Chapter 1 INTRODUCTION “There are about 60 million television sets in the country and about four million PCs. The reach of newspapers and other magazines is even lower. One medium, which has the highest reach in the country, is the mobile” 1.1 Mobile Phone Users and Mobile Industry in India The total mobile subscribers in India were 391.76 million at the end of March 2009. The outstanding growth of 50.04% in 2008 - 2009 was slightly low than 58.13% growth in 2007 – 2008 (Figure 1). India adds around 10 million new subscribers each month and now has achieved world’s second largest mobile subscriptions, which is after China. 85 % of the mobile phone users are from Urban India, where high level of penetration and significant mobile subscribers are offered by metro/urban areas (Figure2), however penetration in rural areas in on increasing trend and will contribute much in future, as many infrastructural developments have been undertaken in rural areas and also as urban market is saturating.. High disposable income and low price of handsets have bought this revolution in mobile industry and have made mobile phone in reach of all social groups, income levels, professionals, businessmen’s and all age groups. Youth between 15– 30 are 45% of the total mobile phone users in India. 1 | Page
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Chapter 1
INTRODUCTION
“There are about 60 million television sets in the country and about four million PCs. The
reach of newspapers and other magazines is even lower. One medium, which has the highest
reach in the country, is the mobile”
1.1 Mobile Phone Users and Mobile Industry in India
The total mobile subscribers in India were 391.76 million at the end of March 2009. The
outstanding growth of 50.04% in 2008 - 2009 was slightly low than 58.13% growth in 2007 –
2008 (Figure 1). India adds around 10 million new subscribers each month and now has achieved
world’s second largest mobile subscriptions, which is after China. 85 % of the mobile phone
users are from Urban India, where high level of penetration and significant mobile subscribers
are offered by metro/urban areas (Figure2), however penetration in rural areas in on increasing
trend and will contribute much in future, as many infrastructural developments have been
undertaken in rural areas and also as urban market is saturating.. High disposable income and
low price of handsets have bought this revolution in mobile industry and have made mobile
phone in reach of all social groups, income levels, professionals, businessmen’s and all age
groups. Youth between 15– 30 are 45% of the total mobile phone users in India.
Figure 1: India Mobile Subscribers Growth
Source: TRAI 2009
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Figure2: Penetration in Metro/Urban India. Source: AIMAI 2008
India’s largest Wireless Service Providers are Bharti Airtel (23.74%), Reliance (17.54%),
Vodafone (16.9%) and BSNL (15.62%). However, these ‘Big 4’ service providers are to get
increasing competition from Tata Teleservices and Idea Cellular. Also further competition will
come from new international entrants such as Bahrain's Batelco, Norway's Telenor and Russia's
Sistema.
Figure3: Market Share of Wireless Service Providers (As on 31st March 2008).
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Source: TRAI 2008
Mobile operators in India along with voice services, provide mobile value added services like
SMS, mobile Internet, e-mail services, chatting services, GPRS etc to customers. Based on the
need of customers, innovative services like Closed User Group, Video Conferencing etc. are
available to mobile customers. However, SMS currently dominates and contributes around 49%
to the overall MVAS revenues.
1.2 Mobile Advertising in India
Mobile advertising is at a nascent stage in India and dominated by SMS advertising, where push
based advertising is most popular. A survey by Limbo GFK on 1000+ people in India found
that 85% of people are receiving advertising messages on their mobile phone, of which 75% said
they receive advertisements through SMS. This means many consumers have experienced SMS
advertising. Close to 400 million mobile phone subscribers and their exceptional growth every
month makes mobile phone the single largest durable in India, the strength on which marketers
are capitalizing and cannot afford to ignore. Adding to it is increasing mobile web usage, the
arrival of new technological advancements like 3G and Location based services in India. At
present, SMS advertising in India is conducted without permission. Therefore, Telecom
Regulatory Authority of India (TRAI) in late 2007 introduced National Do Not Call Registry
(NDNC Registry) to curb unsolicited calls and SMS done for commercial communications
(NDNC Registry 2007). But, it is not proving effective, to stop telemarketing calls and SMS
advertisements from marketers. However, permission based advertising and location based
advertising is expected to be a ‘big thing’ in near future and marketers and businesses in India
are seeing mobile advertising as a great opportunity. The mobile advertising industry in India is
about $ 25 million at present and is expected grow to over $62 million by 2011.
Though marketers in India are looking it as powerful gateway for future the growth in mobile
advertising has been slow and below expectation in past years. The clear reason is that SMS
advertising efforts by marketers are not generating the required impact on consumers in India;
this is because marketers have not fully understood the attitude of consumers towards SMS
advertising and the drivers influencing their attitude. Marketers are still exploring and have still
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not understood the full potential mobile advertising. They wish to explore what it means to
consumer and as consumer is not responding well to SMS advertising, they say “The consumer
sees mobile as communication device, so it’s the consumer who’ll tell what to do”. Therefore,
this study with its objective to find out Indian consumers view of dominantly prevailing SMS
advertising will give intensive insight to marketers and will give directions towards the future of
SMS advertising in India. This will be done by identifying the drivers of consumer’s attitude
towards SMS advertising, if SMS ads generate purchase intentions and if brand advertise through
SMS have any effect on purchase intentions. Further, it will be determined if consumers are
willing to except Location Based Advertising and if privacy concerns regarding location tracking
will be significant for Location Based Advertising.
1.3 Benefits of SMS Advertising
The high global penetration of mobile phones and popularity of SMS is only one indicator of
potential of SMS advertising. Every phone today has the capability to send and receive SMS.
SMS advertising also allows the integration of multiple interactivity features such as Click-to-
call, click to mobile web and click-to-download to handsets with required capabilities by
displaying colored links and underling of URL’s and phone numbers.
Further, SMS advertisements are relatively cheap and easy to send compared with other
mediums and provides wide reach, short lead times and rapid response. Mobile marketing is one
of the few mobile opportunities in which the potential of the opportunity actually exceeds its
current hype. A viral effect takes place and is immense if the receiver of SMS advertisement find
it appealing and forwards it to their friends, family and so on, who are not the initial target of the
campaign. This turns out as a positive ‘word of mouth’ or can say positive ‘word of text’ as
people believe, trust and respond well to messages from their known. This viral makes it
possible to enlarge the reach of the SMS marketing campaign and also increase its effectiveness
linked mobile marketing as having "your best salesman in the pocket of your best customer."
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1.4 Issues with SMS Advertising
The technical issue with SMS advertising is that marketers only have 160 characters to express
their message and cannot use colors and logos to represent the brands. However, these issues are
‘no issues’ compared to the benefits and functionality provided by SMS advertising and when
marketers uses the space effectively to deliver relevant message to the consumer and at right
time. But, there are consumer related issues that might completely hide the benefits and
functionality of SMS advertising. These issues are related to consumer’s privacy and security,
because using the capabilities of mobile phone to collect, store and monitor information the user
can be easily identified through the access to their demographic data, location information,
calling pattern etc.
Email was once considered as killer application for both the consumers and marketers. However,
spam and frauds quickly made it a plague for consumers, which makes consumer resist this
medium when used by marketers. Compared to e-mail, mobile phone is very personal to a
person, and there is less tolerance for interruption or abuse, and above all it cannot distinguish
between a spam and genuine messages itself. Consumers are really sensitive about receiving
SMS from an unknown person or organization and find it really intrusive. Therefore, while
addressing consumers through SMS advertising the privacy issues are really important. For such
issues related to privacy and security of consumer, legislation in many developed countries, e.g.
in European countries, Canada, Australia and New Zealand have made strict rules for advertisers
to use ‘permission based advertising’ for contacting consumers using mobile advertising.
1.5 SMS VAS in India – Perspective
The following market report (Source:- http://www.pluggd.in/india-mobile-market-report-sms-as-
a-vas-service-297/) looks at SMS usage in Urban India to shed some light on its future and
answer a critical question, “Is SMS here to stay or will it be replaced?”
Indians use SMS for all sorts of reasons from receiving jokes to checking on flight status to
enquiring about exam results. It’s a very powerful medium for getting in touch with people
Entertainment, Subjective Norm conscious plan to perform the target behavior”. A study of
coupon usage shows that attitude and subjective norm will lead to intention to use coupon
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FIGURE : THE TRA-BASED MBOILE ADVERTISING MODEL
Consumers’ attitudes towards mobile advertising are positively related to their behavioral intention
to receive and read mobile advertisements.
Apart from one’s attitude towards an object, another important variable determining intention is
subjective norm in the TRA model. Subjective norm refers to an individual’s perception of what
Important people think he/she should or should not do, and the individual’s inclination to comply
with their specific desires. One of the assumptions of the TRA model is that human beings are
rational. Basic economic theory states that an individual often maximizes his/her utility. Under
this circumstance, consumers only accept mobile advertising when they perceive benefit in
receiving and reading mobile advertisements. The “use-and-gratification” approach can explain
the utility perception of mobile advertising. This approach implies that people will consciously
choose and employ certain media to satisfy specific needs since the mass media have social and
psychological functions.
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Informativeness
Entertainment
Irritation
Credibility
Prior Permission
Gender
ATTITUDE
SUBJECTIVE
NORM
INTENTION
INTENTIO
The more positive the subjective norm, the higher the behavioral intention to receive and read
mobile advertising.
Katz, Hass, & Gurevitech (1973) also suggested other two needs:
1. “Needs related to strengthening information, knowledge, and understanding”;
2. “Needs related to strengthening aesthetic, pleasurable and emotional experience”;
Informativeness is described as “the ability to inform customers of product alternatives for their
greatest possible satisfaction. Informativeness can be interpreted as the ability of advertising to
deliver information to consumers in order to satisfy their needs. The Optimum Stimulation Level
theory states that people aspire to accomplish a certain degree of stimulation and collect
information with intrinsic motivation. It has been considered as the main factor in acceptance of
advertising. Informative content is also essential for Internet advertising. A research finds that
the majority of the respondents regard the Internet as an information source rather than as an
entertainment source.
Informativeness is positively related to consumers’ attitude towards mobile advertising.
With Referring to Figure 1, the fourth hypothesis concerns the effect of the entertainment
dimension on consumers’ attitude. Entertainment element in advertising can fulfill consumers’
needs for aesthetic enjoyment and emotional release. Based on the studies of Bauer and Greyer
(1968), Pollay and Mittal (1993) found that hedonic pleasure (perceived entertainment value)
had a positive effect on attitudes towards advertising. The perceived entertainment value of
mobile advertisements will be one of the important factor affecting consumers’ attitudes towards
advertising.
Entertainment has a positive influence on attitudes towards mobile advertising.
The credibility of advertising is defined as “consumers’ perception of the truthfulness and
believability of advertising in general... Credibility has been shown to be one of the antecedents
affecting attitudes towards advertising.
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Credibility is positively related to attitudes towards mobile advertising.
Zanot (1981) reviewed survey results in 1930s to 1970s and concluded that the public’s attitudes
towards advertising became unfavorable gradually. One of the important reasons why people
criticize advertising is irritation. The theory of psychological reactance suggests that people react
adversely when they perceived their freedom of choice is being threatened. When people feel
that advertising is annoying or irritating, they will probably express their irritation by developing
unfavorable attitudes towards receiving advertising. People would also tend to maximize their
benefits or utilities by reducing the cost, i.e. the irritation caused by the advertising.
Irritation has a negative effect on the attitude towards mobile advertising.
Other than the belief dimensions, prior permission (opt-in permission) is also an important factor
affecting consumers’ attitude towards advertising. Permission-based marketing means that
Consumers permit marketers to educate them concerning its products. One experimental study
indicates that prior permission for an email marketing campaign would favor attitudes towards
the advertisers and increase consumers’ purchase intentions. Since the mobile phone is a highly
personal communication tool of the user, prior permission is important for mobile advertising. In
addition, perceived risk will determine an individual’s behavior. The risk associated with mobile
marketing is the loss of privacy of mobile phone users. Rather than maximizing benefits, people
will try to minimize their risk. Prior permission can minimize users’ risk by reducing the chance
of abusing their personal data.
Prior permission has a positive effect on attitudes towards mobile advertising.
Finally, the next construct, gender, will exercise an effect on consumers’ attitudes. Gender is
regarded as a crucial variable in affecting one’s cognition and attitude. Since males and females
represent different biological and sociological processes, they will have different affects and
cognition during their information processes. Previous studies have revealed that the beliefs,
attitude and behavior vary according to gender.
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Gender will have influence on the attitude towards mobile advertising
Various studies found that "Perceived Usefulness" is the central driver of the consumer’s
attitude and acceptance of mobile advertising. Perceived usefulness is "the degree to which a
person believes that using a particular system would enhance his or her job performance”.
Researcher determined that utility or usefulness of mobile advertising to consumers is influenced
by message characteristics such as entertainment, credibility, informativeness, and irritation and
they have used these message related dimensions and various important consumers related
factors to determine the attitude of consumer towards SMS advertising.
4.2 Antecedents of Attitude towards SMS Advertising
4.2.1 Message related factors
4.2.1.1. Entertainment:
SMS advertising can also be viewed as fun, interesting and entertaining, as users need mobile
phones for aesthetic, pleasurable, and emotional experiences. Feeling of fun and enjoyment
associated with advertisements play a great role towards consumers overall attitudes toward the
advertisements. Entertaining advertisements have a good chance to attracting consumers’.
Therefore, it is important that the message is concise and funny, that can immediately captures
consumers’ attention. Entertainment is the major factor that affects the overall attitude in mobile
advertising.
4.2.1.2. Informativeness:
As mobile phones are very personal device, the information delivered to customers must be the
one which is in his interest and is relevant to him. The advertisement need to show accuracy,
timeliness, and usefulness for the consumer. Advertisements tend to be ineffective and irrelevant
because they reach consumers when they are not actually shopping. The contextual information
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(location and time Information) can improve the effect. Information significantly influences the
attitude towards SMS advertising.
4.2.1.3. Irritation:
Receiving frequent and high number of messages on mobile phone can cause irritation to
customers, especially at inappropriate time, where customer is busy with his work, which can
extremely damage brand image. The relevance and entertainment of advertising may decline
with the repetition of messages and would lead to boredom. The number of advertising messages
received on mobile influences the advertising value and attitude of the consumer. Adding to it,
the cause of irritation are unwanted messages (spam) which may lead to a feeling that ads are too
intrusive and affects customers privacy. Due to privacy concerns consumers fear registration on
SMS-based information services. Privacy, data security and unsuitable content have been viewed
as consumer risk, and have been negatively related with positive attitude towards SMS
advertising.
4.2.1.4. Ad Source (Credibility)
Credibility is the amount of trust consumer has and the extent to which he believes in the
advertisement. Credibility of an advertisement can be influenced by company’s credibility and
advertising medium (Mobile Phone here) and have been found affect the attitude towards the
advertisements. Trust is crucial and advertisements received from a credible source give the
sense of reliability and positive response. Consumer’s familiarity with the company and its
products or brand contributes towards a source of trust.
4.2.2. Consumer Related Factors:
4.2.2.1 Attitude towards control and permission:
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User’s permission to receive SMS advertising and control over it have been highlighted across
many studies. The importance of privacy issues call for prior consent (permission) from
consumers. Consumers wish to have to ‘opt in’ before they receive mobile advertising messages,
and have the option to ‘opt out’ at any stage and control the volume of SMS ads they receive.
Permission is considered to be a major factor that may affect attitudes towards SMS advertising.
Marketing communications over mobile phone can only be effective if consumers permit the
continuous reception of advertising.
4.2.2.2. Incentives
Individuals by nature like receiving some sorts of benefits and incentives. They especially like
receiving incentives from direct marketing programs. Incentives for SMS advertising can include
free minutes, free texts, free connection time etc, and they have impact on consumer’s attitude
and intentions towards SMS advertising.
4.2.2.3. Age
Generally, young people are heavy users of mobile services. SMS is infused with the ‘fun’ factor
which makes it especially attractive to young consumers. Younger consumers also show a more
favorable attitude toward traditional advertising in a number of dimensions and feel more
comfortable with ads. The age influences the attitude towards SMS advertising.
4.3. Previous researches on Attitude towards SMS advertising
Mobile advertising is relatively n ew and past literature on it is limited. However various
conceptual and empirical researches have been undertaken majorly in different developed
countries to determine the attitude of consumer towards SMS advertising. Throughout the
literature on mobile advertising and marketing, all the factors discussed in the previous section
have been the common and major factors used by researchers to identify the attitude of
consumers towards SMS advertising. These past researches showed both similarities and
differences.
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In one of the earliest studies done by Rettie & Brum (2001), found that respondents disliked
unsolicited SMS advertising and wanted control over them. Negative attitude was determined,
but respondents were positive and preferred receiving ads with incentives (like discount phone
calls and promotional offers) and preferred receiving messages only after giving permission.
Another early research by Barwise & Strong (2002) in U.K found that consumers
enthusiastically showed acceptance for permission based adverting and found it a good way to
communicate with them, given that incentives are provided, the message is relevant and the
volume of messages is not much. Their study was on 16 to 30 year-olds, and evidence suggests
that 51 % of respondents were ‘very satisfied’ and 42 per cent were ‘fairly satisfied’ by
permission based advertising. Some 72 per cent agreed that advertising with permission was
relevant to them and 84 per cent were willing to recommend it.
The importance of permission was echoed in the studies by Bamba and Barnes (2007) in U.K
and Tsang, Ho & Liang (2004) in Taiwan, where consumers had negative attitude without
permission, but positive if permission was obtained. Bamba and Barnes (2007) noted overall
negative attitude of consumer, and identified that brand familiarity did not have an impact on
consumers. However, Tsang, Ho & Liang (2004) determined that entertainment was the most
significant factor affecting respondents’ attitudes, followed by credibility and irritation. They
also found that consumers were positive when offered incentives and it can increase their
intention to receive SMS advertisements. Drossos et al (2007) in an experimental study in
Greece also found that incentives were important, however, credibility did not affected
consumer’s attitude.
Bauer et al (2005) in their research identified that the higher the perceived utility (information
and entertainment) of SMS advertising the more positive consumers are towards SMS
advertising, and higher the risk perceived (data security and privacy), the more negative they are.
Entertainment and information value were identified as the central acceptance drivers of SMS
advertising. Choi, Hwang & McMillan (2008) found that entertainment and credibility were key
factors predicting positive attitude among both Koreans and Americans. But in the U.S., where
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informativeness positively influenced and irritation was negatively related to the attitude, these
did not have any significant effects on Korean consumers.
Further, Haghirian & Madlberger (2005) in their study on Austrian mobile users found all the
message related factors to influence the attitude towards SMS advertising, where information
was identified to be the strongest factor. They found that attitude toward SMS advertising
strongly depends on message characteristics and it need to be developed carefully. They also
determined that customer’s attributes like age do not play dominant role in attitude towards SMS
advertising. However, Barutcu (2008) in Turkey found that youngsters between 21- 30 years
have more positive attitude towards SMS advertisements and found that consumers have positive
attitudes towards SMS advertising. Carroll et al (2007) in their study in New Zealand found that
permission to send the message, limit to the number of mobile advertising messages they wished
to receive, receiving relevant messages and at suitable time were important factors predicting
positive attitude and acceptance of SMS advertising. However, the overall attitude and consumer
acceptance of SMS advertising messages was much low.
4.3.1. Conclusion:
Overall an extensive literature review of consumer’s attitude towards SMS advertising and the
main drivers behind these has been done. The main drivers highlighted are entertainment,
informativeness, irritation, credibility, incentives, age, and permission and control. It has been
analyzed that permission for SMS advertising is really important, which has been identified in
the very earliest research by Rettie & Brum (2001), and has been seen across all researches,
which makes unpermitted SMS advertising a aggregator of negative attitude. However, the
attitude of mobile phone users towards SMS ads has been different in different countries e.g.
consumers in Turkey have positive attitude, whereas in New Zealand and U.K more towards
negative. Also the other important factors influencing the attitude show differences, like
credibility is an important factor for consumers in Taiwan, Korea and America, but not in
Greece and U.K, and information has positive effect on Americans and Austrians but no effect
on Koreans. This entirely seems to be due to the cultural and technological differences. The
past studies have been conducted in various developed countries like U.K, U.S, Australia, New
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Zealand etc, and a clear lack of such investigation has been noted in developing countries like
India, which is culturally and technologically different to an great extent from the countries past
researches have been done. Therefore, based on Research Question 1 ‘What are the main drivers
influencing Indian consumer’s attitude towards SMS advertising amongst ‘Entertainment,
Informativeness, Irritation, Credibility, Age, Incentives, and Attitude towards control and
permission’, it will be interesting to see what are the key factors influencing their attitude and
how similar or different are they with the attitude researched in developed countries. This will
help in understanding Indian consumers better, for planning SMS marketing strategies
effectively.
4.4. Previous research on purchase intentions through SMS advertising and role of brand advertise in purchase intentions.
There is very limited research done regarding purchase intentions through SMS advertising. Wei,
Xiaoming & Pan (2009) in their study in Singapore found that SMS advertisement creates
purchase intentions and can be highly effective in triggering a purchase when consumers respond
positively towards SMS advertising. Rettie, Grandcolas & Deakins (2005), in their study in U.K
also found that SMS advertising had positive effect on purchase intentions of consumers. The
positive effect on purchase was approximately twice that of positive effect on brand attitude.
Positive purchase intentions were related to brand image, where 87.7 % of those who felt more
positively towards the brand claimed they were more likely to make purchase. Message
relevance was also related to purchase intention and intentions were significant in youngsters
between 16 – 24 yrs. Similarly Choi, Hwang & McMillan (2008) in their study found that brand
was a key factors contributing to the purchase intention among both Koreans and Americans.
However, Drossos et al (2007) in Greece found that incentives influenced purchase intentions
but brand advertised in SMS did not impact the intentions of consumers to purchase.
4.4.1. Conclusion:
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As per the literature review it has been analyzed that SMS ads have a positive effect on purchase
intention. Further, it has been noticed that a brand advertised in SMS can influence the purchase
intentions, as seen in case of U.K. and U.S. However, these studies have been done in advance
countries where culture and consumer behavior or buying behavior is different from India. From
the marketer’s perspective it is crucial to know how far SMS advertising has an impact on
purchase intentions of consumers. Therefore, based on Research Question 2 ‘Does SMS
advertising have a positive effect on purchase intentions of Indian consumer’ and Research
Question 3 ‘Does brand advertised in SMS has any positive effect on purchase intentions’ it
will interesting to see the effect of SMS ads on generating purchase intentions and how far
the brand advertised influences purchase intentions.
4.5. Previous research on customers willingness to accept Location Based Advertising
Even though Location Based Advertising is regarded as one of the best and increasingly valued
marketing tool it has received less scholarly attention and studies in this are extremely rare. As
discussed earlier, Location Based Advertising is not allowed without permission, because it can
bring major privacy concerns. Attitude towards Location Based Advertising is defined as “a
person's general predisposition toward commercial messages that are received on a personal
mobile communication device and customized for one's geographic position”. If consumers
have a positive attitude toward Location Based Advertising, then this marketing tool can allow
mobile marketing to kick into high gear.
Wei, Xiaoming & Pan in Singapore found that people were willing to accept location based SMS
ads and were more inclined to receive ads offering discounts. Merisavo et al in Finland also
found that consumers were willing to receive location based ads. Similarly, Bamba and
Barnes in U.K also determined people’s willingness to accept Location Based Advertising
provided ads should be relevant and personalized, even though sometimes intrusive . However,
Unni & Harmon in U.S. found that even though with permission, consumer’s were not
willing to receive Location Based Advertising and the most important factor leading to
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negative attitude and intention was privacy concerns with respect to tracking of location
information, as consumers fear marketer tracing them and it will be more intrusive and tend to
interrupt the consumer. Even the benefits and value of Location Based Advertising such as
relevant message with context (time and location) was valued low by the consumers. Similarly,
Drossos et al in Greece found that SMS advertising did not led to positive attitude when
received closer to the selling point, reflecting their unwillingness to adopt LBA and location
privacy concerns.
4.5.1. Conclusion:
It is analyzed that mobile users from different countries have different responses towards
Location Based Advertising. For instance, consumers in Singapore and Finland are ready to use
highly personalized location and timely services, and on the other hand consumer in Greece and
U.S., are unwilling and do not show value to contextual benefits of Location Based Advertising
due to the fear that they can be traced and will be in reach of marketers anytime. Looking at the
marketing opportunities and benefits provided by Location Based Advertising, it is expected as a
next big thing in India. But no research on consumer’s views about it has been done there. Any
technology cannot precede the human factor, and consumers for whom and on whom this tool
will we used it is important to know their views and willingness about it. Therefore, based on the
Research Question 4 ‘Are Indian consumers willing to accept Location Based advertising’ and
Research Question 5 ‘Will consumer’s privacy concerns about location tracking be significant
for Location Based Advertising’, it will be identified if Indian consumers are positive and willing
to accept Location Based Advertising, or will they show significant resistance to it due to
location tracking privacy concerns.
Overall, the five Research Question’s once analyzed will give an extensive insight and
knowledge to marketers in India and abroad about how Indian consumer value and how effective
the ‘at present’ used push SMS advertisements sent to them are. Further, it will bring out the
views of consumers towards LBA. All the Research Question’s are steps by step process to
analyze the present and determine the future of push SMS advertising in India.
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Chapter 5
RESULT AND DISCUSSION
The first section of this chapter presents and analyses the results from the consumer survey. Data
has been analyzed using the mean values generated by descriptive statistics using Excel 2007 and
one sample t-test is conducted on quantitative data to make relevant statistical inferences. Where
ever possible a comparison of findings from previous studies has been done. The second section
discusses the findings with relevance to research aim and questions, and lists the opportunities
and threats for marketers.
5.1 Respondents Demographics
This section provides general information about the mobile phone users who responded to the
survey. Out of 108 useable respondents 62 were males and 46 were females.
GENDER
The respondents were also well qualified, with majority having Bachelor (44) or Masters Degree
(36). Around 30% were students and 23% were professionals at managerial levels, and
remaining were at good executive and analyst levels. It shows quite a good balance of males and
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females which are the major part of mobile phone users in Urban India. Also the respondents
were well educated and at good profiles. Being heavy mobile users they form a good target
group for SMS advertising and provide varied data as they have different needs so are their
perceptions towards SMS advertisements.
Descriptive StatisticsThe descriptive statistics computed from the data is presented below. Data with complete
percentages is in Appendix D. *S.D = Standard Deviation.
Consumers Attitude and Drivers Mean S.DOverall Attitude 3.05 0.98Entertainment 3.43 0.94Informativeness 2.70 0.97Irritation 2.20 0.92Credibility of Mobile 3.16 0.87Credibility of Brand 2.35 0.91Incentives 2.28 1.01Permission 1.93 0.88Control 1.74 0.81
Purchase Intentions 3.12 0.73Brand effect on Purchase Intentions 2.47 0.84
Willingness for LBA 2.43 0.85Location Tracking Privacy 3.03 1.11
Figure 1 Descriptive Statistic
Descriptive Statistics
In the results, Mean 1 – 2.70 is positive (except of irritation) Mean - 2.80 – 3.20 is neutral and
Mean 3.20 above is negative, which is also based on the percentage of responses when analysed
for particular question.
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5.2 Analysis of Attitude and Factors influencing attitude towards SMS advertising
Factors Influencing Attitude towards SMS Advertising
Question 1
I feel that receiving SMS advertising is enjoyable and entertaining.
Entertainment Mean S.DQ1. I feel that receiving SMS advertising is enjoyable and entertaining.
3.43 0.94
According to the mean rating of 3.43 it appears that Indian consumers don’t find receiving SMS
ads entertaining and enjoyable. 28.7 % disagreed, 14.81% strongly disagreed and
43.52% respondents were neutral for Q1. Conducting a t-test showed that population mean was
(μ) ≥ 3.57 (Appendix E 2).
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Question 2
I feel that SMS advertising is a good source for timely information.
Informativeness Mean S.DQ2. I feel that SMS advertising is a good source for timely information.
2.70 0.97
Many authors indicated that consumers will only be positive and accept SMS advertising if they
perceive benefits in receiving them on their mobile phone (Bauer et al 2005). The mean rating of
2.70 reflects that Indian consumers find SMS advertising a relatively good source for timely and
useful information. As push SMS advertising is mostly for boosting sales, it seems that timely
promotional offers and sales information’s through SMS channel are found useful and liked by
consumers in India, which positively influences their attitude. 6.48% strongly agreed, 38.89%
agreed to this and 40.74% were neutral. Conducting a t-test it was inferred that population mean
is (μ) ≤ 2.55 (Appendix E 3).
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Question 3
I feel that SMS advertisements are irritating.
Irritation Mean S.DQ3. I feel that SMS advertisements are irritating. 2.20 0.92
Though Indian consumers find SMS advertisements timely and useful, they consider it as a
hindrance in their privacy, which is reflected by the mean of 2.20 for Q3. As the ads are sent
without consumer’s permission in India - too much SMS ads, unwanted messages and any
time/anywhere i.e. may be consumer is at work or busy elsewhere causes this irritation. 21.30%
respondents strongly agreed and 48.15% agreed that SMS advertising are irritating. Conducting a
t-test it was inferred that population mean is (μ) ≤ 2.10 (Appendix E 4), which indicates that
most people agree and find SMS ads irritating.
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Question 4 and 5
I trust the SMS advertisements received on my mobile phone
Credibility of Mobile as Advertisement Medium Mean S.DQ4. I trust the SMS advertisements received on my mobile phone 3.16 0.87
I only trust SMS advertisements by the brand I am familiar with.
Credibility of Brand advertised on Mobile Mean S.DQ5. I only trust SMS advertisements by the brand I am familiar with.
2.35 0.91
Analyzing the responses of credibility of mobile ads, it was seen that Indian consumers are
almost neutral towards believing and trusting the ads received on their mobile phone. In the
mean rating of 3.16, 51.89% said that they are neutral and 18.87% agreed for Q4.
However, Indian consumers show much trust in SMS ads received through the brand they are
familiar with, which is indicated by the mean of 2.35 for Q 5. 12.15% strongly agreed, 54.21%
agreed and 23.36% were neutral for it. Conducting a t-test showed that population mean was (μ)
≤ 2.25 for Q5 (Appendix E 5). This shows that brand and company’s image plays an important
role for Indian consumers to trust the message sent on mobile phone.
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Question 6
I am willing to receive SMS ads when some incentives are provided, e.g. free calls, free SMS package, discounts etc.
Incentives Mean S.DQ6. I am willing to receive SMS ads when some incentives are provided, e.g. free calls, free SMS package, discounts etc.
2.28 1.01
Indian consumers show a positive inclination and intention towards SMS advertising when
incentives are provided, as indicated by a mean of 2.28 for Q 6, where 19.44% strongly agree
and 50.93% agree for it. Conducting a t-test for Q 6 showed that population mean is (μ) ≤ 2.15
(Appendix E6). The power of incentives to influence can also be noted that consumers
would be ready to trade off their privacy concern when incentives in form of monetary
rewards are given to some extent.
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Question 7 and 8
I am willing to receive SMS advertisements when I have provided my permission (Consent).
After giving permission, it is important that I can refuse (opt-out) to receive SMS advertisements anytime I want.
Permission and Control Mean S.D
Q7. I am willing to receive SMS advertisements when I have provided my permission (Consent).
1.93 0.88
Q8. After giving permission, it is important that I can refuse (opt-out) to receive SMS advertisements anytime I want.
1.74 0.81
Like consumers in all countries studied in the past, Indian consumers also consider permission
very important for receiving SMS ads, which positively influences their attitude, as indicated by
the mean of 1.93 for Q 7, where 31.48% respondents strongly agreed and 51.85% agreed for it.
Conducting a t-test for Q7 showed that population mean is (μ) ≤ 1.80 (Appendix E7).
After giving permission, control over it is even more important for Indian consumers, which is
indicated by the mean of 1.74 for Q 8, where 42.06% strongly agreed and 47.66% agreed for it.
Conducting a t-test for Q8 showed population mean is (μ) ≤ 1.62 (Appendix E 8).
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Question 9
I feel positively about SMS advertising.
Overall Attitude Mean S.D
Q9. I feel positively about SMS advertising. 3.05 0.98
Based on a five-point Likert scale, where 1 is strongly agree and 5 is strongly disagree, average
respondents score was 3.05. This implies that consumers in India are neutral towards SMS
advertising. In terms of highest percentage, 39.81% respondents were neutral, 27.78% agreed
and 20.37% disagreed for Q9. Conducting a t-test it was inferred that population mean (μ) = 3.04
(Appendix E 1).
Question 10 and 11
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I am likely to purchase the product(s) presented in the SMS advertisements.
I am likely to purchase if SMS advertisement is from the brand I am familiar with
and trust.
Purchase Intentions Mean S.D
Q10. I am likely to purchase the product(s) presented in the SMS
advertisements.
3.12 0.73
Q11. I am likely to purchase if SMS advertisement is from the
brand I am familiar with and trust.
2.47 0.84
The mean of 3.12 for Q10 shows that SMS advertising has a neutral effect on Indian consumer’s
overall purchase intentions. 61 % respondents were neutral, 14% agreed and 19.44% disagreed
for Q 10.
However, if the ad is from a well known and familiar brand, it leads to a positive effect on
purchase intentions, as indicated by the mean of 2.47 for Q11. 7.41% strongly agreed, 50%
agreed and 33 % were neutral for it. Conducting a t-test for Q11 showed that population mean
(μ) ≤ 2.34 (Appendix E 9).
Question 12 and 13
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I would like being able to receive location based SMS advertisements.
I would like my location to be traced by the mobile service provider and would be comfortable over my location data being shared with the retailers.
Location Based Advertising Mean S.D
Q12. I would like being able to receive location based SMS
advertisements.
2.43 0.85
Q13. I would like my location to be traced by the mobile service
provider and would be comfortable over my location data being
shared with the retailers.
3.03 1.11
The mean of 2.43 for Q12 represents that Indian consumers are willing to accept LBA. A good
amount of 55.56% respondents agreed, 7.41% strongly agreed and 25.93% showed no strong
feeling for accepting LBA. Conducting a t-test for Q 12 showed that population mean is (μ) ≤
2.30 (Appendix E 10). However as per the mean of 3.03 for Q 13 it occurs that consumers are
neutral towards their location tracking privacy. 4.63% strongly agreed, 31.48% agreed, and 34.26
% showed no strong feeling for Q13.
CHAPTER 6
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FINDINGS AND RECOMMENDATIONS
6.1 Findings:
The following can be the finding for the SMS advertising in Urban India:
1. Feeling of fun and enjoyment associated with advertisements play a great role towards consumers overall attitudes toward the advertisements. According to the survey done it was found that Indian consumers didn’t find receiving SMS advertising on their mobile phones entertaining and enjoyable. 28.7 % disagreed, 14.81% strongly disagreed and 43.52% respondents were neutral
2. As mobile phones are very personal device, the information delivered to customers must be the one which is in his interest and is relevant to him. Indian consumers find SMS advertising a relatively good source for timely and useful information.
3. Though Indian consumers find SMS advertisements timely and useful, they consider it as a hindrance in their privacy as the ads are sent without consumer’s permission in India - too much SMS ads, unwanted messages and any time/anywhere i.e. may be consumer is at work or busy elsewhere causes this irritation. The relevance and entertainment of advertising may decline with the repetition of messages and would lead to boredom. The number of advertising messages received on mobile influences the advertising value and attitude of the consumer. Adding to it, the cause of irritation are unwanted messages (spam) which may lead to a feeling that ads are too intrusive and affects customers privacy.
4. Indian consumers are almost neutral towards believing and trusting the ads received on their mobile phone.
5. Indian consumers show much trust in SMS ads received through the brand they are familiar with. Trust is crucial and advertisements received from a credible source give the sense of reliability and positive response. Consumer’s familiarity with the company and its products or brand contributes towards a source of trust.
6. Indian consumers show a positive inclination and intention towards SMS advertising when incentives are provided. Incentives for SMS advertising can include free minutes, free texts, free connection time etc, and they have impact on consumer’s attitude and intentions towards SMS advertising.
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7. Indian consumers also consider permission very important for receiving SMS ads, which positively influences their attitude. Consumers wish to have to ‘opt in’ before they receive mobile advertising messages, and have the option to ‘opt out’ at any stage and control the volume of SMS ads they receive. Permission is considered to be a major factor that may affect attitudes towards SMS advertising.
8. After giving permission, control over it is even more important for Indian consumers.
9. SMS advertising has a neutral effect on Indian consumer’s overall purchase intentions. 61 % respondents were neutral, 14% agreed and 19.44% disagreed
10. Indian consumers are willing to accept LBA. A good amount of 55.56% respondents agreed, 7.41% strongly agreed and 25.93% showed no strong feeling for accepting LBA. However it occurs that consumers are neutral towards their location tracking privacy.
6.2 Recommendations:
While conducting this research we came to know about the likings and disliking about the customers, we also came to know which factors are more demanding to people for making mobile advertising successful. The following can be the recommendations to the companies opting for SMS advertising:
1. Permission based approach is the easiest way to tackle the privacy issue and can effectively build trust. After giving permission consumers would not be surprised on receiving the SMS form marketer, as they would know where and why it is coming, and will respond well to it. Therefore, with permission, marketers can precisely target the consumers and send relevant advertisements, thereby increasing the effectiveness of the campaign. Companies must have control over receiving and stopping mobile advertisements.
2. Due to privacy concerns consumers fear registration on SMS-based information services. Privacy, data security and unsuitable content have been viewed as consumer risk, and have been negatively related with positive attitude towards SMS advertising. Companies must be concerned about customer data, they should protect their privacy.
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3. Entertaining advertisements have a good chance to attracting consumers’. Therefore, it is important that the message is concise and funny, that can immediately captures consumers’ attention. Entertainment is the major factor that affects the overall attitude in mobile advertising.
4. There should be some selectable time for receiving advertisements.
5. There should be some way of getting location based advertising, for those who want it.
6. Mobile Advertising can be applied for couponing, for creating brand awareness, as entertainment provider in location based services, while can also be used for launching new products and also for building customer relationships.
7. Before sending advertisements companies should try confirm whether the advertisements supports customers interests and moreover companies should try to make the SMS advertisements personalized.
Bruner & Kumar 2007 Bruner, C. G. and Kumar, A. (2007). Attitude toward
Location-Based Advertising.[Online] Journal of Interactive Advertising
International Journal of Advertising
E-Business and E-Commerce Management
Journal of Interactive Advertising
Journal of Current Issues and Research in Advertising
APPENDIX
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APPENDIX 1:
T- Test
1. Performing a two tail t-test on Q9 “I feel positively about SMS advertising.”
Null Hypothesis (H0): Population mean (μ) = 3.04 Alternative Hypothesis (H1): μ = 3.04Level of significance α = 0.05Sample mean x = 3.05Sample Standard deviation = 0.98Sample size n=108
= 0.106
For t0.025, 107 = + and - 1.960
We accept the null hypothesis
Hence, for Q 9 the population mean is (μ) = 3.04
2. Performing t-test on Q1. ‘I feel that receiving SMS advertising is enjoyable and entertaining’.
Null Hypothesis (H0): Population mean (μ) ≥ 3.57Alternative Hypothesis (H1): μ < 3.57Level of significance α = 0.05Sample mean x = 3.43Sample Standard deviation = 0.94Sample size n=108
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= - 1.55
For t0.05, 107 = - 1.645
Since t > t0.05, 107, we can accept null hypothesis.
Hence, for Q 1 the population mean is (μ) = ≥ 3.573. Performing t-test on Q2. ‘I feel that SMS advertising is a good source for timely
information’.
Null Hypothesis (H0): Population mean (μ) ≤ 2.55Alternative Hypothesis (H1): μ < 2.55Level of significance α = 0.05Sample mean x = 2.70Sample Standard deviation = 0.97Sample size n=108
= 1.612
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 2 the population mean is (μ) ≤ 2.55
4. Performing t-test on Q3 ‘I feel that SMS advertisements are irritating’.
Null Hypothesis (H0): Population mean (μ) ≤ 2.10Alternative Hypothesis (H1): μ < 2.10Level of significance α = 0.05Sample mean x = 2.20Sample Standard deviation = 0.92
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Sample size n=108
= 1.136
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 3 the population mean is (μ) ≤ 2.10
5. Performing t-test on Q5 ‘I only trust SMS advertisements by the brand I am familiar with’.
Null Hypothesis (H0): Population mean (μ) ≤ 2.25Alternative Hypothesis (H1): μ < 2.25Level of significance α = 0.05Sample mean x = 2.35Sample Standard deviation = 0.91Sample size n=108
= 1.149
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 5 the population mean is (μ) ≤ 2.25
6. Performing t-test on Q6 ‘I am willing to receive SMS ads when some incentives are provided, e.g. free calls, free SMS package, discounts etc.’
Null Hypothesis (H0): Population mean (μ) ≤ 2.15Alternative Hypothesis (H1): μ < 2.15Level of significance α = 0.05Sample mean x = 2.28
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Sample Standard deviation = 1.01Sample size n=108
= 1.340
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 6 the population mean is (μ) ≤ 2.15
7. Performing t-test on Q7 ‘I am willing to receive SMS advertisements when I have provided my permission (Consent)’.
Null Hypothesis (H0): Population mean (μ) ≤ 1.80Alternative Hypothesis (H1): μ < 1.80Level of significance α = 0.05Sample mean x = 1.93Sample Standard deviation = 0.88Sample size n=108
= 1.547
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 7 the population mean is (μ) ≤ 1.80
8. Performing t-test on Q8 ‘After giving permission, it is important that I can refuse (opt-out) to receive SMS advertisements anytime I want’.
Null Hypothesis (H0): Population mean (μ) ≤ 1.62Alternative Hypothesis (H1): μ < 1.62
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Level of significance α = 0.05Sample mean x = 1.74Sample Standard deviation = 0.81Sample size n=108
= 1.558
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 8 the population mean is (μ) ≤ 1.62
9. Performing t-test on Q11 ‘I am likely to purchase if SMS advertisement is from the brand I am familiar with and trust’.
Null Hypothesis (H0): Population mean (μ) ≤ 2.34Alternative Hypothesis (H1): μ < 2.34Level of significance α = 0.05Sample mean x = 2.47Sample Standard deviation = 0.84Sample size n=108
= 1.625
For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 11 the population mean is (μ) ≤ 2.34
10. Performing t-test on Q12’ I would like being able to receive location based SMS advertisements’.Null Hypothesis (H0): Population mean (μ) ≤ 2.30
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Alternative Hypothesis (H1): μ < 2.30Level of significance α = 0.05Sample mean x = 2.43Sample Standard deviation = 0.85Sample size n=108
= 1.604For t0.05, 107 = 1.645
Since, t < t0.05, 156, we can accept the null hypothesis H0.
Hence, for Q 12 the population mean is (μ) ≤ 2.30
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APPENDIX 2:
SMS Advertising Questionnaire:
Please answer all the questions. Your contribution will be highly appreciated.
The following questions are related to SMS advertisements sent to you by businesses, for example, SMS for sales promotion, new product/store launch or any kind of commercial message. Please mark the appropriate for the following questions as follows
Strongly agree – 1
Agree -2
Neutral-3
Disagree-4
Strongly Disagree-5
1. I feel that receiving SMS advertising is enjoyable and entertaining.
Strongly Agree Agree Disagree
Neutral Strongly disagree
2. I feel that SMS advertising is a good source for timely information
Strongly Agree Agree Disagree
Neutral Strongly disagree
3. I feel that SMS advertisements are irritating
Strongly Agree Agree Disagree
Neutral Strongly disagree
4. I trust the SMS advertisements received on my mobile phone.
Strongly Agree Agree Disagree
Neutral Strongly disagree
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5. I only trust SMS advertisements by the brand I am familiar with
Strongly Agree Agree Disagree
Neutral Strongly disagree
6. I am willing to receive SMS ads when some incentives are provided, e.g. free calls, free SMS package, discounts etc.
Strongly Agree Agree Disagree
Neutral Strongly disagree
7. I am willing to receive SMS advertisements when I have provided my permission (Consent).
Strongly Agree Agree Disagree
Neutral Strongly disagree
8. After giving permission, it is important that I can refuse (opt-out) to receive SMS advertisements anytime I want
Strongly Agree Agree Disagree
Neutral Strongly disagree
9. I feel positively about SMS advertising
Strongly Agree Agree Disagree
Neutral Strongly disagree
10. I am likely to purchase the product(s) presented in the SMS advertisements
Strongly Agree Agree Disagree
Neutral Strongly disagree
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11. I am likely to purchase if SMS advertisement is from the brand I am familiar with and trust.
Strongly Agree Agree Disagree
Neutral Strongly disagree
Location Based SMS Advertising is SMS advertisement which you can receive based on your location. Example, when you are near a mall or in the mall, you can receive a SMS from ‘Levis’ that '50% discount has started right now, come and grab the latest collection'. Another example, a discounted dinner offer when passing by a favorite restaurant in the evening.
Location Based Advertising will be permission based, meaning, where you have given your active permission (consent) to receive the SMS from retailers or businesses you want. Please mark the appropriate for the following questions
12. I would like being able to receive location based SMS advertisements
Strongly Agree Agree Disagree
Neutral Strongly disagree
13. I would like my location to be traced by the mobile service provider and would be comfortable over my location data being shared with the retailers.