Business Project LBS

8/3/2019 Business Project LBS

http://slidepdf.com/reader/full/business-project-lbs 1/40

Management Research MethodHow do companies’ Location-Based Mobile Marketing strategies revolutionize the way they reach customer?

Table of Content

Abstract ….………………………………………………………………………..…………… p.2

I) Introduction .……………………………………………………………………………..…. p.3

II) Literature review ………………….………………………………………………….....….. p.4

A) Location-Based Services ……………………………………………………… p.4

B) Location-Based Marketing ……………………………………………………… p.4

C) LBS applications and examples of companies ………………...……………. p.5

III) Methodology ……….………………………………………………………………..……... p.6

A) Methodology overview …………………………………………………………. p.6

B) Sampling process ……………………………………………………………… p.6

C) Elaboration of questionnaires ………………………………………………… p.7

IV) Results ...…………………………………………………………………………...………. p.8

V) Conclusions ......................................……………………………………………..…… p.11

VI) Limitations & further research ……….……………………………………...……….. p.12

References ……………………………………………………………………………......… p.13

Appendices …………………………………………………………………………...…….. p.16




ABSTRACT

Our report focuses on Location-Based Services (LBS) as a part of companies’marketing strategy. This technology is at the cutting edge of a transformation in theway businesses interact with their customers. Its main objective is to target the rightcustomer, with the right message, at the right time and in the right place. However,today we can still consider this phenomenon as limited, only a few companies haveimplemented it and mainly in urban areas. LBS provide a lot of opportunities to firmsat virtually no cost compared to other strategies. Therefore we can imagine that thisservice is going to spread widely in the near future.




I) INTRODUCTION

In this age of significant telecommunication improvements, more and morepeople are using smartphones as a way to be connected to the world. Marketerscontinuously seek innovative ways to achieve differentiation, better attract targetedcustomers and increase profits. They have discovered a brand new way toaccomplish it through Location-Based Services.

We will try to understand this latest trend, rather than providing technicalinformation on the technology involved. How do companies’ Location-BasedMarketing (LBM) strategies revolutionise the way they reach customers? Throughoutour work, we will attempt to establish a profile of companies using LBM, tounderstand why they implement it, to identify their target, their marketing strategyoptions and their efficiency. Regarding customers, we will determine their standardprofile, their motivation when using those services and their view on global

companies’ LBS campaigns. Finally, we will look at the limits of LBM. However, as welacked time and means, we limited our work to internet-connected smartphone users,within London, and focused just on the business aspect of LBS.

This essay will be composed of three parts: the critical review of literature, theresearch method and finally the analysis of data collected.




II) LITERATURE REVIEW

A. Location-Based ServicesIn the “wireless world” LBS is a new technology based on a revolutionary

concept. As said by Brimicombe (2002), its origin is a convergence of technologiessuch as Geographic Information System, Internet, Mobile Telecommunication. Its aimis to provide relevant information to users based on their geographic position (RoseIndia, 2010). To access this technology, users need a mobile device with acommunication network, a positioning component (GPS, Wifi), and an applicationprovider (Steiniger, 2006). The LBS technology is spreading out very quickly.According to recent reports, the smartphone market grew by 64% annually worldwidein Q2 2010 vs. Q2 2009 (Canalysis estimates, 2010). Smartphones would accountfor 19% of the mobile handset market (Boomerang report, 2010). One out of threesmartphone owners would currently exploit LBS at least once a month (Compete

estimates, 2009). Gartner Industry (2009) forecasted the LBS market to double in2009 versus 2008 (41 million in 2008 vs. 95.7 million in 2009).

B. Location-Based MarketingHowever we are more concerned about one specific aspect of LBS which

benefit to companies, the LBM. According to the marketing strategist Sutton, “LBM isthe interaction with customers by their location, offering value based opportunities toincrease customer loyalty and social sharing in which you can measure.”(June 2010).This new technology is used by more people everywhere, at any time and that tendsto bond customers and companies. Businesses have to constantly adapt their marketing strategy to the market in order to attract, satisfy customers and match their

requirements which keep evolving (Buscall, March 2010). To be efficient andinnovative a company needs customers’ feedbacks and customers are alwayslooking for new items (Reed, September 2010). LBM brings additional goalscompared to “traditional marketing”. The aim is to add value to the company byimplementing new strategies according to current evolutions. Shane Snow suggestssome goals such as selling more, acquiring new customers or gaining currentcustomers’ loyalty (April 2010). The main advantage of LBM could be freeadvertising. Its purpose is not necessarily to sell but to “implement the idea” in peopleminds of specific locations (restaurant, shops, bars, hospitals...). Other benefits maybe capturing target easier, increasing impulse buying, developing stronger one-to-one relationship marketing and increasing return on investment (SysComm, February

2010).




C. LBS applications and examples of companiesTo use LBS the first step is to download an application on the smartphone

(Hall, April 2010). The most famous example of LBS application may be Foursquare,the first to enable customers to be connected to their friends and know where they

are at any time. Besides, this service is useful to collect points, award "badges” andcoupons for discounts. The more the user “checks-in” and adds tips on thecompany’s application page (in bars for instance), the more rewards he gets. If he isthe one who “checks-in” the most, he becomes the “mayor” of the place and receivesgreat discounts (Saint, January 2010). Users add tips to let the general public knowwhat they may need to know about places (Flipthemedia, 2009). Some people usetips as a real guide. Foursquare appears to have about 3 million users and it isgrowing by more than 15,500 users per day (Indvik, August 2010). It increasesinteraction with customers. More and more businesses want to market their product/services through the application (Hall, April 2010). Nevertheless, there aresome dangers when gathering so much information, such as selling data collected

(Selvadurai, June 2010).

Nowadays an increasing number of companies use LBS to target customersby offering special offers, discounts and promotions like “buy-one-get-one-free”offers, loyalty and games rewards and specials for the “mayor” (Pattison, October 2010). It also enables to boost visits and reduce costs. McDonald’s was able toimprove foot traffic in stores by 33% in one day for a total cost of $1,000 paid to anLBS application (Van Grove, September 2010). The real appeal for businesses is toknow more about their customers. Through its new marketing campaign, PepsiCoreceives a live notification whenever customers check-in near their stores, so thatthey can provide them offers (Schelling – chief marketing officer of PepsiCoFoodservice).

Can we consider LBS for all kind of businesses? Couldn’t this new technologybe prejudicial for companies? Is this tool the future of advertising or just a fad? Canwe believe that sharing information and location is a danger for consumer? Couldn’thigh discount offers be a way for companies to urge upon the consumptions of nondesired products? What happens next?




III) METHODOLOGY

A. Methodology overview (Appendix 1, p.16)Our research question suggested a deductive approach. We went from

general to specific aspects, from hypothesis to their refutation/validation. Weinterpreted the results of our surveys to define a standard profile of companies usingthis technology and to understand the resulting benefits (Weygand, 2009). Moreover,we undertook our research without having a lot of information/pre-studies since it is arecent trend. It’s an exploratory study, as we tried to comprehend this expandingphenomenon (Saunders et al, 2009). We chose a quantitative approach as wewanted to reach many people in a very short interval of time. Companies can’tdedicate a lot of their time to students’ interviews, so we managed to create aquestionnaire that could be answered very rapidly.

B. Sampling processOur sample was composed of two targets: companies and final consumers.

We intended to question 100 companies because we wanted our essay to focus onthe business aspect of LBS. However, we noticed that it wasn’t realistic in a shortperiod of time. It was easier to get information about companies from consumers.Their vision reflects if the company’s strategy is efficient or not. Finding howmultinationals employ LBS is relevant for us, but they are hard to reach. For example, when going to Starbucks, it’s difficult to get in direct contact with managerswho implement LBS. Starbucks being a chain; the marketing department is

centralized in its headquarters. Consumers represent therefore an alternativeapproach to these multinationals.

We managed to submit our questionnaires to 17 firms and 89 customers, atdifferent time and in different districts of London to have a more accurate sample.However, some biases remained. The main one concerns the discrepancy betweenour sample and the exact population. We chose a convenient sample: companieshave been selected after activating the application on our smartphone andconsumers through a filter question. Our business questionnaire would have requireddata on the rate of companies already using LBM in London. Regarding consumers,we only found information on the population rate of London in 2009 which reach7, 753, 600 (Hollis, 2010) and not on the recent repartition male/female, the rate of

smartphones’ users, “the age-pyramid”...

C. Elaboration of questionnairesWe elaborated two different questionnaires (Appendix 2 p.17, Appendix 3

p.19) corresponding respectively to the reasons why companies use this service andto customers’ perspective. They gathered questions of different types, organized fromgeneral to specific aspects. Our questions were shaped thanks to secondary datafound in books, articles and websites (Saunders et al, 2009). But to fulfil our research, we relied mostly on these primary data and their interpretation. We tried to




keep the questionnaires appealing by proposing answers of various form (nominal,list, scales). We avoided ambiguous questions and neutral answers.Finally, we decided to allocate ten minutes per person interviewed, on a three weeksperiod. We chose to submit our survey ourselves to enable respondents to add some

comments.

The questions of our business survey aimed to:- 1, 2: Know the way companies discovered LBS, since when they use it- 3: Discover what has prompted them to change marketing strategy- 4: Determine if the “target they wanted” is actually the “target they get”- 5: Understand how they attract customers- 6, 7: Highlight evolution in turnover/affluence- 8: Know limitations of LBM

The questions of our customer survey aimed to:- 1: Interview Smartphone users only- 2: Identify one aspect of users profile- 3: Determine what kind of offers are more effective on customers- 4,5: Discover if writing tips on companies help developing customer loyalty

relationships- 6: Discover consumer’s motivation in using LBS- 7, 8: Find what kind of campaigns are the most efficient- 9: Learn what could make customers stop using LBS




IV) RESULTS (referring to our objectives)

A. Company’s questionnaire results

Summary from our investigation about the company survey:

Type of business

No. of respondents Location Company

Restaurants/Bars

9

SohoIslington

Covent GardenCovent Garden

Leicester Square

Leicester Square

PiccadillyCircus

WatfordWatford

Domino’s PizzaThe Breakfast Club

Hummus BrosThe Crusting PipeThe Montagu Pyke

Le Garrick Brasserie

Pret A Manger ThaT Burger!

Chicago Rock Cafe

Shops

5

BarbicanCovent GardenCovent Garden

Westminster Westminster

Brill BarbicanPaul A Young Fine Chocolates

Karen Miller Card Aid-CharityBlue Inc Clothing

Others3

Leicester Square

BrentfordChiswick

Sergio Giannasso Hair & Make-up

Topnotch Health ClubThe Shack - Men's Grooming

TOTAL 17 / /

• Profile of companies using LBM (Appendix 4, p.21)

It seems that the profile of companies using LBS are micro companies, created 5-10years ago and mainly concentrated in the restaurant/bar sector. They are integratingLBS strategies in their marketing plan in order to get more customers, to increasetheir loyalty and to make more economical advertising.

• Companies’ use of LBS (Appendix 5, p.24)The results show that most companies heard first about LBS through internet,followed by business network and word of mouth. Companies’ motivation inimplementing LBS is mainly to increase sales and customer loyalty but also to gainnotoriety and be ahead of competitors.

• Companies’ target when implementing LBM (Appendix 6, p.26)






• Consumer’s motivation in using LBS (Appendix 10, p.35)Consumers seem to use principally discounts. We may assume that because of thefinancial crisis, they are seen as a solution to save money. Final LBS users are likelyto come back to a place which has offered discounts. Moreover, some people use

badges to compete with their friends. Consumers started to use LBS to find goodplaces. Indeed, the applications help users find places around their location amongvarious criteria (restaurant, cinema, bar, etc…).

• Multinational companies overview from customers’ perspective(Appendix 11, p.37)

We approached multinationals through a limited number of companies through theefficiency of their LBM campaigns. Consumers seem to prefer receiving a gift cardrandomly given than a reduction or a free product because they are harder to get(only for the major/winner). We may also consider that the brand image of a companyhas an impact on its campaign efficiency. For example Jimmy Choos or Wagamamacampaigns were far behind MacDonald’s and Starbucks.We wanted to know if age has an influence on the perception of campaigns efficiency(nominal data). The result of our hypothesis was statistically indicating that age is nota factor influencing the perception of campaigns efficiency (significance = 0.052 >0.05).

• Limitations of Location-Based Services Applications (Appendix 12, p.40)Companies sometimes share data about their customers with other companies anddisclose private information which gives customers the impression of being spied:everyone can know who they are, what they are doing, what they want... Customers

also receive misinformation, that make customers quit those applications andcompanies lose opportunities. Hopefully, most of users never encounter this kind of problem, maybe it is due to a lack of knowledge? (cf. Appendix)

V) CONCLUSIONS

Through our study, we managed to respond to all of our research objectives.Basically, we have highlighted some aspects concerning the use of LBS and therelationship between companies and smartphone users. We focused mainly on thepotential of this service for companies as a part of their marketing strategy.Since our subject is based on a complex and sophisticated technology, we needed toexplain first how it operates. This has been developed in the literature review. LBSallow users to share their location. Those applications became a real tendency asshown by the following figures: 3 millions of Foursquare (the most well-known LBSapplication) users in October 2010. Nevertheless, from our results, we confirmed thatcompanies are also likely to find a great interest in these services, enabling them togain more customers and increase their loyalty. Indeed, businesses understood thatLBS users could be potential customers, and that they could reward them when“checking-in” their shops. At present, companies apply mainly discounts, which areappreciated by customers but not very original. Businesses’ strategies match with

customers’ desire in the way that 88% of companies offer discounts and 83% of customers are looking for them. Moreover, LBS can provide companies with




feedbacks from their customers thanks to the tips that they can write on their application page. We realised that those applications were, therefore, interesting for both companies and final users.LBS are recently becoming more and more used. Indeed, we found that 90% of

businesses integrated LBS in their strategy less than one year ago. From thecompanies that we interviewed, we noticed that their customers’ loyalty and productsales have slightly increased and their reputation has improved since theimplementation. The results also show that companies seem to use LBS as a test. If this service isn’t free anymore, if it generates a bad buzz or if the campaign isunsuccessful, the company would stop using LBS.However, we pointed out a discrepancy with our literature review. When wesubmitted our questionnaires to customers, we went to “strategic” places where thelevel of smartphones users supposed to have an LBS application should have beenhigh. We still only got one out of four LBS users instead of the one out of three statedin our literature review.

Concerning businesses, the amount of LBS implementation stays quite marginal as itwas hard to find firms with LBS campaigns. Facebook and other social networks arestill yet likely to offer a better free promotional tool to companies than LBS.

VI) LIMITATIONS AND FURTHER RESEARCH

Although our research and surveys provide useful results, we encountered somelimitations. We didn’t manage to interview as many companies as expected: 17achieved instead of 25 targeted. Our research scope was too large which pushed us

to limit our work. We realised that this service is not yet well implemented in people’smind, just few of them know what it is really about. Besides, it is not sufficiently usedby companies, so those who use it are quite hard to find. They need to have a currentpromotional campaign so that we can localize them with a smartphone. We had tofocus mainly on small businesses since they are more likely to answer. They do notrepresent accurate results since they are only a small part of companies using thisservice.It was easier to identify which companies have implemented LBS application in their marketing plan simply by launching applications in strategic places. On the contrary,regarding customers we lost time interviewing people who were not using LBSapplications. Indeed, we could not know before asking them if they use it, only

focusing on their behaviour and physical appearance. On 373 persons questionedonly 1 out of 4 was using LBS. Moreover, we had to restrict our scope to few crowdedplaces (central London) where users are likely to use those applications.Last but not least, we didn’t have many feedbacks since it is a new trend. As most of our secondary data came from the web (blogs, video, articles) we were not sure of their accuracy: we cannot properly rely on internet references.

We chose to select only smartphones users and put aside internet users viacomputers because we wanted to understand how it works only “in the street”. Asfurther research we could spread our investigation to other kind of internet devices.This would help us understand how LBS work in its whole. We could also take intoaccount the private (individual) use of LBS to have a global vision of it. For example




we could look at social networking (Facebook Place, Twitter…) where people aretelling their location and sharing information about places they like, to their friendsthrough their profile.Another extent to our investigation would be to globalize the research to the USA,

where the service is highly developed. This would be possible with more resourcesand time.

REFERENCES

Books :- Bettini, Jajodia, Samarati (2009). Privacy in Location-Based Applications:Research Issues and Emerging Trends. London: Springer Verlab.

- Brimicombe, (2002). GIS: Where are the frontiers now?. Bahrain.

- Haig, (2002). Mobile marketing: the message revolution. London: Kogan PageLimited.

- Jagoe, (2002). Mobile location services: the definitive guide. New Jersey: PearsonEducation.

- Jiang, (2006). Location based services. Elsevier.

- Küpper, (2005). Location-based services: fundamentals and operation. John Wiley.

- Liu, Yang Location, Localization, and Localizability . London: Springer Verlab.

- Mocke, (2005). Location based services: developing mobile GIS applications.University of Stellenbosch.

- Sarikaya, (2002). Geographic location in the Internet. Netherlands: Kluwer Academic Publisher Group.

- Saunders, Lewis, Thornhill, (2009). Research Methods for Business Students. 5thedition. London: Pearson Education.

- Schiller, Voisard, (2004). Location-based services. Oxford: Elsevir Inc.

- Virrantaus, Markkula, Garmash, Terziyan (2001). Developing GIS-Supported Location- Based Services – First International Workshop on Web Geographical InformationSystem. Japan.




- Walsh, (2002). Location Based Services: Worldwide Market Analysis & StrategicOutlook. IBC Publishing Limited

- Weygand (2009), Méthodes de Recherche de Gestion - programme Cesemed

Internet resources:- Buscall, (Mars 2010). Location-based Social Networking Sites Could Benefit Your

Business.[Available from] http://jontusmedia.com/location-based-social-networking-sites-could-benefit-your-business/ [Accessed 8 October 2010].

- Canalys : expert analysis for the high tech industry, (2010). Android smart phone

shipments grow 886% year-on-year.[Available from] http://www.canalys.com/pr/2010/r2010081.html [Accessed 8

October 2010].

- Clifford, (April 2010). Linking Customer Loyalty With Social Networking . [Availablefrom]http://www.nytimes.com/2010/04/29/business/media/29adco.html [Accessed 8

October 2010].

- Compete Web analytic firm, (2009). Location Based Services: Why smartphone

apps will pay off for advertisers, carriers, application provider. [Available from]http://blog.compete.com/2009/06/02/location-based-services-applications-carriers-advertisers/ [Accessed 8 October 2010].

- Flipthemedia, (2009). Foursquare, the next big social media thing? [Available from]http://flipthemedia.com/index.php/2009/11/Foursquare-the-next-big-social-media-thing/[Accessed 8 October 2010].

- Freedman, (February 2010). What is Foursquare? The Confusion Ends Here. [Available from] http://ustandout.com/social-media/what-is-Foursquare [Accessed 8

October 2010].

- Gartner information technology research and advisory company, (2009). Gartner Says Consumer Location-Based Services Market Will More Than Double.[Available from] http://www.gartner.com/it/page.jsp?id=1059812 [Accessed 8 October

2010].

- Hall, (Avril 2010). Why Foursquare Drives Business: What You Need to Know.[Available from] http://www.socialmediaexaminer.com/why-Foursquare-drives-business-what-you-need-to-know/ [Accessed 8 October 2010].

http://jontusmedia.com/location-based-social-networking-sites-could-benefit-your-business/



http://www.canalys.com/pr/2010/r2010081.html


http://www.nytimes.com/2010/04/29/business/media/29adco.html

http://blog.compete.com/2009/06/02/location-based-services-applications-carriers-advertisers/


http://flipthemedia.com/index.php/2009/11/foursquare-the-next-big-social-media-thing/


http://ustandout.com/social-media/what-is-foursquare

http://www.gartner.com/it/page.jsp?id=1059812

http://www.socialmediaexaminer.com/why-foursquare-drives-business-what-you-need-to-know/







http://www.nytimes.com/2010/04/29/business/media/29adco.html





http://ustandout.com/social-media/what-is-foursquare

http://www.gartner.com/it/page.jsp?id=1059812






- Hollis (2010), Focus on London population and migration 2010 ,http://data.london.gov.uk/datastore/applications/focus-london-population-and-migration [Accessed 8 October 2010].

- Indvik, (August 2010). Foursquare Surpasses 3 Million User Registrations.[Available from] http://mashable.com/2010/08/29/Foursquare-3-million-users/ [Accessed 8 October 2010].

- New York Times, (March, 2010). Starbucks Fans Can Become ‘Baristas’ onFoursquare.[Available from] http://bits.blogs.nytimes.com/2010/03/11/starbucks-fans-can-become-a-barista-on-Foursquare/ [Accessed 8 October 2010].

- Pattison, (October 2010). Geolocation Services: Find a Smartphone, Find aCustomer. [Available from]

http://www.nytimes.com/2010/10/07/business/smallbusiness/07sbiz.html?_r=2 [Accessed 8 October 2010].

- Reed, (September 2010). Location-Based Marketing : The Revolution.[Available from] http://momentfeed.com/2010/09/location-based-marketing-the-revolution/ [Accessed 8 October 2010].

- Reed, Boomerang Report, (2010). Location-Based Marketing: The Revolution.[Available from] http://momentfeed.com/2010/09/location-based-marketing-the-revolution/ [Accessed 8 October 2010].

- Saint, (January 2010). What Is Foursquare And How Do I Use It? [Available from] http://www.businessinsider.com/how-hit-location-based-social-app-Foursquare-works-2010-1#ixzz1249yTEg9 [Accessed 8 October 2010].

- Selvadurai, (June 2010). Video Interview from the cofounder of Foursquare. [Available from] http://www.dailymotion.com/video/xe1jip_naveen-selvadurai-Foursquare_tech?start=0#from=embed [Accessed 8 October 2010].

- Snow, (April 2010). 9 Killer Tips for Location-Based Marketing.[Available from] http://mashable.com/2010/03/15/location-based-marketing/

[Accessed 8 October 2010].

- Steiniger, Neun, Edwarde, (2006). Foundations of Location Based Services.[Available from]http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.94.1844&rep=rep1&type=pdf [Accessed 8 October 2010].

- Sutton, (June 2010). Presentation: Location Based Marketing in 2010 . [Availablefrom]http://socialwayne.com/2010/06/10/presentation-location-based-marketing-2010/ [Accessed 8 October 2010].

- SysComm, (February 2010). Advantages of Location-Based Internet Marketing .

http://data.london.gov.uk/datastore/applications/focus-london-population-and-migration


http://mashable.com/2010/08/29/foursquare-3-million-users/

http://bits.blogs.nytimes.com/2010/03/11/starbucks-fans-can-become-a-barista-on-foursquare/


http://www.nytimes.com/2010/10/07/business/smallbusiness/07sbiz.html?_r=2



http://momentfeed.com/2010/09/location-based-marketing-the-revolution/




http://mashable.com/2010/03/15/location-based-marketing/

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.94.1844&rep=rep1&type=pdf


http://socialwayne.com/2010/06/10/presentation-location-based-marketing-2010/



http://mashable.com/2010/08/29/foursquare-3-million-users/








http://mashable.com/2010/03/15/location-based-marketing/



http://socialwayne.com/2010/06/10/presentation-location-based-marketing-2010/




[Available from] http://www.syscomminternational.com/blog/advantages-of-location-based-internet-marketing/ [Accessed 8 October 2010].

- The Week, (Mars 2010). What is Foursquare?

[Available from] http://theweek.com/article/index/200751/What_is_Foursquare [Accessed 8 October 2010].

- Van Grove, (September, 2010). McDonald’s Foursquare Day Campaign Increased Checkins by 33%.[Available from] http://mashable.com/2010/09/16/mcdonalds-Foursquare-campaign/ [Accessed 8 October 2010].

http://www.syscomminternational.com/blog/advantages-of-location-based-internet-marketing/


http://theweek.com/article/index/200751/What_is_Foursquare

http://mashable.com/2010/09/16/mcdonalds-foursquare-campaign/




http://theweek.com/article/index/200751/What_is_Foursquare






APPENDICESAppendix1: Timetable

Week 128 September

Week 25 October

Week 312 October

Week 419 October

Week 526 October

Week 62 November

- Creation of a 5members group- Decision of our chosen subject- Proposal of different potentialsubjects

- Validation of thesubject- Elaboration of theinitial questionresearch andobjectives

- Redaction of theliterature review- Improvement of our research question

- Reflection aboutour methodology(quantitative or qualitative)- Setting up of our questionnaires- Improvement of our research objectives

- Proceeding to thegeneral researchmethodology- Elaboration of our

timetable- Adaptation of our researchinstruments

- Final changes of our surveys- Redaction of our

report abstract andintroduction




Week 79 November

Week 816 November

Week 923 November

Week 1030 November

Week 117 December

Week 1214 December

COLLECTINGDATA

- Data processing- First results- Review and

condensation of our

literature review andmethodology to theappropriate number of words andaccording tofeedbacks

- Final resultsanalysis based onour researchinstruments

- Elaboration of our conclusion followingour results- Making off of our reference list andappendices

- Final groupresearch reportredaction and review- Submission before

Monday 13thDecember




- Submission of our businessesquestionnaires

- Submission of our businessesquestionnaires

- Submission of our final consumersquestionnaires




Appendix 2: Survey on Location Based Services towards companies

We are studying international business at Westminster University, London, and are

asked to conduct a research for our “Management Research Method” course. Our subject focuses on Location-based Smartphone applications. We would like tointerview a few companies to understand why and how they use those applications.

Activity Sector : Bar/Restaurants Shops Others:Size of business: Micro (<10 employees) Small (< 50 employees) Medium (<250 employees)Age of the company: - 5 years 5 to 10 years 10 to 20 years + 20years

London district (city): .................................................................

1. How did you hear about location based services? (please, tick one)

Internet Word of mouth Business Network

Prospector Other sources of information

2. When did you integrate this strategy to your marketing plan?(please, tick one)

Less than 6 months 6 months 1 year

2 years and more

3. Why do you use Location Based Marketing (LBM)?(please, circle the answer(s))

To gain notoriety To increase your salesTo increase customers’ loyalty

To be up to date To be ahead of competitors

4. What kind of consumers are you targeting by implementing LBM?(please tick as many as you want)






Professional status: Employed Un-employed Retired

Living area: Central London Near surrounding Out of town

1. Do you use a Smartphone with Location Based Services applications?

(please, tick one) Yes No. Thank you for your time.

2. Have you got a good knowledge about mobile technology/application?(please, tick one) No, I’m really bad at it I have a few knowledge about it Yes, I often follow mobile news Yes, I’m keen on mobile technologies

3. What kind of promotion do you often use?(please tick as many as you want)

Discounts Adverts Badge system (the more you check the more advantages you have) Games (e.g. treasure hunt)

4. Have you ever written tips about places you have visited(shop/bar/restaurant...) on their application page?

(please, circle the answer)Never SometimesOften Always

5. Would you go back to a place which has already offered youpromotions?(please, tick one) Yes No

6. Why did you start using LBS applications?(please, tick as many as you want)

To write/read the advices given To find some good places To have some discounts/offers To improve my social network

7. Which of the following campaigns have you ever used? (please, tick as many as you want)

Starbucks giving one dollar off a cappuccino for the mayor Domino’s pizza offering discounts and free pizza to Foursquare mayors Real time treasure hunt around London used by Jimmy Choos Wagamama complementary soup offered for every 5 check-ins

Pizza Hut breadstick offered with a pizza bought for the mayor MacDonald’s gift cards randomly offered for Foursquare’s users




None

8. According to you, which one was the most efficient?(please, tick one) Starbucks giving one dollar off a cappuccino for the mayor

Domino’s pizza offering discounts and free pizza to Foursquare mayors Real time treasure hunt around London used by Jimmy Choos Wagamama complementary soup offered for every 5 check-ins Pizza Hut breadstick offered with a pizza bought for the mayor MacDonald’s gift cards randomly offered for Foursquare’s users None Not applicable

9. Have you met any of the following constraints in Location Based Servicesapplications?(please, tick as many as you want)

Data collected used in a ill-advisedly way Misleading advertising Privacy and security risks (housebreaking, …) Being spied (family, work, …) None

Thank you for your attention

Appendix 4: Profile of companies using LBM

This pie shows us that bar and restaurants are the mains users of LBS technology.Shops come in second position; finally others correspond, in our case for example, tohair dressers,

This pie show the size of business that we that we interviewed, we found that themain users of LBS were micro companies 59% (less than 10 employees). Small

companies (less than 50 employees) come on second 23%. Finally, mediumcompanies 18%.




This graph shows the age of companies that are using it, 7 companies have beencreated 5-10 years ago (41,2%). And only 4 companies (23,5%) have been createdmore than 20 years ago.

This pie shows us the percentage of companies that have integrated this strategy intheir marketing plan. We can assume than 53% (9) of the interviewed companieshave integrated it in the last 6 months.Hypothesis research regarding companies’ objective:

- Null Hypothesis - H0: there is no association between age of the company andthe integration of LBS strategy in their marketing plan (i.e.: age is not a factor that influences the chosen company)

- Alternative Hypothesis - H1: there is association between age of the companyand the integration of LBS strategy in their marketing plan (i.e.: age is a factor that influences the company)




When did youintegrate thisstrategy toyour marketingplan? *

ageofcompanyCrosstabulation

ageofcompany Total

0-5 years 5-10 years 10-20 years +20 years

When did youintegrate thisstrategy toyour marketingplan?

less than 6months

Count 3 2 1 3 9

% withinageofcompany

100.0% 28.6% 33.3% 75.0% 52.9%

6 months Count 0 4 2 1 7


.0% 57.1% 66.7% 25.0% 41.2%

1 year Count 0 1 0 0 1


.0% 14.3% .0% .0% 5.9%

Total Count 3 7 3 4 17


100.0% 100.0% 100.0% 100.0% 100.0%

Chi-SquareTests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square

6.450a 6 .375

Likelihood Ratio 7.839 6 .250Linear-by-Linear Association

.008 1 .930

N of ValidCases

17

a. 12 cells(100.0%) haveexpected countless than 5. Theminimumexpected countis .18.

Significance= 0.375 There is a probability superior to 0.05 so we accept H0 (noassociation between age of the company and integration of the strategy in thecompany) and reject H1 (association).Appendix 5: Companies’ use of LBS




The first graph shows how people heard about LBS. Actually, it seems like internet isthe first channel for companies to be aware about LBS (35%). Then, world of mouthand business network are the next channel. Companies explained that sometimes,their customers told them about LBS and advised them to implement it.Also, companies heard about it through their employees, who check-in at the

company. Managers heard about it also at some conferences, or businessnetworking, shows…Only 6% of companies heard about LBS through prospectors,which is not as surprising as most of LBS are part of startups and don’t have thefunds necessary to prospect. Then, 12% of companies heard about it through other sources of information, such as emailing, newspapers, shows, partners.

As it is a multiple choice question, respondents could tick as many as an answer theywanted that’s why we have these high results.

We asked companies why they did use LBM for, in their marketing strategy. Most of them (88%) use LBM to increase their sales or customers loyalty. In fact, throughLBM, companies can put some discount for their shop when people are around their location. Like that, companies attract new customers who wouldn’t have comewithout the discount. Through those smartphone applications, companies canincrease customers’ loyalty easily. As an example, The Breakfast Club offers 20% for the mayor (it means for the people who check-in the most in their place). Also, TheCrusting Pipe, in Covent Garden, offers a bottle of beer every 10 check-in.76% of companies interviewed use LBM to be ahead of competitors. In fact, theyexplain that with the 2008 crisis, competition has become more “aggressive” thanbefore, and those try to attract the most customers as possible. They have to stayupdated with all trends, and to adapt to customers wants.76% of companies use LBM to gain notoriety as well. They explained that theyunderstood the internet potential and that they had to adapt to this new market. Theywant to be “present” on the web, and say that it is a cheaper way to be known thanadvertising.Finally, only 41% of companies interviewed explain using LBM to be up to date. Theywant to follow trends and to adapt to the market. They try to follow trends, and trynew things for helping the business. Some companies explained that they were justcurious about that technology; therefore it is kind of a test for them.

Appendix 6: Companies’ target when implementing LBM

Companies seem to be all target workers, followed by people enjoying hanging outwith 71% and geeks with 65%. Students come in last position with 53%.




Appendix 7: Companies’ marketing strategies options and their efficiency

Regarding companies’ marketing strategies, discounts are a much more used tool with 88%.

Indeed, there are approximately twice as much discounts as adverts and four times as much

discounts as badges used. Games are rarely used in the companies marketing strategies with

only 6%.

In all situations the clientele had augmented but most of companies agree that the proportion

of new clientele has only slightly increased (82%). Clientele increased quite a lot for few

firms (6%) and some (12%) observed that new customer acquisition improved very much.

The graph shows that even if the clientele amplified, it affects only a little the raise of the

companies’ turnover. The 0-25% part is mainly represented, which means that 82% of

companies saw their turnover rising less than 25%. 18% of companies observed that their

turnover increase between 25% and 50%. Finally, in our cases, the increase of the turnover

never exceeded 50%.

Hypothesis research regarding the evolution of companies’ turnover and affluence

- Null Hypothesis - H0: there is no association between the growth of theturnover and the affluence of the clientele in store.

- Alternative Hypothesis - H1: there is an association between growth of theturnover and affluence meaning the more companies have customers in their

store the more their turnover increases.







On a scale

of 0 to

100%,

have you

noticed agrowth in

your

turnover?

* Did your

clientele

increase

since you

have

integrated

Location

Based

Marketing

?

Did your

clientele

increase

since you

have

integratedLocation

Based

Marketing? Total

A little Quite a lot Very much

On a scale

of 0 to

100%, have

you noticed

a growth inyour

turnover?

0-25 Count 13 1 0

% within

Did your

clientele

increasesince you

have

integrated

Location

Based

Marketing?

92.9% 100.0% .0% 8

25-50 Count 1 0 2

% within

Did yourclientele

increase

7.1% .0% 100.0% 1






supervise the implementation. If it becomes paying many respondents (70.6%) willstop integrating it in their strategic plan.Location-Based Services is a new trend and it is not well implemented yet it has fewlimitations that companies must be aware of.




Appendix 9: Customer profile objective

Approximately one out of three users of LBS technology is a woman and two thirdcorrespond to men.

Concerning the professional situation of users, the unemployment rate seems to behigher than the employment (that is to say 12% more).

The “less than 25 years old” category represents the major part of LBS users,followed by the “between 25 and 50” category and at last the “over 50” category.

Most of LBS final users come from London near surrounding (71%), a quarter residein central London (27%) and a very few live out of town (2%).

The majority of LBS users have little knowledge about mobile technology (38%),some often follow mobile news (29%), and only a few are keen on mobile devices(7%). However, it is important to note that a large proportion of people don’t have anyparticular knowledge about it (26%).




The graph shows that the higher the level of implication in LBS, the lower the number of representatives. Nearly two third of final users have never written any tip about aplace they have visited while only 3% always write some tips.

Hypothesis research regarding customer profile objective:

- Null Hypothesis - H0: there is no association between gender and tips writing(i.e.: gender is not a factor influencing tips writing)

- Alternative Hypothesis - H1: there is an association between gender and tipswriting (i.e.: gender is a factor influencing tips writing)

Ranks

Gender N Mean RankSum of Ranks

Have you ever writtentips about places youhave visited(shop/bar/restaurant...) on their applicationpage?

Female 27 35.11 948.00Male 62 49.31 3057.00Total 89

Test Statisticsa

Have you ever written tips aboutplaces you have visited(shop/bar/restaurant...) on their application page?

Mann-Whitney U 570.000Wilcoxon W 948.000Z -2.708Asymp. Sig. (2-tailed) .007a. Grouping Variable: Gender

Significance = 0.007. There is a low probability so we reject H0 (no association) andaccept H1 (association between gender and tips writing).

Appendix 10: Customer’s motivation when using LBS

The graph accentuates the choice of discounts as a primary aim of LBS use (83%). Itmatches with companies strategy of implementing (at 88%) discount offers, thereforewe can assume that this marketing strategy is successful. Secondly, people seem tolike using LBS to collect badges (31%).There are dozens of badges to collect on LBSapplications as Foursquare (for example when check-in 5 times in one day in 5different shops). People like to compete with their friends, to see who has got themost badges. Finally, people use less LBS applications for games or for adverts:




respectively 9% and 13% of people. Games and adverts don’t have a lot of successfor customers for several reasons: games are not interesting and they don’t like tosee adverts on their phones as they are subject to advert all day.

People are willing to come back to a place which has already offereddiscounts/vouchers.

Consumer’s main reason to begin using LBS is to find some good places (43%)around their location and among specific criteria (restaurant, cinema, bar, etc…). For example, if someone wants to go to the cinema while he is with his friends in thestreet, he just has to launch the application to find the nearest cinema and getdirections to get there. Also, people started using LBS to find offers and discounts

(30%). It seems that because of the crisis, people are more attracted by discountsand try to find the best deal.Then, only 15% started using LBS to improve their social network. They want to findnew friends, to discover their friends’ tastes and location. Finally 12% started usingLBS to write or read advices. In fact, people who just came to a new city want toknow more about places around them.




Appendix11: Multinational companies’ overview from customers’ perspective

The most effective campaign seems to have been MacDonald’s one with 37% of the

suffrage nearly overtaken by Starbucks’ with 30%. The third position is occupied byDomino’s with 12%. The others don’t seem to have the same impact and hardly pass10% of responses.

Hypothesis research regarding customers’ perspective on multinational companiesobjective:

- Null Hypothesis - H0: there is no association between age and their perceptionof an effective campaign (i.e.: age is not a factor that influences the chosencampaign)

- Alternative Hypothesis - H1: there is association between age and their perception of an effective campaign (i.e.: age is a factor that influences thechosen campaign)







According toyou, whichone was themostefficient? *

AgeCrosstabulation

Age Total

less 25between 25and 50 over 50

According toyou, whichone was themostefficient?

Starbucksgiving onedollar off acappuccinofor the mayor

Count 10 2 1 13% within Age 15.6% 10.0% 20.0% 14.6%

Domino’spizza offeringdiscounts andfree pizza toFoursquaremayors

Count 5 0 0 5% within Age 7.8% .0% .0% 5.6%

Real timetreasure huntaroundLondon used

by JimmyChoos

Count 0 2 0 2% within Age .0% 10.0% .0% 2.2%

Wagamamacomplementar y soup offeredfor every 5check-ins

Count 0 1 0 1% within Age .0% 5.0% .0% 1.1%

Pizza Hutbreadstickoffered with apizza bought

for the mayor

Count 2 0 1 3% within Age 3.1% .0% 20.0% 3.4%

MacDonald’sgift cardsrandomlyoffered for Foursquare’susers

Count 12 4 0 16% within Age 18.8% 20.0% .0% 18.0%

None Count 1 1 1 3% within Age 1.6% 5.0% 20.0% 3.4%

Not applicableCount 34 10 2 46

% within Age 53.1% 50.0% 40.0% 51.7%Total Count 64 20 5 89

% within100.0% 100.0% 100.0% 1




Chi-Square

Tests

Value df Asymp. Sig.(2-sided)

Pearson Chi-Square

23.541a 14 .052

LikelihoodRatio

20.828 14 .106

Linear-by-Linear Association

.009 1 .926

N of Valid

Cases

89

a. 20 cells(83.3%) haveexpectedcount lessthan 5. Theminimumexpectedcount is .06.

Significance = 0.052. There is a probability slightly superior to 0.05 so we reject H1(association between age and perception of campaign efficiency) and accept H0 (noassociation).




Appendix12: Why can consumer stop using LBS?

Respondents agreed it is their responsibility to not disclose private information to thewhole public. They are the ones who draw their profile on applications to spread their

social network so they must be careful of what they compute. Besides some peoplefeel the impression of being spied because everyone (not only their friends) canknow where they are and what they are doing. They also receive false publicitymeaning they get trapped and pay more than they were supposed to pay. Manyreasons which may force customers to give up applications which cause lose of opportunity to companies. It is also the responsibility of companies to not reveal allinformation about their customers. Hopefully for them there are more customers whonever encounter troubles (78.9%) when using LBS applications and are satisfied bythe service offered.

Hypothesis research regarding limitation of LBS application: Which factor can

influence the fact that consumer meet constraint?- Null hypothesis – H0: there is no relation between the knowledge about LBS

applications and problems encounter when using them- Alternative hypothesis – H1: There is a relation between the knowledge

customers have about LBS applications and problem they may face. The morethey use it the more information they compute on applications and the morelikely they are to face limitation and give up applications.




Have you

met any of the following

constraints

in Location

Based

Services

applications

? * Have you

got a good

knowledge

about mobile

technology/a

pplication?

Have you got

a good

knowledge

about mobile

technology/ap

plication? Total

No

I have a few

knowledge

I often follow

mobile news

I am keen on

mobile

technologies

Have you met

any of the

following

constraints in

Location

Based

Services

applications?

Data

collected

used in a ill-

advisedly way

Count 1 0 0 1 2

% within

Have you got

a good

knowledge

about mobile

technology/ap

plication?

4.3% .0% .0% 16.7% 2.2%

Misleading

advertising

Count 1 1 1 0 3

% within

Have you got

a good

knowledge

about mobile

technology/ap

plication?

4.3% 2.9% 3.8% .0% 3.4%

Privacy and

security risks

Count 0 0 1 0 1

% within .0% .0% 3.8% .0% 1.1%



Documents

Business Project LBS