Sources of Trust and Consumers' Participation in Permission-Based Mobile Marketing

Sources of Trust and Consumers' Participation in Permission-Based Mobile Marketing

Heikki Karjaluoto (University of Oulu, Finland) and Teemu Kautonen (University of Vaasa, Finland)
DOI: 10.4018/978-1-60566-156-8.ch028
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The chapter investigates different sources of trust as factors affecting consumers’ willingness to provide companies with personal information and the permission to use it in mobile marketing. The chapter develops a conceptual model, which is tested with data from a survey of 200 young Finnish consumers. The data were analyzed by means of structural equation modeling (LISREL8.7). The main source of trust affecting the consumers’ decision to participate in mobile marketing is the company’s media presence, rather than personal experiences or social influence. Hence, mobile marketers should focus on building a strong and positive media presence and image in order to gain consumers’ permission for mobile marketing. Further, international research is required in order to investigate especially institutionally-based sources of trust in different regulatory and cultural environments.
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The development of mobile handsets and new mobile network technologies such as 3G and wireless local area networks (WLAN) opens up new opportunities to how to manage customer relationships. The literature on mobile marketing has mainly focused on consumer perceptions of mobile marketing (e.g., Barnes & Scornavacca, 2004; Bauer, Reichardt, Barnes, & Neumann, 2005; Dickinger, Haghirian, Murphy, & Scharl, 2004; Karjaluoto, & Alatalo, 2007; Lewis, 2001; Merisavo et al., 2007; Okazaki, 2004; Tsang, Ho, & Liang, 2004), and its effectiveness (e.g., Barwise & Strong, 2002; Kavassalis, Spyropoulou, Drossos, Mitrokostas, Gikas, & Hatzistamatiou, 2003; Nysveen, Pedersen, & Thorbjornsen, 2005). Emerging areas such as the role of mobile marketing in the integrated marketing communications mix (Karjaluoto, Leppäniemi, & Salo, 2004; Karjaluoto, Leppäniemi, Salo, Sinisalo & Li, 2006) and brand building (e.g., Rettie, Grandcolas, & Deakins, 2005; Sultan & Rohm, 2005) are receiving more and more attention in the literature (for a literature review see Leppäniemi, Sinisalo & Karjaluoto, 2006).

Most studies agree that mobile marketing, the most common current form of which is text messaging, will turn into an active direct marketing medium as part of the promotion mix. In other words, given the special features of the mobile medium including its personal nature and ubiquity, it works best in activating consumers to either purchase a product or react in some other way intended by the marketer right after the message has been received. The benefits of mobile marketing in CRM programs include a high rate of personalization, interactivity and a low cost of reaching large target audiences at the right time and in the right place (Anckar & D’Incau, 2002; Facchetti, Rangone, Renga, & Savoldelli, 2005).

Mobile marketing is in many countries subject to government regulation and it is thus permission-based (Barnes & Scornavacca, 2004; Barwise & Strong, 2002; Leppäniemi & Karjaluoto, 2005). Besides a prior permission to send multimedia or text messages, mobile marketing also requires the consumer to provide at least basic personal information to the marketer. In addition to the mobile phone number, this may include background and location information. The more companies can utilize various kinds of customer data, the more personalized and effective their mobile marketing messaging is likely to be (Yunos, Gao, & Shim, 2003). Moreover, data on customer preferences enables the companies to make their messages relevant to the customer, whereby the messages also become more welcomed by the customers (Ho & Kwok, 2003).

A relevant concern from the consumer perspective is how companies use these data. Previous studies have associated trust with the consumer’s decision to provide personal information to marketers (Gordon & Schoenbachler, 2002; Shen & Siau, 2003). However, while there is an abundance of marketing and management literature on trust focusing on contexts such as business relationships (e.g., Ganesan & Hess, 1997; Sako, 1992; Zaheer, McEvily, & Perrone, 1998), organizational issues (e.g., Creed & Miles, 1996; Six, 2005) and electronic transactions in general (e.g., Ba, Whinston, & Zhang, 2003; McKnight & Chervany, 2002; Shen & Siau, 2003; Yang, Hung, Sung, & Farn, 2006), the literature on the role of trust in the particular context of mobile transactions is still at an early stage (e.g., Cheng & Yuan, 2004). However, according to a recent study (Greenville, 2005) one of the main reasons explaining the slow uptake of mobile marketing is the lack of consumer trust. This U.K. based study found that companies are reluctant to adopt mobile marketing mostly because they fear that the consumers are reluctant to participate, as the consumers are expected to worry about the problems of e-mail spamming being paralleled on their mobiles.

Key Terms in this Chapter

Trust: is a multidimensional concept generally referring to a relationship of reliance. Trust is commonly defined as the trustor’s expectation of such behavior from the trustee that is “beneficial or at least not detrimental” to the trustor’s best interests.

Institutionally Based Trust: A dimension of perceived trust and consists of trust related to institutions and regulation.

Mobile Marketing: Can be defined as “the use of wireless media as an integrated content delivery and direct response vehicle within a cross-media or stand-alone marketing communications program” (Mobile Marketing Association). In general it means marketing on or with a mobile device. Current techniques include text and multimedia message campaigns, mobile web advertising such as banners and keywords, location-based advertising and various downloadable solutions on a mobile phone.

Sources of Trust: Refer to various antecedents of trust, i.e. sources from which information used as a basis of a trust decision is derived. These can be grouped into personal and institutionally based trust.

Personal Trust: A dimension of perceived trust and consists of personal experiences with an organization and social influences.

Permission-Based: In this context means that marketing messages received on mobile phones should be based on opt-in rules. In other words, marketers are not usually allowed to send any communications to mobile phones without the user’s prior permission.

Media Presence: Relates to an organization’s general presence in major media.

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