MOBILE DIGITAL MARKETING AND THE FUTURE OF HOTELS
THESIS
Submitted in Partial Fulfillment of
the Requirements for
the Degree of
MASTER OF SCIENCE IN MANAGEMENT OF TECHNOLOGY
at
NEW YORK UNIVERSITY POLYTECHNIC SCHOOL OF ENGINEERING
by
Karishma Aggarwal
May 2014
MOBILE DIGITAL MARKETING AND THE FUTURE OF HOTELS
THESIS
Submitted in Partial Fulfillment of
the Requirements for
the Degree of
MASTER OF SCIENCE IN MANAGEMENT OF TECHNOLOGY
at
NEW YORK UNIVERSITY POLYTECHNIC SCHOOL OF ENGINEERING
by
Karishma Aggarwal
May 2014
Approved:
Advisor Signature
Date
Department Head Signature
Date
Copy No. # Student ID#:
iii
VITA
Charisma Aggarwal [email protected]
1. NEW YORK UNIVERSITY, COLLEGE OF ENGINEERING & NYU STERN New York City, New York Masters in Technology Management & Innovation Jan 2013 – May 2014 Masters Degree in Technology Management (deployment & digitalization of businesses) and Innovation. Luxury marketing course from NYU Leonard N. Stern School of Business.
2. NEW YORK UNIVERSITY, COLLEGE OF PROFESSIONAL STUDIES New York City, New York Professional Certificate in Digital Marketing 2014 Digital Marketing, Online Strategy, Multi-Channel Marketing, Analytics
3. UNIVERSITY OF DELHI New Delhi, India Bachelors of Commerce (Business) 2005-2008
4. THE BRITISH COUNCIL HND Business & Computing Applications, UK, New Delhi Associates equivalent in E-commerce and online Business Applications 2003-2005
1. Giorgio Armani Corporation, USA Feb – May 2014 CRM, E-Commerce & Trade Marketing Contract position where my role includes planning for Armani events for all brands in the portfolio, strategy to increase footfall at retail locations, Brand's e-commerce initiatives and external partnerships. 2. Omni-Channel Marketing, Branding, and Promotions, New Delhi, India 2010 –2013 Business Development Consultant: Specialized in collaborations, events and launching Luxury Brands into India’s Ultra Wealthy Marketplace 3. GLOPLAST Manufacturing and Design, New Delhi India 2002 – 2010 Head of Business Development and Customer Relationships for manufacturing large LED signs and displays main clients include multi-national corporations.
CONSULTING PROJECTS:
iv
FERRARI SUPER CARS, INDIA: Market launch of Ferrari and Maserati in India
Activities: Created and managed various events and marketing campaigns including F1 track events, Ferrari Ezperienza, the launch of Ferrari FF with F1 driver Fernando Alonso etc. Personally promoted to a network of billionaires, ambassadors, and politicians as prospective buyers
GENESIS LUXURY, INDIA: Market Research, Strategic and Acquisition Consulting
Activities: Consulted on various projects, including luxury retail locations based on research, reporting on collaborating with international luxury brands
ESSEC BUSINESS SCHOOL, PARIS: Promoted renowned MBA in Luxury Marketing via Round Table Conferences in India to connect the alumni and luxury industry professionals
HOTEL GRAND, NEW DELHI: Instrumental in re-positioning the luxury hotels chain
formerly Grand Hyatt target towards the India’s ultra-wealthy market.
v
Acknowledgements
Firstly, I would like to acknowledge the contribution of Dr. Brian Glassman, PhD.,
Technology Management, Product Development, & Innovation for motivating me and
being a mentor. Without his constant moral support, this research would not have been
completed.
I would also like to express my appreciation to Dr. Bharat Rao, Department Chair for the
Management of Technology Program. The knowledge he conveyed to me through his
course on marketing was directly applied to create this thesis’s primary and secondary
research studies.
I would like to thanks to Professor Jonatan Jelen, my advisor for teaching the
entrepreneurship course and Professor Mike Driscoll both of who strengthen my
enthusiasm for technology. Professor Driscoll’s course on Advance Trends in Technology
and Global Innovation demonstrated his immersion passion for business and
technology, which played strongly into the formation of this thesis.
I further extend my personal gratitude to the interviewees Mr. Amit Modi, Mr. Maurizio
Bonivento, Mr. Arjun Channa and Mr. John K. Knowles for their time and replying
candidly to questioning shown herein.
Lastly, I would like to give a strong thanks to Mr. Vivek Veeriah, Administrative Director
of Management of Technology Program for being prompt and supportive at all times.
vi
Dedication
To my parents: Vimal & Neeta
vii
ABSTRACT
MOBILE DIGITAL MARKETING AND THE FUTURE OF HOTELS
by
Karishma Aggarwal
Advisor: Jonatan Jelen
Submitted in partial fulfillment of the requirements for
the degree of Master of Science in the Management of Technology
May 2014
ABSTRACT
This research focuses on mobile marketing. In particular, it focuses on the value that
mobile marketing: methods, technologies, and strategies have to the hotel industry.
Chapter 1 is a comprehensive review of the current state of mobile marketing and
details: the growth rates of mobile marketing, how consumers are using the smart
phones and tablets, using mobile analytics, understanding mobile marketing strategies,
and the newest mobile marketing technologies. Any reader wishing to gain a firm
understanding of mobile marketing from one source would find chapter 1 particularly
valuable.
Chapter 2 and Chapter 3 build on the prior chapter by focusing on the application of
mobile marketing to the hotel industry. In particular it examine current traveler mobile
viii
habits, how smart phones and tablets are used to book hotel and use their services, and
includes a detailed reviews of top hotel apps of 2013.
Chapter 4 is standard with any research study and includes the research studies: goals,
motivation, limitations, and study methodology.
Chapter 5 discusses the interview results. Here the general managers of four hotel
chains are interviewed and their responses were cross-‐compared against the prior
literature. In particular, the interviews captured information on these hotels’: marketing
capabilities, customer’s mobile usage, management’s awareness of current mobile
technologies, and the value management see in specific mobile technologies.
Finally, Chapter 6 is a summary of the research findings and provides the author’s future
predictions of how mobile marketing will evolve and affect the hotel industry in the near
future.
ix
TABLE OF CONTENTS
ABSTRACT ......................................................................................................................... vii
TABLE OF CONTENTS ......................................................................................................... ix
LIST OF FIGURES ............................................................................................................... xii
LIST OF TABLES ................................................................................................................ xiv
CHAPTER 1
INTRODUCTION .................................................................................................................. 1
A. Summary of the Chapter .......................................................................................... 2
B. Key Definitions ......................................................................................................... 3
C. Key Statistics Related to the Growing Usages of Mobile Phones ............................. 3
D. The Shift in the Mobile Phone Devices toward Smart Phones ................................. 5
E. Smartphones are Becoming More Affordable ......................................................... 7
F. Tablets usage and Marketing ................................................................................... 9
G. Mobile Based Commerce ....................................................................................... 11
H. Smartphone User Habits a Worldwide Assessment ............................................... 13
I. The Future of Shopping and Omni-‐Channel Retail ................................................. 18
J. Mobile Shopping .................................................................................................... 24
K. Mobile Applications, Apps ..................................................................................... 30
L. Measurement: Application Analytics ..................................................................... 34
M. Innovative Mobile Advertising and Media ............................................................. 35
N. Strategy of Mobile Advertising .............................................................................. 41
O. Mobile Tactics ........................................................................................................ 44
CHAPTER 2
MOBILE MARKETING FOR HOTELS ................................................................................... 46
A. Hotel Mobile Marketing and Distribution Channels .............................................. 46
B. Smart Phones and Tablets use in Travel ................................................................ 49
C. Undercutting the Online Travel Agencies .............................................................. 57
D. The Future of Mobile Hotel Website and Apps ...................................................... 59
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CHAPTER 3
ANALYSIS OF TOP HOTEL APPS ......................................................................................... 62
A. A Situational Analysis for Hotel Apps ..................................................................... 62
B. W Hotel Mobile App Analysis ................................................................................. 63
C. Ritz-‐Carlton Mobile App Analysis ........................................................................... 64
D. Four Seasons App Analysis ..................................................................................... 65
CHAPTER 4
RESEARCH GOALS AND RESEARCH METHODOLOGY ........................................................ 68
A. Summary of Chapter .............................................................................................. 68
B. Research Goals ....................................................................................................... 68
C. Research Limitations .............................................................................................. 70
D. Research Methodology .......................................................................................... 70
E. Limits of applying results ....................................................................................... 71
CHAPTER 5
RESEARCH RESULTS AND DISCUSSION ............................................................................. 72
A. Summary of this Chapter ....................................................................................... 72
B. Profile of Respondent 1 -‐ Amit Modi, CFO, Hotel The Grand, New Delhi .............. 73
C. Profile of Respondent 2 -‐ John K. Knowles Roger Smith, New York City ................ 74
D. Profile of Respondent 3 -‐ Arjun Channa, General Manager, Starwood Hotels,
Canada .......................................................................................................................... 75
E. Profile of Respondent 4 -‐ Maurizio Bonivento, General Manager Empire Hotel,
New York ...................................................................................................................... 76
F. Interviewee Profile Analysis ................................................................................... 76
G. Results of Marketing Capabilities Questions .......................................................... 78
H. Marketing Capabilities ........................................................................................... 78
I. Results for the Percentage of Customers using Mobile Questions ........................ 78
J. Results of Awareness of Trends Questions ............................................................ 79
K. Implementing New Technologies ........................................................................... 80
L. Results of Mobile Coupon Scenario Question ........................................................ 80
xi
M. Results of Mobile Advertising Scenario Question .................................................. 81
N. Results of Advertising with Geo-‐Fencing Scenario Question ................................. 81
O. Results of Mobile Hotel Services Scenario Question ............................................. 82
P. Results of Social Media Scenario Question ............................................................ 83
Q. Results of Mobile Social Media Targeting Guests Scenario Question .................... 84
R. Results of Places of Interest and Value Scenario Question .................................... 85
CHAPTER 6
CONCLUSIONS AND FUTURE OF MOBILE MARKETING FOR HOTELS ................................ 86
A. Summary of the Chapter ........................................................................................ 86
B. General Conclusion on the Mobile Marketing ....................................................... 86
C. Conclusion on the Review of Literature for Hotel Mobile Marketing .................... 87
D. Conclusions from the Analysis of Top Hotel Apps .................................................. 87
E. Conclusion of Result of the Research Study ........................................................... 88
F. Future of Hotel Mobile Marketing ......................................................................... 88
G. A Bright Outlook on the Future .............................................................................. 89
H. Prospective Threats: .............................................................................................. 90
BIBLIOGRAPHY .................................................................................................................. 92
APPENDIX A-‐ SURVEY INSTRUMENT ............................................................................... 100
APPENDIX B-‐ SURVEY RESULTS ....................................................................................... 110
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LIST OF FIGURES
Figure 1: Mobile-‐Cellular Penetration in 2013 ................................................................... 4
Figure 2: Mobile-‐Cellular Subscription Growth Rates 2005-‐2013 ...................................... 5
Figure 3. Mobile Phone Users Worldwide, 2012-‐2017 ....................................................... 7
Figure 4: Worldwide Smartphones Shipments (USD Billions) ............................................ 8
Figure 5: Mobile Traffic Sources by Device ......................................................................... 9
Figure 6: Global PC (Desktop / Notebook) and Tablet Shipments by Quarter Q1:1995 –
Q1: 2013 ............................................................................................................... 10
Figure 7: Global Device Penetration per Capita ............................................................... 11
Figure 8: From Telephones to Smartphones – Technology Adoption Lifecycle US.
Households by Type of Phone 1900-‐2011 ............................................................ 14
Figure 9: Seven Primary Reasons that People use their Smart Phones ............................ 17
Figure 10: The Non-‐Stop Customer Experience Model .................................................... 20
Figure 11: Advertisement Offering delivered via a RFID Beacons and Smartphones ....... 26
Figure 12: Purchasing Options Mobile Shopping Lifecycle ............................................... 28
Figure 13: Traditional Purchase Funnel ............................................................................ 28
Figure 14: Mobile Applications continue to Dominate the Web ...................................... 30
Figure 15: Mobile Apps Features and Functionality ......................................................... 32
Figure 16: Kind of Mobile Apps from Developer Standpoint ............................................ 33
Figure 17: Mobile Ads Classifications ............................................................................... 40
Figure 18: Frequency vs Quality of Mobile Strategy ......................................................... 43
Figure 19: Percentage Increase in Mobile & Tablet; Decrease in Desktop in Q3 2013 .... 48
Figure 20: Graph Showing Usage by Time of Computer, Tablet, and Smart Phone ......... 48
Figure 21: Reasons for Booking on a Smartphone ........................................................... 48
Figure 22: Part 1: Infographic on Travel Usage Trends for Mobile devices in USA ........... 51
Figure 22: Part 2: Infographic on Travel Usage Trends for Mobile devices in USA ........... 52
Figure 23: Infographic showing what customers want from Hotels ................................. 55
Figure 24: Infographic on Today’s Mobile Booker ............................................................ 56
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Figure 25: Affluent Travels in USA using more Hotel Sites vs. OTAs ................................ 58
Figure 26: Impact of Quality of Website and App on Segmentation of Travelers ............ 60
Figure 27: Facilities requested by Business, Leisure and Family Travelers ....................... 61
Figure 28: Hotel Brands according to Digital IQ Index for Hotels 2013 ............................ 62
Figure 29: Graphic User Interface of W Hotels Mobile Application ................................. 63
Figure 30: Graphic User Interface of Mobile Application of Ritz Carlton Hotels .............. 64
Figure 31: Graphic User Interface of Mobile Application of Four Seasons Hotels ........... 65
Figure 32: Affluent USA Traveler’s Bookings made via Browser and Mobile App ............ 67
Figure 33: Respondent 1: Amit Modi, CFO, Hotel The Grand, New Delhi ........................ 73
Figure 34: Respondent 2: John K. Knowles, Director of Digital Marketing, Roger Smith . 74
Figure 35: Respondent 3: Arjun Channa, Hotel Manager, Starwood Hotels, Canada ...... 75
Figure 36: Respondent 4: Mr. Maurizio Bonivento, General Manager Empire Hotel, New
York ....................................................................................................................... 76
Figure 37: Private Encrypted Technology Solutions ......................................................... 91
xiv
LIST OF TABLES
Table 1: Mobile email opens are significant, on phones and tablets. .............................. 10
Table 2: Goldman Sachs’ Global Mobile Commerce Forecast, 2012-‐2018E $ in billions,
except per buyer ................................................................................................... 12
Table 3: List of Google Analytics App’s Feature ................................................................ 34
Table 4: Division of Population into Mobile Adoption Segments ..................................... 42
Table 5: Division of Population into Mobile Adoption Segments ..................................... 43
1
CHAPTER 1
INTRODUCTION
“There is no black magic to successfully attracting customers via the Web.”
Rand Fishkin
Forth Thought
Since the inception of the mobile phone for consumers in 1973, there has been a steady
evolutionary change in the market for mobile phones and how customers interacted
with them on a daily bases. As I have and I bet everyone have observed the mobile
phone is no longer a device solely used to communicate, it morphed into a massively
powerful tool for information and decision making, entertainment, navigation,
photography, gaming, and intern-‐connectivity. Truly, it has changed the way people
operate and live in the twenty century on a daily and minute-‐by-‐minute base. The global
climatic shift in the way mobile phones touch our daily lives has created a tremendous
opportunity for marketers. The walls between traditional methods of marketing and
digital marketing have tumbled down, and peering across the void we see that reaching
the customer, wherever they are, has never been easier.
With these massive changes comes a landmark opportunity to guide marketers to
channel, target, and engage customers through the immensely powerful smart phone.
Marketers have already started down this road and are setting up signs guiding others
toward mobile ready websites, and mobile advertising in apps and search engines.
However, at the speed new technologies are being created in the 20th century a number
of new options are appearing that would further advance mobile marketing. Therefore
2
looking forward, I impatiently asked the question, “How are smart phone going to be
used to permanently change the way marketer reach their customer?”
A. Summary of the Chapter
Chapter one is review of the literature relevant to mobile marketing. Beginners to
advanced practitioners will benefit from the detailed review of this subject. This chapter
starts with a section A on the key definitions relevant to mobile marketing, then moves
into the growth rate and usage of mobile phones and other mobile connected devices
(section B). The next section D describes the segmentation of smart phone as compared
to mobile phones showing the shifting tied towards multi-‐media/web capable devices.
This is followed by section F being growing usage of tables, such as the iPad, as they are
a device specifically targeted by mobile marketers.
Moving away from the device towards the environment the next section G examines the
world of mobile commerce and its tremendous growth rates. This is followed by section
H an review of worldwide habits of smartphone uses as they consume media, shop, play
games. The marketers goal is to seamless provide a brand message across multiple
medians, consequently section I thus the next section examines Omni-‐channel retails.
Keeping with the vain of retail, section J describes the different aspects of mobile
shopping which is emerging as a massive branch termed mobile retail. Subsequently,
section K discusses the hot areas of mobile applications “apps” is described and
continues to redefine the way brands interact with consumers.
Application analytics starts section L, as this is vital to confirming one’s marketing
campaigns and strategies. With the base understanding of how to measure results,
section M gets very interesting and describes the future and innovation in mobile
marketing via meeting customer’s core physiological needs. Here physiological needs
like instant gratification, goal achievement, social interactions, belonging to a
3
community, and self-‐identifications are related to new and innovative mobile
technologies.
B. Key Definitions
A general definition of Mobile Advertising would be a form of advertising that is
communicated to the consumer via a handset. This type of advertising is most
commonly seen as a mobile web banner, mobile web poster, or full screen interstitial
that 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 being
pre, mid, and post roll ads (Mobile Marketing Assocation, n.d.). The same organization
defines Mobile Marketing as “a set of practices that enables organizations to
communicate and engage with their audience in an interactive and relevant manner
through any mobile device or network” (Mobile Marketing Association).
While m-‐commerce (mobile commerce) is more of transaction or revenue based, mobile
marketing is a bigger part of the mobile ecosystem than mobile advertising or m-‐
commerce. Mobile marketing is more about brand building, customer acquisition,
engaging customers, starting a conversation, and creating word of mouth. In simpler
terms, mobile marketing efforts like mobile advertising and mobile transactions are
increasing the amount of m-‐commerce.
C. Key Statistics Related to the Growing Usages of Mobile Phones
According to statistics the number of mobile subscriptions have reached almost the
same number as the world’s population as of 2013. Figure 1 shows out of 6.8 billion
subscriptions, more than half 3.8 billion are in Asia-‐Pacific region. It been estimated
that the global mobile penetration has reached almost 100%; hence, there would be
slower growth in the number of subscribers. The report suggests, “Mobile cellular
4
penetration rates stand at 96% globally; 128% in developed countries; and 89% in
developing countries” (International Telecommunication Union, 2013).
Figure 1: Mobile-‐Cellular Penetration in 2013 Source: (International Telecommunication Union, 2013)
The decrease in growth corresponds with the reduction in cellular subscription growth
rates shown by figure 2. One problem is that this data does not include devices like
iPads and Tablets, or devices like Google Glasses (wearable technology) which also
constitute an increasing number of the mobile device market. It is also shows that with
the increased usage of high-‐speed broadband mobile services, customers can download
and buffer rich media content such as pictures, movies, and games resulting in a rich
media experience over the prior simple non-‐smart phones.
Tablets are also a big part of mobile as more and more users are using these multiple
devices in their daily lives. As of 2014 the hands down leader in the category is an iPad.
However, more android tablets are being adopted and they may surpass Apple’s OS in
the near future (The Guardian, 2013).
5
Figure 2: Mobile-‐Cellular Subscription Growth Rates 2005-‐2013
Source: (International telecommunication Union, 2013)
D. The Shift in the Mobile Phone Devices toward Smart Phones
There are three categories of mobile phone devices as of 2014 (Nielsen, 2013).
1. Smart Phones: with touch and non-‐touch screens (Blackberry, iPhones, Samsung
Galaxy etc.)
2. Multimedia Phones: with or without touchscreens but it does not have an
advanced operating systems.
3. Features Phones: does not have advanced operating systems it is only used to
make call and text primarily with QWERTY keyboard, or standard 123456789*0#
dial pad.
The world of mobile advertising is due to the advent of smartphones. PC Magazine
describes the smartphone as “A cellular telephone with built-‐in applications and
Internet access. In addition to digital voice service, modern smartphones provide text
6
messaging, e-‐mail, Web browsing, still and video cameras, MP3 player and video
playback and calling. In addition to their built-‐in functions, smartphones run myriad free
and paid applications, turning the once single-‐minded cellphone into a mobile personal
computer” (Pc Mag, n.d.). In other words, a smartphone is like a mini personal computer
and has many other features other than just calling or simple text communication.
Technically the era of smartphones began when IBM launched “Simon” in 1993
(Microsoft Research, n.d.).
Experts suggest that the number of smartphone users are increasing in the world; there
would be nearly 1.75 billion smartphone users by the end of 2014, and nearly 4.5 billion
mobile phone users as shown in figure 3 (EMarketer, 2014). In addition, another report
states that there were 6.8 billion mobile-‐cellular subscriptions in the world in 2013
(International telecommunication Union, 2013). It will be noteworthy that numbers of
mobile users have multiple subscriptions one for personal and one for business. Some
businesses even mandate employees to keep personal and business communications
separate so that when the employee leaves or are transferred, the business phone are
transferred to the new employee one; also, it helps companies keep privacy issues
intact. Nearly half of Brazilian and Russian users have more than one mobile phone
device (Nielsen, 2013). Number of subscribers are growing four times fasters than the
world’s population (AT Kearney, 2013).
7
Figure 3. Mobile Phone Users Worldwide, 2012-‐2017
(Billions, % of population and % of change) Source: (EMarketer, 2014)
E. Smartphones are Becoming More Affordable
High-‐end smart phones were the highest selling versions as of 2010; however, with a
total saturation of the high-‐end market that growth has slowed to replacement phones.
Now, as the cost for smart phone drops, we are seeing another adoption of smart
phones in the low-‐end market; apple computers tried to target this market with their
IPhone 5C but unfortunately it did not meet sales expectations. Companies like Wiko
and many other Chinese manufacturers that sell smart phones for less than $ 100 are
increasing in their market share in both developed and developing countries. The
consumers buying these cheaper versions would rather buy a new phone than a used
high end model. More importantly, the move to smart phones by those who previously
owned mobile phones seek access to social media, music, and other attractive features.
Another reason for the shift to target the low-‐end market is due to drastically reduced
manufacturing costs making lower priced smart phones profitable at reduced price
points. Manufacturers target the price sensitive spectrum, which is untouched by high
8
end manufacturers like Apple and Samsung. This market is especially much bigger in
emerging markets such as Africa, Asia, and the Indian subcontinent.
The shift toward smart phones in the low-‐end segments is creating an increase number
of viewers for mobile advertisements and mobile marketing. This allows for mass
targeting advertising content and not just meant for the upper crest of society that had
propensity to buy expensive handsets only. The Figure 4 shows worldwide smartphone
shipments in Billions from 2011 through the forecasted 2018. One can see that the
number of smartphones priced at or less than $99 has been steadily increasing since
2011 when the first $99 smart phone was introduced. In 2011, the shipments grew to 90
million (approximately) then rose almost 3 times the following year to almost 300
million handsets in 2012. An estimated increase to almost 350 million in 2014 is
projected. Reports have forecasted the number of cheap handsets will reach 450 million
by 2018. On the other hand, smartphones priced at or above $500 increased from 2011-‐
2012 from 250 million to 350 million and then remained steady, which is indicative of
market saturation for the high-‐end smart phones. Forecasted show the more expensive
smartphone handsets will decline to 300 million by 2018. (The Economist, 2014)
Figure 4: Worldwide Smartphones Shipments (USD Billions) Source: (The Economist, 2014)
9
F. Tablets usage and Marketing
“One in every 5 people in the world own a smartphone, one in every 17 own a tablet”
(Business Insider, 2013). Since tablets can also be connected via Wi-‐Fi and GSM
technologies, they are considered a significant part of the mobile ecosystem. Tablets are
like mini computers and more users are adopting them due to the ease of use and the
mobility factor. More companies are installing tablets in the retail sector as tablets to
improve customer engagement and operational efficiency (Samsung, 2013). Tablets are
also responsible for increased email marketing effectiveness as an increasing number of
users are opening emails on their tablets. “Retailers are now dedicating an average of
6% of their search budgets to search campaigns on tablets. By the end of 2013, more
than seven out of 10 retailers surveyed said they will have phone-‐and tablet-‐ specific
search programs in place” (Forrester, 2013).
Figure 5: Mobile Traffic Sources by Device Source: (Forrester, 2013)
10
Table 1: Mobile email opens are significant, on phones and tablets. Source: (Forrester, 2013)
Figure 6: Global PC (Desktop / Notebook) and Tablet Shipments by Quarter Q1:1995 –
Q1: 2013 Source: (AOL Advertising)
11
Figure 7: Global Device Penetration per Capita
Source: (Business Insider, 2013)
Figure 7 above shows that how PC (desktops and laptops), mobile phones and tablets
are increasing their penetrating the global market, this is providing a push to m-‐
commerce. The rate of PC adoption (i.e. the slope of the curve) is decreasing (18% in
2010, 19% in 2011, 20% in 2012 and 20% in 2013); however, the mobile and tablets
curves are rising sharply. The per capita penetration of mobile smartphone devices has
sharply increased to 22%, surpassing the PC penetration in 2013 and tablets to almost
6%, three times since 2011 in just two years. Nonetheless, tablet penetration is still
small in comparison.
G. Mobile Based Commerce
M-‐Commerce is becoming a behemoth, the sales numbers and number of paid searches
tells the tale. Estimated show that by 2018 mobile commerce will account for nearly half
of e-‐commerce by percentage of revenues (Internet Retailer, 2014). Table 2 show
“global m-‐commerce sales reaching $133 billion in 2013, and an expected $626 billion in
sales in 2018. In the US, m-‐commerce will be more than triple by 2018,
representing $131 billion or 32% of American e-‐commerce sales” (Goldman Sachs,
12
2014). The Goldman Sach 2014 report divides the revenues from smartphones and
tablets and estimates of global m-‐commerce revenues; their numbers indicate the
revenues were $133 Billion in 2013 and are estimated to increase to $204 billion
approximately in 2014 (Goldman Sachs, 2014).
Table 2: Goldman Sachs’ Global Mobile Commerce Forecast, 2012-‐2018E $ in billions, except per buyer
Source: (Goldman Sachs, 2014)
Monitoring the rise in the use of m-‐commerce against projections will be imperative in
determining the growth in the mobile advertising industry. Global mobile advertising
spending is forecasted to reach $18.0 billion in 2014, up from the estimated $13.1
billion in 2013 (Gartner, 2014); however another report indicates the mobile ad
revenues in 2013 to be $18 billion which is followed by a very bullish $30 billion in 2014
(EMarketer, 2014). This is a significant increase in just one year.
13
Even though, mobile advertising is still catching up with traditional advertising mediums
such as television and print, it is increasing in leaps and bounds. Google and Facebook
are the leaders in mobile advertising. These two giants constitute world’s two thirds of
the mobile ad market. The other companies included Twitter, Pandora, Yelp!, and
Millennial Media etc. (EMarketer, 2014). Google is a major leader taking the 53% of the
pie with a distant second Facebook with just 15%; however, these two makeup the two
thirds of the entire market (EMarketer, 2014). Facebook is increasingly shifting their
strategy to mobile as more and more Facebook users are now accessing the social
networking site with their smartphones and tablets. The company revealed that almost
78% of the users of the social media site were mobile (TechCrunch, 2013) resulting in a
bump in their stock prices in 2014 due to increase in revenues from mobile advertising.
H. Smartphone User Habits a Worldwide Assessment
The usage and device penetration of mobile, especially in the case of smartphones,
differs greatly by regions, countries, and demographics. Smartphone users in developed
or developing countries, within different income groups, of different ages, be they male
or female have different usage patterns, this allows marketers to segment and carefully
target products and services to the appropriate customers/user groups. Users not only
use mobile devices when they are on the move, as predicted earlier but 68% of
consumer’s smartphone usage occurs at home (Harvard Business Review, 2013). It can
be seen that most mobile use happens in the “me time” of the consumers, which is a
great opportunity for marketers to target advertisements and promotional material. The
“me time” consists of shopping, self-‐expression, looking for news and information,
preparing for activities, such as, a forthcoming travel or planning holidays etc. and
accomplishing productive tasks such as preparing financial sheets, paying taxes online
etc.. (Harvard Business Review, 2013).
14
The rate of technology adoption among consumers is speeding up; amazingly,
consumers in earlier decades were slower to adopt new technologies. “It took early 25
years for telephones to reach 10% adoption but less than five years for tablet devices to
achieve the 10% rate. It took an additional 39 years for telephones to reach 40%
penetration and another 15 before they became ubiquitous. Smart phones, on the
other hand, accomplished a 40% penetration rate in just 10 years” (McGrath, 2013).
McGrath substantiates their argument with the understated technology adoption graph
explaining the phenomenon of the sudden rise of mobile phones.
Figure 8: From Telephones to Smartphones – Technology Adoption Lifecycle US. Households by Type of Phone 1900-‐2011
Source: (DeGusta, 2012)
Since more and more people are adopting smart phones in at a faster pace than
previous technologies; such as, phones or mobile phones, there has been a constant
change in the way users are using their smart phones devices. It is imperative for mobile
marketers to understand the mobile usage pattern and mobile behavior of users.
15
There are many activities that a mobile user performs via their handheld devices (AOL
Advertising, 2012):
To Accomplish: All the activities a user does to feel accomplished. These could
include productivity tasks, scheduling etc.
To Socialize: Interaction with people, friends and family on social media apps,
messenger services etc.
To Prepare: Planning and preparing for future and upcoming activities like on the
calendar, planning trips etc.
For Me Time: The time spent by the user for themselves in relaxing and
entertainment for example watching movies, trailers, surfing etc.
To Discover: Seeking information, news etc.
To Shop: Purchasing of new products and services, looking for discount deals on the
phone
To Express: Expressing their interests, opinions and passions through mobile devices
InsightsNow (2012) provided an in-‐depth analysis of what people actually do with their
mobile handsets. The authors provide information to marketers and helps in product
development to assess what information to be targeted to consumers and how. The
information that is provided via companies like those that InsightsNow are compared to
the consumer behavior analysis surveys provide from the traditional advertising and
marketing research analysts. These analysts frequent shopping malls and physically
analyze through the “observing” technique how shoppers behave in a shopping mall and
how products can be placed on shelves and in stores to increase their visibility and sales.
With this increase in mobile usage, brands must be able to engage customers through
mobile apps, mobile ready sites, and mobile optimized advertising. Hence, this detailed
analysis narrows down mobile behavior so that more companies can target integrated
cross platform solutions to deliver better mobile content and targeted advertising.
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The research provided by InsightsNow (2012) was conducted in three phases:
ethnographic, qualitative, and then quantitative. For the ethnographic research, they
recorded on video and took notes on seven days of select subject smart phone usages.
This was followed up with in-‐depth qualitative interviews, which allowed the
researchers to determine the what, when, where, and why those subject interacted
with their mobile phone during that seven day period. For privacy reasons the content
of phones, texts and emails was strictly not recorded; but more importantly, the time
and frequency of these activities was recorded.
Next, two separate quantitative studies were deployed, the first method gave 1000
smart phone users an in person survey. This survey asked questions about three
different moments in which they used their phone (excluding voice calls, email, and
texts). The second method respondents agreed to have their mobile behaviors tracked
across a 31-‐day period using metering technology provided by Arbitron Mobile Oy, a
subsidiary of Arbitron Inc.
The combination of these two independent studies, the survey instrument and the
collection of metered data helped gathering information on approximately 3000 user
interactions with their smart phones. This captured the landscape of mobile phone
touch points what the researchers called the mobile moments being the deep
motivations spur by each moment. On further segmentation, these mobile moments
were mapped as moment markets and are presented in the figure 9 below.
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Figure 9: Seven Primary Reasons that People use their Smart Phones Source: (Harvard Business Review, 2013)
Some revelations gleamed from this study made the researchers realized that one
activity can be performed under different headings; such as, ordering a pizza falls under
shopping and me time both as the user was dreaming of eating a pizza in me time lead
to the ordering of pizza in the shop activity. It can be seen from the figure 8 above that
users spent 46% of their time in me time activities that could include, but are not limited
to watching videos, relaxing, entertainment, reading gossip, and just internet surfing for
pleasure etc.
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The next most frequent activity was socializing with their peers being nineteen percent
of the smart phone user’s time or 7 hours per user per month. The socializing apps could
include but are not limited to social media applications, instant messenger applications
What’s app, blackberry messenger, Facebook chatter etc...
The next most popular activity was accomplishing (see figure 9) and shopping with
nearly eleven to twelve percent of their time respectively spent performing both the
activities. As we have noticed that more and more people are shopping their mobile
devices, this number has been on a constant increase and in 2013 the mobile retail
officially surpassed online and PC retail (Internet retailer, 2013).
The authors assert “It was further noticed that marketers were still making incorrect
assumptions and hence leading to misleading conclusions about mobile use and
mobile phone users:”
Firstly, marketers make poor assumptions about applications usage: Mobile
applications can be used for more than one purposes. For example, social media
applications like Facebook can be used for me time and socializing both. Secondly, they
fail to connect to users during the me time. Ads targeted on the me time were seen to
do poorly if they are not related to the context. Thirdly, they do not invest enough in
mobile media: “Ten percent of consumers' media time, but only 1% of all advertising
money is spent on mobile” (Harvard Business Review, 2013). Hence marketers need to
invest more time and resources in mobile media; such as, video ads, mobile ads etc. so
that more mobile users can click and avail those opportunities.
I. The Future of Shopping and Omni-‐Channel Retail
Marketers are also targeting customers through omni-‐channel retailing. Omni-‐channel
retailing can be described a step further than multi-‐channel retailing. Multi-‐channel
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retailing targets customers via many channels like digital: mobile, online, social or
traditional ads via brick and mortar, TV, tele-‐marketing etc... In Omni-‐channel, a
seamless customer experience are delivered at all levels regardless of which channel the
customer buys through. “It is a seamless, [the] omni-‐channel approach provides a
single, unified experience for the customer across all channels” (Accenture , 2013).
As the new customers are more empowered via the instant information and knowledge
at their fingertips via smart phone a dramatic shift in the way traditional shopping is
occurring is underway. This make delivering the same or omni-‐channel experience that
much more important. It has been discovered that initially the companies had a great
deal of control over the consumer’s decision making process while making a purchase
decision; however, with the advancement of technology that has empowered
customers, marketers now have a diminished amount of control and access to the
customer’s decision making process. With analytics data companies can only analyze
and track how the customers are making a purchase decision but as said their
influencing it at any stage is greatly reduced.
The understated figure 10 describes The Non Stop Customer Experience Model vs. the
traditional one (Accenture Outlook, 2012). Their model expands on the consumer’s
decision process for purchasing by moving away from the archaic linear model (Discover
– Consider – Evaluate – Purchase) and instead uses new feedback loop model. The linear
model was introduced before mass information technology where consumers had
limited access to information. Traditionally, consumers purchase decisions were usually
more straightforward with less outsider influencers in the decision-‐making process.
However, with social media technology and other digital channels the customer’s
purchase process is non-‐linear and much less influenced by the marketer’s influences.
Consequently, in today’s world there is no long a mainline for influencing the consumer
via the marketer’s messaging, as the access to information via the consumers’ smart
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phone from more trusted sources provides more influential information for making their
purchase decisions.
Figure 10: The Non-‐Stop Customer Experience Model
Source: (Accenture Outlook, 2012)
The following can be said for the new non-‐Stop customer experience model
(Accenture, 2013):
• Customer’s journey is more dynamic
• Customer’s journey is more accessible
• Customer’s journey is continuous and “always on”
Ridby 2011 states the following: “E-‐commerce is now approaching $200 billion in
revenue in the United States and accounts for 9% of total retail sales, up from 5% five
years ago. The corresponding numbers are about 10% in the United Kingdom, 3% in
Asia-‐Pacific, and 2% in Latin America. Globally, digital retailing is headed toward 15% to
20% of total sales, though the proportion will vary significantly by sector. Moreover,
digital retailing is now highly profitable. Amazon’s five-‐year average return on
investment, for example, is 17%, whereas traditional discount and department stores
average 6.5%.”
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Omni-‐channel retailing presents the opportunity of an integrated sales experience that
is benefitting both the consumers and the retailers with the information-‐rich and a
highly price competitive shopping experience. Customers are now browsing products
online, with a reference point, they are better at spotting deals for product at brick and
mortar store, they are asking for reviews from friends on social media via their
smartphones, and are making a purchases via the iPad or tablet. This is an “a-‐typical”
modern shopper that wishes to review the same shopping cart with the third or now in
future the fourth screen, which could be a wearable technology like Google Glass, or
Apple’s iWatch.
The importance of a seamless brand experience across all channels does not only help
increase sales it but also increase brand equity and perception in the eyes of the
consumers. It is important to integrate all digital channels being offline physical
channels with that of the digital online channels. If a customer tries a product in a
store’s isle, he should be able to add that to a wish list, then make a click to purchase
action online later maybe when they are more compelled or have available funds. Even
after physically interacting with a product stores should provide online and offline
promotions to induce a purchase, or even allow cross-‐stores prices comparisons.
It is vital that various activities performed both offline and online are integrated at all
levels; this includes backend and frontend of the supply chain. At the back-‐end the
online and m-‐commerce stores must be integrated to the supply chain of the physical
brick and mortar so that the systems would know no matter what sales channel is being
used how much inventory of a particular products is available at a particular time. With
this technology, the advantages of both shopping online and offline can be merged.
The benefits of shopping online are many and include: rich product information, being
customer reviews and tips, editorial and advertorial content, user generated content,
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coupons and promotions, social media two way dialogue, option of a convenient and
one click checkout and most importantly, the convenience of anytime anywhere access.
And with a smart phone all of these benefits are available at their fingertips making it
easy for them to compare prices and products and immediately asking for opinions from
peers, share pictures on social media, and click through store’s product information.
One must not neglect the major benefits of shopping at brick and mortar (B&M) stores
such as: instant in store pickup, helpful sales personnel with their detailed knowledge
and experience, customization options, handpicked items, or selective assortment of
products according to location. Most importantly, B&M stores offer the ability to
physically test and try products which for many items is vital (think couches), walk in
returns and or replacement, instant gratification of purchase, and enabling impulse
shopping by enticing store windows el al (Bibliography: Future of Shopping 2HBR).
With omni channel retailing all the advantages of B&M can be merged and neither the
consumers nor the retailers has to accept trade off benefits of one or the other. The
only task would be for companies to hire the technological talent that could develop
and replicate offline shopping experiences online. However, some have noted a
technophobic culture that permeates many retailers, and young computer savvy
employees refuse to work at such places. On the other hand, the modern consumers are
very adaptive and appreciative of technology and new mediums that bring “coolness”
and convenience to their modern lifestyles so why should retail fight against something
the consumer wish for like the move toward an omni-‐channel experience?
Rigby states there are four reasons retailers are not as receptive to e-‐commerce, m-‐
commerce, or the whole omni-‐channel phenomenon (Rigby, 2011). Firstly, retailers are
wary of hypes and booms example is the dot com bubble of 2002. Retailers are careful
about new phenomenon that are wildly optimistic or overpriced. Since digital is fairly
new and still growing in adoption, many companies are over cautious in dedicating too
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much timely or financial resources especially after many were burnt by the dot com
bubble.
The metrics for measurement of digital marketing in online and mobile are still nascent
and not universal; hence, calculations for return on investment (ROI) can vary
extremely. There can be large differences in the way digital advertising agencies,
companies, and search engines, and digital publishers calculate ROI. A perfect marriage
is to use measurement metrics, which are best able, allocate budgets and award
incentives for maximum output. The process is still evolutionary and will take few more
years to get cemented and could be a Ph.D. dissertation in itself.
Amazingly, digital retailing threatens existing B&M economics, system and incentives.
Since traditional retailing has been in place for more than a century, measurement
metrics are fairly set and cemented. These metrics do not match the online world at all.
For example, usually commissions in traditional retailing are up to 20%-‐30% and when
this is applied to the online or mobile commission base, the system completely fails. The
ticket value of items purchased online especially through mobile is usually much low
due to their volume based business models and lower respective overhead. Hence,
commissions are usually much lower but purchase frequency and online traffic is much
higher. The e-‐commerce giant Amazon pays 4% to a maximum of 8.5% to all its affiliates
and partners (Amazon, n.d.). Since, traditional retailers are more set in their ways and
new generation customers like the millennials are moving towards mobile shopping,
traditional retailers will have to move towards Omni-‐channel retailing as soon as
possible.
One may be interested to know that traditional retailers tend to focus on financial
metrics, which are incompatible with online measures. Retailers’ stock prices are
generally by return on invested capital, sales per square foot, and growth rather than by
profit margins. “Amazon’s five-‐year operating margin is only 4%—far below the 6%
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average for discount and department stores; but with faster inventory turns and no
physical store assets, Amazon’s return on invested capital is more than double the
average for conventional retailers. As a result, Amazon’s market value, $100 billion, is
roughly equivalent to that of Target, Best Buy, Staples, Nordstrom, Sears, J.C. Penney,
Macy’s, and Kohl’s combined” (Rigby, 2011). Hence, the online and traditional retail
works completely on a different measurement system.
Finally, conventional retailers have not had great experiences with breakthrough
innovation. Traditional retail will face extreme pressures from online retailers if they do
not adopt omni-‐channel strategies. The view by retailers that customers would always
come if the store doors were open is simply not true. The over demanding customers
who need an integrated and modern shopping environment, also demand a better B&M
retail environment; such as, information about products, shorter checkout lines, more
convenient billing systems etc.
J. Mobile Shopping
More than 44% of the consumers are using their smart phone devices to make
purchases. Even when they are not purchasing, they are using their devices to
comparing prices. This has led to a phenomenon called “show-‐rooming” when a
customer goes to a B&M store but actually makes a purchase online (through mobile or
tablet) after seeing the product in the shelf. Show-‐room is finding a cheaper price on the
web, and amazingly about 36% of mobile shoppers go online while they are making
purchases in store (Margarita Constantinides, 2013). With this information, one can
assert that smart phones are becoming an important tool in the lives of the customers,
which is a notable shift in the purchasing behavior of the customers. Mobile users also
share information through social media about their purchases or look for items on social
media on websites such as “pinterest” and “instagram” to find promoted items offline,
in stores.
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This integration of offline and online retail has been a breakthrough in combining
marketing technologies. Companies like Walmart and Macy’s have mobile apps where
the users can turn on “store mode” and get offers from the Wi-‐Fi system as they pass by
different sections. They receive offers, discount coupons, loyalty points, and welcome
messages. However, this can be performed through either Bluetooth (low energy
Bluetooth or BLE) technologies used by many retailers where the mobile phone users
have their Bluetooth turned on or by Wi-‐Fi. Low energy Bluetooth technology is the
latest and more targeted technology because users is in a very specific range, say a
particular isle of the store receive a signal as compared to the Wi-‐Fi which is for the
entire store or floor (VeriFone, 2013). Low energy Bluetooth requires installing
“beacons” or small physical devices in various parts of the store and then as the
customer passes by they receive a specific targeted coupon, message, or information
about the particular section.
There are many kinds of beacons available in the market but as of 2014 there are few
limitations associated with this kind of technology. Firstly, mobile users may not have
their Bluetooth turned on as it consumers battery and it is less popular technology to
Wi-‐Fi. Secondly, the purchase of a large number beacons for each stores and malls, as a
whole can be an expensive proposition especially for a technology in the trial stages.
Finally, the beacons work on batteries and replacement of batteries or beacons
themselves after a limited period can be an additional expense and hassle.
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Figure 11: Advertisement Offering delivered via a RFID Beacons and Smartphones Source: (Swedberg, 2013)
One should note that in addition to customers being empowered by technology, the
storeowners, store managers, and sales associates are also empowered. Sales associates
now carry iPads like seen in the “Genius Bar” at the Apple’s stores, which are connected
to the point of sale systems allowing for on the spot purchases. Further, this allows
store managers or supervisors to monitor in real time the effectiveness of sales
associates. It is a complete 360-‐degree solution can be provided at retail outlets.
There are more techniques that can help retailers integrate mobile and M&B, increasing
their share of customer’s wallet and allowing to integrating more into the customer’s
purchasing lifecycle. For example, Walmart’s apps have set reminders on mobile for
refilling pharmacy prescriptions and customers can walk in and scan the QR codes for
pick-‐ups for medicines (Margarita Constantinides, 2013). Further, brands like Kate Spade
have taken technology in retail to a new level buy replacement of paper prices and
product information labels with iPads. The replacement of paper signs that display price
information for products with iPads with much more information about the clothes or
BLE Beacon
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bags etc. This creates engagement and sharing and the customer feels “sucked in” which
is much more likely to display interest and make a purchase than just a customer, which
is window-‐shopping and passing by. FastCoLabs research (2013) states: “They’re using
the iPad to take something very simple -‐ the paper sign which displays the price for, say,
a line of bags-‐-‐and turn it into a bottomless pool of product information, video and,
social integration capable of sucking in shoppers. Not just that, but these iPads will be
able to perform any operation a computer might do in a boutique: point of sale, product
walk-‐throughs, loyalty tracking, employee training, shopping analytics-‐even inventory
and supply chain management.”
Mobile Shopping Lifecycle
Mobile shopping has disrupted the traditional purchasing funnel that was linear and
straightforward where the customers narrowed down a large choice of products to a
single one. However, in the modern mobile shopping lifecycle, as the name suggests the
process is very circular and loops into the same process again (figure 10). However, at
each of the stages in the mobile shopping life cycle the customers have an equal chance
of closing their purchase as any other (Figure 12) , unlike the traditional funnel approach
(Figure 13). This is a landmark shift-‐allowing customer to purchase at will instead of
standing in the line at the front cash register!
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Figure 12: Purchasing Options Mobile Shopping Lifecycle
Source: (Martin, 2013)
Figure 13: Traditional Purchase Funnel Source: (McKinsey, 2009)
Very interesting research by Martin (2013) explains the six stages of the mobile life
cycle. Firstly, the setup stage: This is the pre-‐buy stage that acts as a pull strategy for
most marketers. The information should be set up according to the mind-‐set, location,
and time frame of the potential customers. Users of smartphones and tablets consider
this stage before physically going into or contacting the store with the “call” features.
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Secondly, the move in stage: This is when the consumers are in-‐transit, physically going
either towards the store or running other errands. Geo-‐location and geo-‐conquesting
shall help marketers targeting customers when they are in this stage to motivate and
lure them into the brick and mortar (B&M) stores. Usually offers, discounts, promotions,
events etc. help marketers increase their foot traffic by pushing information when the
customers pass with in a preset proximity to each stores.
Thirdly, The push stage: This when the customer is on the premises physically at the
location. Initially, due to the phenomenon of show-‐rooming mobile phones were
considered as a threat by the B&M stores but recently, the flip side is that are being
converted as assets too. I was asked not to use my phones to photograph products that I
was comparing in stores. Now mobile applications, websites, and scanning opportunities
turn mobile and tablets into instant coupon generation engines can help the customers
gather information on the products in the windows or on the shelf and order online
especially when their size is not available on the racks.
Fourthly, The play stage: This is the selection process while the customer is in the store.
Real-‐time pricing displayed through the smart phone and computed via algorithms along
with real-‐time tracking of customers within the store can increase purchase rates. This
also happens through proximity marketing, which happens through Wi-‐Fi, Internet
(GPS), RFID chips and other mediums.
Fifthly, The wrap stage: This is the checkout and point of purchase stage where the
marketers can upsell customers, sell ancillary or supporting items. This can be done
outside of the cash register, and is much more effective at mobile checkpoints,
counters, and kiosks where the other products can be viewed and discussed.
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Sixthly, The take away stage: This is the post purchase stage where the customers can
share reviews, feedback, or even share their experience and purchases on social media
platforms to create online buzz and word of mouth.
K. Mobile Applications, Apps
More people are using mobile applications to access information and not just ads.
Mobile applications or as in the modern vernacular apps create more loyalty for
customers as once downloaded making it is easier for marketers to target customers
with ad messaging. “Mobile ad budgets in the U.S. are expected to increase from $2.3
billion in 2012 to almost $11 billion in 2016 and on an average, 82% of their mobile
minutes with apps and just 18% with web browsers” (Gupta, 2013). An average
customer spends 2 hours and 40 minutes approximately every day on mobile
applications (Khalaf, 2014).
Figure 14: Mobile Applications continue to Dominate the Web Source: (Khalaf, 2014)
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From the Figure 14 above shows more customers are accessing information through the
mobile applications vs. mobile browsers. The time spent on mobile applications has
increased to 86% from 80% during 2013 and the use of mobile web has decreased by
6%.
From a marketer point-‐of-‐view, smartphone applications fall under 5 main categories
(Gupta, 2013): First, gaming and entertainment: account for a maximum of 42% of
time spent on smart phones. Second, social networks: lead by the Facebook app, leads
to up to 31% of time consumption. Third, Utilities: productivity applications like
calculator, calendar etc. Fourth, discovery: Finding information on mobile; Yelp,
TripAdvisor, Google maps, TripAdviosr, Foursquare, are some noticeable apps. Fifth,
brand apps: are brands and companies such as AT&T App, Nokia App etc. Brands have
their own applications to provide all brand related information and e-‐commerce
capabilities. Amazon and Macy’s mobile apps are some most popular retail applications
as of 2014.
Gupta (2013) did a great job in describing the usage of applications as follows. Firstly,
providing convenience: Even though responsive design for websites have worked for
most companies, it is much more convenient for a user to access information through a
mobile application as they have simplified design and features and quicker load times.
Mobile check-‐in’s, paying bills, checking weather are just some of the activities that
mobile users do the most through their smart phone mobile applications.
Secondly, offering a unique value: There are certain capabilities that only a mobile
application can exploit vs. an online desktop website or even a mobile website. Retailers
are using QR codes and scanning capabilities to increase sales while mobile users are on
the move. This list of capabilities are growing as website cannot access the hardware of
the phones where apps can utilize anything from camera, light sensors, gyroscopes,
GPS, and other hardware features to make a more immersive experience.
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Thirdly, adding social value: Facebook is the most used social app in US (ComScore,
2013). More and more people are connecting to peers through apps such as What’s Up
App, which was recently bought by Facebook for an astounding $19 Billion in 2014. It is
estimated that more than 450 million users used What’s Up app to connect with others
(BusinessInsider, 2014).
Fourthly, incentivizing the users: Marketers can use mobile applications for short term
or long-‐term promotional campaigns. Companies have used mobile apps for fun games
like “scan and win” kind of promotions or a widely happening phenomenon called
“show-‐rooming” where mobile users look for discounts and coupons online while being
in a physical brick and mortar store to compare prices and avail a better offer. These are
showing marketers a completely new way to motivate users with the fun game like
aspects that users adore.
Fifthly, entertaining the users: As we noticed above smart phone users largest time
spent in their apps is on gaming applications and watching videos, surfing for pleasure
etc. during their free “me time” is self-‐explanatory that mobile applications are used for
personal entertainment.
Figure 15: Mobile Apps Features and Functionality Source: (L2Think Tank , 2014)
Figure 15 above shows the results of a studied 304 mobile applications (L2Think Tank,
2014) enlisting common features that brands are providing to the customers in terms of
functionality and features. A successful mobile strategy needs to offer more
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functionalities and features than to the customer in order to stay competitive and entice
customer to use that app in the future (avoiding download and forget).
From a developer’s standpoint, the following are the kinds of mobile applications
(Salesforce, n.d): First, Native Apps: Specific to be a mobile platform (iOS or Android);
they look and perform the best. Second, HTML5 Apps: Made by using standard web
technologies such as HTML5, JavaScript, CSS etc. Limitations include specifically session
management, secure offline storage, and access to native device functionality (camera,
calendar, geo location, etc.). Third, Hybrid Apps: Combination of Native and HTML5
Apps including their best and worst elements and embedding HTML5 elements in a thin
native container. Figure 16 below best describes the benefits and functionalities of
different mobile applications from a developer point-‐of-‐view.
Figure 16: Kind of Mobile Apps from Developer Standpoint Source: (Salesforce, n.d.)
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L. Measurement: Application Analytics
Google also recently launched mobile application analytics to study the effectiveness of
mobile apps. Not only just the number of times an application was downloaded can be
studied, but also content accessed from the mobile application, time spent in the app,
features most can be analyzed through advanced analytics. Google’s free service allows
marketers to study app engagement, app impact, and count the number of new and
existing users. Table 3 below describes Google’s App Analytics features.
Google Play Integration Displays what media the visitor played.
Traffic Sources The sources, be it search engines or other
websites directing traffic to one’s site.
Crash and Exception Reporting Instances of poor site browsing or failures to
connect.
Custom Reports The ability to create detailed analytics report
providing only the metrics one wants to see.
Event Tracking Tracking the flow of clicks toward a goal like the
purchase of a product or service.
Flow Visualization Showing visitors flow through the app structure
to the desired goal.
Real-‐Time Reporting Updated analytics often to the last 15 minutes.
Ecommerce Reporting Detailed report showing purchase rates of
products or services.
Goal An event preset by the marketer, like a click on:
add to cart, contact us, or purchase now.
Goals Flow How visitors navigate a site and ultimately reach
their desired goal.
Table 3: List of Google Analytics App’s Feature Other tools include Localytics, Geckoboard, Mixpanel, Mobile App Tracking, Clicky etc.
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M. Innovative Mobile Advertising and Media
Advertising has taken a completely new medium and form of expression through mobile
phones. It is just not about search, mobile websites or apps but other innovative
mediums to create customer engagement. Brands are using mobile phones as tools to
create curiosity by scanning QR codes and “revealing” discounts, coupons, send free m-‐
cards (mobile cards), or simply share their purchase experiences with peers. Since there
is so much clutter in the advertising world there is an over exposure of ads to customers
inside and out of home, the ads can be more effective if targeted with more
understanding of the customers and their time.
Ads are now being targeted thorough an understanding of the consumers’ activities and
behaviors being the “when” and “how” they consume this advertising. “To engage
consumers, advertisers must focus on where and when they will be receptive [to
advertisements]. This requires strategically embedding ads in four domains of human
experience: public sphere, social sphere, tribal sphere and psychological sphere”
(Rayport, 2013). Interrupting and repetition kills the advertisements effectiveness and
marketers must focus on customer receptiveness rather than bombarding them with
content that is redundant or worst annoying. To create impactful advertising campaigns,
marketers must fundamentally rethink their advertising strategy and execution then
shift their focus to expand their definition of targeted advertising. Hence, it is imperative
to study the way consumers consume advertising content.
Rayport (2013) speaks about embedding advertisements into four spheres of human
experience and interactive ads into everyday life of consumers. The first sphere is a
public sphere where we move from one place or activity to another, both online and
off; put ads during downtime when customers are moving from one place to another or
are in transit mode. To target advertising content in this sphere, the marketers must
take a note of the following. Firstly, the ads must be relevant. If the customer is near a
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Macy’s store on 34th street in New York City, the offers and ads must be “geo-‐targeted”
and not showing offers in London or even downtown Macy’s store. Secondly, the ads
must be engaging, refreshing and interactive. Simply putting a banner ad under the
mobile application is a good idea but not a great one. Interactive mobile ads where the
customer is “engagement” or performs and activity by itself is a better idea to target
and closer to the conversion funnel. For example, scanning a QR code to reveal the
discount on the product or Uber Taxi application started this campaign if the user of
Uber app promotes their app link on his / her social media platform; the user gets a
discount coupon for the next ride. Thirdly, the ads help customers reach their
objectives: Online purchasing, especially a mobile purchase, are based on an impulse.
The attention span of the customers are very low and there is a lot of advertising clutter
available out there.
The second sphere is the social sphere, and it is where customers interact and relate to
each other enabling new and enrich the existing relationships. Firstly, the ads are
relevant in the social context. For example Living Social deals, Amazon-‐local discounts
and offers while surfing on Facebook. Secondly, the ads address a social need or solve a
social problem. For example, Ms. Charisma Aggarwal needs to find a restaurant for six
people at 7pm Saturday night in New York City. Normally this would be a very difficult
task that would require calling up to 10 different restaurants; however, with the new
world of apps one like OpenTable makes this a very easy task as the app locates several
reservations within a 5 miles vicinity and displays their menus.
Thirdly, they must facilitate social interactions. The reviews and comments shown on
apps are an excellent example for this. Customers can interact with others customers
through product reviews and discuss complex issues over forums or instant chats.
Google Glass started a program called “Google Explorer” in which an enthusiast can
interact with other users or explorers about the Google Glass and help them solve
issues, explain usage and even come up new ideas for product improvement.
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The third sphere is the tribal sphere; it is where when customers express their identity
via check-‐ins or by displaying logos of brands to connect with the symbolism and
perception of the brand. Tribe in this context means belonging or feeling like one
belongs to a part of a group. The difference between social and tribal sphere is that
while the social sphere emphasizes the broad interactive conversations and interaction,
the tribal sphere is a closed group with specific like-‐minded people. Within the social
sphere, customers chose their close peers and interact as a tribe to create self-‐
identification and express themselves and their tribe’s differences.
Firstly, the tribe acts to relates and describes the characteristics of their tribe.
Advertising that advantages the tribal affiliation must suit the tribe’s individual
character and values in-‐order to connect on the emotional level. Secondly, tribe
advertising addresses the desires for identity, self-‐expression, and membership. It also
provides a social signal or status marker there by empowering the individual as being a
part of that tribe. For example when people go to parties, it is called a social sphere but
when people go to exclusive clubs, it is a tribal sphere. Luxury brand marketers follow
the tribal sphere religiously as it is a cult that people want to belong to for social and
personally uplifting. When women buy Louis Vuitton, Hermes, or Armani products they
relate to each other as being a part of the elitist tribe.
Rayport (2013) example of the tribe sphere are given by Yelp!, a famous website to
search for products and services within a particular location. In Yelp! frequent
restaurant goers and enthusiasts leave comments, check-‐ins, and reviews of
restaurants. “Yelp is populated exclusively by user-‐generated reviews of offline venues
ranging from restaurants to cultural institutions. It hosts nearly 33 million local reviews
and claims roughly 84 million unique visitors a month” (Rayport, 2013). Hence, their
core business model of this mobile application is targeting customers in the tribal
sphere.
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The fourth sphere of human interaction is the psychological sphere; this is where
customers discusses specific thoughts and feelings. Here the advertisements are
designed to target customers using phrases or call to action interferes with the
customer’s psychological process that are usually triggering a positive reaction or
feelings. The psychological sphere operates in one of the four following ways. Firstly, the
advertisements use language to develop a cognitive beachhead for the brand. The use
of taglines and phrases that the brands use underneath their logos helps the customers
identify and relate with their products and services. For example, Nike’s “just do it” or
Apple’s “think different” or 3M’s “Innovation” or eBay’s “world’s online marketplace”
helps the customer to identify with company and relate to them. Secondly, they tend to
create habits and repeated consumption. Ads that target emotion strive to have the
customers come back for repeat purchases and use. Loyalty programs, points, club
memberships are all the ways marketers increase the share of wallet of the customers.
Increased share of wallet in turn helps the brands and marketers increase the lifetime
value of their customers.
Thirdly, they target cognition or thinking abilities: Apple’s “think different” or IBM’s
“think” are all targeted based on cognitive abilities. It is also a smarter way to engage
the customer by catching their attention and asking them to think. It helps the ads get
away from the clutter and catching the attention span for a longer period. Fourthly, the
ads forge an emotional connection with the customers. It is a well-‐known that logic
leads to conclusion and an emotion leads to an action. Hence, most advertising be it
traditional or on mobile tend to forge an emotional connection or bond with the users.
Advertising effectiveness is higher when marketers concentrate less on advertising but
stress more on creating value for customers. Creation of value for customers like
providing offers on Facebook or discount coupons etc. will help customers click on the
advertisement content in their me time or social sphere time or when they are more
relaxed and willing to share experiences.
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The five steps framework to apply these spheres (Rayport, 2013). Firstly, it is defining
objectives first from a consumer’s, not an advertiser’s point-‐of-‐view. A clear primary
objective of the mobile advertising campaign must be reinforced, as they are building
awareness, increasing traffic, increasing app downloads, more mobile purchases etc.
The objectives must involve the customer’s point-‐of-‐view and not just a media fad
based perspective. Secondly, targeting the campaign to create value for consumers. The
customers must be able to derive or create value out of the advertising, be it
knowledge, purchase of items, or entertainment value. Ads must enhance the life of the
consumer in general to be able to be an effective mobile campaign.
Thirdly, testing, listening, and adjusting ads to improve the customer experience.
Performing analytics and monitoring the performance of the mobile advertising
campaign is an absolute essential. Google analytics and other social media performance
tools are available allowing the campaign to be tracked and modified if a certain
keywords or keyword strategies are not performing well. An automated online
behavioral tracking system helps monitoring the social chatter and helps in managing
mobile advertisement campaigns. Fourthly, evaluating of an expansion strategy via
monitoring the mobile analytics and the online behavioral pattern.
Famous American fashion designer Michael Kors devised a successful mobile marketing
strategy by launching Facebook ads on mother’s day few years ago (MobileMarketer,
2012). Later, next year they integrated the success with Instagram and other social
media platforms after witnessing the success of their first mobile campaign (Luxury
Daily, 2013).
Lastly, constantly refreshing the message and content. Customers get bored of old
content, thus, refreshing new content or creating user generated content is necessary.
Old ads go stale and are meet with boredom. In the case of mobile applications, it is
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important to provide updates, new features, or completely changing the look and feel of
the mobile application. Companies must make sure redesigned apps targeting new users
and enhancing the experience of existing users.
Yet another point-‐of-‐view is to classify mobile advertisements into low involvement or
high involvement purchase decisions then hedonic or utilitarian products (Andrew
Stephen, 2013). Products that fall into the category of High involvement purchase
decision are higher in ticket value (also known as the cost or amount of one transaction;
higher the transaction amount, higher the ticket value). Low involvement purchase
decision usually take less time to decide in a purchase decision and can be lower in
ticket value as well.
On the other axis, utilitarian products are compared with that of necessities or
something with utility or practical use and hedonic can be related with something of
entertainment value, pleasure, luxury, or products that have emotional satisfaction
values over practical.
Figure 17: Mobile Ads Classifications Source: (Andrew Stephen, 2013)
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Market research (Andrew T. Stephen, 2014) that surveyed about 40,000 U.S. consumers
about products featured in 54 mobile display ads in three years -‐ from 2007 to 2010.
These products covered 13 industries, including consumer goods, financial services and
automobiles, among others suggests the kind of products that should be advertised or
not on mobile (Andrew Stephen, 2013). He found that advertisements for utilitarian and
high involvement purchases boosted the user’s attitudes and purchase intentions
(Figure 13). He also found that mobile banner ads for hedonic, low involvement
products had no impact at all. Hence, banner ads in mobile advertising in particular
should be reserved for high involvement and utilitarian products.
N. Strategy of Mobile Advertising
Mobile has transform customers and their expectations from companies. This created a
significant shift in the way customers make their purchases decisions. Research (Josh
Bernoff, 2014) research study of 4,000 Americans showed that how mobile has
transformed customer expectations and how companies must respond to it accordingly.
Smartphones and tablets have induced the sense of instant gratification among
customers as they are now used to having everything instantly at their fingertips.
Customers are now making that “mobile shift” and B&M stores had better be ready to
serve these customers on an offline. Josh Bernoff (2014) study “Four strategies to
survive the mobile mind shift” describes the shift as the “the expectation that any
desired information or service is available, on any appropriate device, in context, at a
person’s moment of need.” His index termed MMSI (Mobile Mind Shift Index from 0-‐
100) has evolved and nearly 22% of customers in America have made a shift and are
constantly making purchase decisions by mobile. Interestingly, this group is also more
affluent than the average American population.
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MMSI also indicates that how urgently the companies are using their customers; an
average of 38% has been standardized. Companies scoring higher than that are
successful and the rest below are lagging behind. Table 4 and 5 below shows how
connected a consumer is on a continuum broken into six categories being: disconnected
(least), dabblers, roamers, adapters, immerses, and perpetual (most).
Table 4: Division of Population into Mobile Adoption Segments
Source: (Josh Bernoff, 2014)
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Table 5: Division of Population into Mobile Adoption Segments
Source: (Josh Bernoff, 2014)
Figure 18: Frequency vs Quality of Mobile Strategy Source: (Parrish, 2013)
Interesting research by Parrish (2013) compares the impact of mobile advertising by
quality and frequency of the experiences. The first quadrant is high quality and low
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frequency experiences: Mayo Clinic and Virgin Atlantic Airways fit here. The author
recommends that these companies create more reasons to interact with the customers
by informing them about products, services, offers etc. The second quadrant is high
quality and high frequency experiences. Companies such as Apple and Starbucks deliver
frequent experiences that are highly positive, but he recommends that they must
expand their customer relationships by pursuing more valuable mobile experiences. The
third quadrant is the worst being low in quality and low in customer experiences. These
brands have to redefine their services and partnerships completely. Brands such as
health insurers and automotive repair shops frequently fit into this quadrant. In the
fourth quadrant are brands that provide low quality and high frequency experiences.
For these brands, Parrish (2013) recommends a better and utility-‐filled experience.
Companies such as Bank of America and Comcast are in a dangerous position as they
disappoint and annoy users’ on a frequent basis (Josh Bernoff, 2014).
O. Mobile Tactics
There are various mobile tactics other than paid mobile advertising that advertisers can
take advantage of consisting of alerts, user generated content, and tracking (L2Think
Tank, 2014).
Firstly, Alerts: Usually SMS push alerts or mobile applications text messages draw
customers into the physical stores. It has been noted that SMS push alerts have a six to
eight times response rate as compared to emails while push notifications (yodel mobile)
states up to a 540 percent increase in click open the mobile applications on a daily basis
(L2Think Tank , 2014).
Secondly, User generated content: Here the user reviews and comments on a product
or services experiences. This is called “earned media” as compared to “paid media”
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which customers rely and trust more than pure online ads. Early research shows
customers trust earned media twice as much as paid media. Customers can also spot
user reviews that are too boastful of a product as being fake or company paid reviews.
Companies like Amazon have taken great efforts to eliminate fake reviews.
Thirdly, Scanners: QR codes became popular in 2000 where customers would scan a
printed code to get more information about the product or service, or even subscribe to
more information. This creates a pull strategy and is more customer engagement.
Scanning could be done on the move or while being in the physical store. Nearly 10% of
the customers (L2Think Tank, 2014) have reported to be scanning regularly while being
in the store.
Lastly, Tracking: This is a completely new paradigm where research needs to be
conducted. However, given the large privacy concerns it most likely will see many
barrier to implementation especially where the information is publically available.
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CHAPTER 2
MOBILE MARKETING FOR HOTELS
This chapter focuses on the mobile marketing trends and strategies for the hotel
industry. It starts with the statistics that more and more travelers in the US and around
the globe are using mobile devices to make purchase decisions. It then explains that
why users are turning to mobile and desktop bookings are on a constant decline. The
third section describes the mobile users’ path to purchase and what actually travelers
are looking for when they are making these purchase decisions about hotels. Then the
next section highlights the decline in online travel agencies and the rise of hotel
websites for brand loyalty and repeats purchases. Lastly, there is a situation analysis of
the current apps of the hotels and the Digital IQ Index 2013.
A. Hotel Mobile Marketing and Distribution Channels
Hotels have moved beyond traditional online and mobile advertising in order to capture
the global travelers. Initially, hotels would target web searches related to bookings to
acquire new customers; however, now hotels are moving more towards retaining
current travelers especially those who are global and national frequent flyers on large
corporate accounts.
“In 2010, 1.5% to 2.5% of visitors to hotel websites came from mobile devices, however,
in 2011 travel suppliers and OTAs reported a dramatic increase in mobile bookings and
Google witnessed a 3,000% increase in hotel mobile searches compared to 2009”
(Hotelmag, 2011). A recent case study by Hotelmag (2011) has found that returns on ad
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spent (ROAS) through online medium for hotels is 2770% (28:1) and total return on
investment (ROI) of 2,237% (23:1) that includes website design, SEO, SEM, email
marketing, social media marketing etc.
Online market research company e-‐Marketer reported that US mobile travel sales will
multiply more than three times between 2013 and 2017 estimating nearly $50 billion in
2017. It is also reports mobile sales will account for almost 30% of digital travel sales
(DN, 2013). Digital IQ Index for Hotels in 2103 (L2 Think Tank, 2013) states that “92% of
the bookings have been done by customers online in the last 20 years.” This study also
revealed that 66% of travelers indicate they will spend more time online researching
travel purchases in 2012, which is an increase of 7% over the previous year. The
importance of other traveler’s reviews and user-‐generated content is highlighted in this
study, they found that over 63% of customers (being 3 out of 5) referred to travelers
reviews on various websites before making a final purchase decision. This is logical for
an industry filled with many travel choices; the travelers tend to trust other travelers
more than the marketing messages of the hotel. Video also play an important role in
influencing customer’s hotel choices. According to this study, almost three quarters of
the affluent travelers commented that they would prefer seeing an actual video before
or while making a hotel purchase decision.
Hotels are a hyper-‐competitive industry and with so much marketing clutter
bombarding traveler this makes communicating a unique value proposition of a
particular hotel very difficult. The screening of hotel search results on the smaller screen
of smart phones makes it even more difficult to display the unique value of a hotel. The
statistics below show that the number of travelers booking hotels through smartphones
and tablets has been increasing year after year and is expected to increase.
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Figure 19: Percentage Increase in Mobile & Tablet; Decrease in Desktop in Q3 2013
Source: (HeBS Digital, Dec 2013)
Figure 20: Graph Showing Usage by Time of Computer, Tablet, and Smart Phone
Source: (Google Insights, 2012)
Figure 21: Reasons for Booking on a Smartphone
Source: (Google Think , 2014)
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Figure 21 shows that travelers shifting from their home computers to more leisurely
devices like smart phones and tablets later in the day. Google Insight (2012) describes s
convenience is the biggest reason why that affluent traveler in the US are using
smartphone devices to make travel purchase decisions online.
B. Smart Phones and Tablets use in Travel
The author feels strongly that travelers especially those traveling for leisure would
prefer to leave their laptops at home in favor of a light easy to store and secure table or
smart phone. DN (2013) cites that travelers are accessing mobile devices for the
following reasons.
Mobile Web (Searches & Mobile Website): Mobile optimized websites are an absolute
imperative for any hotel or hotel chain today. Initially, a responsive design website was
manageable, but now a complete and separate mobile optimized website is required.
The mobile web offers extremely limited amount of space thus, hotel marketers must
select only priority content and simple navigation for their pages.
Mobile Apps: A mobile app is an extension of the mobile web. While users usually close
the browsers, a mobile app for a hotel would empowers the marketers with longer
promotions and mindshare as travelers could use the app before, during, and after their
stay. Mobile apps can provide additional functionality as will be seen in chapter 4. A
well-‐designed mobile application for smartphones and tablets is an important factor in
differentiation one’s hotel and battle to serve the demanding travelers of the near
future.
M-‐Commerce: Mobile commerce has greatly increased the number of hotel booking. A
report by HeBS Digital (Dec 2013) by digital agency for hospitality displayed an increase
in booking of 86% through mobile and 57% through tablets in hotel bookings in Q3 2013
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as compared to Q2 2012. This means, revenues from mobile devices nearly doubled
over the previous year and whereas revenue from desktop devices booking has declined
by 4.34% (TNooz, 2013).
Location Based Services: Geo-‐location based marketing (which uses the GPS location
services in a travelers smart phone) is becoming the hot trend for hotels and it is helping
them target customized content to travelers within a particular distance. From mobile
coupons, discount offers, information about hotel amenities, and special events, geo-‐
location based marketing offers tremendous potential to marketers.
Augmented Reality: Is a new trend where using augmented reality glasses a traveler
cane experience a destination with an augmented experience. Historical sites, tours
destinations, and other venues can benefit from the information provided to travelers
overlaid over locations through their augmented 3D classes.
QR Codes: Scan-‐able QR codes have been around since 2000; however, they have
become much more useful in saving information, like web address, product specs, or
looking up prices. Additionally, promotions and more information such as videos,
websites and offers can be scanned via QR codes.
Social Media: It is here to stay! Facebook dominates the social media channel for hotels
and their value to advertising and promotion is highest with Facebook users of which
are highly influenced by their peers, celebrities, TV and media, and their heroes.
Interestingly, Travel daily (2002) states, “Smartphones are used more to find and
contact businesses, while tablets are used more for research, price comparisons, and
reviews.” A mobile-‐path-‐to-‐purchase study conducted by Nielsen Telmetrics (2012)
revealed that mobile traveler profiles that has helped marketers in targeting more
specific advertising and advertorial content. Further, they tells the behavioral insights of
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the mobile users and revealed “88 percent of smartphone users accessed travel-‐related
information and spent an average of 93 minutes per month on travel apps and
websites” (Telmetrics, 2012).
Figure 22: Part 1: Infographic on Travel Usage Trends for Mobile devices in USA
Source: (Nielsen Telmetrics, 2012)
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Figure 22: Part 2: Infographic on Travel Usage Trends for Mobile devices in USA Source: (Nielsen Telmetrics, 2012)
This author loves infographics they are eye catching, attractive, and an interesting ways
to display information. Figure 22 is an info-‐graphic showing the results of a study
(Nielsen Telmetrics, 2012) here mobile travelers are more focused on researched and
searched a lot a significant amount on prices of hotels, airlines fairs, and restaurants.
Smartphones were mostly used by travelers to look for location based information and
tablets for more researching hotels and restaurants. It was also seen that over 25% of
the smartphone and tablet users narrowed down their choice of hotel and saved it on
their smartphones for future use. An interesting result of the study was that users
clicked on geo-‐targeted information more frequently, that is they clicked on mobile ads
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more frequently when they were in the approximately that hotel or restaurant. It was
also seen that the majority of mobile travel users notice mobile ads with nearly one-‐
third users clicking on the ads for more information, which is a high percentage as
compared to the desktop advertising world. Almost two thirds noticed mobile ads via
smartphone and 63 percent noticed ads via tablets. This study reflected users in the
United States.
In the UK, it was noticed that 30% of the users used mobile exclusively for travel
research; whereas, this number is much lower in United States. In the United States 88%
of the smartphone, users were using mobile for accessing travel information. However,
the conversion rates were similar where 53% of tablet users ultimately made a purchase
decision in the UK as compared to 48% in the United States. The mobile conversion
rates were 41% and 43% respectively (Nielsen Telmetrics, 2013).
Delivering a unique and enjoyable experience with high levels of customer service is the
core concept of the hotel and hospitality industry; however, smartphones and tablets
are disrupting the way the experience and customer service are being delivered. In
today’s world, travel starts when a traveler starts looking for hotel information, a
destination information, information related to tourism, attractions, etc. With mobile,
travelers want to be empowered by all the conveniences of computer but they want it
on their tablets or smartphones. This shift has created a massive opportunity to capture
travelers who as Josh Bernoff described in Chapter 1 section N are mobile adopter and
would instantly related to 22% of travelers who are adapters, immersers, and perpetuals
as of 2014. This author postulates that business travelers due to their non-‐constant
access to computers are even higher on the mobile adoption scale and should represent
50% to 70% of these adapters, immersers, and perpetuals. Consequently, the
opportunity to target guests and travelers on their mobile devices is extremely strong.
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Travelers’ trip purchases can be viewed via a three stages process being: the pre-‐stay,
the stay, and after stay stages. A marketer must be in control of the travelers and their
personalized preferences during each of these stages. This requires tracking guest’s
preferences, behaviors, and actions during each stage and building detailed profiles.
Profiles can be of individual guests, company, or group of travelers allowing the hotel to
attract travelers. Hotels can the selling during a travelers stay, and continues a
relationship after a travelers stay has been completed creating an unparalleled
customer experience; this distinguishes the hotel from the rest.
Figure 23 infographic is a pictorial representation of a survey (Hotels.com, 2013) created
by Hotels.com, a leading OTA (online travel agency). Figure 23 shows how travelers are
using their mobile apps to book hotel rooms. Normally, guests use either an online
travel agency like Priceline or a hotel’s websites for bookings. Hotels.com’ survey shows
the growing usage of smartphones and tablets for bookings, this thesis takes the
perspective one-‐step further. Mobile marketing and applications by hotels and hotel
chains should be promoted as booking made through them avoid OTA commissions and
other vender’s fees allowing hotels to interact repeatedly and directly with travelers.
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Figure 23: Infographic showing what customers want from Hotels Source: (Hotels.com, 2013)
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Figure 24: Infographic on Today’s Mobile Booker Source: (Hotels.com, 2013)
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Finally, figure 24 shows some interesting statistics about travelers and their hotel stays.
Most importantly, travelers prefer hotels with free Wi-‐Fi; however, many large hotel
chains make million off daily Wi-‐Fi charges, so it is a strained relationship. Item two in
figure 20 shows that wired rooms that provide convinces like controlling automatic
drapes, lighting, and sounds from a single remote are the favorite of 20% surveyed,
where 15% said their favorite was loner iPad to use in the room.
Figure 24 shows that 70% of bookings on mobile are made for the same day, and that
those bookings are for two nights or less. This leads to the hypothesis that mobile
bookings are great for impulse or last minute decisions to book a hotel, especially by
those without computer access. Figure 24 also shows that iPad user book three night in
advance, which is twice as many as those smart phone users who book the same days in
advance. One can postulate that the bigger screen of the Apple’s iPad and other tablets
helps travelers spend more time in decision making resulting in larger purchase
decisions especially those associated with a multi-‐day booking. Finally, it shows the
popular locations booked via mobile devices, which are mainly tourist destinations
visited by guests for short stay; however, this should shift as mobile booking become
more adopted.
C. Undercutting the Online Travel Agencies
It has been reported that it cost a hotel $2-‐6 per transaction for a booking made on their
own website, vs. the $40-‐$120 when a booking is made via online travel agents such as
Travelocity, Orbitz, Expedia, Priceline etc (L2 Think Tank, 2012). It was estimated that in
just one year hotels lost $2.2 Billion to online travel agents (L2 Think Tank, 2012). These
costs usually include payment gateway costs, advertising costs, publicity and advertorial
costs and commissions.
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Figure 25: Affluent Travels in USA using more Hotel Sites vs. OTAs Source: (Google Think, 2013)
Figure 25 shows that more and more affluent travelers are now directly searching
through hotel websites, which has increased as compared to online travel agents that
have decreased the same percentage.
Many hotel owners and general managers feel a certain amount of resistances to the
large online travel agencies (OTA). Porter’s five forces show the OTA have a significant
amount of pricing power especially in comparison to the smaller independent chain
hotels. Online travel agencies have the power because they control the visibility of a
hotel to thousands of prospective travelers on a daily bases. Because of this OTA use
their power to negotiate lower room rates squeezing hotel profits and offering lower
rates to guests.
To offer a contrary view OTA did create a massive market of booking, making comparing
hotels and selecting those with the amenities, location, and services that a particular
traveler desires more visibly and easily. The downside of OTAs are less obvious to hotel
owner and general managers than to the travelers. However, hotel owner and general
managers are constantly looking for ways to gain advantages when being compared
against other hotels, as well as, ways to increase traveler loyalty. One particular avenue
available to achieve both these objectives is to use mobile devices to enrich, empower,
engage, increase convenience, and create an amenity that is unique to their hotel. Even
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though OTA are using mobile websites and mobile apps to help travelers book nights,
they are not integrated into the hotels services and amenities this is where the hotels
can create additional value over the OTA and generate significant loyalty with their
current and future guests.
D. The Future of Mobile Hotel Website and Apps
In the Infographics figure 23 and figure 24 show the kind of services travelers demand.
Knowing the traveler hotels through hotel websites and mobile apps will allow the hotel
to customize offerings and create a close customer relationship. The brand loyalty
return bookings and increase chances for referrals are a valuable prize.
It has been found that there is deeper interest displayed by travelers in improved digital
experiences at hotels, but also that a great digital experience may actually foster loyalty
among travelers resulting in direct increase in hotel profitability (Magnani Caruso
Dutton, 2014).
Furthermore, it was found that rooms that were booked directly from the hotel
websites fetched higher margins and prices, almost 3-‐5 times a profitable as compared
to rooms booked via travel agents and other online travel agents (L2 Think Tank, 2013).
The Magnani Caruso Dutton (2014) studied how customers are using digital experiences
to develop loyalty with hotels around the world. One thousand traveler were surveyed
by US based digital and management consulting group MCD. Traveler were divided into
three segments: family traveler, leisure traveler and business traveler.
The first segmentation, family travelers traveled two or more times a year and mostly
with their kids, who were 13 years or younger. Almost all 92% said they enjoyed family
vacations even though they were hectic and chaotic. The second segmentation, Leisure
travelers were solo, in couples, or in groups. Package bookings are a regular feature as
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bulk bookings in the travel and hospitality industry offer deep discounts. According to
the above-‐mentioned study, 84% responded they travelled to get away from the daily
routine. The third segmentation, business travelers responded that have stayed in
hotels in last 60 days and hotels were considered second home. Business travelers also
linked their digital experiences to the quality of their stay at the hotels.
Figure 26: Impact of Quality of Website and App on Segmentation of Travelers Source: (Magnani Caruso Dutton, 2014)
Figure 26 shows that 70% of the travelers reflected that digital experiences were
strongly important to them while selecting a hotel online. It was less important to
leisure travelers at 64%, this could be due to family travelers need more amenities such
as facilities for kids, planning as compared to leisure travelers who are just getting away
for pleasure and do not seek as many facilities while on a “get away” trip. Business
travelers on the other hand also look for facilities such as Wi-‐Fi, restaurants etc. as they
travel more frequently and need access to fitness facilities, and Wi-‐Fi for emails.
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Figure 27: Facilities requested by Business, Leisure and Family Travelers Source: (Magnani Caruso Dutton , 2014)
The largest number of travelers, almost 80% wanted to access all offered hotel
amenities and services on their smartphones. Seventy eight percent of travelers wanted
smart phone maps of areas of interest a check-‐in and checkout services automated
through their smartphones. While more than 60% of travelers wanted to make
smartphones as their keys, order room services, and even pay their hotel bills, only 43%
of them were interested to stay indoors to synchronize smartphones with in-‐room
televisions.
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CHAPTER 3
ANALYSIS OF TOP HOTEL APPS
A. A Situational Analysis for Hotel Apps
The following chapter analysis several hotel apps, the analysis is useful in calling out the
user interface and the differences in features provided by each hotel app. The Digital IQ
Index for Hotels 2013 by L2 Think Tank (L2 Think Tank, 2013) revealed that Starwood
Hotels’ W Hotels has the leading edge and is a Genius that has the most innovative
digital marketing across all platforms.
Figure 28: Hotel Brands according to Digital IQ Index for Hotels 2013 Source: (L2 Think Tank, 2013)
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The W Hotels app is one-‐step ahead when compared to other hotels. The app gives a
options of making the hotel reservations but creates engagement through a music
channel. Customers are entertained through music that can be streamed; as well as,
receive special promotions and offers pushed by the hotel.
The author studied the app interfaces of three large luxury hotels and witnessed the
difference in the graphic user interfaces. The boutique hotels usually do not invest in
mobile applications yet even when the benefits of mobile advertising have proved to be
very beneficial. The graphic user interface (GUI) of W Hotels app with the highest Digital
IQ Index 2013 amongst all hotels (L2 Think Tank, 2013).
B. W Hotel Mobile App Analysis
Figure 29: Graphic User Interface of W Hotels Mobile Application
Source: (W Hotels, 2013 Apple App Store May App 2014)
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As we can, the mobile application is very engaging, encourages customer retention and
is extremely useful for purposes other than just making a booking. There is an in-‐app
music store where different kinds of music can be streamed. There is also a W-‐Store
where customers can purchase souvenirs and another useful travel products helping in
brand recall. The application also offers special offers for discounts for W Hotels
worldwide properties. The mobile application was downloaded by the author for over a
month period and author’s phone was near W Hotel property in New York City several
times; however, there was no geo-‐location offers. The W Hotels mobile application is a
great one but lacks many more services like that some other hotels are currently
covering.
C. Ritz-‐Carlton Mobile App Analysis
We also studied other hotels mobile applications such as that of Hotel Ritz Carlton from
the Marriott hotels chain.
Figure 30: Graphic User Interface of Mobile Application of Ritz Carlton Hotels
Source: (Ritz-‐Carlton New York Apple App Store May App 2014)
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The mobile application from this hotel has more features and very clear-‐cut call to
action to the user they must not delete it after their stay. The application has a QR code-‐
scanning feature, which is use after the stay as well. The app is more interactive and
according to the author, one of the better graphic user interfaces of the mobile
applications among all hotels is that of Four Seasons Hotels.
D. Four Seasons App Analysis
Figure 31: Graphic User Interface of Mobile Application of Four Seasons Hotels
Source: (Four Seasons Hotel Apple App Store May App 2014)
The mobile application is by far the most innovatively architecture among the luxury
chain hotels. The left menu of the mobile application is extensive and gives access to all
the utilities of the user. The application also has an airline pricing application of the
nearest airports to the property the user is staying in. The application also has a detailed
menu section of the spas and restaurants of the property users are staying in. It is by far
has the most utility point of view in the mobile applications section.
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We also studied the mobile browser sites of these three hotels and found that there
were very similar features in all three. Figure 32 has a detailed view of the mobile
browser sites of the three hotels mentioned above. Interestingly, when the users open
the mobile website of the Ritz Carlton hotels, there is a suggestion to download the
mobile application, which does not come in the other two.
Figure 31 Mobile Websites of W Hotels, Ritz Carlton Hotels and Four Seasons Hotels
Source: (Starwood Hotel Apple App Store May 2014) The mobile websites are also an important feature of the mobile advertising, along with
the mobile applications as some users prefer not to download too many mobile
applications or are not aware they exist. In addition, some of the hotels do not invest in
various kinds of mobile applications that is; iOs applications are different from android
applications.
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Figure 32: Affluent USA Traveler’s Bookings made via Browser and Mobile App
Source: (Google Think, 2014)
Figure 32 shows the various smartphone booking methods by affluent travelers in USA.
The report (Google Think, 2014) shows that almost 59% of affluent travelers used a
mobile site for overnight bookings and 69% for vacation activities. Fifty five percent of
the affluent travelers also used their mobile applications for overnight bookings and
almost a third of them used it for vacation activities.
Having both a mobile site and mobile application is a good idea for any hotel is because
there are certain things mobile applications can do that mobile sites cannot. Property
Management systems (PMS) of the hotels can be integrated with mobile applications
which not possible on mobile browsers.
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CHAPTER 4
RESEARCH GOALS AND RESEARCH METHODOLOGY
A. Summary of Chapter
This chapter outlines the research goals, which are to understand how hotel owner and general
managers would respond to new mobile marketing technologies. Here the author seeks to
answer three research questions stated below using a formal face-‐to-‐face interview method
with four selected hotels representing a diverse selection. This research was conducted within a
one-‐month period and can be applied within a limited view as it is meant to be an initial view of
these research questions and guide future research.
B. Research Goals
The following study will advance the current state of research on mobile marketing as it
pertains to hotels. Chapter 3 discusses the current state of research on mobile
marketing for hotel, which helped identify a number of problems facing this area of
research. From this list the author selected the following problems because they could
be addresses through the following research, they are:
How familiar are hotel owners and general manager to the new technologies proposed
to advance mobile marketing?
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How valuable would hotel owners and general manager think some of the new
technologies proposed to advance mobile marketing would be to their establishments?
What barriers do hotel owners and general manager encounter when trying to
implement these new technologies?
Consequently, the research goals are to answer these questions and in doing so advance
the research. The importance of answering each of the following questions is as follows.
The first question being “How familiar are hotel owners and general manager to the
new technologies proposed to advance mobile marketing?” and the second question,
“How valuable would hotel owners and general manager think some of the new
technologies proposed to advance mobile marketing would be to their establishments?”
both address how the proposed technologies are going to being received. There are tens
of thousands of hotels in the world, if 90% of hotel owners and hotel general managers
think a particular technology is not valuable then it will never be adopted in mass and
ultimate come to fruition, thus the proposed technologies are nothing more than cool
idea. However, if the technology is deemed valuable then further research should be
conducted to determine how to best to apply the technology to each hotel segment.
Unfortunately, no data or research exists on the attitudes towards the myriad of new
mobile marketing technology.
The third question, “What barriers do hotel owners and general manager encounter
when trying to implement these new technologies?” seeks to shed light on the how
these new mobile marketing technologies will be implemented. Many great
technologies often fail to reach those who can use them due to barriers, and
corporations with their large number of processes, policies, and decision makers are
famous for being slow to adopt new technologies. If the barriers to these new mobile
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technologies are identified early on then they can be research, and the resulting
solutions can be used to help ease the adoption of these technologies.
C. Research Limitations
Due to time and resource restrains, a number of study options could not be used. Online
surveys offering quantitative research options would require more than two months
soliciting companies and collect the required data. Case study options require multiple
follow up interviews and time to structure the case and could easily stretch outside the
remaining time period. The proposed study outlined below could be completed in the
given period, and four hotel of interest could be reasonably solicited in the short period
remaining.
D. Research Methodology
The following study will answer the research question via a structured interview method
derived from the qualitative research method. Face-‐to-‐face interview are core to the
interview method as it allows capturing un-‐screened responses to a questions, including
gestures, which are often more telling. Further, in person interviews, which are
structured, allow covering a wide range of question yet allow for follow-‐up or
clarification questioning avoiding null answers. All questions will be answered using a
Likert five-‐point scale.
The categories of interview questions are broken into the following areas. Biography
information captures the respondent identification and hotel identification including
number of employees, revenues, and the respondent’s years of experience. This allows
the author to provide a detailed profile of each respondent and their hotel so their
responses can be rationalized against their profile ore their company’s profile. The
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second category of questions relates the capabilities of their hotel in terms of marketing
budget, marketing employees, and the hotels ability to implement new mobile
marketing technologies. The third area of questions deals with the awareness of certain
mobile marketing technologies. The more aware a technology is to its potential users
the more likely it is to be evaluated, and then adopted into the hotel’s processes. The
last category of question examines the value of a specific mobile marketing technology
to that respondent. By doing this we can judge how relevant and particularly valuable a
proposed technology would be. Further, we can gain specific knowledge about which
aspects of the technology would be valuable, less valuable and particular situations
where the technology would be applied inside their hotel.
The findings for each category of questions will be presented and cross-‐analyzed so that
differences between hotels and respondents can be uncovered. Further, references
from the literature will be brought into the discussion of results so that respondent’s
answers can be further analyzed and rationalized. Conclusions for each category of
questions will be stated and followed by proposed options for future research. If
requested by the interviewee their name and or company name will be de-‐identified.
E. Limits of applying results
Qualitative research studies with small number of respondents are very useful in directing
future research studies such as large statistical studies.
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CHAPTER 5
RESEARCH RESULTS AND DISCUSSION
A. Summary of this Chapter
The author interviewed top management at four hotels in New City, Toronto Canada,
and New Delhi India and receive information on their hotels, marketing capabilities,
awareness of marketing trends, and familiarity and receptiveness to new mobile
marketing technologies. The survey questionnaire can be seen in Appendix A was
design to collect qualitative data through in-‐person interview and face-‐to-‐face Skype
interviews. After receiving each respondent’s responses, their answers were noted and
cross-‐analyzed against the other respondent and industry norms.
The top management of four high-‐end hotels’ were interviewed. These were Mr. Amit
Modi (Chief Financial Officer, The Grand Hotel, New Delhi, India), Mr. John K. Knowles,
(Director of Digital Marketing, Hotel Roger Smith, New York City, New York, USA), Mr.
Arjun Channa (Hotel Manager, Sheraton Hotel, Starwood Group, Toronto, Canada), and
Mr. Maurizio Bonivento (General Manager, The Empire Hotel, New York City, New York,
USA).
Each interview lasted approximately 2 hours. Initially the author explained the format of
the interview and the benefit of taking the interview. The interviewees showed
immense enthusiasm due to the current developments in mobile marketing. The main
problem with the interview process was that some interviewees declined to respond to
some questions due to reasons of corporate confidentiality. As well, two interviewees
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requested to study the complete questionnaire in advance prior to responding to the
questions.
B. Profile of Respondent 1 -‐ Amit Modi, CFO, Hotel The Grand, New Delhi
Figure 33: Respondent 1: Amit Modi, CFO, Hotel The Grand, New Delhi
Respondent 1 Mr. Amit Modi is the Chief Financial Officer of Hotel The Grand New
Delhi, India, a luxury five start hotel located in the Vasant Kunj region. His property is
situated next to the luxury shopping areas of the DLF Emporio Mall and DLF Promenade.
Mr. Modi manages the business on behalf of his family, The Sarafs, who own eight
additional hotel properties in India and Nepal. This hotel was purchased from the Grand
Hyatt chain eight years ago having of 350 rooms with 700 staff members, two
restaurants (Indian cuisine and Italian cuisine), an upscale bar, and a continental cuisine
coffee shop. The Grand is a five star business hotel and is actively involved in attracting
foreign tourist. Mr. Modi is a self-‐professed technology visionary and states that
technology can help acquire more loyal guests’ especially foreign business travelers.
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C. Profile of Respondent 2 -‐ John K. Knowles Roger Smith, New York City
Figure 34: Respondent 2: John K. Knowles, Director of Digital Marketing, Roger Smith
Mr. John K. Knowles is the Director of Digital Marketing for the Roger Smith Hotel
located in New York City in the busy midtown area. This hotel is a part of six other
properties owned by Mr. Knowles’ family on the east coast of United States. The Roger
Smith hotel is a boutique four-‐star hotel that attracts tourists, and is a family run
business. The hotel also is joined with the Roger Smith Pop Venue, which host events
like art shows, and brand launch events. This hotel has two restaurant bars the hotel,
The Lily’s on the ground floor and Henry’s as the roof top bar. Mr. Knowles manages the
Marketing, PR and Digital Marketing for the property and the Pop Venue. His social
media marketing team is very active and gained the Roger Smith Hotel a celebrity social
media status (ReviewPro, 2011).
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D. Profile of Respondent 3 -‐ Arjun Channa, General Manager, Starwood Hotels,
Canada
Figure 35: Respondent 3: Arjun Channa, Hotel Manager, Starwood Hotels, Canada
Mr. Arjun Channa, completed his hospitality management degree from the famous
hospitality institute of IHHTI in Basel, Switzerland and has been a member of the
Starwood Hotels Group for the past 20 years. Currently, he is the general manager of
the Starwood Hotel property in Toronto, Canada. This property has 1,350 rooms and is
located in the prime area near Toronto towers. He has also managed the Sheraton
hotels brand of the Starwood in China and Aruba.
Mr. Channa has strong leadership skills and is a confirmed industry expert having
mentored future GM in addition to his primary responsibilities.
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E. Profile of Respondent 4 -‐ Maurizio Bonivento, General Manager Empire Hotel,
New York
Figure 36: Respondent 4: Mr. Maurizio Bonivento, General Manager Empire Hotel,
New York
Mr. Maurizio Bonivento is the General Manager of the famous Empire Hotel located in
the elite area of Central Park West in New York City. The hotel is a five star boutique
hotel owned and managed by Amsterdam Hospitality who has several other properties
in the United States. The Empire hotel has a restaurant, Ed’s Chowder House that is
managed by the company in its title. Mr. Maurizio is from Venice, Italy and has worked
in the hospitality sector in United States for over two decades. Prior to working with
Amsterdam Hospitality, he was with Starwood Group of Hotels in New York.
F. Interviewee Profile Analysis
Respondent 1 Amit Modi is extensively involved in the operations of the hotel property
in New Delhi. He has been associated with the hotel for the 8 years and is a self-‐
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professed visionary according to the definitions in Section 2.5 of Appendix A. He has the
authority to be an independent decision maker on the budgets and allocation of IT
capabilities for this property.
Respondent 2 John Knowles is a young entrepreneur who joined the family business
rather recently in 2012. Apart from helping in the marketing division, he does not seem
to be much involved in operations. The decision-‐making is usually influenced by him but
approved by other members of the family. He is also a self-‐professed visionary according
to the definitions mentioned in Section 2.5 of Appendix A.
Respondent 3 Arjun Channa is the hotel’s general manager for the Sheraton, Toronto
property of the Starwood chain and oversees all responsibilities of the title. He describes
himself as people's person, very task oriented, practicing inspirational leadership. He
was recently sent to Aruba to manage the task force to sort a critical issue with the
human resources of Starwood properties property. Due to his long stint with the group,
he is extremely influential with the top management in the corporate and has excellent
negotiation skills. He seems to be extremely passionate about digital and mobile
capabilities and describes this as a hyper-‐competitive arena. He is also a self-‐professed
visionary according to the definitions mentioned in Section 2.5 of Appendix A.
Respondent 4 Maurizio Bonivento is a very hospitable GM and is a seasoned industry
professional. He came from a two-‐decade career at Starwood Hotels before recently
moving to Amsterdam Hospitality. Maurizio has seen the old era of managing customer
profiles in a paper based database system and is a staunch believer of computerized
CRM systems of accommodating guests and marketing. He described his memoirs of his
initial days when customer records and preferences were saved each time as a card in a
chronological order. The Empire Hotel was recently renovated and has been featured in
the famous hit TV show Gossip Girls.
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G. Results of Marketing Capabilities Questions
In the comparative analysis of Appendix B, it can be seen that the marketing budgets
vary dramatically and are highest for independent five star hotel and lowest for
boutique hotels. It is obvious that the five star hotels, independent and chains, as
Starwood would have more marketing capabilities than smaller boutique hotels.
Respondent 1 has a marketing budget of $13.4 million which is $19,000 per room. This
the highest because they attract business people from around the global and include
referral fees in their marketing budget. Respondent 2 budget is very small at $50,000
annually, but given the small size of the hotel and location in New York City a large
amount of tours traffic normally fills the hotel. Respondent 3 chain’s budget is $300
million which relates to $230,000 per property. Finally, Respondent 4 marketing budget
is $50,000 annually and given the valuable location in New York City and fame
generated from the TV show Gossip girl does not require a large marketing budget to fill
up hotel rooms.
H. Marketing Capabilities
None of the respondents, be it a boutique hotel or a big chain like Starwood hotels with
the highest Digital IQ (L2 Think Tank, 2013) had a separate mobile marketing team. Most
of the hotels confused social media team with mobile marketing team. This author
strongly recommends that these hotels create a mobile marketing team given the
massive trend toward mobile consumption and the constant threat of competition.
I. Results for the Percentage of Customers using Mobile Questions
The survey responses show that a greater percentage of business travelers are using
smart phones as represented by respondent 1 and 2 stating that 76% to 100% of their
traveler use smart phones. Similarly, a larger percentage of customers for respondents 1
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& 2 are booking with smartphones (76% to 100%) again supporting more tech savvy
customer trend. New York boutique hotels have lower percentage of smart phone users
and customer-‐booking (51-‐75% for both). This is possibly due to the tourist heavy
cliental from around the world. Same day bookings are very high for respondents 1 & 3
at 51% to 75% and lower for respondent 2 at 26% to 50%. This is significant because
even though it is a small number of respondent is shows that travelers are use mobile
for booking in Toronto, New York, and India.
J. Results of Awareness of Trends Questions
The interview ask the GM about their awareness of the following mobile technologies:
Geo-‐fencing and location based advertising, SMS based advertising, mobile ready-‐
websites, mobile search advertising, mobile coupons, In-‐app advertising, and QR codes.
A higher likelihood of mass adoption is associated with technologies, which are known
too or aware of by a larger group, which in this case is GM.
All respondents were very familiar with mobile ready websites. General manager’s with
larger marketing budgets being respondent 1 & 3 were at minimum very familiarity with
all the mentioned mobile marketing technologies. Respondent 1 was actively research
mobile marketing and thus was extremely familiarity with these topics, respondent 2
had the second highest familiarly with these technologies. The budget seems to play a
large role in how active the general managers were in researching new mobile
marketing technologies. Only respondent 2 Boutique hotel in New York City (Roger
Smith hotel) provided frequency of use in replying to the survey as perhaps others were
familiar with the topic but not using it that frequently.
The lower level of awareness with respondent 1 & 3 hinds that a significant amount of
education will be needed to help in the adoption of a number of these mobile marketing
technologies.
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K. Implementing New Technologies
Larger hotels can implement new technologies more easily as they seem to have more
IT support and financial capabilities. The Starwood Hotel managed by respondent 3 has
the largest number of employees ready to assist on IT as it is a big chain; also this hotel
is currently investing immensely in IT and digital. Implementation is preferred by in-‐
house and respondent 4 prefer to outsource implementation them. A reason for
outsourcing was that internal IT capabilities were not available and their budgets was
lower due to strategic investment decisions elsewhere.
L. Results of Mobile Coupon Scenario Question
The following situation was asked for question 8.1:
When your guests check-‐in they are delighted to know that the hotel has a free
smartphone apps alerting them of specials and coupons from any one of the hotels
amenities. Later that afternoon the restaurant manager realizes the number of the
reservations for evening dinning are low, and to boost reservations he is authorized
by the GM to send out a coupon to guest for a complementary appetizers and drink.
Every guest with the app gets an alert that afternoon, and clicking on the alert they
can see the menu of appetizers and drinks which all look very tempting, five guests
accept the coupon on the spot. Later that evening a number of additional guests
comes to claim the offer. This mobile couponing scenario could apply with bars,
spas, or other hotel services.
This technology scenario seems very valuable to larger hotels or a hotel with in-‐house
restaurant services as it is an additional revenue stream. It also seems valuable to
business hotels where guests are less mobile. Business travelers come for more
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frequently and for shorter stays and prefer to stay locally, where tourist tend to explore
outside of walking distance. Consequently, the technology presented in this situation is
of limited value to boutique hotels in New York City who do not have restaurants and
bars as their revenue streams like in the case of respondent 2 or have outsourced their
restaurant and bar services like in the case of respondent 4.
M. Results of Mobile Advertising Scenario Question
The following situation was asks for question 8.2:
Your marketing manager plans an advertising campaign for an upcoming wedding
conference in his hotel. He decides to target mobile users and boost bookings. The
ads run on mobile Facebook, Apps, Mobile banner ads, and Mobile Google for
several days. Reviewing the campaign the marketing manager finds that for
spending $800 in ads several bookings totaling $7000 dollars were placed. This form
of advertising would apply to other hotel services.
Mobile advertising is rated very valuable to the bigger hotels like in the case of
respondents 1 & 3 who have large advertising budget, and rated valuable by
respondents 2 & 4. Respondent 1 & 3 have banquet halls for wedding and conference
purposes and a push from mobile advertising would be seen as a major addition to
revenue. The literature assertion that advertising budget are going to shift a significant
amount of revenue to mobile ads seems to be supported by this result. Training for
mobile advertising is going to continue to be important, as the content for the ads has
to be unique and fresh.
N. Results of Advertising with Geo-‐Fencing Scenario Question
The following situation was asks for question 8.3:
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Your marketing manager plans an advertising campaign for the casual dining
restaurant in this hotel. He decides to target all individuals within 2 miles who
checked-‐in via Facebook. The ads run on Facebook mobile ads for several days a
with a coupon offer for free drinks. Reviewing the campaign the marketing manager
finds that for spending $50 in ads generates several dinner bookings totaling $550
dollars. This would apply to other hotel services.
Bigger hotels seem to see great value in attracting outsiders to their restaurants. With
less revenue generated by restaurants and bars the boutique hotel Roger Smith of
respondent 2 see this as limited value as the Lily’s and Henry’s Rooftop bars of the
property can only accommodate 50 people or less. The Roger Smith promote the bars
through an events strategy and not generic geo-‐targeting; however, respondent 2 had
started to develop keen interest in the proposition. The amount of revenue generated
from restaurants, spas, etc. seems to drive the value of geo-‐fencing especially in areas
where high traffic exists or in the case of properties located in prime tourist locations.
O. Results of Mobile Hotel Services Scenario Question
The following situation was asks for question 8.4:
When your guests check-‐in they are delighted to know that, the hotel has a free
smartphone app giving them information and reservation abilities for that hotel
services’ and amenities. Later that afternoon a guest “Jill” wanted to get a spa
treatment for the next day, so while in a noise restaurant she checks the hotel’s spa
times, reviews pictures of beautiful spa interior, and decided that the spa’s prices
were reasonable, so she books a slot for 1pm the following day. A minute later, a
SMS rang her phone confirming, “Hello this is Christine Haze, and I would be
delighted to have your treatment at 1pm.” This app would apply equally as well to
hotel services like golf, special events, private clubs, ordering limos, wakeup calls,
and the likes.
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This is valuable to all respondents as customer service is seen to be an important aspect
to all. It is also more convenient to the guests and additional revenue stream for the
hotel. Relaxation services are valuable to both leisure travelers who travel to relax and
business travelers who are stressed due to work. Respondent 1 has a large spa in the
hotel itself and this scenario is seen as partially valuable. Apart from the guests, the
technology described in this scenario would also generates income from the affluent
locals who shop at the prestigious shopping destination adjacent to respondent 1’s
hotel property. Respondent 2 does not have an in-‐house spa or fitness services but uses
a local gym chain to service the guests being the New York Sports Clubs. Respondent 3
has an in-‐house spa called Senses with various treatments for guest only. Respondent 4
has a famous rooftop pool deck and partial spa but sees this technology as very
valuable.
P. Results of Social Media Scenario Question
The following situation was asks for question 8.5:
When your guests check-‐in they are delighted to know that the hotel has a free
smartphone apps giving them alerts and info about events at the hotel. Later that
evening the bar manager posts several cool pictures of a mixology event to
Facebook. Alerts on the app of “Cool Mixology Event Pics” flash on guest phones,
several guest attend and post their own pictures on their Facebook tagging the
hotel. The fun atmosphere is conveyed to many hotel guests further drawing a
crowd. Similar scenario would apply for any hotel events.
This seemed Valuable across all respondents as it was seen as a large part of
promotional activity. It could fall under marketing efforts or social media. Respondents
1, 2, 3, and 4 have bars and mixology events are seen as a way to increase inbound
traffic of people not just for guests but also people around the hotel radius. Respondent
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1 does major promotional activity to promote the G-‐Bar by hosting events that are
usually covered in the society section of the cities newspaper. Pushing alerts via this
mixed form of advertising is seen as valuable across all respondents and important as a
way to inform the guests of freebies and additional services provided by the hotels.
Q. Results of Mobile Social Media Targeting Guests Scenario Question
The following situation was asks for question 8.6:
Your hotel staff has an app on their smart phones, which allows them to send
photos and text directly to the hotel’s social media manager for review then
posting immediately to the hotel’s twitter, Instagram, and Facebook page.
During one such event Jake the bar manager sends a picture and fun stories of a
bar event to the social media manager, who correct his spelling, performs photo-‐
corrections then posts the pic and story to social media pages. Jake’s
contribution is noted in the log. This feature would apply to any events and all
staff could participate.
All of the respondent’s hotels have a Facebook page. Respondent 2 is most active on
social media as compared to the others. Respondent 3 does social media promotion
through the company’s main page and not the location specific web page. Respondent 1
and 4 are active on social media; however, they recently started posting updates on
Facebook and other platforms. By far, Facebook was the favorite and most updated
social media platform among all respondents.
Even though respondent 2 is active on Facebook, because of his specialty in social media
advertising, he would not want untrained employee posting or uploading media to his
social media team. The Roger Smith has its own content creation team and has a
controlled approach to what goes on their social pages. Other respondents find this
scenario of user generated content rather more valuable.
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R. Results of Places of Interest and Value Scenario Question
The survey question 8.7 ask the following scenario:
When your guests check-‐in, they are delighted to learn from the front desk
manager that the hotel has a free smartphone describing local amenities,
landmarks, restaurants, clubs, and other services which could be of value to
them during their stay. One guest downloads the app and learns of a small
specialty wine bar down the street down the street recommended by the
concierges, and loves it after trying it. The same scenario played out with guest
visiting local shops, tourist destinations, and even one who needed an
emergency doctor. Many guests end up using this app.
We noticed that all respondents thought this was a highly valuable application and
Respondent 2 mentioned, “I love this idea, it has got personality potential to give the
right recommendation and can make it very personal.” The benefit of this idea seem to
mesh well with how boutique hotels view themselves being a destination, and being in
New York City with a tremendous number of local restaurants, bars, events, sightseeing,
the boutique hotels can make the guest experience different and unique to their
palette.
Technically all of the respondent’s cities (New York, Toronto and New Delhi) were
considered tourist destinations another reason why all respondents found this
technology very valuable. Respondent 1 further thought this is a great idea as this
would decrease the amount of work of the front desk managers has in informing every
guest about the local event and attractions.
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CHAPTER 6
CONCLUSIONS AND FUTURE OF MOBILE MARKETING FOR HOTELS
A. Summary of the Chapter
This chapter summarizes the author’s analysis on mobile digital trends and the hotel
industry trends on mobile advertising. The author makes remarks on the positive and
negatives of the prevailing trends, and states their predictions of these trends in the
next five years.
B. General Conclusion on the Mobile Marketing
Mobile smart phones and other mobile devices like tablet will continue to be adopted in
mass across all countries especially as prices drop; users will continue to integrate them
into their daily lives. Although mobile devices are used for work, their main value is in
allowing users to discovers, shop, prepare, socialize, and accomplish; marketer who
offer ways to accomplish these different goals can engage customers more readily than
just providing a marketing message. Achieving the mentioned goals via apps has been
shown to be highly effective in targeting and converting sales over smart phones and
mobile devices. Mobile shopping is here to stay and it must be integrated into the in-‐
store retail experience because products and services can be evaluated, bought, or
upgraded at any point before, during, or after visiting the retail store. Mobile analytics is
an extension of web analytics and will be a requirement for proper management of
marketing campaigns. There are several strategies for mobile marketing on of the most
interesting is targeting the customer in the mobile mind shifted segments of adapter,
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immerses, and perpetuals. More importantly, mobile tactics, like SMS alerts great for
delivering short and notable call to action, user generated content, which is highly
trusted, and scanners and tracking will grow in their importance to mobile marketers.
C. Conclusion on the Review of Literature for Hotel Mobile Marketing
Hotels stays booked over smart phones and mobile devices will continue to grow (and
see a large accelerations) in number of bookings and the length of stay especially for
booking made during the evening as users tend to relax with their phone or tablets. ROI
on mobile ad campaign will remain high until all hotels shift over to advertising in this
media. Mobile ready website for a hotel is absolute requirement. Business travelers on
use smart phones and mobile devices for booking, as access to computer is limited. The
influence of other traveler’s reviews (AKA user content) is stronger than the marketer
message and thus reviews and accolades should be placed front and center in aps and
on mobile webpages. Free Wi-‐Fi is a critical decision point in booking rooms for mobile
device users. To reduce the revenue impact of online travel agencies like Orbitz,
Expedia, and Priceline on hotel it is recommend that hotel chains develop hotel apps
that allow for booking, loyalty programs, save preferences, and other features. They
should especially target business travelers and families with these custom apps.
D. Conclusions from the Analysis of Top Hotel Apps
The Digital IQ index for hotel is currently the best ranking for hotel apps. All apps must
work across the two major platforms being Apple iOS and Google’s Android. Hotel apps
can satisfy a number of different needs from entertainment, bookings, finding and using
hotel services, being alerted to events, special offers, or discounts, information about
local landmarks, restaurant menus, messaging. Regardless the 2013 best app is currently
from the W hotels. The largest four star hotel chains have the top hotel apps as their
headquarters choose this area as a vital strategic initiative.
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E. Conclusion of Result of the Research Study
This research study interviewed the general manager of four hotels: The Hotel Grand in
being a 350 room four-‐star business hotel in New Delhi India, the Roger Smith a 75 room
boutique hotel in New York City, the Starwood Hotel being a 1,350 room four-‐star
business hotel in Toronto Canada, and the Empire Hotel a boutique hotel in New York
City.
All four hotels lacked a mobile marketing team; the large business hotels had significant
marketing budgets whereas the small boutique hotels budget was significantly smaller.
The hotels with the larger budgets were more aware of new mobile marketing
technology as they had the budget to consider them. Customers visiting the business
hotels were 75% to 100% likely to use a smart phone and book rooms via mobile device.
The larger hotels had the IT staff to help implement mobile technologies.
Several technology scenarios were posed to the respondents; the most valuable were
the mobile advertising, mobile hotel services, mobile social media advertising, and
mobile guides for local places of interest.
This research study hints that significant education of general managers across the
thousands of hotels will be needed for them to adopt the most valuable mobile
marketing technologies.
F. Future of Hotel Mobile Marketing
First movers implementing mobile marketing technologies and services will have a
significant advantage over other hotels in competencies and customer loyalty.
Currently, the large chain hotels like Starwood, Hilton, and Marriott are making large
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investments in their mobile capabilities. Consequently, they are rated as industry
leaders winning all accolades and awards.
This author foresees that moving the mobile marketing technology forward will take
significant time, as it needs to be adopted by hotels ranging from smaller boutique
hotels to large big independent hotels each with their own resource constrains,
technology capabilities, and local guest requirements. A significant amount of the mass
adoption depends on the digital culture of the host country. For example, more
consumers in the United States and Western Europe are tech savvy; hence, hotels in
these regions are investing a lot more in mobile apps and mobile sites. Countries like
India and China are investing less in mobile even though they have particularly high
penetration of the mobile subscriptions.
G. A Bright Outlook on the Future
There are several key trends that will develop in the near future for mobile marketing
technologies, as follows:
Multi-‐channel Integration of the Overall Hotel Systems. The author sees the industry
moving towards a complete integration similar to that of the retail industry. The use of
tablets and iPads are transforming retail (Yates, 2013) and a similar wave is predicted in
the hotel industry. Not just the concierge services but the entire cross-‐channel and multi
channel activities will be integrated to give the customer a complete and seamlessly
travel experience. The user will be able to make all reservations from their mobile
application and their preferences will be saved for the future visits. Tablets held by the
hotel managers will provide guest specific preferences, KPI, analytics and allowing the
managers to provide the best service and upsell guest on services. More importantly
hotel manager are not desk jockeys they need to be free to manage on the move, and
any technology, which allows this ability, will be highly sought.
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Big Data in Hotels: Big data analytics and mobile analytics will dominate in the future.
The pricing algorithms could be adjusted and new offers will be delivered to travelers
according to their behavioral and purchase patterns. There would be extreme
personalization in pricing with the help of technology (Amadeus, 2013). Keep in mind
that mobile devices have limited screen space to display ads and marketing messages
will have to target traveler’s exact motivation and need. Thus, it will be valuable in both
operational and predictive analytics online and especially on mobile where they will
need help closing the sale.
Technology is the New Affluence: In the hyper-‐competitive industry of hotels, points of
differentiation are growing to include the technology capabilities and offerings of the
hotel. Hotels are not in the business of mobile technologies, however, having a digital
edge over competitors as shown by the research herein results in higher brand loyalty,
increased customer satisfaction, and even customers seeking out ones hotel’s services
over a non-‐digital hotel. Travelers will be increasingly looking for a seamless integration
of the mobile sites with the hotel services. Hotel managers will immediately benefit
from the using mobile management system. Simply put “mobile has affected every part
of our lives, and will be an expected part of future hotel services.”
H. Prospective Threats:
Legal concerns about the collection of personal information and the use of that
information for marketing purposes exist in every use of mobile technologies. However,
as the technology develops, the legal aspects of using it will take a more concrete shape
and form. Tracking items like cookies or purchase on smartphones has been scrutinized
for a while. Certain consumers are hyperactive conscious about being tracked or
profiled by marketers and government agencies such as National Security Agency for the
United States etc.
91
Another potential threat is encrypted data and the ultra-‐private smartphone (Talbot,
2014). New smartphones, which are highly encrypted and encrypts calls, text messages
and other capabilities and do not allow marketers to track the mobile behaviors. Figure
37 shows the example of Silent Circle technology available in the market today. Even
though there will be encryptions and privacy issues the author believes, the benefits
provided by mobile technologies will be chosen by customers and its advantages will
overcomes the paranoia of privacy.
Figure 37: Private Encrypted Technology Solutions Source: (Silent Circle)
92
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APPENDIX A-‐ SURVEY INSTRUMENT
1. Introduction
1.1. Welcome to the research interview on Mobile Marketing and Advertising by
Charisma Aggarwal a Master Student in the Master of Technology Management
Program at NYU Polytechnic School of Engineering
1.2. This set of interview questions was design to capture information on the mobile
marketing practices of hotels and is the results are expected to directly benefit
respondents. The benefits of this interview are:
• Valuable self-‐assessment of your company’s current practices
• You will learn about new methods of mobile advertising
1.3. If you choose too we can de-‐identify your company’s names however there is
benefits from a branding perspective to being visible.
1.4. If you choose too we can de-‐identify your names however there is benefits from
self-‐branding perspective of remaining visible.
1.5. You can choose not to answer any question.
1.6. This interview will take 1 hour, all questions
2. Interviewee and Company Identification
2.1. Name of the person being interviewed
_____________________________
De-‐identified or identified
2.2. Company Name
_____________________________
De-‐identified or identified
2.3. Role and position of interviewee
What is your current role and position inside of this company?
_____________________________
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2.4. Time in Role
How much time have you spent in your current role?
_____________________________
2.5. Technology Adoption profile – related to hotels
a) Technologist – I love trying out newest technologies, and figuring out
how it works, what bugs it has, and its limitations.
b) Visionary – I will use newest technology if I believe it will provide me a
competitive advantage, even if it has a lot of bugs to be worked out and
is slightly expensive.
c) Pragmatic – I will use the newest technology if other major competitors
have faith in it and are using it as well. Also there is too much of a cost to
being left behind.
d) Conservative – I will use the newest technology if it is well tested all the
bugs are ironed out, the price has been pushed down to a reasonable
level, and all competitors are using it.
e) Skeptic – Generally I am skeptical about new hotel technologies and
preferred not to employee them unless absolutely necessary to compete.
2.6. Company Size-‐ How large is your company in terms of
2.6.1 Number of employees?
_____________________________
2.6.2 Number of properties?
_____________________________
2.6.3 Average number of rooms in each properties?
_____________________________
2.7. Company Revenues?
What yearly revenues does your company fit within?
$1M-‐5M, $5-‐25M, $25-‐50M, $50-‐75M, $75-‐100M, 100M-‐200M, 200M+
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_____________________________
2.8. Company Health? Which of the following would you consider your company to
be?
a) Healthy profits and growing
b) Healthy profits not growing
c) Acceptable profits
d) Declining profits
e) Un-‐profitable
2.9. What type of Hotel would you place yourself as? Choose more than one if
required
a) Boutique
b) Destination
c) Chain
d) Resort
e) Independent
f) Other ____________________
3. Marketing Capabilities & Budgets
3.1. What is your rough advertising budget per year? Per Property?
_____________________________
3.2. What is your rough digital advertising budget per year? Per Property?
_____________________________
3.3. Marketing
3.3.1 How many employees are employed specifically in the marketing
department?
_____________________________
3.3.2 Do you have a separate digital marketing team?
_____________________________
3.3.3. Is there a dedicated mobile marketing team?
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_____________________________
3.4. What level of internal capability do you have to train employees related to
new marketing technology, methods, or techniques. Say providing an
elaborate 4 hour seminar on a marketing topic like mobile market.
a) Capable of providing training weekly.
b) Capable of providing training monthly.
c) Capable of providing training quarterly.
d) Capable of providing training bi-‐yearly.
e) Capable of providing training yearly.
4. Awareness of Mobile Marketing trends
4.1. Trends towards usage. – What percentage of your customers have smart
phones?
1) 0-‐25%, 2) 26%-‐50%, 3) 51%-‐75%, 4) 76%-‐100%, 5) unsure
4.2. Percentage of your customers have booked travel via their smart phones?
1) 0-‐25%, 2) 26%-‐50%, 3) 51%-‐75%, 4) 76%-‐100%, 5) unsure
4.3. Percentage of your customers which have made hotel bookings over their smart
phones?
1) 0-‐25%, 2) 26%-‐50%, 3) 51%-‐75%, 4) 76%-‐100%, 5) unsure
4.4. Percentage of your customers which have made same day hotel bookings over
their smart phones?
1) 0-‐25%, 2) 26%-‐50%, 3) 51%-‐75%, 4) 76%-‐100%, 5) unsure
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5. Applications for Mobile Marketing -‐ Which of the following Mobile Marketing and
Advertising Applications are you familiar, or what degree to which your company
perform the following:
5.1. Geo-‐Fencing and location based Advertising
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
5.2. SMS based mobile Advertising
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
5.3. Mobile ready websites
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
5.4. Mobile search advertising
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
5.5. Mobile Facebook Advertising
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
5.6. Mobile coupons
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
105
5.7. In-‐app advertising
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
5.8. QR codes
5. Extremely Familiar, 4. Very Familiar, 3. Moderately familiar, 2. Slightly
familiar, 1. Not familiar
5. Very Frequency, 4. Frequently, 3. Occasionally, 2. Rarely, 1. Never
6. Coordinating Online and Mobile Marketing Campaigns
6.1. What level of coordination do you have between Online and Mobile Marketing
Campaigns?
5. Very High, 4. High, 3. Moderate, 2. Low, 1. Very Low, None
6.2. Explain your challenges in coordinating online and mobile marketing campaigns.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
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7. Capability of Implementing New Technologies
7.1. How many employees do you have available to perform on-‐site IT services?
_____________________________
7.2. How employees would be available to implement a new on-‐site technology
related to mobile apps?
_____________________________
7.3. If a technology provider offered to install any hotel on-‐site technology related to
a mobile app would that be preferable over using your own on-‐site IT services?
_____________________________
8. Smart Phone App Ideas (Importance of the following)
8.1. Mobile Coupon scenario
When your guests check-‐in they are delighted to know that the hotel has a
free smartphone apps alerting them of specials and coupons from any one
of the hotels amenities. Later that afternoon the restaurant manager
realizes the number of the reservations for evening dinning are low, and to
boost reservations he is authorized by the GM to send out a coupon to
guest for a complementary appetizers and drink. Every guest with the app
gets an alert that afternoon, and clicking on the alert they can see the menu
of appetizers and drinks which all look very tempting, five guests accept the
coupon on the spot. Later that evening a number of additional guests come
to claim the offer. This mobile couponing scenario could apply with bars,
spas, or other hotel services.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable,. NA
107
8.2. Mobile Advertising Scenario
Your marketing manager plans an advertising campaign for an upcoming
wedding conference in his hotel. He decides to target mobile users and
boost bookings. The ads run on mobile Facebook, Apps, Mobile banner ads,
and Mobile Google for several days. Reviewing the campaign the marketing
manager finds that for spending $800 in ads several bookings totaling
$7000 dollars were placed. This form of advertising would apply to other
hotel services.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable,. NA
8.3. Mobile Advertising with Geo-‐Fencing
• Your marketing manager plans an advertising campaign for the casual
dining restaurant in this hotel. He decides to target all individuals within 2
miles who checked-‐in via Facebook. The ads run on Facebook mobile ads
for several days a with a coupon offer for free drinks. Reviewing the
campaign the marketing manager finds that for spending $50 in ads several
dinners bookings totaling $550 dollars were placed. This would apply to
other hotel services.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable,. NA
8.4. Mobile Hotel Services
When your guests check-‐in they are delighted to know that the hotel has a
free smartphone apps giving them information and reservation abilities for
that hotel services’ and amenities. Later that afternoon a guest “Jill”
108
wanted to get a spa treatment for the next day, so while in a noise
restaurant she checks the hotel’s spa times, reviews pictures of beautiful
spa interior, and decided that the spa’s prices were reasonable, so she
books a slot for 1pm the following day. A minute later a SMS rang her
phone confirming “Hello this is Christine Haze, and I would be delighted to
have your treatment at 1pm.” This app would apply equally as well to hotel
services like golf, special events, private clubs, ordering limos, wakeup calls,
and the likes.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable,. NA
8.5. Mobile Social Media (guest targeted)
When your guests check-‐in they are delighted to know that the hotel has a
free smartphone apps giving them alerts and info about events at the hotel.
Later that evening the bar manager posts several cool pictures of a
mixology event to Facebook. Alerts on the app of “Cool Mixology Event
Pics” flash on guest phones, several guest attend and post their own
pictures on their Facebook tagging the hotel. The fun atmosphere is
conveyed to many hotel guests further drawing a crowd. Similar scenario
would apply for any hotel events.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable, NA
8.6. Mobile Social Media (outbound all)
Your hotel staff have an app on their smart phones which allows them to
send photos and text directly to the hotel’s social media manager for
review then posting immediately to the hotel’s twitter, Instagram and
Facebook page. During one such event Jake the bar manager sends a pics
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and fun stories of a bar event to the social media manager, who correct his
spelling, performs photo-‐corrections then posts the pic and story to social
media pages. Jake’s contribution is noted in the log. This feature would
apply to any events and all staff could participate.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable,. NA
8.7. Places of Interest and value
When your guests check-‐in they are delighted to learn from the front desk
manager that the hotel has a free smartphone describing local amenities,
landmarks, restaurants, clubs, and other services which could be of value to
them during their stay. One guest downloads the app and learns of a small
specialty wine bar down the street down the street recommended by the
concierges, and loves it after trying it. The same scenario played out with
guest visiting local shops, tourist destinations, and even one who needed an
emergency doctor. Many guest end up using this app.
5. Very Valuable, 4. Valuable, 3. Average value, 2. Limited value, 1. Not valuable,. NA
110
APPENDIX B-‐ SURVEY RESULTS
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