How smartphones and applications have changed market and

consumer behavior

Thesis

By

Jakub Odvarko

Submitted in Partial fulfillment

Of the Requirements for the degree of

Bachelor of Science

In

Business Administration

State University of New York

Empire State College

2016

Reader: David Starr-Glass MBA, M.Sc., M.Ed.

https://elearning.unyp.cz/pluginfile.php/58141/mod_data/content/267/Odvarko%2C%20Jakub_508480_Senior%20Project%20Thesis.pdf
Acknowledgement

It is a pleasure to thank those who helped me with writing this thesis.

At first, I would like to thank Professor Starr-Glass for his guidance throughout writing process. He

has been tremendous mentor, who has been always prepared to help and offer useful advices.

Further, I would like to thank my parents for their unconditional support during my time at

University of New York in Prague.

I would also like to thank Barbora, for her support and patience.

These people made my studies and writing my thesis much easier. Thank you!
Outline:

1. Abstract

2. Introduction

3. History

3.1 Internet

3.2 Electronic commerce

3.3 Portable devices

4. Smartphones and applications

4.1 Smartphones overview

4.2 Difficulties and shift to mobile first strategy

4.3 Mobile marketing

4.4 Applications

4.5 Marketing through applications

4.6 FOMO

4.7 Mobile commerce

4.8 Smartphone payments

4.8.1 Graphs

4.8.2 Security

4.8.3 Near field communication

4.8.4 Emerging countries

5. Consumer behavior

5.1 Introduction to consumer behavior

5.2 Buying process

5.3 Marketing mix 4Ps

5.4 Types of purchasing behavior

5.5 Factors influencing customers

5.6 Research methods

6. Impact of smartphones and applications on consumer behavior

6.1 Shift of power

6.2 Most trusted sources

6.3 Interaction with clients

6.3.1 Customer relationship management

6.3.2 Interaction through applications

6.3.3 Social sites

6.4 Utilization of consumers` power

6.5 Impact of smartphones on spenders

7. Conclusion
1. ABSTRACT

Research question: How smartphones and applications have changed the market and

consumer behavior?

Popularity of internet has been rising exponential since its introduction in 1989, companies

recognized potential of this behavior pretty quickly and electronic commerce established

itself as important part how to do business between customers and companies. Importance

of electronic commerce even increased with the introduction of smartphones - portable

devices, through which people were able to be online all the time.

Sales of smartphones exceeded even optimistic expectations and they were quickly

becoming new personal computers. Options of electronic commerce widened, companies

were able to expose customers to advertisement all the time and were modifying their

marketing techniques accordingly. Because of potential of smartphones to be main force of

e-commerce more and more companies started adjusting their offer towards mobile webs

first.

Useful tool how utilize possibilities of smartphone became applications. They were created

specifically for smartphones users and enabled producers to track customers in much better

way. Via features such as location based marketing, or push notifications companies were

able to notify customers with their messages at perfect time and place.

From economical point of view, companies were investing into mobile advertisement more

and more money, and these investments returned several fold.

On the other hand, internet in smartphones did not bring just possibility to advertise and sell

24/7. It also gave customers inexhaustible amount of choices and ability to search and share

everything within a while. It results to situation, when people base their decision more on
advices from people, than from companies. For companies it means, buying cycle is never

ending and attitude of one costumer after the purchase affects more and more people,

whether buy, or not to buy particular product. When companies want to provide good

service and affect wide scale of people, they have to incorporate customers in development

of products and listen what they want, it is the right way how to spread good perception of

company among users and also a way, where companies will enjoy increasing revenues and

customers will enjoy products, which they demand.

2. INTRODUCTION

Since the introduction of Internet in 1989, possibility to be online was more and more

popular among people. Amount of Internet users and time spent browsing webs were increasing

heavily. It urged companies to offer their products and services not only in their stores, but also

online – electronic commerce became important mediator in business interactions.

It affected not only interactions between companies and customers (B2C), but also

interaction among firms (B2B), customers (C2C), and enabled people to offer their ideas to

companies. (C2B).

As people seek possibility to be online more and more often and browse internet

everywhere, anytime. It leads to creation of portable devices, that would comply these

requirements.

First attempts were not so successful, while design of mobile web pages was too different

from design on their PCs. It changed in year 2007, when CEO of Apple Steve Jobs introduced

iPhone, mobile that was multifunctional and that was aimed to offer people same features as their

PCs at home.

The aim of my thesis is to explore deeply how this invention have changed the world. In

order to create reliable description, I will describe its impact from companies´ point of view and

from point of view of customers.

In the first part, I will describe what companies had to change in order to fully utilize

opportunities smartphones were offering them. I will deal with changes in marketing and

advertisement and what effect new strategies of companies had on their commerce.

I will further focus on important task connected with smartphones – mobile applications,

which possibilities of smartphones shifted even further.

7
 As a goal of this part I want to describe role of smartphones, which were not just mobile

phones anymore, but which were tools, which had higher and higher impact on the success of

businesses.

In the second part, I want to describe, that companies were not the only ones, that were

affected.

With help of description of consumer behavior tendencies, I will describe how smartphones

affected buying process, purchasing behavior factors that were influencing customers and their new

position caused by enormous amount of information and ability to interact and share opinions with

people all around the world.

As a goal of second part I want to describe changes that companies had to take, in order to

attract people and make them their customers.

My research I base on scholarly journals, which help me to understand regularities of mobile

commerce and consumer behavior, these findings I support with high amount of articles from

experts on given topic, and by statistical data.

8
3. HISTORY

3.1 Internet

In order to explain how development of smartphones changed the market I have to go back

to the past. A lot of people connect smartphone era with introduction of iPhone and they are not

entirely incorrect, however in order to understand this boom better, let me go even further to year

1989, when Sir Tim Berners Lee invented World Wide Web.

As shows table 1, it took a few years before people got used to looking for information

online, but from that time, amount of users of internet worldwide kept increasing heavily to

more than 3,6 billion users by 2016. When I take into account latest statistic of world population,

which was approximately 7,2 billion people, it means that half of the world is “online”. (Internet

World Stats, 2016)

9
Table 1. Internet users online in millions

Note. Retrieved from Open Learn Business Studies. Copyright 2013 by Dr. Fiona Ellis-Chadwick.

Reprinted with permission.

3.2 Electronic commerce

It did not take long and customers had another option, not only they could look for

information online, internet became also place where companies, or customers went, when they

wanted to buy, or sell items.

Purchasing and selling goods and services through electronic network, which involved some

sort of payment was designated as electronic commerce (e-commerce) and because of increasing

popularity of internet, it was becoming more and more important mediator in business interactions

(Henderson, n.d.) (Wang and Chen, 2010)

10
 Some kind of attempts to transfer through electronic modes occurred already in 1960s, when

electronic data was interchanged on value added networks (VANs), however real boom of

electronic commerce is connected with the introduction of internet and mainly with the mid and late

90s. (Airline, 2016)

Electronic commerce was firstly divided into three classes, inter-organizational (B2B), intra-

organizational (within business) and customer to business. Then, it was slightly modified according

to four classical categories similarly to traditional commerce:

(Kalakota and Whinston 1997, p18)

Business to business (B2B) - two companies trade with each other

Business to customer (B2C) - company sells to customers, there is no human interaction, purchase

is done through shopping cart software

Customer to business (C2B) - customer has an idea to create a project and he offers it through

internet to companies, which think about investing in it

Customer to customer (C2C) - online webpages that work as a marketplace, where individuals try

sell, or buy goods from each other (Airline,2016)

As shows curve at table 2 bellow, advantages of e-commerce such as wider offer, speed or

almost constant availability 24/7 outweighed disadvantages such as customers had to wait for

ordered product, or that they could not touch it and see it in front of them - from year 1996 amount

of purchasing activities through internet went steadily up quite similarly with the increasing amount

of internet users.

Table 2. Worldwide e-commerce generated revenue in Billions US

11
Note. Retrieved from DigitalSuperHighway. Copyright 2002 by NUA Internet Studies. Reprinted

with permission.

http://www.digitalsuperhighway.com/Future/InfoSuperhighway.html.

3.3 Portable devices

As time went, inventors came with something even more revolutionary, devices through

which people were able to use internet wherever they want - portable devices.

Some kind of portable devices were available already in 1980s. There were phones in luxury

cars, or limousines, in late 80s businessmen used pagers, that reminded them, when they missed call

in order to call back, or than in early 90s appeared personal digital assistants (PDA). (Sailus,2014)
12
 In this period of time, when the first wireless telephone technology (1G), was being replaced

by the second generation (2G) there were available first ``smartphones``, mobiles that were able to

offer more than just making a phone call.

In 1992 was introduced Simon Personal Communicator from IBM, and next companies

followed, Nokia with its Nokia 9000, or Ericsson with its GS88. (Reed, 2010)

Even though they were never called smartphones and they were very distant from

smartphones as we know at this time, they had the first similarities. Besides calling, they were able

to send and receive emails, play role of personal data assistants, or enter command to fax machine.

(Taylor, 2014)

First attempts to incorporate ability to be browsing web through mobile phone were done

shortly before millennium, in 1999. Beginnings were difficult, not only navigating through press

buttons was not easy, mainly almost no web pages were set for mobile web, so in fact it was

possible to check only basic news, or emails, not mentioning that because of the rarity of web in

mobile it was quite expensive, thus not so wide scale of people was using it. (Reed, 2010)

It kept changing after millennium as third generation of wireless telephone technology

occurred, it was an intermediate step before January 2007, when CEO of Apple, Steve Jobs

introduced iPhone and possibility of web browsing from mobile should have become something

natural. (Burnes, 2010)

13
4. SMARTPHONES AND APPLICATIONS

4.1 Smartphones overview

Opinions on iPhone at first differed, on one side Steve Jobs, who was describing it as

something revolutionary and magical, what was 5 years ahead of any other mobile phone device, on

the other side, heads of some other companies, such as Steve Ballmer, chief of Microsoft, who was

describing it as overpriced, difficulty manageable and inutile for business people. (Arthur, 2012)

Consumers determined the winner right away, Apple sold 270 000 iPhones within the first

30 hours when they put up iPhone for sale, and predictions were to sell minimum 10 million by the

end of 2008. (Miller, 2007)

14
 Numbers exceeded expectations, Apple managed to sell 1.39 million iPhones within 2007

and whooping 11.63 million by the end of 2008 (Statista, 2016)

Times when mobile phones were used by majority people only for making phone calls and

sending messages were gone, by introduction of iPhone, they became multifunctional, almost

everything could be searched, shared with people all around the world, or purchased within a while,

namely 24/7.

Competitors had to react, some such as Nokia still believed in their strategy and in their

strong position on the market, the others followed Apple and prepared their smartphones. Already

in November 2008 was launched first smartphone with Android operating system G1 and others

started bringing their products not so much later. When I look at table 3, it was definitely step in a

right direction, people adopted smartphones very fast, and sales went up exponential. (Arthur, 2012)

Table 3 Computers, smartphones, and tablet sales in thousands

Note. Retrieved from Arstechnica, Copyright 2012 by Arstechnica. Reprinted with permission

http://arstechnica.com/business/2012/08/from-altair-to-ipad-35-years-of-personal-computer-market-

share/4/

15
 As can be seen on table 4. smartphones already in 2012 held more than half of the market

with smart connected devices and according to International Data Corporation, market seemed to be

destined to even increase this share in the future.

Table 4 Worldwide smart connected device forecast % market share

Note. Retrived from Fidelityilf, Copyright 2012 IDC. Reprinted with permission.

http://www.fidelityilf.com/market_news/21Century/pdf/mobile-and-ecom.pdf

It was estimated that by 2016 2 billion people would use smartphones, which basically

meant almost every 4th person on the planet. As can be seen on the table 5, numbers are likely to

16
exceed expectations again and it seems very likely that in this year smartphone users exceed

number of 2 billion by around 100 000 million users, same tendency should follow also in near

future, optimistic statistics talk even about third of the world`s population by the end of 2017 to be

owners of smartphone, however even the more ``skeptical`` ones show unequivocal tendency.

(Nayberg, 2015) (Statista, 2016)

Table 5 number of smartphone users worldwide in billions

Note. Retrieved from Statista, Copyright 2016 Statista. Reprinted with permission

https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/

When I look one more time at the table 5 above, on one hand we can see that year on year

growth is decreasing (2014-2015 18,4%, 2015 - 16 12,9%, forecast 2016 - 17 10,4%, 2017-18

17
9,05%, 2018-19 7,11%), however it does not signal decreasing popularity of smartphones, it is

simply caused, that more and more people own smartphone already, numbers still increase steadily

and it is not likely to stop in the future. Because of circumambient popularity of smartphones all

kinds of customers demand them, even companies with cheaper technological devices need to have

smartphones in their offer and therefore they become much more affordable to wide scale of people,

when there are already smartphones for less than 50 dollars, smartphones from being something

special, became something very usual nowadays and creators adopted their production towards this

trend. (Mobile and e-commerce are reshaping consumer behavior, 2016)

4.2 Difficulties and shift to mobile first strategy

Beginnings of smartphones were however not without difficulties, even though amount of

users was increasing steadily, a lot of people complained about several things about these new

technological devices.

Some of the difficulties such as smaller size of the screen, or awkward orientation without

mouse were more of a matter of time until customers got used to them, moreover these

disadvantages were compensated by the already mentioned portability.

Main problem was insufficient compatibility with an offer on websites on PCs, while ability

to be web browsing through mobile was one of the primary aims of smartphones. In 2009 more than

third of websites were not optimized for mobile devices and even when they were optimized,

people complained about difficulties with opening them and slow downloading. (Burnes, 2010)

Already in that year 2009 Luke Wroblewski, product director at Google, pointed on

increasing popularity and potential capabilities of smartphones, thus he was advising designers to

18
switch from PC first strategy, when websites were firstly created for personal computers and after

for mobiles, to mobile first strategy. (Wroblewski, 2009)

Future proved him right, increasing popularity and potential of smartphones caused, they

became practically new personal computers and people were making more and more decisions from

them, thus it seemed as better place for advertisement and interaction with customers.

In order to exploit capabilities of smartphones better, companies started shifting their offer

of products and services further from desktop first strategy in favor of smartphones. This strategy

was called mobile first strategy, in other words they intended to design content of websites more in

favor of mobile platforms and give customers what they want - faster loading of webpages and

content fitting appropriately on small screen of smartphone. (Investopedia, n.d.)

However, mobile first strategy can be better described as ``mobile equal strategy``. There

are companies such as Uber, that use only smartphone for their business and interaction with

clients, however for majority of firms, mobile first strategy does not mean, that other devices are

useless. Even when shifting strategy in favor of one device, it is understandable and efficient to

exploit also advantages of different devices.

Smartphones are thought to be great tool for interaction with clients 24/7, researching and

purchasing stuff that customers are familiar with, that do not need much consideration, or profound

research, on the other hand PCs still have also their advantages, such as for example larger space of

desktop, which not only shows more content, but understandably give companies also bigger space

for advertisement and promotion, from customer`s point of view they are thought to be better for

deeper research which requires more thinking, when purchasing more expensive items, or new

items, with which customer is not familiar with yet. (Nayberg,2015)

PCs and smartphones should not be taken as replacements, or even competitors, actually in

order for companies to fully exploit possibilities of technologies, they should be taken as

complements, that cooperate among each other effectively, while every device is useful for

something else in different kinds of situations.

19
 The need to be compatible is supported by survey from ExactTargetMarketing that revealed,

for 91% consumers it is important to have access to the offer of the company across all devices.

(Iyoob, 2015)

More than 40% adults proclaimed they don't have problem to start an activity on one

device, and continue, or finish it on another one. The number goes even higher, when the research

focused on the amount of devices the person owns, 53% of people who own 2 devices are glad

when they can do the same thing on their devices, talking about people with 3 devices the

percentage was even 77% of customers who want to switch from one device to another. (Singer,

2014)

Companies nowadays need to allow customer to do same things, when they switch from one

device to another, it is crucial to make sure different devices and offer on them are compatible

together and as bonus they have to utilize features and benefits that each type of device offers them.

4.3 Mobile marketing

There are six main types of communication, how marketers interact with clients:

advertising, sponsorship, sales promotion, personal selling, public relation and online marketing (e-

communication) (Marie & Grybś, 2013)

There had been marketing communication through phones within online marketing already

before introduction of smartphones. Companies interacted with clients via SMS, or MMS, through

which they could send relevant marketing messages at first in form of texts, and later in form of

images, videos, or audio. (Tähtinen, 2016)

20
 Already at that time phones used first proximity systems, such as proximity bluetooth

marketing, which defined target subscribers in near geographical area and from broadcasting

stations they sent him appropriate content to catch their attention. (Rayfield, 2010)

Another marketing techniques was e.g. voice marketing, which was not very popular among

people, it is based on calling sample of people from the list that was created before and people than

hear pre-recorded message. (Smidova, 2013) (Car, Simunic and Laskarin, 2013)

With calling clients, companies could utilize the Pay Per Call in mobile marketing, that

worked on same basis as pay per click, provider paid for advertisement according to how many

times customers called the number from the advertisement. (Smidova, 2013) (Car, Simunic and

Laskarin, 2013)

Rising popularity of smartphones and changes in shopping patterns understandably brought

new marketing strategies and further increased the importance of mobile as a marketing tool.

Innovative companies with experiences with electronic commerce saw it as a new communication

channel with high potential, how to reached the consumer. (Lamarre, Galarneau and Boeck, 2011)

Whether internet changed the way for marketers how to interact with customers,

smartphones shifted this even further. On PCs customers were online and offline, however on

smartphones they were online practically all the time, so it was big chance how to expose them

towards constant advertisement.

According to comScore, people on average spend 60% of their digital time on their

smartphones and check their mobile 150 times a day, it means 3.2 hours that could be used for

interaction with them. (Singer, 2014)

Simply put, smartphones changed position of mobile phones from one of the ways how to

do marketing and affect customers, to way with potential to become the most important

communication trend, which increases and makes easier two-way interaction between customer and

provider. (Marie and Grybs, 2013)

21
 For description of mobile marketing can be used abbreviation in form of fittingly word

MAGIC - M - mobile, A - anytime, G - Globally, I - Integrated, C - customized. (mediaguru, n.d)

When I focus on new marketing techniques connected with smartphones and their

usefulness for target audience preferences I have to at first mention mobile webs, mobile version of

web page that fits on a smartphone had increasing importance, in order to make it easy for people to

search online. (Car, Simunic and Laskarin, 2013)

With mobile webs were connected also mobile banner adds. I have said earlier, PCs were

better for advertisement because of bigger screens, however companies could not resign to have

advertisement on such emerging product as smartphone was and had to modify it to fit on smaller

screen. (Car, Simunic and Laskarin, 2013)

Next feature was Quick response barcode (QR code), which was pictured on print ads. This

code could be scanned through smartphone and client received data from the barcode. This is

interconnection of digital and print advertisement, whose advantage is, that QR codes are able to

gather a lot of data, thus client can get quickly and without need of further search appropriate

extended information about given product, or service. (Smidova, 2013)

In connection with smartphones there was one feature, that surpassed in importance the

others, mobile webs were still not perfect and on smartphones they often lacked important features,

that were available on PC. It led to increasing amount and importance of mobile applications, which

were able to utilize features of smartphones and connect with customers at perfect time and place,

as I will show later.

New features obviously lower use of previous techniques such as sending sms, or mms,

while there were suddenly better ways how to promote products and services, however they did not

make them useless, while these techniques could be still efficiently used in order to let customers

know about applications and direct them there.

Increasing importance of mobile internet, can be also supported by the table 6 bellow, that

shows how companies realized potential opportunities and started investing in advertisement on

22
internet on smartphones. These investments went sharply up, in only 3 years from 2012 to last year the

increase was by almost 50%, and by 2018 predictions speak even about almost 120% increase in comparison

to year 2012.

Table 6 Worldwide spending on mobile advertisement in billions US dollars

Note retrieved from Content-loop, Copyright 2014 eMarketer. Reprinted with permission

http://www.content-loop.com/10-mobile-marketing-statistics-help-justify-budget/

4.4 Applications

As one of the features of mobile marketing I mentioned mobile applications, which however

play such an important role, that should be in independent chapter.

23
 I have already showed how amount of smartphones was increasing steadily (Table 3, Table

5), thus people were online more and more often, so it was crucial to edit and optimize content

towards smartphones. In order to satisfy all interested parties companies not just had to prepare

products and services that people wanted, but prepare them also in ``packages``, that customers

would appreciate and which would be easy for them to ``open``.

At first I would like to say what is main difference between application and mobile website.

Mobile website is in general similar to the website, that can be seen on PC, however because of

smaller size of screen, design is usually slightly different than on PC, without some of additional

features.

On the other hand, applications are since beginning prepared for small touch screens.

Similarly, to websites they show content of the page, however they leverage features and simplicity

of smartphone such as navigation to particular place (location based mapping), writing down dates

connected with the service, camera to take photo and use it for further actions, or click-to call, for

dialing a phone number with just one click, to receive further information from expert after doing

initial research and many others. It is way how to maximally utilize smartphones and make easier

and faster communication with customer in order to understand them. (Mobile Apps: What

Consumers Really Need and Want, n.d.) (Hague, 20116)

Application can be powerful tool how to create strong relationship, that will push customers

to engage with the company again and again and though it strengthens their loyalty. (Spanier, 2016)

When I compare applications with mobile websites, applications seem to be ``clear

winner``. Researches showed, 85% of smartphone users preferred applications and used them 90%

of time while browsing on their phone. (Chaffey, 2016) (Moth, 2013)

Main aspects, they appreciated were higher convenience (55%), speed (48%) and simplicity

when browsing and ability to connect different services in smartphone (40%) (Mobile Apps: What

Consumers Really Need and Want, n.d.)

24
 Table 7 bellow shows amount of downloaded apps year on year, and it can be said, that their

popularity rose with the same upward tendency as popularity of smartphones.

Su Jung Kim commented applications this way: ,,Mobile applications are the complete

changer in the way of communicating, not primarily among people but mainly in interconnection

between firm and customers. Efficient usage of applications is able to boost a company bottom line

and change the way the cards are dealt on the market and has potential to create dominance in the

commerce domain.” (Iowa State University, 2015)

Table 7 Worldwide downloaded apps (in millions)

Note. Retrieved from Statista. Copyright 2016 Statista. Reprinted with permission

https://www.statista.com/statistics/266488/forecast-of-mobile-app-downloads/

25
4.5 Marketing through application

As I said in previous chapter, applications were very popular among users, thus it seemed as a useful

tool how to interact with the customer, in this chapter I will speak about how they affected marketing of

companies.

Companies should not care only about fact, that smartphones give customers ability to purchase all

the time, benefits that are given through applications are not connected only with direct purchase

button. Even without it, they can be beneficial and bind customer with the company, while they can

easily offer clients needed information, or navigation to particular store, information about new

products campaigns, or discounts.

There are two main features, that are connected with applications and that make it easier to

target particular customer and expose him to advertisement - location based marketing and push

notifications.

Location based marketing is in a lot of aspects similar to proximity marketing, however

works within wider area. When customer agrees with it, location based marketing, utilizes map in

smartphone and enables companies to determine through GPS location of the particular customer,

and deliver him appropriate multi-media. It enables them to offer him content that might be useful

right at the particular moment in the particular place. Simply put, it enables marketers to send

perfect content at perfect time. (Car, Simunic, Laskarin, 2013) (Henriksveen, 2016)

Example of use of location based marketing can be connected with worldwide known coffee

company Starbucks, that through location based marketing sends its customers messages, discount

coupons to near Starbucks shops, or encourages people to check-in Starbucks, to let other people
26
know they are there, as a reward customers receive discounts, loyalty points etc. (Lamarre,

Galarneau, and Boeck, 2011)

When I move to push-up notifications, those are “messages”, that appear on screen of

smartphone and warn customer right away that something new connected with product, or service

happened, it keeps him updated about the new offers, coupons, new stock etc. As a result consumer

is engaged and informed about everything new, right at the moment and they do not have to wait

until customer opens and checks his email, or visits website. (Brooks, 2014)

When customer opens particular application he is alerted to the important stuff and

navigated by in-app notifications. It is beneficial for both sides, customers do not have to browse

through unnecessary elements, search for long time, thus they can focus on the most important

thinks in app, on the other hand companies are able to better bind customer to the application, while

61% of customers leave an application if they do not immediately find what they were looking for,

moreover they are able to direct customers where they want. (Deshdeep, 2015) (Feldmar, 2016)

Clients do not have to allow to be located, or to be warned by push notifications. Often they

do not want to be bothered by notifications, or they do not want to fill personal details and give it to

companies. It is right of every individual, nevertheless this situation is not beneficial for anybody,

companies do not get info about client and cannot target his preferences and tendencies, thus

customers do not receive personalized content and in fact do not fully utilize features of application.

As Daniel Joseph, co-founder of The App Business, who helps companies to develop their app

strategy, says: “The more an app knows about the user and the more of this it can pass back to ad

networks, the more precisely advertisers can target their ads and the more effective they’re likely to

be.” (Spanier, 2016)

Direct positive effect of applications marketing on purchases is quite hard to calculate, while

many companies do not want to expose how particular application affect their sales, therefor

specific experiment was taken by assistant professor Su Jung Kim. She and her colleagues were
27
comparing sales within 3 months in 13 US states. New product on the market was in the first period

advertised traditional ways and in the second period it was offered through application. Results

showed, even though application did not have direct purchasing button, spending increased by 19%

to 48%. Deeper analyze showed, spending was directly related with extent of features they used

from the particular application, the more engaging the app was and the more they were using it, the

more they were willing to spend. (Iowa State University, 2015)

4.6 FOMO

Companies hear from everywhere it is mandatory to offer and promote their products and

services via applications, these opinions have its substantiation, people still download more and

more application (Table 7) and according to research of marketing experts from Ameyo, companies

that do not optimize their mobile browsing experience or introduce mobile apps are thought to

effectively turning away a third of their potential customers. (Hague, 2016)

On the other hand, when I compare App store from year 2007, which was offering 500

applications and App store from current year 2016, that is offering 2 million applications, it can be

assumed, that some of those applications lack appropriate quality. (Statista, 2016)

A lot of firms without application might feel fear of missing out (FOMO) and rush to offer

clients also their app, however in order to be successful and exploit possibility of applications, they

should firstly valorize role of the particular application and whether they are able to bring quality

one.

28
 They have to offer customers something that provides something more beneficial for them,

it has to be more than just a promotion of the brand. Customers can choose from big number of

applications, for almost everything what customer can imagine, they cannot expect many second

chances, when they do not attract customer right away. Final product of application apart from

smooth functioning, must attract customer and engage him. (Iowa State University, 2015)

Marketers often speak about the first 7 critical seconds, when customer makes the first

critical decision, whether he is engaged or not and whether he is interested and wants to know more

information, quite similar situation applies with applications, 79% of customers reopen application

maximally once, or twice if application did not run appropriately for the first time. (Mobile Apps:

What Consumers Really Need and Want, n.d.) (Stenitzer, 2013)

According to Su Jung Kim research more than half of downloaded apps are deleted after

one, or two uses. Companies have to take into account, even though 90% of browsing time on

smartphone, users use applications, according to ComScore, 42% of this time is “taken by big

names” such as Facebook, Instagram, Youtube etc. (Iowa State University, 2015) (Nield, 2014)

As Ms. Robinson says: ,,Applications are definitely useful tool how to increase return on

investment and improve overall brand perception, however at every stage of process companies

have to consider potential customer.`` (Spanier, 2016)

When bringing application with low quality, the effect is likely to be contra productive and

leads to low ratings and spread of bad perception of the company. Because of interconnection of

online world and search engines in stores, low rating of one company will in fact strengthen

competitors, whose application will appear next to the bad one, because of same search terms.

29
4.7 Mobile commerce

Mobile commerce (m-commerce) can be described as upgraded part of electronic

commerce, which for the exchange of products and services uses wireless handheld devices.

(Surbhi, 2015)

Name mobile commerce might prompt, that by wireless electronic devices are meant

mobiles, however it would be incomplete, while it is connected with all devices that do not need to

be constantly plugged in the wall. (Investopedia, n.d.)

Mobile commerce as a part of e-commerce has been dated already since the 90s, when

people used devices, such as laptops, or Personal digital assistants (PDAs).

Already at that time, main advantages of mobile commerce were, that it increased

accessibility, portability and connectivity of electronic commerce. (Subhi, 2015)

Boom of mobile commerce, however came really with the mentioned introduction of

smartphones, that started taking market ``by storm`` and made it different place. Mobile commerce

with spread smartphones and tablets was not established just as another part of electronic

commerce, it aimed to drive it directly. (Hague, 2016)

It was supported by words of PhD candidate Jen Hui Wang: ,,Mobile shopping is no longer

a future trend, it is a trend, that is happening right now.“ (Nayberg, 2015)

When I show current number from Statista (Table 8), current worldwide revenue from

mobile commerce is estimated to be 429 billion US dollars in 2016, it is 337,8% growth from year

2013 and according to experts it should reach 669 billion US dollars by the end of the year 2018.

Table 8 Worldwide mobile e-commerce revenue in billion US dollars

30
Note. Retrieved from Statista. Copyright 2016 Statista. Reprinted with permission

https://www.statista.com/statistics/324636/mobile-retail-commerce-revenue-worldwide/

As revenue from mobile commerce was rising, importance of electronic commerce towards

commerce as a whole was rising as well and this trend is likely to continue.

When I focus on one component of revenue - sales, from next table 9, according to blue line,

share of electronic commerce sales within total sales is predicted to almost double from 2015 to

2020 from 7.4% to 14.6%.

Table 9 Worldwide retail e-commerce sales and the share of total retail sales.

Note. retrieved from eMarketer, Copyright 2016 eMarketer. Reprinted with permission

31
https://www.emarketer.com/Article/Worldwide-Retail-Ecommerce-Sales-Will-Reach-1915-

Trillion-This-Year/1014369

As a way to utilize advantages of smartphones, I have described earlier mobile applications.

I have said apart from being able to direct purchase through application all the time, it had also

other benefits such as informing, engaging and binding customers.

On following two graphs is shown how went up revenue from purchases directly in

applications (Table 11), but also what was the total revenue that mobile applications secured to

companies from three models of applications - payment for application, direct purchases in

applications and in-app advertisement in it. (Table 10) (Dogtiev, 2015)

Table 10 Worldwide mobile app revenue in billion US

32
Note. Retrieved from Statista. Copyright 2016. Reprinted with permission

http://www.businessofapps.com/app-revenue-statistics/

Table 11 Total worldwide in-app purchase revenues (in million US dollars):

33
Note Retrieved

Retrieved from Statista. Copyright 2016. Reprinted with permission

http://www.businessofapps.com/app-revenue-statistics/

First idea of revenue from applications, was to earn money mainly from fee that customer

had to pay for downloading an application, because of popularity of smartphones and applications

at first it went quite well e.g. between year 2011 and 2012 revenue from selling application more

than doubled from 7,1 billion to 15,4 billion US dollars, from that time however revenue rose much

slower on average “only” by 3,9 billion US (current revenue from selling applications 27,6 billion

dollars). Paying for applications was outweighed by above mentioned in-app purchasing. It is more

efficient to let customer download application for free, and let him interconnect with the company,

expose him to advertisement and potentially encourage him to make purchases for more than he

would have made for just downloading it. (Dogtiev, 2015) (Statista, 2015)

34
 Efficiency of this modification of commerce strategy, can be proved by above already

mentioned table, when I calculate proportion of in app purchase revenues within worldwide mobile

app revenue, it goes up heavily - between years 2011 and 2017 it goes from proportion of 8,56% to

estimated 40,83% this year and even 48,2% by the end of next year.

2011 – 8,56% 2012 - 11,37% 2013 - 17,2%,

2014 - 22,45%, 2015 - 30,85% 2016 - 40,83%

2017, 48,2%)

4.8 Impact of smartphones on spenders

I have said earlier smartphone is a great for buying small items, and PC for items that need

more research. It is supported by research of Mr. Wang, that showed that promotion through

smartphones worked positively on purchases of both low spenders and high spenders, but especially

on those, who spend under purchasing median. It is not bad news for companies, in fact quite

positive ones.

After lower spenders adopted the using smartphone for payments their spendings went up

and it seemed to be a powerful tool how to convert low buyers into bigger ones. Based on the

results, expert Krishnamurthy appreciated the increasing tendency by high spenders, nevertheless he

described them as loyal buyers who spend a lot of money, but their main benefit in connection with

application he saw in helping to enhance a good reputation of particular application in social media

environment, and that they influence others. However, they take into account that high average

35
spending in general takes more time and deeper research, therefor it is understandable that these

people prefer PCs, for their purchases. (Nayberg, 2015)

On the other hand, low spenders, who buy cheaper things and do not intend to make deep

research, for them smartphones are brilliant, they create stickiness and strengthens their loyalty,

with which companies are able to offer them new and more expensive gadgets, the odds they will

be buying soon is pretty high, because it is fast and they can buy almost everything what they want

at the moment - they tend to spend more than they are used to and convert from low spender into

bigger ones. (Nayberg, 2015)

4.9 Smartphone payments

4.9.1 Graphs

With introduction and increasing popularity of smartphones occurred also new ways of

payments. It is understandable, because ability to purchase all the time was one of the main aspects

that companies and customers connect with smartphones.

Firstly, on the following graphs I will show what is progression of m-commerce buyers and

their spendings through smartphones. Table 12 shows how many people purchased goods through

mobile device and table 13 how, with increasing number of m-payers, rose also revenue from

mobile payments.

36
Table 12 Global number of m-commerce buyers in millions

Note. Retrieved from Statista. Copyright 2016. Reprinted with permission

https://www.statista.com/statistics/374623/mobile-commerce-buyers-worldwide/

37
Table 13 Total revenue of global mobile payment (in billions U.S. dollars)

Note. Retrieved from Statista. Copyright 2016. Reprinted with permission

https://www.statista.com/statistics/226530/mobile-payment-transaction-volume-forecast/

4.8.2 Security

Increase in mobile payments can be obviously connected with increasing number of

smartphone users and higher internet usage, but there are also other reasons. The main one is

decreasing threat from security of payments.

38
 At first wiring money through mobile phone was received with distrust. Companies had to

change this opinion in order to fully utilize portable devices and let people buy right away.

One of the events, that definitely caused increased trust in mobile payments was the

incorporation of secure element chip (SE). It takes care of storing and processing data securely

when interacting with external devices and it prevents from unauthorized access and secures, that

payment will be done in a safe way. (Marwaha, 2014)

When I take into account, that user needs to know several passwords, credit card/CVV

number, or that more and more smartphones require fingerprint of the user for confirmation of

particular activity mobile payments are becoming more and more reliable.

There is less and less need to carry cash or credit care, when I take into account the security,

usability, and ease of use, smartphones are able to play role of mobile wallets and next way how

make payments at point of Sale (POS)

4.9.3 Near field communication

Smartphones do not have to play just role of wallets. Because of Near field communication

(NFC), smartphones should not be used just for payments in exchanging money kind of way, but

should make the life of customer easier in a way that he wouldn't have to carry just a cash, but also

other types of cards, or keys. The aim is to be able to have ``in`` smartphone all types of loyalty

cards, tickets, keys, be able to get coupons, loyalty points, scan codes in the shops etc. Smartphone

will be able to use particular item and wirelessly confirm all these kinds of transactions at particular

place utilizing already mentioned proximity marketing. (Mobile and e-commerce are reshaping

consumer behavior, 2013)

According to Nicky Stafford, Global Consumer Equities, this trend is likely to rise also

because of another reason, smartphone as a payment tool is mainly used by rising generation, 93%
39
of people between 18 and 29 years old, in comparison to just 38% over 65 years old. While this

trend is likely to continue as these generation matures in connection with steady technological

progress, quite likely it will be mandatory for more and more services to offer customers this kind

of wireless interaction in order to satisfy them. (Mobile and e-commerce are reshaping consumer

behavior, 2014)

4.9.4 Emerging countries

Mobile payments influenced also one more interesting thing. They are one of the main

reasons that lead to expansion of smartphones all over the world. When I look at the picture bellow

(Table 14), emerging countries are understandably behind rich countries in both internet usage, or

ownership of smartphone, however rising tendency there is clear, and especially with ownership of

smartphone I can speak about sharp increase in last two years from 21% to 37% of population.

What are the reasons for it? The first has been already mentioned - creation of cheaper

smartphones that are affordable to wider scale of people, the second is that despite lower

sophistication, caused by lack of real legacy networks or systems, mobile payments are very useful

for them. In a lot of emerging countries, they face problem with insufficient access to banking

systems. Through mobile phones customers can solve this difficulty by simply depositing, paying,

wiring, or withdrawing of money. It also helps to establish more transparent markets, where prices

of services and products are set and written and therefor it is easier to communicate them in real

terms. (Poushter, 2016) (Mobile and e-commerce are reshaping consumer behavior, 2013)

40
Table 14 Technology usage % rate emerging economies vs. Advanced economies

Note. Retrieved from Pewglobal. Copyright 2015 by PEW RESEARCH CENTER. Reprinted with

permission. http://www.pewglobal.org/2016/02/22/smartphone-ownership-and-internet-usage-

continues-to-climb-in-emerging-economies/

41
5. CONSUMER BEHAVIOR

5.1 Introduction to consumer behavior

In order to understand how smartphones and applications changed not only technological

devices, but also behavior of customers, I have to at first focus on consumer behavior in general.

In the past, companies did not take the study of consumer behavior too seriously. According

to marketing experts as much as 85% of what had been published under the rubric of consumer

psychology prior to 1968 was for the companies rather low level, or questionable worth at most.

Nowadays the importance is significantly increasing and it is mandatory area of study for

companies in order to understand the market. (Jacoby, Johar and Morrin, 1998)

Importance of consumer behavior was described by authors of the book Consumer Behavior

- Building Marketing Strategy, Mr. Hawkins and Mr. Mothersbaugh: ,,All marketing decisions are

based on assumptions and knowledge of consumer behavior.`` (Krishnan, Santhi and Sekeran, n.d.)

Official definition of consumer behavior speaks about study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products, services,

experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and

society.” (Perner, n.d.)

It can be defined a bit easier, consumer behavior can be described as study of individuals,

groups and organization and their behavioral patterns.

Creating a quality product is obviously important, however it is just one step towards the

goal of attracting potential customer and gaining money by selling them product. We live in the

42
world where, due to the technological development of many firms, differences among products are

getting smaller and smaller. There are so many different kinds of products and so many different

kinds of brands, when company wants to effectively promote their product, push the customer

towards buying it, and try to bind them to the brand, they have to look also on the behavior and

tendencies of their potential customers and set marketing towards it. In order to better understand

them and their actions, they have to start looking at selling not only from economical point of view,

but take into account also psychological and sociological aspects. (Brosekhan, A., Velayutham, M.,

& Phil, M., n.d.)

We, as the customers, make many decisions and choices among products every day such as

what food will we eat, or what clothes will we wear and many others. These decisions are, in our

minds, spontaneous and routine, however marketers have to try to find out connection among them

and predict our most likely future choices and behavior. (Study of marketing: Consumer Behavior,

2014)

In order to create something more than just another product, something what will offer

additional emotional benefit to the customer, differentiation of particular brand is mandatory,

companies have to try to distinguish product from the products of competitors according to

preferences of the customers and connect the brand as much as possible with the client. Ability of

producers to emphasize and fulfill customers` demands and satisfaction, quicker than the

competitors, while keeping quality high, will determine whether their business will succeed, or not.

(Brosekhan, A., Velayutham, M., & Phil, M., n.d.)

43
5.2 Buying process

It would be shortsighted to think, results of a company are based only on the

purchase itself, it is just one stage of buying process. Companies have to care also about the steps

that lead to, or influenced purchase, and also care and try to stay in touch with customer after

purchase, it is mandatory in order to get feedback and evaluation, by which they can better predict

tendencies of the customer towards the company. (Brown, 2008)

Division of purchasing behavior was firstly introduced by John Dewey, already in year

1910, later it was modified by one of the biggest authority in the world of marketing Mr. Phillip

Kotler, who divided the buying decision process into 5 stages: (Choibamroong, n.d.) / (Kotler,

1999) (5 steps to understanding your customer’s buying process, 2016)

1) Need recognition,

2) Information search

3) Evaluation of alternatives

4) Purchase decision

5) Post purchase behavior

NEED RECOGNITION

Recognition of the particular need is often proclaimed to be the most important step of

whole buying process. Without recognition of the need, no purchase can be made, the potential

customer at first must have motivation to fulfill some of his desires. (Johnston, 2016)

44
 Motivation of customer can be divided on conscious and unconscious. Conscious motivation

is based on some previous experience, or knowledge and customer exactly knows what he wants

and why he wants it. On the other hand, unconscious motivation theory is based on teachings of

Sigmund Freund and says, that customer knows what he wants, however he doesn't know why, he

just acts according to his desires. (Fratu, 2011)

Rationality of motivation was described by professor Jagadish Sheth, who divided it on

functional and nonfunctional. The functional is based on rational part of the individual and

motivates him to get what he wants according to what he can ``afford``. Non-functional beyond is

based on his social and emotional feelings and motivates the individual to get what he would like

to. (Sheth, J.N., 1983)

Motivation comes from all around, it can be stimulated internally such as hunger, or thirst,

or it can be stimulated by external forces such as advertisement or advice. (Jaideep, n.d.)

Even though companies cannot control everything, understanding what motivates people

enables them to influence customers towards next steps of buying process.

INFORMATION SEARCH

Amount of ways how to get information are nowadays very wide, people can get

information from their family, friends, advertisement, or they can just experiment.

Even though creating quality product is obviously crucial for long-term cooperation between

companies and customers, companies have to also realize, that nobody knows everything and

nobody is able to find all appropriate information. People see so much advertisement around them

every day and are influenced all the time, that attention of customers becomes quite selective, and

to a lot of advertisement they are almost ``blind``. Therefor most important aspects of beginning of

45
buying process is creation of positive perception and brand awareness of particular brand, which is

positioned as a vital first step in building the bundle of associations which are attached to the brand

in memory. Marketers have to make sure, that people are aware of the brand and try to enhance

feeling that this particular product will satisfy them. (Brosekhan, A., Velayutham, M., & Phil, M.,

n.d.)

They have to take into account selective retention, which describes companies in order to

catch attention of customers cannot just come with frequent advertisement, they have to bring

something new and innovative what invokes attention and especially retains in customer`s head.

Next goal is to create selective exposure, which means customers attach name of brand and

associates it with particular desire, or event. It is positioned as one of the biggest advantages against

the competitors, when customers search for options and evaluate alternatives.

When I move a little bit back to motivation from companies, according to professor Brown,

with successful utilization of selective retention and exposure, companies are able to work with

awareness of need, and even invoke motivation by the customer unconsciously, such as make them

hungry, when they see particular commercial etc. (Rani 2014) (Brown, 2008)

EVALUATION OF ALTERNATIVES

I am not saying, that customers are some kind of robots, that can be manipulated to

whatever marketers want. Of course, they will choose certain product according to many relevant

criteria such as quality, price, features, popularity etc. which will satisfy them the most, however in

nowadays world where differences are smaller and smaller among products and services,

purchasing behavior is also affected heavily by customer perception, which product they feel will

bring the most benefits and biggest satisfaction.

46
PURCHASE DECISION

When customer finally picks a product or service that satisfy him the most, sellers are not

winners yet.

Customer can still modify, avoid or postpone his decision. Some factors such as

unanticipated situational factors, e.g. loss of job and thus not having the money they cannot control.

On the other hand, final purchase can be also disrupted by attitude from others and this

aspect they can to some extent control. (Jaideep, n.d.)

As said Philip Kotler: ,,Final purchase decision may be ‘disrupted’ by two factors: negative

feedback from other customers and the level of motivation to accept the feedback.`` No product will

satisfy everybody on the planet, however general feedback is possible to be coordinated when

companies interact with the clients but not only before and during the purchase but also after as I

will describe in next part. (Johnston, 2016)

POST PURCHASE BEHAVIOR

With the purchase interaction between companies and customers should not end. In fact, it is

stage, that can enhance customer to return back, thus purchasing cycle to be repeating again.

From monitoring of post purchase behavior companies get feedback and evaluation how

satisfied the client was. It enables them to understand his behavior patterns, which helps them

towards forecasting the likely future tendencies of the customers and by it, they should be able to

improve their own decision making process. Moreover, it also makes it easier for companies to

offer the client new products, or to be able to promptly settle possible problems and show them that

they care about them. (Brown, 2008) (Fratu, 2011)

47
 The goal is to create strong relationship between customers and company that is called

stickiness, which consists from 3 components: ease of gathering and understanding marketing

information; trust in the brand; and ability to weigh their options.

It is thought to be the strongest driver for purchasing, while ``sticked`` customers have

tendency to keep returning not only to brands and retailers they trust, but also to brands they feel

they are much more connected with, to products that have much higher personalization for the

customers. (Nayberg, 2015) (Marie and Grybs, 2013) (Ryals, 2016)

By stickiness, companies do not try to attract only the particular customer, but all people

around him. When perception about brand of one person is good, companies by binding one person

gain to some extent free advertising channel towards the friends of the person that will be to

affected by his positive attitude.

5.3 Marketing mix 4Ps

There is a marketing proverb content is the king, but context is an ace. The better

understanding of customers and their tendencies in particular situation, the easier it will be to offer

something new.

Before bringing something new to the market, every company and its marketers should do

marketing mix about particular product, or service and look at it from view of 4Ps, which was

introduced by marketing professor E. Jerome Mccarty. Ps stand for terms Product, Price, Place and

Promotion and it helps them to define their marketing options and set their strategy towards the

market. (The Marketing Mix and the 4Ps of Marketing, n.d.)

48
 Product - Producers have to honestly consider how good particular product is, but also how

customers perceive the quality of the brand. Whether this is it what customers want and what will

satisfy them. In these section, companies think about wide scale of aspects about intended product,

from name, or shape, to it distinguish itself from current products of competitors.

Price - When company has a comprehensive idea about the product, next aspect they have to

consider is pricing, but not only price for which they intend to sell particular product and

developing cost. They have to also consider, who will be target customers and what are their

financial opportunities, how profound researches they will do and how risk averse they will be.

They have to take into account how often and to what extent will be demanded discounts, and how

will potential customers react to change of prices in general. All these findings have to be again

compared to prices of competitors in given area. Answers on all these questions will show

companies for which price they are able to sell particular item and whether it can be worth it.

Place - Next aspect companies have to consider is place where they want to sell it and

consider distribution routes from company to customer. Before introducing new product they have

to think about situation in particular city (area), whether they are introducing something brand new,

or whether there are companies that produce something similar, afterwards they have to consider

where there are places where they can sell it and whether target group of customers is big enough,

or significant enough that demand will be sufficient and it will be worth producing it. While

researching of target group in particular area, they also should try to estimate assumed level of

innovativeness, it tells producers how likely will customers give chance to new product and how

willing are they to experiment with new ways of doing things.

Promotion - Last but not least aspect to consider is way, how will they promote their

products and services in order to make people aware of product and secure it good perception. From

this point of view, they have to consider aspects such as which channels influence customers the

best, whether live, or online, whether they have to change their promotion methods because of

seasonality in particular area, and whether they will be able to overcome promotion of competitors.

49
(Donthu and Gilliand, 1996).(Brosekhan, A., Velayutham, M., & Phil, M., n.d.) (The Marketing

Mix and the 4Ps of Marketing, n.d.) (Investopedia, n.d.)

Company might have brilliant idea, but when they do not consider just one part of this

process, it might ruin all others, while they might be than creating perfect product e.g. for price, that

nobody is willing to spend, or in area where nobody is interested in buying it.

Of course it is not easy in reality to create product which people want, make them aware of

it, put it at place that is visited regularly and set the price at level, when customers are willing to

buy while, company enjoys profit, nevertheless by analyze from 4Ps perspective and looking for

appropriate answers on above mentioned question, it will definitely increase chances, that producers

will be able to distribute not just right content, but will be able to be offer it at the right time, place,

with appropriate price and through most effective channel to the customer. (Singer, 2014)

5.4 Types of purchasing behavior

I have already spoken about perception and brand awareness and their importance for

choosing a product, now I would like to apply it on different types of purchasing behavior. In

previous chapter I described stages of purchasing process, it should be however said, that every

purchase is different and requires different amount of involvement, caused by amount of

importance of particular purchase for individual, thus not every time customers go through all 5

stages, when they are making a purchase. (Chand, n.d.)

Understandably every customer is different and what is expensive for one customer, might

be cheap for the other, however in order to determine initial strategy for different products,

purchasing behavior may be split into impulse buying, routine behavior, limited decision behavior

and extensive decision behavior. (Brown, 2018)

50
 When I start with impulse purchases, that are usually cheaper items, customers often skip

first 3 stages and simply buy product right away when they see it, such as e.g chewing gum at cash

machine. Customers do not plan these purchases and do not do any research before buying it.

Quite similar are purchases that can be described as routine response behavior, they are done

automatically with just limited amount of information and very little planning. People purchase

these kind of items according to what they have locked in head (selective exposure) and what they

perceive is best from them (what they feel from the past) (such as ordering specific drink for lunch,

or same food in a restaurant).

These purchases typically, because of their low price and with it connected low risk, require

low level of involvement for customers.

Somewhere between low and high level of involvement are located purchases described as

limited decision making. Customers have some perception and do have some information about

particular product, or service. Before they purchase, they seek for a few options and spend at least

some time with research, but not as thorough, or as time consuming, as with a higher priced item.

These purchases such as buying clothes, or ordering a taxi are not done by majority of people such

regularly as for example ordering coke for lunch, so they make some kind of prior research,

however for majority of people it is still not such a big purchase and the averse towards the risk is

still quite low. Offer of these things is very wide, therefor perception and brand awareness still play

crucial role.

When I get to products, that usually require the highest amount of involvement from

purchases such as buying a car, or house, these are called extensive decision behavior. These

usually include the highest amount of thinking, selective exposure and retention don't play as big of

a role as for the previous types, while customers tend to go through all stages of above mentioned

buying process, spend most time with profound research and discuss and evaluate all alternatives

with people and sources they trust.

51
 Nevertheless, as I have already said, nobody is able to go through all information, even here

customers have some perception and awareness and choose only from certain brands. Even though

high involvement product involves highest amount of research, customers also want to buy good

brand name, when they are spending a lot of money. That is why perception of customers is crucial

also here, when we consider how small differences are among products with similar prices

nowadays. (Consumer Behavior: How People Make Buying Decisions, n.d.) (Brown, 2008) (Chand,

n.d)

5.5 Factors influencing customers

Customers are affected by many external and internal factors and they act in some kind of

way towards them according to their personality. Marketers try to gather information and react

towards them, companies cannot control all the factors, while they might change within a second,

however understanding of customer’s personality let them predict, and to some extent control the

behavior of the consumer.

Basic questions, by which marketers try to define the dimensions of buyer behavior and

according to which they schedule the promotion and advertisement can be summarized by questions

such as:

What do consumers buy?

When do they buy it?

Where do they buy it?

52
What are criterias for their choice?

How do they buy it?

Who influences them in the buying decision?

(Fratu, 2011)

Factors influencing customers can be divided into three main categories - personal,

psychological and social. (Brown, 2008)

When I start with the personal ones, those are the information about the person such as e.g.

customer`s age, education, profession, demography, economic circumstances, interests, personality,

opinions etc. In different parts of life customers have different tendencies and preferences,

researches try to gather as many habits and characteristics as possible and try to analyze what kind

of person the customer is and make predictions about his tendencies and future steps. (Fratu, 2011)

(Rani, 2014)

The second ones are social factors. Those are important for consumer behavior research,

because nobody is shaped just by himself, but also by the area he comes from.

Everybody is determined by the culture, family, social class, or people around. It is

unchallengeable that family and surroundings of each individual has huge impact on the individual

and they set up preferences and values that often go with the person for the rest of his life.

People that influence consumers` decisions are called reference groups. These reference

groups usually change during life, those can be parents, family, friends, colleagues, or sometimes

even people person admires such as celebrities. For marketers it is important to analyze which

people influence purchasing process of customer and what role do they play, because they are the

ones who mostly affect one of the most important part of buying process, the pre-purchase phase

and decision making. (Fratu, 2011) (Rani, 2014)

The third category is psychological. In this category, the consumer behavior study focuses

on such aspects as state of mind, social ambiance around him, what is self-image of the customer,

53
how he sees himself, what motivation leads him towards purchase, whether he makes decisions for

his own self-realization, or whether he does it because of some kind of prestige and he wants to be

appreciated by people around etc. (Fratu, 2011)

Often for the analyze is used the well know Maslow hierarchy of needs, which consists of

physiological, safety, love and belonging, esteem and self-actualization needs. (Brown, 2008)

According to Maslow, every time person fulfills one need, he moves up to another one in

the hierarchy, while the previous one no longer motivates him. (McLeod, 2007)

By analyze at what level of hierarchy is the consumer, the marketers are able to find out

what are reasons and motivation behind the purchase. (Brown, 2008)

5.6 Research methods

I have already suggested proper interaction leads to better understanding of the market,

knowing what customers want and analyze factors that lead him towards buying process, make it

easier for companies to determine what kind of services and products are demanded. The goal of

researches is to find out how to satisfy the highest possible proportion of target customers, gain

advantage over the competitors and thus increase the value of the company. Therefor I should also

mention what kind of researches can be used in order to find out appropriate information.

(Krishnan, Santhi and Sekeran, n.d.)

At first, research methods are divided on primary and secondary ones. In the primary

research method approach, companies have to do the research by themselves. In the secondary

54
research method approach, research has been already done by someone else and companies may

just use the data (Perner, n.d)

Against practices I will start with secondary research method approach. Benefits against the

primary method are definitely lower cost and time consumption. They do not have to spend time

and money for purpose of attracting customers, while data are already available and they just have

to make sure, that sources of data are relevant. (Do, n.d)

On the other hand, advantages of primary research methods are, particular company has

all the control over the research, it is able to do research on the specific task they are looking for,

and address appropriate questions. It allows them to choose appropriate group of people, place, or

time, and they do not have to detect relevancy of other researches that might have brought different

outcomes because of different situation. (Primary research, 2016)

Most usual tool for primary research are surveys - questionnaires, where respondents choose

from given choices, or should finish sentence according to their preferences. The advantage of

surveys is that companies can get basic opinions of wide scale of people, on which companies can

start to build up strategy for promotion. On the other hand, there are also disadvantages, with given

choices customers might not explore themselves properly, on the other hand infinity possibilities of

finishing sentences might be hard to analyze for marketers, in order to get valid information

(Perner, n.d.)

More precise information and opinions of potential customer companies may receive from

focus groups. As the name prompts, it is a group, composed of small sample of people (usually 8-

12) that discuss and share their opinion on products, or services that are being introduced by the

moderator of the discussion. Disadvantage over surveys is obviously the smaller size of sample that

may not give relevant info, so focus groups sessions should be repeated several times, on the other

hand with good moderator, who prevents creation of some kind group leader, who will influence

others, and is able to enhance conversation, focus group is effective for companies in questions of

creating something new, or modifying existing products and services, while moderators can observe

55
spontaneous reaction of people, tendencies how they choose, what aspects do they look for, what do

they compare and can ask additional questions based on answers of respondents etc. (Perner, n.d)

When company has already reached client, very useful way how to gain information about

him are the data gained through the membership. By introducing to the client the possibility to be

connected with the company, marketers can gain a lot. By filling up questionnaire the marketers

receive a lot of personal information - age, educational level, demography, shopping list at the

particular company etc. from which they can make assumption what kind of customer this will be.

Apart from that, they also receive contact and it allows them to start building a connection between

them and client, enables them to promote new services and products, inform them about special

offers and discounts and be able to promptly settle possible dissatisfaction. (Perner, n.d)

I have said, primary research methods are more expensive, it is not connected only with cost

spend on marketers, or preparing researches, companies have to realize, the more information they

want, the more they have to offer to clients. Customers are more likely to answer surveys, attend

focus group session or became a part of loyalty program when it is connected with some kind of

discount, or advantage for the customer.

Online research methods and advent of smartphones made primary research method in many

ways easier, majority of people are accessible all the time, therefore it is no surprise that response

on mobile offers is 10 times higher than print offers. Use of internet enables companies redirect

customers to appropriate question and offer them more personalized content very fast. (Mehra,

2016) (Perner, n.d.)

From internet and research data they are able to get many information about interests and

preferences of everybody, and track their journeys and tendencies in order to target them.

Companies that are able to collect and exploit the unstructured data the best have advantage, and are

in very strong position to understand what consumers want and therefor they are on step closer to

the purchase (Mobile and e-commerce are reshaping consumer behavior, 2013)

56
6. IMPACT OF SMARTPHONES AND APPLICATIONS ON

CONSUMER BEHAVIOR

6.1 Shift of power

In the previous chapter I have spoken about consumer behavior in general, now I would like

to move forward towards how consumer behavior was affected by changes connected with

introduction of smartphones, with them connected applications and how companies had to react

towards new customer tendencies.

With the increasing popularity of smartphones, two new consumer behavior trends showed

up, nomophobia and access over ownership need. Nomophobia can be described as a need of

costumers to have their mobile all the time, access over ownership points on the fact, that being

online all the time has higher importance for people than need to posses something. (Marie and

Grybs, 2013)

Therefor it is understandable that smartphones changed situation significantly and changed

the old orders on the market. Not only from the technological side, but also changed position of

customers. Even though they were still the same people, it could be said, this technological

development put much higher power into their hands, and with that fact companies had to adjust to

their new tendencies and preferences. (Iyoob, 2015)

When I use words from the analyze from company Deloitte, how technologies changed

consumer behavior, customer became more of professional shoppers. Smartphones and ability to

use internet all the time does not bring only the ability to purchase all the time and ability for

companies to expose them towards advertisement, it also allows customers to look for inexhaustible

57
amount of information and options, get reviews, compare, share experiences with others etc. There

are websites, where people discuss, rate and compare products, websites which compare prices and

monitor the best possible deals.

Those are not companies anymore who set up conditions unreservedly. The amount of

choices and speed within they can get them, give customers ability to choose. When one firm does

not satisfy them, the next, or the next one will.

6.2 Most trusted sources

Table 15. Consumers` most trusted source of information on products and services

Note. Raconteur. Copyright 2014 Deloitte. Reprinted with permission

http://raconteur.net/business/is-marketing-really-the-future-of-sales

Increasing influence of customers on purchases can be seen from the table 15. Because of

online information everywhere companies are not the main source of information anymore. They

are not the most trustful ones, either in terms of looking for the best offer, and quite surprisingly not

even in terms to get service, or technological advices. (Ryals, 2016)

58
 In comparison to traditional commerce, electronic commerce and mobile commerce do not

safe just time of customers, they allow them also search for more possibilities how to make good

choices. Attractive advertisement is not everything, while current tendency of people, is to look in

the smartphone and look for the experience of others, those are the most trusted sources nowadays.

Reference groups, in other words people that affect customer, are extended significantly by

anonymous people on the internet whose review the person read. According to Deloitte research

81% of people read reviews online and check ratings of application. These reviews are trusted by

84% of customers, in comparison to just 42% readers, who find digital banners reliable. (Singer,

2014) (Surbhi, 2015)

It is obvious, that perception and (brand awareness) are not shaped mainly by traditional

channels such as media, or advertisement anymore, but mainly by opinion of other people, who are

discussing and rating online. Importance of interaction with customers pre, and post purchase

became, in era when they are online all the time, is even more important than before and buying

process (need recognition, information search, evaluation of alternatives, purchase decision and

post purchase behavior), because of increased interconnection among people, is never ending cycle.

When companies are dealing with one person that makes a purchase, they are potentially dealing

with wide scale of people around the person, who will be influenced by his perception in real, but

mainly in online world, where his opinion will be taken by many readers as a truth and will guide

them. Therefor it is mandatory for companies to study and understand customers at even deeper

level than before. (Singer, 2014)

59
6.3 Interaction with clients

6.3.1 Customer relationship management

As I have said before, selling is just one part of the process, in order to maintain revenues

and profits with steadily increasing tendency, in nowadays age when power and possibilities of

customers are high and competition is all around, they have to achieve the interconnection with the

customers and be transparent towards them. In order to achieve that, companies have to invest into

capabilities that help them to get information and facilitate the interaction between customer and

company.

Those capabilities can have different names in different companies, but the most usual is the

Social customer relationship management (CRM), that focuses on developing relationships with

customers, tries to attract their attention and target them with an offer.

There should be management that focuses on content, and prepare strategies how to

introduce services and products to the clients. As I have said, they cannot focus on just selling and

describing what company`s products can do, customers can find all these information online, thus

selling is not just economic anymore, they have to focus on deeper relationships with customer. The

more interaction and availability customers will percieve, the more transparent particular company

will look and because of positive perception the more sought it will be. (Ryals, 2016)

6.3.2 Interaction through applications

Due to the fact that people are online through their smartphones and applications fast

majority of the time, these are great tools how to interact with clients and engage them on regular

60
basis, thus it is no surprise that responses to mobile offers are estimated to be 10 times higher than

to print offer. (Mehra, 2016)

On one side it is true, that because of endless offer of online information and reviews, and

because of declining trust in information from companies customers tend to prefer pull info, instead

of push info, and companies should be careful, in order not to bother potential clients, on the other

hand, smartphone is not TV channel, where commercials are put on the screen without desire of

customers, when downloading application customer allows receiving push type of notifications, so

they expect to receive these kind of messages and push type of marketing should not be met with

negative response.

When company manages to attract customer and make him download app, it is much easier

to track consumer behavior and set strategy according to it, such as send him personalized content

according to his activity. Even though applications target wide scale of people, at some point they

are able to switch to one to one communication and track individual ``journey``. Frequent

interaction enables companies to optimize content almost immediately according to wishes of

customers and be more specific in their campaigns and make them more efficient with greater

return on investment. (Spanier, 2016)

6.3.3 Social sites

Smartphones emphasizes also role of social sites to extent, that they are one of the main

ways for companies how to promote themselves to a lot of people (possibly at no cost), and interact

with potential clients.

It is reported that 66% of customers spend most of their application online time browsing on

social media such as Facebook, Twitter, Instagram etc. Therefor apart from analyzing e-commerce

61
and m-commerce, companies have to analyze also commerce on social platforms - s-commerce.

(Mehra, 2014)

When I use Facebook as symbol of social sites, that is the most used mobile application

nowadays, it was introduced in year 2006, and now it has now it has almost 1,8 billion active users

worldwide. I do not want to discuss what is bigger finding whether social sides or smartphones, or

applications, again those are not competitors, those are complements, and especially from

smartphones` and applications` point of view, complements that can be used not only very

efficiently, but are almost mandatory at this time.

When we consider how important opinions of others in this ``smartphone`` era are, how

many people are on social sides, and how often they are online, it can be said social media

revolutionized the way business operates and communicates with consumers and has huge impact

on retail business. (Delgado, 2013)

Not only it is another platform how to analyze people opinions and get feedback on products

and services pretty quickly, but it is also great platform where they can promote themselves, their

special offers, news, recommend new products either through fan page, or with higher efficiency

through sponsored page, that will target customers based on their actions and preferences on social

sites. When they achieve to build fan community, they have another channel, that will promote

company`s products further. (Mobile Apps: What Consumers Really Need and Want, n.d.).

Similarly, to applications interaction and advertisement through social sites do not seem so

pushy as traditional ways of advertisement, or websites banners, while in majority of cases it is up

to users and their preferences, what they see on their social platforms and it is easy to ensure to

block unwanted content in a few steps.

62
6.4 Utilization of consumers` power

At the beginning of this chapter I showed on the graph how important are the reviews from

others for customers. When I consider how important ``vox populi`` is, the best scenario, for

everybody`s happiness, companies` and also customers`, is to incorporate customers already in the

developing process, make customers not only critics, but also creators.

By effective interaction customers become presumers, those are customers who are willing

to interact with the company and being research. In ideal scenario, loyal customer is part of

creating, funding and afterwards also promoting process through people around him. (Marie and

Grybs, 2013)

When I cite Mr. Krishnamurti: ,,The more opportunities you give a customer to interact with

a retailer, the more the value of the retailer goes up and the more the sales revenue from that

customer goes up.” (Nayberg, 2015)

By interacting I do not mean to incorporate them in technical developing process, I mean

encouraging them to interact in order to see what is bad and what is good in advance.

Even though comments and ratings are beside family most trustful source of information

and 81% of people read them, amount of people who actively contribute to discussion with their

ideas and advices slightly exceeds 33%. It basically means that one of the most important channel

for companies, that could tell them what people really want and which determines perception of the

company heavily, does not work as well as it could, it leads to situation that consumers do not get

what they want and companies do not sell as they could, therefor they have to focus on encouraging

as many people as possible to respond. (Ryals, 2016)

Importance of comments and ratings was supported by another experiment of Su Jung Kim,

when she examined how they affect sales. It is no surprise that positive comments had positive

effect on purchases and vice versa, more important is declining tendency of purchases, where there

63
were no discussion and ratings about given product, while people had no responses from channel

they base their decision on. (Iowa State University, 2015)

It is in interest of companies to encourage people post about them, make respondents out of

viewers, in order to know what people want and to increase awareness of the brand, that initiate

other towards purchase. Any deleting of bad comments is contra productive, sales will still decline

and as a bonus their credibility and reputation will be ruined.

In chapter Consumer behavior, I wrote, that nobody wants to do things for free, as responses

are becoming more and more important, companies have to treat customers in some kind of way in

order to encourage them towards posting and sharing. Even thought it might cost something such as

coupons, or discounts from time to time to time, they at firstly receive appropriate information what

customers want and it will be easier to provide it, secondly they work on the perception and

transparency of the company, because they show they really care about what customers desire.

Fact, that customers realize their strong position and expect bonuses for their interaction was

further examined by Su Jung Kim, which focused on how people react to interaction with the

company in case of inconvenience. The prompt response, before even solving problem technically

is the mandatory first step for all kinds of customers in order to show company cares, next steps in

order to satisfy customer however changed with the level of engagement of particular customer, the

viewers of comments were satisfied with just an apology and solving the problem, however the

more engaged the customer was, the more he expected from the company, in form of some kind of

compensation and deeper explanation in order to regain their trust, nevertheless as I have said, those

are the customers that company can benefit the most from, even when it is more expensive. (Iowa

State University, 2015)

64
7. CONCLUSION

Opinion on smartphones at first differed, for example chief of Microsoft Steve Ballmer was

describing it as overpriced, difficulty manageable and inutile for business people. However, sales of

iPhones were exceeding all expectations and proved wrong all these oppugners

Some companies followed Apple with introduction of their smartphones and it was

definitely step in right direction, when is taken into account, that within two year sales of

smartphones exceeded sales of computers.

In the first part of my work I focused on changes, that these devices brought on the market.

Other devices such as PCs still had their advantages such as size of the screens, that were better

platforms for profound research, or they offered bigger space for advertisement, however popularity

of smartphones and amount of time people spent on them, urged companies to shift their online

offer more in favor of these new devices - computer first strategy was exchanged for mobile first

strategy, where content was at first created in favor of smartphones.

Being online all the time, meant customers were able to purchase all the time. In order to

fully utilize the possibility of purchasing via smartphones, it was mandatory to convince people,

that payments are conducted in a safe way. With incorporation of secure element chips and other

safety devices such as passwords and fingerprints smartphones established themselves as more and

more popular way of payment, moreover they did not play just role of wallets, with Near Field

Communication customers, it was possible to use mobile phones as keys, cards, or tickets in more

and more occasions.

While smartphones were in fact becoming new personal computers, on which people are

online all the time, it seemed to be more than just another way how to do marketing, it seemed to

65
have potential to become the most important communication tool, while it was perfect place how to

expose customers towards constant advertisement.

Companies had tried to use mobile phones as a source for their marketing and advertising

activities already before, through SMS, MMS, or blueetooth they tried to inform and target

customers, however smartphones extended these possibilities heavily.

With help of smartphones, companies targeted clients at first through mobile webs and

connected mobile banner adds, which were however outweighted by increasing popularity of

applications, which were thought to be complete changer in way of interconnection between firms

and customers and enhanced clients to be engaged more with the particular company.

Applications were from the beginning created to fit on smartphones and leverage their

features - their popularity kept increasing from the beginning. Majority of people considered them

as more convenient, simple and appreciated connection of different smartphone services.

From marketing point of view, two main factors of success of applications were push

notifications and location based marketing.

When customer agreed with being notified, companies were allowed to inform client at

perfect place at right time. Even though applications targeted wide scale of people who downloaded

them, they were able to swap to one-to-one communication and track individual journey of client,

set strategy according to it and send personalized content according to his preferences.

Another useful marketing tool became in-app navigation. This tool was beneficial for both

sides – client found immediately important information, on the other hand companies were able to

navigate clients where they needed to.

Understandably people did not have to agree to be notified, however this decision was not

beneficial for anybody – companies did not have information of clients, and customers got less

personalized content.

66
 Not having an application for business was thought to mean turning away third of potential

clients, however companies had to take into account that boom of applications caused that more and

more firms were eager to offer their products and services through this form, thus competition was

becoming tougher.

In order to utilize possibilities of applications, it must have been good one, even though

people spent 90% of their browsing time on applications, 42% of this time was taken by small

amount of applications such as Facebook, Youtube etc, thus free market space was not

inexhaustible.

On the other hand, the better and the more engaging application was, the more people were

willing to spend. Companies understood this and amount of money investing in mobile

advertisement was increasing heavily. (8,76 billion US 2012 and 45.85 billion US 2015)

Correctness of these investments can be seen from impact of smartphones on area of mobile

commerce, between years 2013 and 2016 worldwide revenue from mobile commerce has increased

by 337%. Advantages in form of higher accessibility, portability and connectivity caused, m-

commerce with smartphones did not establish themselves just as another part of e-commerce, they

aimed to drive it directly.

In second half of my work I focused, how expansion of smartphones affected consumer

behavior of people and how companies reacted towards it.

Importance of understanding consumer behavior of customers was clear before introduction

of smartphones, however from that time importance of it even increased.

Being online all the time gave people ability to constantly check opinions of other people,

rate various products, look for inexhaustible amount of information – they became professional

shoppers.

67
 Their position towards companies changed, constant advertisement from everywhere

caused, people did not believe it unconventionally anymore, especially when they could within a

while search in their smartphone and look for experiences of other customers.

Companies could not look at interaction with people just from economical point of view,

they had to try to incorporate customers in developing process - It was a way how to get

information what customers really wanted. Reference groups, because of interconnected world,

widened, happiness of one, meant positive promotion channel towards many people, who were in

touch with particular customer in real, but from that time also online world, thus buying process

was in fact never ending.

In order to achieve and utilize interconnection with customers, companies created

capabilities such as Consumer relationship management, which focused on developing relationship

with customers, and searched how to attract customers among inexhaustible amount of choices,

how to create advertisement that would stick in heads of customers, who would afterwards connect

it with particular desire.

Companies had to try to interact with customers as much as possible and gather as many

information as possible either from application, web sites or from social sites. Understanding clients

enabled them to optimize content almost immediately according to wishes of customers and be

more specific in their campaigns.

Companies that are able to create stickiness between them and customers and which are able

to collect and exploit feedbacks from customers the best, have advantage and are one way closer to

the purchase.

68
WORKS CITED:

Marie, A., & Grybś, M. (2013). Modern trends in consumer behaviour in era of e-communication.

Studia Ekonomiczne, 151, 263-273.

Jacoby, J., Johar, J. V., & Morrin, M. (1998). Consumer behavior: A quadrennium. Annual Review

of Psychology, 49, 319-344.

Krishnan, A., Santhi, K., & Sekeran, C. (n.d.). Consumer Buyer Behaviour at Point of

Purchase.Global Vision Publishing House

Rani, P. (2014). Factors influencing consumer behaviour. Excellent publishers, 2(9), 52-61.

Tähtinen, J. (2006). Mobile Advertising or Mobile marketing. A need for a new concept?.Frontiers

of e-Business Research 2005. 152-164.

Sheth, J.N. (1992). Acrimony in the ivory tower: A restrospective on consumer research. Journal of

the Academy of Marketing Science, 20(4), pp. 345-353

Nayberg Yevgenia. (2015, DecembIer 7). How We Shop Differently on Our Phones. Retrieved

October 12, 2016, from http://insight.kellogg.northwestern.edu/article/how-we-shop-differently-on-

our-phones

Internet usage statistics. (2016, June 30). Retrieved November 1, 2016, from

http://www.internetworldstats.com/stats.htm

69
Wang, C-C., & Chen, C-C. (2010). Electronic commerce research in latest decade: A literature

review. International Journal of Electronic Commerce Studies, 1(1), 1-14.

Reed, B. (2010, June 18). A Brief History of Smartphones. Retrieved October 26, 2016, from

http://www.pcworld.com/article/199243/a_brief_history_of_smartphones.html

Choibamroong, T. (2005). Knowledge of tourists’ behavior: a key success factor for managers

in tourism businesses. Bangkok University Journal, 5(2), p. 1-8,

Arthur, C. (2012, January 24). The history of smartphones: Timeline. Retrieved October 17, 2016,

from https://www.theguardian.com/technology/2012/jan/24/smartphones-timeline

Burnes, J. (2010, March 17). The Mobile Shift: How Mobile is Changing Consumer Behavior.

Retrieved October 15, 2016, from http://www.slideshare.net/james.burnes/the-mobile-shift-how-

mobile-is-changing-consumer-behavior

Fratu, D. (2011). Factors of influence and changes in tourism consumer behavior. Bulletin of the

Transilvania University of Braşov (Series 5), 4 (53/1), 119-126.

Miller, P. (2007, July 25). Apple sold 270,000 iPhones in the first 30 hours. Retrieved October 16,

2016, from https://www.engadget.com/2007/07/25/apple-sold-270-000-iphones-in-the-first-30-

hours/

70
Lamarre, A., Galarneau, S. & Boeck, H. (2011). Mobile marketing and consumer behavior current

research trend. Int. J Latest Trends Computing. 3(1), 201.

Statistics and facts about smartphones. (2016, October 11). Statista. Retrieved from

https://www.statista.com/topics/840/smartphones/

Mobile and e-commerce are reshaping consumer behavior. (2013, June 28). Retrieved November 2,

2016, from http://www.fidelityilf.com/market_news/21Century/pdf/mobile-and-ecom.pdf

Brian Honigman. (2014). Mobile Internet Ad spending worldwide 2012-2018 (Table). Retrieved

from Content-loop.

http://www.content-loop.com/10-mobile-marketing-statistics-help-justify-budget/

Brosekhan, A., Velayutham, M., & Phil, M. (n.d.). Consumer Buying Behaviour – A Literature

Review. IOSR Journal of Business and Management, 08-16.

Mobile First Strategy. (n.d.). Retrieved November 2, 2016, from

http://www.investopedia.com/terms/m/mobile-first-strategy.asp

Iyoob, J. (2015, May 15). Technology And Its Impact On Consumer Behavior. Retrieved October

18, 2016, from https://www.linkedin.com/pulse/technology-its-impact-consumer-behavior-jim-

iyoob

Henderson, K. (1999). Electronic commerce in the online and electronic publishing industry:

Business model for web publish scholarly journal. In J. W. T. Smith, A. Ardö, & P. Linde

(Eds.), Redefining the information chain: New ways and voices (pp. 37-50). Proceedings of the

International Council For Computer Communication [ICCC] and International Federation for
71
Information Processing [IFIP] conference held at the University of Karlskrona/ Ronneby,

Sweden, 10-12 May. Retrieved from

http://elpub.scix.net/data/works/att/9904.content.06592.pdf

Singer, J. (2014, October 3). 5 Ways mobile changed consumer behavior forever, Part 2. Retrieved

October 21, 2016, from http://www.the-future-of-commerce.com/2014/10/03/5-ways-mobile-

changed-consumer-behavior-forever-part-2/

Mobile Apps: What Consumers Really Need and Want. (n.d.). Retrieved October 29, 2016, from

http://offers2.compuware.com/rs/compuware/images/Mobile_App_Survey_Report.pdf

Study of marketing: Consumer behavior. (2014, November 20). Retrieved October 1, 2016, from

https://thestudyofmarketing.wordpress.com/chapter-6-consumer-behavior/

Mobile Commerce. (2011). Retrieved November 01, 2016, from

http://www.investopedia.com/terms/m/mobile-commerce.asp

Brown, A. (2008, September 4). What is Consumer Buying Behavior? Retrieved September 16,

2016, from http://www1.udel.edu/alex/chapt6.html

Kalakota,R & Whiston, A. (1997) Electronic commerce: a manager’s guide. Reading Mass:

Addison Wesley

72
Hague, S. (2016, February 2). Mobile Commerce: A Colossal Shift in Consumer Behavior.

Retrieved November 3, 2016, from http://www.ameyo.com/blog/mobile-commerce-a-colossal-shift-

in-consumer-behavior

Car, T., Simunic, M. & Laskarin., M. (2013). Mobile marketing and advertising strategies in

tourism and hospitality industry. Paper presented at Academic and Business Research Institute

International Conference, New Orleans, March 21-23. Retrieved from

http://www.aabri.com/NO2013Manuscripts/NO13039.pdf

McLeod, S. (2011, June 22). Maslow's Hierarchy of Needs. Retrieved November 2, 2016, from

http://www.simplypsychology.org/maslow.html

Four PS. (n.d.) Retrieved November 5, 2016, from http://www.investopedia.com/terms/f/four-

ps.asp

Do, T. L. (n.d.). Secondary Research (C. Keene, Ed.). Retrieved November 3, 2016, from

http://designresearchtechniques.com/casestudies/secondary-research/

Primary Research - Advantages (2016). From Data Collection: Primary Research Methods Tutorial.

KnowThis.com. Retrieved November 14, 2016 from http://www.knowthis.com/data-collection-

primary-research-methods/primary-research-advantages

Mehra, H. (2016, March 4). 15 things you probably never knew about mobile apps (S. Yanting,

Ed.). Retrieved November 10, 2016, from https://www.techinasia.com/talk/15-insights-knew-

mobile-apps

73
Feldmar, R. (2016, January 27). How mobile apps influence consumer spending. Retrieved

November 2, 2016, from https://blog.resco.net/2016/01/27/how-mobile-apps-influence-consumer-

spending/

Iowa State University. (2015, September 30) Mobile apps and online reviews influence consumer

behavior. ScienceDaily.Retrieved from

www.sciencedaily.com/releases/2015/09/150930092506.htm.

Johnston, E. (2016, May 18). 5 steps to understanding your customer's buying process. Retrieved

October 26, 2016, from https://www.b2bmarketing.net/en-gb/resources/blog/5-steps-understanding-

your-customers-buying-process

Chaffey, D. (2016, October 29). Mobile marketing statistics compilation. Retrieved October 26,

2016, from http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-

marketing-statistics/

Moth, D. (2013, March 12). 85% of consumers favour apps over mobile websites. Retrieved

November 7, 2016, from https://econsultancy.com/blog/62326-85-of-consumers-favour-apps-over-

mobile-websites

Jaideep, S. (n.d.). Top 5 Stages of Consumer Buying Process. Retrieved November 14, 2016, from

http://www.yourarticlelibrary.com/consumers/top-5-stages-of-consumer-buying-process/48596/

Number of available apps in the apple app store. (2016). Statista. Retrieved from

https://www.statista.com/statistics/263795/number-of-available-apps-in-the-apple-app-store/)

74
Nield, D. (2014, August 23). Digitaltrends. Retrieved October 3, 2016, from

http://www.digitaltrends.com/mobile/smartphone-users-download-zero-apps-per-

month/#ixzz4QNBphjnm

Stenitzer., G. (2013, September 16). The 'Critical 7 Seconds': Starting the customer conversation, or

ending it? Retrieved November 12, 2016, from http://adage.com/article/btob/critical-7-seconds-

starting-customer-conversation-ending/290295/

Chand, S. (n.d.). Consumer Buying Behaviours: 4 Important Types of Consumer Buying

Behaviours. Retrieved November 6, 2016, from

http://www.yourarticlelibrary.com/consumers/consumer-buying-behaviours-4-important-types-of-

consumer-buying-behaviours/22153/

Marwaha, G. (2014, September 1). Mobile Payments: What is a Secure Element? Retrieved

November 12, 2016, from http://www.gmarwaha.com/blog/2014/09/01/mobile-payments-what-is-a-

secure-element/

Ryals, L. (2016, September 5). The future of sales marketing. Retrieved November 7, 2016, from

http://raconteur.net/business/is-marketing-really-the-future-of-sales

Number of monthly active Facebook users worldwide. (2016). Statista. Retrieved from

https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/

Delgado, R. (2013, August 15). Technology’s Influence on Consumer Behavior. Retrieved

November 9, 2016, from http://www.business2community.com/business-innovation/technologys-

influence-on-consumer-behavior-0585685#QEud6Euab2YKkkW1.97

75
An app is not enough – a new research report for software-de ned retailers. (2015, June). Retrieved

November 10, 2016, from http://info.appdynamics.com/rs/031-WIX-618/images/AppD-report-App-

not-enough.pdf

Summerfield, J. (n.d.). Mobile Website vs. Mobile App. Retrieved November 10, 2016, from

https://www.hswsolutions.com/services/mobile-web-development/mobile-website-vs-apps/

Deshdeep, N. (2015, October 1). 10 Reasons Mobile Apps are Better Than Mobile Websites.

Retrieved November 16, 2016, from https://vwo.com/blog/10-reasons-mobile-apps-are-better/

Rouse, M. (n.d.) What is location based marketing. Retrieved from

http://searchsalesforce.techtarget.com/definition/location-based-marketing-LBM

Arline, K. (2015, February 26). What Is E-Commerce? Retrieved November 14, 2016, from

http://www.businessnewsdaily.com/4872-what-is-e-commerce.html

Sailus, C. (2014, November 14). The Evolution of Portable Media Devices & Cell Phone

Technology. Retrieved November 8, 2016, from http://study.com/academy/lesson/the-evolution-of-

portable-media-devices-cell-phone-technology.html

The Marketing Mix and the 4 Ps: Understanding How to Position Your Market Offering. (n.d.).

Retrieved November 01, 2016, from https://www.mindtools.com/pages/article/newSTR_94.htm

Poushter, J (2016, February 22). Smartphone ownership and Internet Usage Continues to Climb in

Emerging Economies. Retrieved November 2, 2016, from

76
http://www.pewglobal.org/2016/02/22/smartphone-ownership-and-internet-usage-continues-to-

climb-in-emerging-economies/

Martin, T. (2014, July 28). Pocket computing: Evolution of the smartphone. Retrieved November

19, 2016, from http://pocketnow.com/2014/07/28/the-evolution-of-the-smartphone

Wroblewski, L. (2009, November 3). Mobile First. Retrieved November 18, 2016, from

http://www.lukew.com/ff/entry.asp?933=

Perner, L. (n.d.). CONSUMER BEHAVIOR: THE PSYCHOLOGY OF MARKETING. Retrieved

October 8, 2016, from http://www.consumerpsychologist.com/Electronic_Commerce.html

Smidova, V. (2013, May 22). Co je dobré vědět o mobilním marketingu. Retrieved November 9,

2016, from https://www.mediaguru.cz/2013/05/co-je-dobre-vedet-o-mobilnim-marketingu/

Rayfield, D. (2010), Get Your Business Moving: 9 types of Mobile marketing, Retrived November

12, 2016, from http://harpsocial.com/2010/03/get-your-business-moving-9-types-of-mobile-

marketing/

Henriksveen, E. B. (2016, August 28). Location-based Marketing vs Proximity Marketing - What is

the Difference? Retrieved November 15, 2016, from http://unacast.com/post/location-based-

marketing-vs-proximity-marketing-what-is-the-difference

77
Chapter 3 Consumer Behavior: How People Make Buying Decisions. (n.d.). Retrieved November 3,

2016, from http://2012books.lardbucket.org/books/marketing-principles-v1.0/s06-consumer-

behavior-how-people-m.html

Brooks, M. (2014). How A Mobile App Is A Competitive Advantage For Small Business. Retrieved

November 8, 2016, from http://www.business2community.com/mobile-apps/mobile-app-

competitive-advantag-small-business-0901087

Spanier, G. (2016, April 27). Apps changing face of mobile marketing - raconteur.net. Retrieved

November 2, 2016, from http://raconteur.net/technology/apps-changing-face-of-mobile-marketing

Surbhi, S. (2015, October 16). Difference Between e-commerce and m-commerce (With

Comparison Chart) - Key Differences. Retrieved November 1, 2016, from

http://keydifferences.com/difference-between-e-commerce-and-m-commerce.html

Dogtiev, A. (2015, November 16). App Revenue Statistics 2015. Retrieved November 2, 2016,

from http://www.businessofapps.com/app-revenue-statistics/

TABLES/GRAPHS

Dr. Fiona Ellis-Chadwick (Department for Strategy and Marketing). (2013) The growth of internet

user worldwide, 1995 - 2013 (Table). Retrieved from Open Learn Business Studies (History of

online retail)

78
http://www.open.edu/openlearn/money-management/management/business-studies/history-online-

retail

NUA Internet Studies. (2002). Worldwide eCommerce generated revenue, 1994 - 2002 (Table)

Retrieved from http://www.digitalsuperhighway.com/Future/InfoSuperhighway.html

Apple iPhone sales by year 2007-2016. (2016). Statista. (Table) DOPLNIt co Retrieved November

2, 2016, from https://www.statista.com/statistics/276306/global-apple-iphone-sales-since-fiscal-

year-2007-/

Jeremy Reimer. (2012) Computers, smartphones and tablet sales in thousands, 1975 - 2010 (Table)

Retrieved from http://arstechnica.com/business/2012/08/from-altair-to-ipad-35-years-of-personal-

computer-market-share/4/

IDC. (2012) Worldwide smart connected device forecast % market share, 2012 - 2017 (Table)

Retrieved from http://www.fidelityilf.com/market_news/21Century/pdf/mobile-and-ecom.pdf

Statista. (2016) Number of smartphone users worldwide, 2014 - 2020 (Table) Retrieved from

https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/

Statista. (2016) Worldwide mobile e-commerce revenue, 2013 - 2018 (Table). Retrived from

https://www.statista.com/statistics/324636/mobile-retail-commerce-revenue-worldwide/

eMarketer. (2016) Worldwide retail e-commerce sales and the share of total retail sales, 2015 -

2020 (Table). Retrieved from https://www.emarketer.com/Article/Worldwide-Retail-Ecommerce-

Sales-Will-Reach-1915-Trillion-This-Year/1014369

79
Statista. (2015) Number of mobile app downloads worldwide. 2009 - 2017 (Table). Retrieved from

https://www.

Worldwide mobile app revenues. 2011-2017 (Table) Retrieved from http://www.

businessofapps/app-revenue-statistics

Statista. (2016) Global number of m-commerce buyer. 2012 - 2018 (Table). Retrieved from

https://www.statista.com/statistics/374623/mobile-commerce-buyers-worldwide/

Statista. (2016) Total revenue of global mobile payment. 2015 - 2019 (Table). Retrieved from

https://www.statista.com/statistics/226530/mobile-payment-transaction-volume-forecast/

PEW RESEARCH CENTER. (2015) Technology usage % rate emerging economies vs. Advanced

economies. 2013 - 2015 (Table) Retrieved from http://www.pewglobal.org/2016/02/22/smartphone-

ownership-and-internet-usage-continues-to-climb-in-emerging-economies/

Lynette Rylas. (2016) Consumers most trusted source of information on products and services,

(Table). Retrieved from http://raconteur.net/business/is-marketing-really-the-future-of-sales

80