlsson, & Pirkko, 2010, p.2). Currently, the number of personalized mobile marketing services is little in the hotel industry. It is also hard to develop personalized mobile marketing services for each segment in the hotel industry (Pousttich,2006).
However, as more technological developments continue to take place in the mobile services, hotels will be able to personalize mobile marketing even further in order to provide travelers, tourists and hotel users with more freedom. One of the most important innovations in the telecommunications sector is the creation of smart phones that have the capability to function as hand-held computers (Purdy, 2010).
If one will think about the capabilities of a personal computer and then have the same type of functionality in a miniaturized version and it becomes easy to understand the potential of mobile phones to receive information from advertisers. As a result advertisers had experimented in the creation of applications as part of their advertising campaign to bring in more customers.
The hotel industry is just one of the many businesses that can benefit from the use of mobile marketing. There is enough evidence to show that hoteliers are impressed with the ability of mobile marketing to reach out their target market and make them aware of the products and services available for them (Carlsson, Carlsson & Pirkko, 2010, p.1) The number one reason for the suitability of mobile marketing for the hotel industry is linked to the fact that their customers are always on the move.
This is especially true for tourists and business travelers that can be local or international travelers and therefore it would be impractical to reach them using the traditional method of delivering advertising content. In Switzerland, a web page by the name Hotelguide.com is an example of a working mobile marketing service provider. It has a directory of over 100,000 hotels around the world whereby WAP enabled numbers for these hotels are provided.
A customer can call directly to these hotels and make a reservation. In Asia and Australia, Sino.net offers hoteliers with mobile marketing services. Users for this site are able to access names, location, city of different hotels, check prices offered by the hotels online, review description of the rooms and call directly to book a reservation or to send one (Carlsson, Carlsson, Pirkko, W, 2010).
According to one report, “Many hoteliers have selected the iPhone to create their application due to its popularity and functionality … Google’s Android operating system has emerged as a major force embraced by a variety of device manufacturers and therefore should also be considered (Pearo & Carroll, 2011, p.24).
It has also been said that web or branded downloadable applications on the iPhone, Blackberry, or Droid platform uses mobile concierge applications “shifting the physical concierge costs to a location-sensitive personalized guide to local restaurants and attractions” (Pearo & Carroll, 2011, p.24).
Marketing can be done through mobile marketing such as sending ads that informs the customers regarding “upgrades, spa reservations, add-ons, and mobile coupons” (Pearo & Carroll, 2011, p.24).For example, there are companies like OpenWays that are pioneering the capability to open rooms using the customer’s mobile phones ((Pearo & Carroll, 2011, p.25).
Another example is the Android application called Tripit and it was designed to keep travel information easy to store and simplify it to inform the user about important details regarding the trip. According to one study “Tripit takes in all those overstuffed emails confirming your plane tickets, your hotel room, and your car rental, then turns them into an elegant itinerary with helpful links and information – like the fact that its supposed to be 58 in Seattle this Friday, and its 20 minutes from the airport to your hotel in rush hour traffic, so you’d better wear a coast and call for a shuttle” (Purdy, 2010, p.240).
One has to consider the following:
- Back in 2001, OpenGrid expanded its FastBook™ solution to enable Hilton customers to wirelessly find a U.S Hilton®, Conrad™ or Hilton Garden Inn® hotels;
- review property description;
- display availability and rates;
- reserve a room;
- retrieve/cancel a reservation and
- access their Hilton Honors® loyalty program profile (members only).
A year earlier Swissôtel Hotels & Resortshad introduced their world-wide WAP service that allowed users to access hotel-specific information, locate the nearest hotel, receive directions to the facility as well as review weather reports. Another hotel chain that launched a WAP solution in the year 2000 was Thistle Hotels. Thus it could be assumed that mobile services should be quite visible by 2005 (Carlsson, Carlsson & Pirkko, 2010).
Mobile marketing experts summed up the opportunities available for the hospitality industry by pointing out the significant change that occurred in the past few years and they wrote: “With the elimination of financial and economic barriers, marketers finally have the chance to leverage the new business model and address the opportunities of mobile marketing real-time access to customers, deep insights into consumer behavior, and value generation for customers.
The rewards for those who capitalize on these opportunities—deeper engagement with consumers, increased brand loyalty, and enhanced customer lifetime value—not only are clear, but are not to be missed” (Friedrich et al, 2008, p.11). The opportunities are never ending and growing every single day. Consider the following insight from a report given a year ago: “SMS, or ‘Short Message Service,” is the most the most widely used data application in the world, with 2.4 billion active users, or 74% of all mobile phone subscribers” (Reitzin, 2010).
This is based on the idea that: “Tourism is an activity of great importance both economically and in terms of the pleasure it gives to holidaymakers worldwide. Nearly all individuals in the western world take some sort of holiday away from home every year, although the number of days differs across and within different countries” (Brown & Chalmers, 2003, p.14).
It is important to adhere to best practices as dictated by the industry (Mobile Marketing Association, 2010, p.1).Consider the following: “In early 2008, more than 250 million of the 303 million residents in the U.S. have a cell phone. At the end of 2007, there were almost 20 million cell phone subscribers in Canada, which represents a 60 percent penetration rate” (Dushinski, 2009, p12).
According to experts in the “Forrester Research predict that mobile marketing spending in the United States will grow from $270 million in 2008 to $405 million in 2009. After that it goes exponential, becoming a $2.8 billion market by 2012” (Bernhart, 2010, p.1).
According to those who closely monitor the emerging trends regarding mobile marketing, “91% of mobile phone owners keep their phone within one meter, 24 hours a day (Quirk eMarketing, 2010, p.1). This explains why the feedback mechanism is in place. The customer can easily reach out for the mobile phone or pull it out from his pocket, read the message and respond.
This is where a well conceived marketing campaign can become very effective. The moment the customer feels that marketing campaign is beneficial having informative or entertainment value then he or she will respond immediately to the message.
According to a study conducted in 2003 in Finland by the Institute for Advanced Management Systems Research, a few individuals were using mobile services to support their travel activities (Gilbert, 2003). However, many of them expressed intention to use mobile services once the services became viable and readily available to them (Carlsson, Carlsson, & Pirkko, 2010, p.1).
In the last decade, the hotel industry has experienced a lot of drastic changes as a result of numerous possibilities offered through wired internet (GS1 Mobile Com, 2008). With the mobile services beginning to offer alternatives which are more effective to the hotel industry, it is expected that they will have a deep impact on the operations of the hotel industry.
Nevertheless, it is clear that hoteliers are not yet taking advantage of the full capabilities of mobile marketing. It is easy to understand that it is still a new medium and compared to TV and print advertising much has yet to be learned by business leaders and advertises alike. Another important feature of mobile marketing and one that has to be emphasized when discussing the hotel industry is its capability to be scalable and cost-effective (The PhocusWright, 2011).
It is now possible to create a marketing campaign with a fraction of a cost. A hotel chain can target previous guests that had indicated their satisfaction with their services and if they left their phone mobile phone numbers then they can receive messages about promos and other important ads regarding the hotel and ancillary services. The hotel industry can greatly benefit from mobile marketing.
This is especially seen when customers had created a business relationship with the hotel and so the next time they visit they would simply use their mobile phones to make reservations (Varnali & Toker, 2009). With the creation of innovative applications that provide a way to seamlessly manage all travel details, customer finds it convenient to use the same hotel every time he or she is in town for a business conference or business dealing.
This method of ensuring customer loyalty was unavailable in the past (Friedrich, 2008). But with the existence of technology that helps it easier to communicate and receive feedback it is possible to maximize the efficiency of a business enterprise.
The good news to hotel executives is that technology is not going to plateau anytime soon (GS1 Mobile Com, 2008). As improvements are made to mobile phone technology and as the cost of communication, sending text messages, making calls, accessing the Internet are reduced then it creates a positive impact to mobile marketing (Keefe, 2008).
The more consumers would buy mobile phones and subscribe to the various services that make them a part of an interconnected community. The virtual world created is another opportunity for the hotel industry to improve the way they communicate to their target market.
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