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

Introduction

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.