Ed Jennings Dissertation Chapter One Outline – Date May 2008
Introduction
1) The acceptance by age group, to redeem a casual dining electronic restaurant coupon, delivered as a text message, to a cell phone user in the United States, when compared to the overall redemption rate of paper coupons.
Background
2) There are 250 M wireless subscribers using cell phone devices in the United States. 3) Cell phone adoption reached the 100 millionth user in 17 years. This adoption rate is faster than color televisions and landline telephone users. 4) Seventy-six percent of consumers use a cell phone device and average making or receiving 12 calls per day. 5) Voice would be considered the killer application for cellular phone devices. 6) Twelve billion text messages are sent in the United States each month. 7) Data usage has increased and 25% of mobile cellular device users have unlimited data packages. 8) Short codes are not commonly used in the United States. Short codes are an easy to remember number which is input by the user and is shorter than a phone number. The short code is used for value-added services such as voting, sweepstakes, and alerts about special deals. Short codes are typically charged at a higher rate than a standard message.
9) In a recent survey, 25% of the population studied expressed an interest in mobile advertising but the results varied by age. 10) Geo location may provide opportunities to provide cellular phone device users with relevant coupons based on their location and time of day. By contrast, mobile users may find geo-based offerings an intrusion of privacy. 11) Concerns of cellular phone device users may be spam, intrusive advertising, cost, losing control of who is able to reach the user, and privacy if geo location coupons are used. 12) Opt-in strategies will be studied as an important issue to the acceptance of mobile coupons. 13) Cellular phone usage and text messaging usage have been shown to vary by age group. 14) Restaurant sales for 2008 are expected to be 558.3 billion dollars. 15) Restaurants are the number one most frequent search on the Internet and print yellow pages. 16) Restaurants are generally divided into two categories: full service restaurants and quick service restaurants (QSR). Full service restaurants consist of three sub-categories: fine dining; casual dining; and family dining restaurants. 17) Full service projected sales for 2008 are expected to be 376.7 billion dollars. 18) Many of the full service restaurants have a web site: fine dining (98%), casual dining (96%), and family dining (90%). 19) Forty-eight percent of adults have visited a restaurant web site. 20) Eleven percent to thirty-five percent of the National Restaurant Association surveyed population said they would like to receive a cell phone notice of the daily special at their favorite full service restaurant. This is different from a coupon because the special is
available to all patrons without a coupon. The advantage of notification on a cellular device is advanced information. 21) Coupons are a popular form of advertising and offer savings which can increase the disposable income of the person redeeming the coupon. 22) Three hundred thirty-one billion dollars worth of coupons were distributed in 2006. Consumers redeemed less than $3 billion dollars worth of coupons in 2006. In 2004, 54% of coupons were grocery related and 46% were non-grocery related.
Problem Statement
Growing a business and profitability are inherent components of any profit-driven business plan. Multiple methods are incorporated as part of the marketing mix to promote a business. The marketing mix may incorporate the use of coupons. The redemption rates of coupons are decreasing. In 2006, $331 billion in potential coupon savings were distributed. Consumers redeemed less than $3 billion of the coupons distributed in 2006 (source is from about.com – Montaldo, 2007). Grocery coupons accounted for 54% of potential savings, while 46% of potential coupon savings were outside of the grocery industry. To redeem a paper coupon, the paper coupon must be presented at the point of purchase. If the consumer has forgotten the coupon, the discount will not be available. Coupons which are redeemed provide savings and increase disposable income. Cellular phone technology has the potential of increasing the redemption rate of casual dining restaurant coupons when compared to the redemption of paper coupons. Cellular phone technology has reached adult saturation. The number of people in the United States with cellular phones is 250 million subscribers (citation). Messaging as a form of
data usage has increased to 12 billion text messages in 2006 (citation). Cellular phones and Blackberry ® devices are incorporating more data options and 25% of the subscribers have unlimited data usage plans. This represents an opportunity for one-on-one communication with potential buyers. The Yellow Pages Association, in conjunction with Knowledge Networks Statistical Research, ranked restaurants as the number one search in print and online yellow pages based usage with 1.288 billion print look-ups between 2004 and 2007. The Internet yellow page usage for restaurants was 12.8 million look-ups between 2004 and 2007 (reference). Restaurants are broken into two primary headings: full service; and quick service. Full service restaurants are comprised of fine dining, casual dining, and family dining. The purpose of this quantitative study is to determine the acceptance and redemption of mobile casual dining coupons on a cellular phone device by age group, when compared to the overall redemption of paper coupons in the United States, in spite of potential electronic mobile concerns for privacy.
Purpose
The purpose of this quantitative study is to understand by age group, the acceptance and redemption of mobile coupons versus paper coupons in the United States. The act of having a mobile coupon could influence the behavior of the consumer in their casual dining restaurant choice. The study will examine if both the technology adoption model and theory of reasoned action are required. The independent variables would be coupon redemption in a casual dining restaurant setting, age, experience or recommendation of friends, and influence to change behavior because the user has a mobile coupon with them on their cell phone device.
The research design will use online surveys to collect data. This methodology allows for a quick qualification by age, while sending an electronic questionnaire to a sample of adults in the United States, who meet a set of predetermined criteria. Simultaneously, a pre-sample test will be performed to detect any problems with the survey. A smaller sample will be performed on paper to determine if any significant variances exist between the online and paper survey. Independent variables will be measured using established scales. Standard statistical tools coupled with accepted measures of reliability and validity will be used. The specific test population will be United States consumers who are adults between the ages of 18 and 65.
Significance of the Study
1) Cell phone devices have reached saturation in the United States. Restaurants are one of the most frequent uses of discretionary income. The adaptation of coupons to electronic delivery on a cellular phone could increase the redemption rate over paper coupons. This would have possible implications for mobile coupons in other industries as a promotional vehicle. 2) The importance of this study to leadership is the use of technology to deliver an existing form of promotion and the effect on consumer behavior, segmentation, promotional cost, and marketing strategy. Further, the study will examine the importance of avoiding spam, abating user privacy issues, and perceived user cost, with this electronic form of mobile advertising.
Nature of the Study
3) Quantitative Research 4) Independent variables will be measured using established scales. 5) Standard statistical tools coupled with accepted measures of reliability and validity will be used.
Hypotheses and Research Questions
6) Younger adults are more likely to accept and redeem a mobile coupon at a casual dining restaurant than an older adult. 7) There will be a higher perceived rate of mobile coupon redemption versus paper coupons at casual dining restaurants. 8) Users of cellular devices will be more likely to opt-in for mobile coupons in a casual dining restaurant if their friends provide a recommendation of a positive experience. 9) Users who have asked to receive coupons for casual dining restaurants will be positively influenced to eat at the restaurant where they have an existing coupon, versus a restaurant where they do not have a coupon.
Conceptual or Theoretical Framework
10) There are two potential theoretical areas where the research fits: the theory of reasoned action and the technology adoption model.
11) The yellow pages print and online directories have been in existence for over 100 years and provide approximately 7,500 yellow page headings which describe the majority of products and services purchased by consumers. Developing a model to understand the acceptance and redemption of mobile coupons for casual dining restaurants will allow other yellow page headings to use the same methodology to determine the fit for mobile coupons in the marketing mix. 12) Important issues include the decline of print coupon redemption, opt-in strategies for mobile coupons, the differences between paper, e-mail, and mobile coupons, and mobile coupon redemption rates because people are more likely to have their mobile phone with them. In addition, the concepts of the mobile phone, casual dining, coupons, and text messaging are widely accepted. Will the acceptance of all four concepts combined influence purchasing decisions by the buyer? If so, is this influenced by age group? 13) The knowledge and familiarity with the literature is contained in the 150 articles collected at this point in time, coupled with the relevant organizations I have joined. Additional articles and literature will be collected over the next 18 months to augment any missing information which is already available.