This is for Catherine Owens

Qualitative and Quantitative Critical Review

Problem Statement:

The study discusses about the adoption of mobile advertising by multinational companies. This study

aims to fill the research gap about the perceptions of MNCs operating in Europe regarding SMS based

push type mobile advertising adoption.

Importance of this study is to know the reason behind the adoption of mobile advertising by

multinationals. The study is important for three reasons:

1. Understanding acceptance of new Information technology can help to reveal the logic behind

the practitioner’s strategic decisions in Information management. Although, there are

numerous studies that have addressed conceptual issues & conducted consumer surveys,

there is a little research available in the literature on MNCs perception of utilization of mobile

advertising.

2. Europe is often referred as a promising but unexpected frontier for M-commerce. This

research into MNCs in European markets provides insights for academics & practitioners.

3. The Japanese I-mode technology has extended in European markets, and is important &

meaningful to ask whether, the Japanese firms perceive mobile advertising as a distinct form

of advertising compared to their European & American counterparts. Do Japanese firms

Exhibit more +ve (or –ve) perceptions of mobile advertising adoption because of their i-mode

experience or does the i-mode experience have no effect.

The Author of the study feels that the research on this theme is almost non-existent & therefore, the

study will be an interesting & important addition to the literature.

Conceptual Framework:

Conceptual framework for studying & identifying key determinants of MNCs decision making on

SMS-based mobile advertising adoption. The study has been done in order to conceptualize MNCs

adoption of SMS-based mobile advertising. Prior research indicates that the adoption to innovations

was primarily based on three factors: Environmental, Managerial and Organizational. However, this

study has been done focusing on only two factors: Environmental and managerial. Organizational

factors were discarded as it seemed extremely difficult to assess relationship between local and

central offices in terms of mobile advertising adoption.

An intensive literature review on information as well as marketing management has been conducted.

According to the study, the most important managerial & environmental factors for establishing a

mobile-based business model are:

Managerial Factors:

1. Branding Strategy: The study mentions that mobile email has been considered an effective

tool to enhance brand awareness, build customer loyalty & develop demographic data bases.

Example of McDonald's and Coca-Cola using mobile advertising as a branding strategy have

been mentioned in the study.

2. Facilitating conditions: In order to establish a theoretical framework of wireless internet

adoption, technology adoption model suggests facilitating conditions as one of the most

important factors. Availability of conditions such as high speed internet connections, web

enabled mobile handsets would significantly improve the adoption of MMS-based advertising

campaign.

3. Location-based services: The unique feature of mobile internet is the ability to track the users

position and tailor services and promotional offers accordingly. The study discusses that if

GPS-based handsets are made available to consumers, it will be easier to provide location

based services and provide right information for the right place.

Environmental Factors:

1. Service costs: According to the study, this factor have influenced the decision of establishing a

mobile-based business. The study discusses about the high service costs charged by the

mobile operators. It is said that, if the business model of I-mode service had been transferred

through partnerships and knowledge exchange, European service providers would charge

their content provider much lower fee and this would encourage MNCs to create their own

mobile campaign.

2. Regulatory control: Mobile advertising is an opt-in service. The opt-in function is essential in

order to give users total control over what they receive with their privacy.

3. Cultural barriers: The study discusses that it is difficult to adapt to mobile advertising in

Europe due to significant cross-border differences. With regard to mobile convergence was

rapid, but Europe has not been homogeneous with regard to information technology. From

MNCs perspective such differences may be a serious impediment to adopting mobile

advertising.

Hypothesis tested by Author:

The following hypotheses were formulated to test the principal thesis of the research:

1. H1: The relationship between branding strategy and MNCs’ intention to use mobile

advertising is positive.

2. H2: The relationship between facilitating conditions and MNCs’ intention to use mobile

advertising is positive.

3. H3: The relationship between location-based services and MNCs’ intention to use mobile

advertising is positive.

4. H4: The relationship between service costs and MNCs’ intention to use mobile advertising is

negative.

5. H5: The relationship between regulatory control and MNCs’ intention to use mobile

advertising is negative.

6. H6: The relationship between cultural barriers and MNCs’ intention to use mobile advertising

is negative.

Two additional hypotheses3 were also addressed to identify overall differences between the

firms:

H7: Japanese, European and American firms differ significantly in terms of their perceptions of use

of mobile advertising.

H8: Japanese, European and American firms differ significantly in terms of their intention to use

mobile advertising.

Methodology:

Questionnaire items and measures: Thirty question items were created on the basis of the preceding

literature review. The questionnaire was pre-tested with local advertising practitioners.

Multinational corporations: The study aims to interview senior marketing executive of MNCs’

subsidiaries operating in European markets.

Telephone survey: Telephone interviewing in international marketing research has increased in recent

years. The ability to cover a broadly distributed sample without requiring a field staff.

Data Analysis:

Based on the data obtained through telephone interviews, statistical analysis was conducted to test

the hypothesis, in line with the methodological recommendations. The analysis used in the study are:

1. Principal component analysis

2. Hierarchical regression analysis

3. Multivariate discriminant analysis

Conclusion:

Based on the findings of this study, the author finds that MNCs’ adoption of mobile advertising

remains in its infancy, but will began to come into usage by employing one of the most important

concept in contemporary marketing: Branding. Author, concludes that it is important to understand

the difference in Japanese, American and European MNCs’ mobile advertising adoption lies in the

extent to which they perceive it as an effective branding medium.

MNCs’ should consider mobile advertising in a context of effective media mix planning. As

demonstrated by the example of McDonald’s, one of the most viable ways to employ mobile

advertising is in combination with print, television or fixed internet media.

Comments & Criticism:

The author of this study have provided a lot of information before getting into the main context of the

study. The information regarding Japan i-mode service provider helped to understand the study

better. The study gives information about the adoption of mobile advertising by MNCs. But, the

research was only done in Europe and not worldwide.