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Abstract
The growing intensiveness of market competition creates a new marketing challenge for sports brands. The leaders of the global sportswear market seek new ways to conquer the hearts and minds of the new and existing customers. The emergence of new media forms provides unique marketing opportunities. Mobile advertising has already become an indispensable component of sophisticated marketing strategies for sports brands. In recent times, mobile technology has evolved the traditional business practices, and this is the medium that sports brands look like a complete and cheap solution for catering to their marketing needs. Using this technology seems to be a viable option as this medium of advertising is gaining popularity all over the globe.
For advertising through mobile devices, companies base their marketing strategies on different models and mechanisms depending upon the nature, frequency, and nature of the advertisements. The present study has focused upon the mobile marketing strategies followed by sports brands including Nike and Adidas. The study involves primary research through interviews to acquire individuals views and responses from two countries the UK and Saudi Arabia. The findings suggest that consumers residing in the UK perceived messages via mobile advertisements more positively as compared to consumers in Saudi Arabia. Different factors have been identified for this finding. Also, both Nike and Adidas have been successfully using mobile marketing to affect consumer intentions, attitude, and buying behavior however the findings do not suggest which company is better performing.
Introduction
Background
The growing intensiveness of market competition creates a new marketing challenge for sports brands. The leaders of the global sportswear market seek new ways to conquer the hearts and minds of the new and existing customers. The emergence of new media forms provides unique marketing opportunities. Mobile advertising has already become an indispensable component of sophisticated marketing strategies for sports brands. Different companies hold different views on what mobile advertising is and how it works. Reyck and Degraeve (2003) suggest that mobile advertising is essential advertising via mobile phones . Adidas is one of the pioneers of mobile advertising in the sportswear business. Sports brands like Adidas are among the key contributors to the rapid development of mobile advertising. However, not all sports brands readily recognize the usefulness of the advertising media. Therefore, it is essential that the benefits of using mobile advertising in sports branding and marketing be understood and applied across a variety of sports marketing solutions.
The hike in competition among top sports brands that started since the Soccer World Cup 2010 has resulted in the emergence of different more effective marketing mediums for highlighting their products prominently on the consumers preference list (Schwartz 2010). The intense competition also resulted in huge mergers of sports goods giants, such as the merger of Adidas and Reebok, which jolted the whole market including Nike, who was considered to be the closest competitor to Adidas. Although both these giant rivals have their share of the market safe, these companies are engaging in aggressive marketing activities that aim on attracting the customer base of each other (Adidas Backpack 2011).
In recent times, mobile technology has evolved the traditional business practices, and this is the medium that sports brands look like a complete and cheap solution for catering to their marketing needs. Using this technology seems to be a viable option as this medium of advertising is gaining popularity all over the globe. Companies like Unilever Brothers, Louis Vuitton, Marks and Spencer, and many others are using this medium effectively. Major reasons for this medium for marketing to become increasingly popular are its reach to the mass population and the cheaper costs that a company incurs for using this medium (Murphy 2010; Butcher 2009; Mobile Marketer 2010). It is expected that mobile advertising will gain more strength in the future and the medium will then be considered more influential as compared to TV advertising, and the spending of companies on mobile advertising will exceed TV and other mediums of advertisements (Div 2010). This mainly due to the reason that this medium of advertisement is cost-effective, where the marketers do not have to bear heavy costs of acquiring services of advertisement agencies, models, celebrities, and icons (Hanbo 2008).
For advertising through mobile devices, companies base their marketing strategies on different models and mechanisms depending upon the nature, frequency, and nature of the advertisements. These models are designed by marketing professionals and the advertising agencies, who decide as to how they want the system to work for making it more effective and according to consumers behavior towards the trends practiced by a large number of marketers (Harjeet 2011).
Scholars and researchers also attempted to identify the types and models that sports brands adopt to penetrate their target markets through the use of mobile advertisement. Pousttchi and Wiedmann and George (2007), explained six basic types of mobile advertisement messages that can be used to influence customers positively. They conducted extensive research of mobile marketing messages sent to the customers by different brands and categorized these messages into six categories. For this reason, they acquired the brands permission to analyze the marketing messages thoroughly.
These advertisements can be used by sports brands to build the image of the brand in consumers minds, to inform customers about offers and discounts, to deliver marketing teasers, to provide information about a product or groups of products, and to respond to customers queries. Another reason can be to understand consumer demands and suggestions through mobile polls and competitions. The conceptual models, on which sports brands base their mobile marketing mechanism are designed keeping in view the customers acceptance level towards the ad and different success factors, which are derived from detailed studies on the impact of mobile advertisement on consumers attitude and behavior. Key Pousttchi and Wiedmann (2007) suggested four further models of mobile advertising depending upon the acceptance that is acquired by the sports brand from the customers, namely one-off push model, one-off pull model, continued dialogue, and fundraising. These models are explained as follows:
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First model in which the marketer continuously alerts the customer about its offerings and promotions after acquiring permission from the receivers. Here the data protection legislations are incorporated where the data houses provide customers data after taking prior approval from the customers through different online surveys.
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The second model refers to a relatively cautious marketing campaign where the marketer communicates the promotions with the receiver, after acquiring permission on every occasion.
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Continued dialogue is a mobile advertisement model in which the sender and receiver of mobile advertisement communicate with each other continually and its more like a chat between the marketer of promotions and offerings and the customer. The customer asks queries to the marketer and the marketer replies accordingly.
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The last model, fundraising refers to a mobile advertisement medium in which the marketers ask customers for donations and charities by simply replying with certain alphabets and numbers to the messages that marketers send.
The expected positive response from the consumers side has caused further efforts to bring more development in this medium by companies who are utilizing this source of marketing. Many companies, who are depending wholly on mobile advertising have reported an increase in their profits. Nielsens (2009) study on the impacts of mobile advertising on consumer behavior revealed that consumer groups have shown the potential to widely accept mobile advertisements and continue to reflect promising behavior by making purchasing decisions after receiving advertisements on their mobile devices. As far as sports brands are concerned, they are seeing this new medium as a chance to penetrate those segments of the market that are not being tapped before.
We can take the example of Adidas who is considered to be one of the pioneers of the industry. Adidas initially faced continuous ignorance of their mobile advertisements from consumers until the company used more efficient and more effective mobile advertisements to attract the target market. The problem with Adidas mobile marketing messages what that they were either taken as spam or they were not enough attractive to catch customers eye. For making the impact of mobile advertisement, the company had to restructure its marketing strategies to meet the requirements and trends of the increasing market size. Nike followed Adidas and implemented the same marketing strategy with slight differences and achieves success. As of 2010, Nike holds around 34% of the market share and is considered to be the market leader (Schwartz 2010). The closest competitor is Adidas who managed to hold the second-largest market shares following the largest market shareholder, Reebok.
Mobile advertisements effectiveness heavily depends upon the mobile penetration rate in the markets where companies have adopted this medium. In Saudi Arabia only, by 2009, the mobile penetration rate was standing at 77% (Kippreport 2010) whereas, in the United Kingdom, mobile penetration rate exceeded the 100% mark by the year 2009 as it was estimated that every citizen beside adolescents owns a mobile phone. Currently, it is standing at 126% and expected to rise by another 25% to reach 151% by 2012 (Telecoms Market Research 2008).
Another factor that plays an important role in the success of mobile marketing campaigns is the permission of customers that must be acquired before sending them marketing messages. This is a vital factor, as the companies acquire customers databases from data warehouses and management companies. The private data that these databases contain, related to customers, if leaked to those who might use it for wrong purposes, will put brands image in jeopardy and will result in their mobile marketing strategys failure. For this reason, a marketer is supposed to acquire permission from the customers either they want to receive mobile ads or not to ensure that the mobile medium of marketing has been utilized properly and has targeted the right customer at the right time, in the consumer market (Jayawardhena et al. 2011). This acquisition of permission is compulsory for the success of mobile marketing and the laws in the UK and Saudi Arabia also demand the companies acquire customers permission.
The Data Protection legislation passed in both countries in particular and worldwide in general demands the organizations to protect the right of customers privacy and avoid leakage of precious market data (Bayazidt 2010; Air2Web 2003). In the past, some cases revealed that the leakage of a firms customer database caused it to lose a huge portion of its customer base and the remaining customers became conscious about how the companies use their personal information. For example, T-Mobile lost its entire customer data due to a mistake committed by one of its employees in 2009. Due to this leakage of data, customers faced severe problems like hacking of their emails and their correspondence with T-Mobile (McNamara 2009). The studies like one conducted by Pousttchi and Wiedmann on the impact of mobile advertisement on consumers attitude revealed that most of the customers are willing to receive mobile advertisements as they are informative and put a positive impact on their spending against receiving advertisements on their mobile phones. Pousttchi and Wiedmann utilized 55 case studies of organizations involved in mobile marketing and out of these 55 studies, analyzed 30 cases in detail. To test the reliability of these case studies, both researchers interviewed 44 mobile marketing experts in Europe.
The main problem with this dissertation lies in gathering statistics and data related to the impact of mobile advertisement on consumers attitude towards marketing brands in Saudi Arabia, due to the reason that not much work has been done by researchers to study the impact and its effectiveness on the Middle-Eastern nation. For this reason, it would be interesting to study what researchers findings are to provide valuable information to the readers regarding the mobile penetration in Saudi Arabia, the use of mobile advertising by brands in the kingdom, and the impact of mobile advertising on consumers buying behavior and perception regarding those brands.
This study aims to study the implication of mobile advertisement by different sports brands, particularly Adidas and Nike, to their marketing efforts to promote and highlight their products in the consumer market. The focus throughout this study lies on how effective this new technology is in attracting a customer base of competitors in the sports goods manufacturing industry. The emphasis has been put majorly on Adidas and Nike due to the reason that both these companies are considered to be the first movers towards mobile marketing and have reserved impressive record in creating a brand image and attracting more customers through the use of mobile marketing. This study is an interesting piece of work as it opens new doors of information for the readers as in past; no significant work has been done by researchers in Saudi Arabia and the United Kingdom, the location where the research work has been carried out, to understand this effective and cheaper medium of marketing (Christine.net 2007).
Research Objectives
This research explores the issue of mobile advertising and its implications for sports brands. The dissertation covers the ways mobile advertising is (and can be) used by the two sportswear manufacturing companies, Adidas and Nike. This study aims to explore the use of mobile advertising by Adidas and Nike in Saudi Arabia and the U.K. The research seeks to compare and contrast mobile advertising strategies by Nike and Adidas in Saudi Arabia and the United States. The basic issue under research is whether and how mobile advertising can serve as a success factor for large companies and brands in the sportswear manufacturing industry. The dissertation analyses the issues of mobile advertising beyond the sportswear manufacturing industry. No predictions as to the future of mobile advertising in the global markets are made in the study. The research questions are limited to exploring the contribution of Adidas to mobile advertising and its strategic implications for Nike. The principal objectives of the research include
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To define mobile advertising
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To describe the effects of mobile advertising on sports brands;
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To examine the effects of mobile advertising on Adidas and Nike in Saudi Arabia and the U.K.;
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To estimate the use of mobile advertising by Nike and Adidas in Saudi Arabia and the U.K.;
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To assess Nikes current marketing strategy in Saudi Arabia and the U.K.
Project Aim
This study aims to provide an understanding of mobile advertisement and its adaptation by sports brands to influence consumer behavior in the UK and Saudi Arabia. For this reason, Adidas and Nike have been selected as prime sports brands, as they are utilizing this medium of marketing for promoting their offers and products. The degree of effectiveness of mobile marketing channels has been analyzed based on their adaptability by the sports brands, and their tendency to attract masses towards showing a positive attitude to these brands. For this reason, several authentic theories and literature has been critically reviewed to get an idea of how mobile marketing works and what are the factors that sports brands involved in mobile marketing should keep in focus while designing their ads. The literature review chapter also includes the work of previous researchers who have studied the same subject with little variations. The efforts of the researcher in the first three chapters assist him to formulate the conclusion and findings to support the research questions designed in the later chapter of this study.
Research Questions
Keeping in view the objectives and aims of this study, the following research questions are designed by the researcher to reach a valid conclusion to this research work:
What is the impact of mobile advertising on consumer behavior and how effective it has been? What is the impact of mobile marketing on consumers behavior towards sports brands in Saudi Arabia and the UK?
What is the impact of adopting mobile marketing channels on the performance of Adidas and Nike?
Are there any significant changes in Nikes and Adidas marketing strategy due to the adaptation of mobile marketing channels?
Significance of the Study
Given the novelty of mobile advertising and its role in marketing sports brands, little or no research is performed in the past to explain the theoretical underpinnings of global mobile advertising. Therefore, this dissertation contributes to a better understanding of mobile advertising, its effects on sports brand position and popularity, and its applicability in various strategic and marketing settings, especially in Saudi Arabia and the UK. In the absence of strong theoretical grounds, this research study utilizes the principles of statistical research. The benefits of the model for marketing research are difficult to underestimate. First, the model is equally comprehensive and complex (Franses and Paap 2001). Second, it includes only relationships that facilitate the understanding of the mobile advertising phenomenon (Johnson 1998). Third, it reduces the risks of error (Schmidt And Hollensen, 2006). The statistical model is measurable, relevant, reliable, and easy to duplicate (Craig and Douglas 2005; Kolb 2008). It supports the development of logical relations between Adidass marketing solutions and its mobile advertising resources (Franzen 1999). It also helps to identify their applicability in the context of Nikes marketing strategies and their success.
Ethical Considerations
It is the primary responsibility of the researcher to acquire prior approval of the project supervisor, before carrying out any research work. The interview questions designed to obtain primary data are designed in the light of the supervisors instructions and have been proofread by the supervisor before implementation. The supervisor has assisted in the analysis of the data retrieved from secondary and primary sources, and the findings are formulated with the consent of the supervisor. Keeping in mind the considerations and ethical guidelines provided by the university and the states in which the interviews are conducted, the researcher has acquired prior acceptance from the concerned authorities. Special measures are taken to safeguard the privacy of the information that the respondents have provided and not shared with anyone except the supervisor. Avoiding similarity level and plagiarism throughout the research work has been paid special attention and any help from a third party or outsourcing any part of this study is avoided. Authors of publically available information, that the researcher utilizes as secondary information, are provided due credit. It is the right of the researcher that anyone who uses this study for referencing or any other academic purpose without the approval of the researcher or his supervisor, they can take suitable actions against those personals. In the end, it is to be notified that any ethical issue that might be pointed out by readers should be because of human error.
Literature Review
Introduction
This literature review focuses on presenting an in-depth analysis of the trends and growth in the marketing of sports brands through mobile advertisements that have emerged as an effective tool for promotional activities across different industries worldwide. In this literature review, facts, and figures related to mobile marketing are presented, supported by the theories that previous researchers and scholars have formulated. The literature review also aims to create an understanding of the nature of the present study and expected outcomes from the study when it is completed. It is attempted that the literature chosen for review is selected from authentic and reliable sources using different academic databases and online sources based on the criteria identified in the next chapter of this report.
Mobile Advertising
Tsang et al. (2004) define mobile advertising as a part of M-commerce, which allows businesses to promote their activities and products by advertising them on mobile devices held by consumers. The authors identified various factors that they considered responsible for the increasing popularity of this channel of advertising. The increasing use of cellular services has led consumers not only to buy a large number of mobile phones and other cellular devices but also increase the use of mobile services available to them. In particular, the introduction of short messaging services (SMS) has drastically changed the way communication is made, and realizing this fact organisations are also making use of this mobile technology to communicate with their customers (Tryhorn 2009). Nowadays, organizations are designing applications and add-on extensions to enable customers to receive offers and shop through their mobile devices instead of traveling to the physical shop location. The innovative technological changes in the mobile phone industry have also brought a revolution in the marketing industry worldwide in which mobile devices have become one of the most effective medium for one-to-one marketing (Tsang et al. 2004).
Prenzel (2009) suggests mobile advertising has allowed companies to increase their market coverage and approach a much larger customer base that has certainly affected positively their earnings. This is the reason that organizations across the globe are now launching two billion mobile ads each year which certainly have significant implications on shaping up consumer behavior.
Haghirian et al. (2008) in their study emphasized the escalating usage of mobile devices to advertise products by organizations. According to them, mobile advertisement has been recognized by organizations as a way of creating more value for their business and products/services amongst consumers. This medium has paved a way to directly communicate with customers, eliminating the time constraints and location barriers. The mobile advertisement has provided several ways for these organizations to create awareness among the targeted populations. This study also provides in-depth details of how mobile marketing is effective in different markets cultural setups, but the study does not provide sufficient information on how mobile marketing works and how organizations can achieve desired results from carrying it out. A problem that most organizations counter with using mobile marketing is that the impression and impact of these advertisements do not last long as compared to other marketing forms such as those through print and other electronic mediums (Schwartz 2009).
Mobile marketing in the UK
Consumers in the UK have shown passive behavior towards mobile marketing mainly due to the privacy issues, to which UKs customer base is very sensitive. Although, the results that organizations involved in mobile marketing have achieved reflect a bright future of this medium of marketing in the country. The Mobile Marketing Association of the UK has predicted in 2010 that the spending by businesses on mobile marketing of their products will rise to 124% by the end of 2011 (Brill 2011). As the number of smartphones is also increasing in the UK with 50% of mobile users in the country having smartphones, the scope of mobile marketing is also expanding rapidly. This is because smartphones provide more interactive options and support media which allow mobile marketers to present their products/services to customers in a highly creative and interactive way. The use of social network sites by mobile marketers for the promotion of products/services have also been observed as one of the growing aspects of mobile marketing in the UK which is leading to greater levels of acceptability amongst mobile users of the marketing tactics used by companies (Spotlight Ideas 2010).
Mobile Marketing in Saudi Arabia
Saudi Arabia has been a lucrative market for mobile operators, being the second-largest telecom market in the Middle East. Mobile marketing is a new phenomenon in Saudi Arabia, and marketers still find it difficult to successfully influence customers through this medium. This is because of the strict Sharia laws and the societal structure of the kingdom, which does not allow many especially women to make use of such technological products that may expose them. But still, mobile marketing has been comparatively successful in the Saudi market as compared to other Middle Eastern markets. The economic growth of the Middle East in recent years has increased general awareness of individuals of their buying rights, and this is the reason that they are now demanding and requiring more information related to the product they purchasing and mobile marketing offers one of the less costly and convenient methods for organizations. It is estimated that the acceptance of mobile advertisement by Saudi customers will rise to 37% by the end of the year 2011 as compared to 23% in 2010 (Bayazidt 2010).
Theoretical Framework
For a clear understanding of consumer behavior and the impact of mobile advertising t, this section highlights different theories and their relevance to the research subject that is to investigate buying behavior and trends towards the purchase of sports goods.
Theory of Planned Behaviour
Ajzen (1991) redefines the theory of planned behavior by stating that this theory helps in identifying the relationship between customers intentions and attitudes towards a product, subjective norms, and perceived behavioral control. This implies that this theory overviews the intentions of an individual related to the particular behavior that they reflect (Ajzen 1991). In light of the present study, the theory can help in presenting a prediction regarding the behavior of the consumers. As for the present study, it implies that the greater an individuals behavioral inclination towards receiving the mobile advertisements, the greater the probability that the individual will make purchasing decisions or make an inquiry about the product that has been marketed through a mobile marketing channel. It is evident that the subjective norms of individuals are positively influenced and the behavioral inclination of individuals feel in the favour of availing the offers they get through mobile advertising. In this manner, it can be said that the theory of planned behavior relevant to mobile context as it helps to understand the degree of acceptability to the mobile marketing messages and the attitude that consumers show towards the message (VanNorman 2011).
Multi-Attribute Model
Ajzen and Fishbein (1980) proposed a multi-attribute model which constitutes a complex and influential concept regarding the relationships between individuals believes their attitudes, intentions, and behaviour. With respect to mobile marketing, the multi-attribute model sbehaviorhaConcerning attitude to mobile advertisements depends on their evaluation of mobile advertisement. This reflects the fact that an individuals positive attitude towards the mobile advertisement depends upon the nature of his or her belief which should also be positive and the individual should be willing to receive and respond positively to the advertisement. This also implies that attitudes of the consumers might fluctuate with a change in their evaluation of the mobile ad or a change in their belief which they have interlinked with their decisions regarding the product offered in these advertisements (Vatanparast 2010).
Communication Model
To make it easier for the readers to understand the whole process of mobile marketing, a communication model, proposed by David Berlo (1960) is presented here. Berlo extended the famous model of communication of Shannon and Weaver (1949) to make it more clear and understandable.
In his model, Berlo defined the whole process of communication presented by Shannon and Weaver that included 4 steps, i.e. source message, channel, and receiver. Berlo made amendments by identifying the attributes that each communication step should address. The source is identified as the sender of the communication message. The sender should have good communication skills so that the receiver shows interest in listening to what the sender is saying. Senders knowledge and attitude derive his intention to send a message which is deeply influenced by his or her cultural background. In the second phase, the intended message is designed keeping in mind the purpose, selection of language, and prioritizing the message, i.e. which message is important and should be communicated first. In the third phase, the most important part of the communication process is identified; this is the channel or medium of communicating. The completion of the communication process heavily depends upon the type and efficiency of communication channels. In the last stage, the receiver receives the message, and again, it depends upon the receivers perception, his societal traits, knowledge, and attitude, that what meaning he or she derives from the communicated message.
The mobile marketing system works in the same manner as Berlos communication model does. The sender, a consumer brand, for example, designs the promotion message keeping in view the culture, knowledge, attitude, and society of the receiver. Then a proper channel of marketing, i.e. mobile devices or software, is selected to approach the target audience by sending them the marketing message on their mobile devices. At this point, the receivers attitude, knowledge, and social background play a vital role in the success of the marketing message. If the audiences attitude is in favor of the sender, the marketing communication is said to be achieving its desired results.
Berlos classic communication model helps the marketers to understand the importance of understanding target audiences attitude and their societal background. It also provides marketers with the necessary information regarding the selection of efficient mobile marketing medium and proficient designing of the marketing message.
Conceptual Framework
Mobile Advertising Model
Shannon and Weaver (1949) in their communication model provided an insight into the technicalities of the communication process which involves taking communication message from the sender to the recipient. Shannon and Weaver designed this model keeping in view the requirement for the efficient communication process between the sender and the receiver. Shannon and Weaver also identified factors that distort the communication process and referred to them as Noise. In the present study, this model has been adopted to present the process of getting a marketing message from the senders end to the receivers end in a mobile marketing setup which is also discussed. This is represented in the following figure.
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