Business Project LBS

Management Research Method
How do companies Location-Based Mobile Marketing strategies revolutionize the way they reach customer?
Table of Content
Abstract ... I) Introduction .... II) Literature review ........
p.2 p.3 p.4
A) Location-Based Services p.4 B) Location-Based Marketing p.4 C) LBS applications and examples of companies .... p.5
III) Methodology ...... p.6 p.6 p.6 p.7 p.8 p.11 p.12
A) Methodology overview . B) Sampling process C) Elaboration of questionnaires

IV) Results ....... V) Conclusions ........................................ VI) Limitations & further research ......
References ...... Appendices .....
p.13 p.16

ABSTRACT
Our report focuses on Location-Based Services (LBS) as a part of companies marketing strategy. This technology is at the cutting edge of a transformation in the way businesses interact with their customers. Its main objective is to target the right customer, with the right message, at the right time and in the right place. However, today we can still consider this phenomenon as limited, only a few companies have implemented it and mainly in urban areas. LBS provide a lot of opportunities to firms at virtually no cost compared to other strategies. Therefore we can imagine that this service is going to spread widely in the near future.

I)
INTRODUCTION
In this age of significant telecommunication improvements, more and more people are using smartphones as a way to be connected to the world. Marketers continuously seek innovative ways to achieve differentiation, better attract targeted customers and increase profits. They have discovered a brand new way to accomplish it through Location-Based Services. We will try to understand this latest trend, rather than providing technical information on the technology involved. How do companies Location-Based Marketing (LBM) strategies revolutionise the way they reach customers? Throughout our work, we will attempt to establish a profile of companies using LBM, to understand why they implement it, to identify their target, their marketing strategy options and their efficiency. Regarding customers, we will determine their standard profile, their motivation when using those services and their view on global companies LBS campaigns. Finally, we will look at the limits of LBM. However, as we lacked time and means, we limited our work to internet-connected smartphone users, within London, and focused just on the business aspect of LBS. This essay will be composed of three parts: the critical review of literature, the research method and finally the analysis of data collected.

II)
A.
LITERATURE REVIEW
Location-Based Services In the wireless world LBS is a new technology based on a revolutionary concept. As said by Brimicombe (2002), its origin is a convergence of technologies such as Geographic Information System, Internet, Mobile Telecommunication. Its aim is to provide relevant information to users based on their geographic position (Rose India, 2010). To access this technology, users need a mobile device with a communication network, a positioning component (GPS, Wifi), and an application provider (Steiniger, 2006). The LBS technology is spreading out very quickly. According to recent reports, the smartphone market grew by 64% annually worldwide in Q2 2010 vs. Q2 2009 (Canalysis estimates, 2010). Smartphones would account for 19% of the mobile handset market (Boomerang report, 2010). One out of three smartphone owners would currently exploit LBS at least once a month (Compete estimates, 2009). Gartner Industry (2009) forecasted the LBS market to double in 2009 versus 2008 (41 million in 2008 vs. 95.7 million in 2009). B. Location-Based Marketing However we are more concerned about one specific aspect of LBS which benefit to companies, the LBM. According to the marketing strategist Sutton, LBM is the interaction with customers by their location, offering value based opportunities to increase customer loyalty and social sharing in which you can measure.(June 2010). This new technology is used by more people everywhere, at any time and that tends to bond customers and companies. Businesses have to constantly adapt their marketing strategy to the market in order to attract, satisfy customers and match their requirements which keep evolving (Buscall, March 2010). To be efficient and innovative a company needs customers feedbacks and customers are always looking for new items (Reed, September 2010). LBM brings additional goals compared to traditional marketing. The aim is to add value to the company by implementing new strategies according to current evolutions. Shane Snow suggests some goals such as selling more, acquiring new customers or gaining current customers loyalty (April 2010). The main advantage of LBM could be free advertising. Its purpose is not necessarily to sell but to implement the idea in people minds of specific locations (restaurant, shops, bars, hospitals...). Other benefits may be capturing target easier, increasing impulse buying, developing stronger one-toone relationship marketing and increasing return on investment (SysComm, February 2010).

C.
LBS applications and examples of companies To use LBS the first step is to download an application on the smartphone (Hall, April 2010). The most famous example of LBS application may be Foursquare, the first to enable customers to be connected to their friends and know where they are at any time. Besides, this service is useful to collect points, award "badges and coupons for discounts. The more the user checks-in and adds tips on the companys application page (in bars for instance), the more rewards he gets. If he is the one who checks-in the most, he becomes the mayor of the place and receives great discounts (Saint, January 2010). Users add tips to let the general public know what they may need to know about places (Flipthemedia, 2009). Some people use tips as a real guide. Foursquare appears to have about 3 million users and it is growing by more than 15,500 users per day (Indvik, August 2010). It increases interaction with customers. More and more businesses want to market their product/services through the application (Hall, April 2010). Nevertheless, there are some dangers when gathering so much information, such as selling data collected (Selvadurai, June 2010). Nowadays an increasing number of companies use LBS to target customers by offering special offers, discounts and promotions like buy-one-get-one-free offers, loyalty and games rewards and specials for the mayor (Pattison, October 2010). It also enables to boost visits and reduce costs. McDonalds was able to improve foot traffic in stores by 33% in one day for a total cost of $1,000 paid to an LBS application (Van Grove, September 2010). The real appeal for businesses is to know more about their customers. Through its new marketing campaign, PepsiCo receives a live notification whenever customers check-in near their stores, so that they can provide them offers (Schelling chief marketing officer of PepsiCo Foodservice). Can we consider LBS for all kind of businesses? Couldnt this new technology be prejudicial for companies? Is this tool the future of advertising or just a fad? Can we believe that sharing information and location is a danger for consumer? Couldnt high discount offers be a way for companies to urge upon the consumptions of non desired products? What happens next?

III) METHODOLOGY
Methodology overview (Appendix 1, p.16) Our research question suggested a deductive approach. We went from general to specific aspects, from hypothesis to their refutation/validation. We interpreted the results of our surveys to define a standard profile of companies using this technology and to understand the resulting benefits (Weygand, 2009). Moreover, we undertook our research without having a lot of information/pre-studies since it is a recent trend. Its an exploratory study, as we tried to comprehend this expanding phenomenon (Saunders et al, 2009). We chose a quantitative approach as we wanted to reach many people in a very short interval of time. Companies cant dedicate a lot of their time to students interviews, so we managed to create a questionnaire that could be answered very rapidly. A. B. Sampling process Our sample was composed of two targets: companies and final consumers. We intended to question 100 companies because we wanted our essay to focus on the business aspect of LBS. However, we noticed that it wasnt realistic in a short period of time. It was easier to get information about companies from consumers. Their vision reflects if the companys strategy is efficient or not. Finding how multinationals employ LBS is relevant for us, but they are hard to reach. For example, when going to Starbucks, its difficult to get in direct contact with managers who implement LBS. Starbucks being a chain; the marketing department is centralized in its headquarters. Consumers represent therefore an alternative approach to these multinationals. We managed to submit our questionnaires to 17 firms and 89 customers, at different time and in different districts of London to have a more accurate sample. However, some biases remained. The main one concerns the discrepancy between our sample and the exact population. We chose a convenient sample: companies have been selected after activating the application on our smartphone and consumers through a filter question. Our business questionnaire would have required data on the rate of companies already using LBM in London. Regarding consumers, we only found information on the population rate of London in 2009 which reach 7, 753, 600 (Hollis, 2010) and not on the recent repartition male/female, the rate of smartphones users, the age-pyramid...
C.
Elaboration of questionnaires We elaborated two different questionnaires (Appendix 2 p.17, Appendix 3 p.19) corresponding respectively to the reasons why companies use this service and to customers perspective. They gathered questions of different types, organized from general to specific aspects. Our questions were shaped thanks to secondary data found in books, articles and websites (Saunders et al, 2009). But to fulfil our research, we relied mostly on these primary data and their interpretation. We tried to

keep the questionnaires appealing by proposing answers of various form (nominal, list, scales). We avoided ambiguous questions and neutral answers. Finally, we decided to allocate ten minutes per person interviewed, on a three weeks period. We chose to submit our survey ourselves to enable respondents to add some comments. The questions of our business survey aimed to: - 1, 2: Know the way companies discovered LBS, since when they use it - 3: Discover what has prompted them to change marketing strategy - 4: Determine if the target they wanted is actually the target they get - 5: Understand how they attract customers - 6, 7: Highlight evolution in turnover/affluence - 8: Know limitations of LBM The questions of our customer survey aimed to: - 1: Interview Smartphone users only - 2: Identify one aspect of users profile - 3: Determine what kind of offers are more effective on customers - 4,5: Discover if writing tips on companies help developing customer loyalty relationships - 6: Discover consumers motivation in using LBS - 7, 8: Find what kind of campaigns are the most efficient - 9: Learn what could make customers stop using LBS

IV) RESULTS (referring to our objectives)

A. Companys questionnaire results Summary from our investigation about the company survey: Type of business Restaurants/Ba rs No. of respondents Location Soho Islington Covent Garden Covent Garden Leicester Square Leicester Square Piccadilly Circus Watford Watford Barbican Covent Garden Covent Garden Westminster Westminster Leicester Square Brentford Chiswick / Company Dominos Pizza The Breakfast Club Hummus Bros The Crusting Pipe The Montagu Pyke Le Garrick Brasserie Pret A Manger ThaT Burger! Chicago Rock Cafe
Shops 5 Others 3 TOTAL 17
Brill Barbican Paul A Young Fine Chocolates Karen Miller Card Aid-Charity Blue Inc Clothing Sergio Giannasso Hair & Makeup Topnotch Health Club The Shack - Men's Grooming /
Profile of companies using LBM (Appendix 4, p.21) It seems that the profile of companies using LBS are micro companies, created 5-10 years ago and mainly concentrated in the restaurant/bar sector. They are integrating LBS strategies in their marketing plan in order to get more customers, to increase their loyalty and to make more economical advertising. Companies use of LBS (Appendix 5, p.24) The results show that most companies heard first about LBS through internet, followed by business network and word of mouth. Companies motivation in implementing LBS is mainly to increase sales and customer loyalty but also to gain notoriety and be ahead of competitors. Companies target when implementing LBM (Appendix 6, p.26)

The main target of companies using LBM is working people. We can suppose that they all want to reach them since they are likely to have purchasing power. The second target is represented by people enjoying going out, followed by geeks and students. Companies marketing strategy options and their efficiency (Appendix 7, p.27) Discounts seem largely to be the most used marketing tool followed by advertising. Since companies faced a slight increase in their clientele and turnover after the integration of LBS in their strategy, we can suppose that they are both related. We wanted to see if there was a correlation between the affluence of customers in the store and the increase in the turnover, so we decided to test it as a hypothesis. The result shows that there is definitely an association between the increase of companies turnover and the affluence of customers in their stores (significance = 0,005 <0,05). Companies facing limitations using LBS application (Appendix 8, p.30) Companies integrate this new trend in their strategic plan but it is not well implemented yet. It has few limitations that companies must be aware of and must take into account when using LBS. Sometimes campaigns are unsuccessful and create bad buzz marketing that affects the companys image.
B.
Consumers questionnaire results % of users, based on the no. of respondents 14% 36% 8% 18% 100%
Summary from our investigation about the customer survey: No. of No. of Days Location respondents respondents using LBS Friday evening Camden Town 92 13 Saturday Apple Store 180 64 afternoon Oxford Street Sunday afternoon Covent Garden 61 5 Euston square Monday morning 40 7 - UCL TOTAL / 373 89
Customer profile (Appendix 9, p.31) The standard profile of LBS final users corresponds to an unemployed man under 25 years old, living in the near surroundings of London. He has little knowledge about mobile technology, uses mainly LSB applications for discounts but has never written tips about place he visited. We wanted to investigate if gender has an influence on the fact to write tips about a place visited (ordinal data). The result of our hypothesis was statistically significant, indicating that gender is a factor influencing tips writing (significance = 0.007 < 0.05).

Consumers motivation in using LBS (Appendix 10, p.35) Consumers seem to use principally discounts. We may assume that because of the financial crisis, they are seen as a solution to save money. Final LBS users are likely to come back to a place which has offered discounts. Moreover, some people use badges to compete with their friends. Consumers started to use LBS to find good places. Indeed, the applications help users find places around their location among various criteria (restaurant, cinema, bar, etc). Multinational companies overview from customers perspective (Appendix 11, p.37) We approached multinationals through a limited number of companies through the efficiency of their LBM campaigns. Consumers seem to prefer receiving a gift card randomly given than a reduction or a free product because they are harder to get (only for the major/winner). We may also consider that the brand image of a company has an impact on its campaign efficiency. For example Jimmy Choos or Wagamama campaigns were far behind MacDonalds and Starbucks. We wanted to know if age has an influence on the perception of campaigns efficiency (nominal data). The result of our hypothesis was statistically indicating that age is not a factor influencing the perception of campaigns efficiency (significance = 0.052 > 0.05). Limitations of Location-Based Services Applications (Appendix 12, p.40) Companies sometimes share data about their customers with other companies and disclose private information which gives customers the impression of being spied: everyone can know who they are, what they are doing, what they want... Customers also receive misinformation, that make customers quit those applications and companies lose opportunities. Hopefully, most of users never encounter this kind of problem, maybe it is due to a lack of knowledge? (cf. Appendix)
V) CONCLUSIONS
Through our study, we managed to respond to all of our research objectives. Basically, we have highlighted some aspects concerning the use of LBS and the relationship between companies and smartphone users. We focused mainly on the potential of this service for companies as a part of their marketing strategy. Since our subject is based on a complex and sophisticated technology, we needed to explain first how it operates. This has been developed in the literature review. LBS allow users to share their location. Those applications became a real tendency as shown by the following figures: 3 millions of Foursquare (the most well-known LBS application) users in October 2010. Nevertheless, from our results, we confirmed that companies are also likely to find a great interest in these services, enabling them to gain more customers and increase their loyalty. Indeed, businesses understood that LBS users could be potential customers, and that they could reward them when checking-in their shops. At present, companies apply mainly discounts, which are appreciated by customers but not very original. Businesses strategies match with customers desire in the way that 88% of companies offer discounts and 83% of customers are looking for them. Moreover, LBS can provide companies with

feedbacks from their customers thanks to the tips that they can write on their application page. We realised that those applications were, therefore, interesting for both companies and final users. LBS are recently becoming more and more used. Indeed, we found that 90% of businesses integrated LBS in their strategy less than one year ago. From the companies that we interviewed, we noticed that their customers loyalty and product sales have slightly increased and their reputation has improved since the implementation. The results also show that companies seem to use LBS as a test. If this service isnt free anymore, if it generates a bad buzz or if the campaign is unsuccessful, the company would stop using LBS. However, we pointed out a discrepancy with our literature review. When we submitted our questionnaires to customers, we went to strategic places where the level of smartphones users supposed to have an LBS application should have been high. We still only got one out of four LBS users instead of the one out of three stated in our literature review. Concerning businesses, the amount of LBS implementation stays quite marginal as it was hard to find firms with LBS campaigns. Facebook and other social networks are still yet likely to offer a better free promotional tool to companies than LBS.
VI) LIMITATIONS AND FURTHER RESEARCH

Although our research and surveys provide useful results, we encountered some limitations. We didnt manage to interview as many companies as expected: 17 achieved instead of 25 targeted. Our research scope was too large which pushed us to limit our work. We realised that this service is not yet well implemented in peoples mind, just few of them know what it is really about. Besides, it is not sufficiently used by companies, so those who use it are quite hard to find. They need to have a current promotional campaign so that we can localize them with a smartphone. We had to focus mainly on small businesses since they are more likely to answer. They do not represent accurate results since they are only a small part of companies using this service. It was easier to identify which companies have implemented LBS application in their marketing plan simply by launching applications in strategic places. On the contrary, regarding customers we lost time interviewing people who were not using LBS applications. Indeed, we could not know before asking them if they use it, only focusing on their behaviour and physical appearance. On 373 persons questioned only 1 out of 4 was using LBS. Moreover, we had to restrict our scope to few crowded places (central London) where users are likely to use those applications. Last but not least, we didnt have many feedbacks since it is a new trend. As most of our secondary data came from the web (blogs, video, articles) we were not sure of their accuracy: we cannot properly rely on internet references. We chose to select only smartphones users and put aside internet users via computers because we wanted to understand how it works only in the street. As further research we could spread our investigation to other kind of internet devices. This would help us understand how LBS work in its whole. We could also take into account the private (individual) use of LBS to have a global vision of it. For example

we could look at social networking (Facebook Place, Twitter) where people are telling their location and sharing information about places they like, to their friends through their profile. Another extent to our investigation would be to globalize the research to the USA, where the service is highly developed. This would be possible with more resources and time.
REFERENCES
Books : - Bettini, Jajodia, Samarati (2009). Privacy in Location-Based Applications: Research Issues and Emerging Trends. London: Springer Verlab. - Brimicombe, (2002). GIS: Where are the frontiers now?. Bahrain. - Haig, (2002). Mobile marketing: the message revolution. London: Kogan Page Limited. - Jagoe, (2002). Mobile location services: the definitive guide. New Jersey: Pearson Education. Jiang, (2006). Location based services. Elsevier.
- Kpper, (2005). Location-based services: fundamentals and operation. John Wiley. - Liu, Yang Location, Localization, and Localizability. London: Springer Verlab. - Mocke, (2005). Location based services: developing mobile GIS applications. University of Stellenbosch. - Sarikaya, (2002). Geographic location in the Internet. Netherlands: Kluwer Academic Publisher Group. - Saunders, Lewis, Thornhill, (2009). Research Methods for Business Students. 5th edition. London: Pearson Education. - Schiller, Voisard, (2004). Location-based services. Oxford: Elsevir Inc. - Virrantaus, Markkula, Garmash, Terziyan (2001). Developing GIS-Supported Location- Based Services First International Workshop on Web Geographical InformationSystem. Japan.

- Walsh, (2002). Location Based Services: Worldwide Market Analysis & Strategic Outlook. IBC Publishing Limited - Weygand (2009), Mthodes de Recherche de Gestion - programme Cesemed
Internet resources: - Buscall, (Mars 2010). Location-based Social Networking Sites Could Benefit Your Business. [Available from] http://jontusmedia.com/location-based-social-networking-sites-couldbenefit-your-business/ [Accessed 8 October 2010]. - Canalys : expert analysis for the high tech industry, (2010). Android smart phone shipments grow 886% year-on-year. [Available from] http://www.canalys.com/pr/2010/r2010081.html [Accessed 8 October 2010]. - Clifford, (April 2010). Linking Customer Loyalty With Social Networking. [Available from] http://www.nytimes.com/2010/04/29/business/media/29adco.html [Accessed 8 October 2010]. - Compete Web analytic firm, (2009). Location Based Services: Why smartphone apps will pay off for advertisers, carriers, application provider. [Available from] http://blog.compete.com/2009/06/02/location-based-services-applications-carriersadvertisers/ [Accessed 8 October 2010]. - Flipthemedia, (2009). Foursquare, the next big social media thing? [Available from] http://flipthemedia.com/index.php/2009/11/Foursquare-the-next-big-social-mediathing/ [Accessed 8 October 2010]. - Freedman, (February 2010). What is Foursquare? The Confusion Ends Here. [Available from] http://ustandout.com/social-media/what-is-Foursquare [Accessed 8 October 2010]. - Gartner information technology research and advisory company, (2009). Gartner Says Consumer Location-Based Services Market Will More Than Double. [Available from] http://www.gartner.com/it/page.jsp?id=1059812 [Accessed 8 October 2010]. - Hall, (Avril 2010). Why Foursquare Drives Business: What You Need to Know. [Available from] http://www.socialmediaexaminer.com/why-Foursquare-drivesbusiness-what-you-need-to-know/ [Accessed 8 October 2010].

- Hollis (2010), Focus on London population and migration 2010, http://data.london.gov.uk/datastore/applications/focus-london-population-andmigration [Accessed 8 October 2010]. - Indvik, (August 2010). Foursquare Surpasses 3 Million User Registrations. [Available from] http://mashable.com/2010/08/29/Foursquare-3-million-users/ [Accessed 8 October 2010]. - New York Times, (March, 2010). Starbucks Fans Can Become Baristas on Foursquare. [Available from] http://bits.blogs.nytimes.com/2010/03/11/starbucks-fans-canbecome-a-barista-on-Foursquare/ [Accessed 8 October 2010]. - Pattison, (October 2010). Geolocation Services: Find a Smartphone, Find a Customer. [Available from] http://www.nytimes.com/2010/10/07/business/smallbusiness/07sbiz.html?_r=2 [Accessed 8 October 2010]. - Reed, (September 2010). Location-Based Marketing : The Revolution. [Available from] http://momentfeed.com/2010/09/location-based-marketing-therevolution/ [Accessed 8 October 2010]. - Reed, Boomerang Report, (2010). Location-Based Marketing: The Revolution. [Available from] http://momentfeed.com/2010/09/location-based-marketing-therevolution/ [Accessed 8 October 2010]. - Saint, (January 2010). What Is Foursquare And How Do I Use It? [Available from] http://www.businessinsider.com/how-hit-location-based-socialapp-Foursquare-works-2010-1#ixzz1249yTEg9 [Accessed 8 October 2010]. - Selvadurai, (June 2010). Video Interview from the cofounder of Foursquare. [Available from] http://www.dailymotion.com/video/xe1jip_naveen-selvaduraiFoursquare_tech?start=0#from=embed [Accessed 8 October 2010]. - Snow, (April 2010). 9 Killer Tips for Location-Based Marketing. [Available from] http://mashable.com/2010/03/15/location-based-marketing/ [Accessed 8 October 2010]. - Steiniger, Neun, Edwarde, (2006). Foundations of Location Based Services. [Available from] http://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.94.1844&rep=rep1&type=pdf [Accessed 8 October 2010]. - Sutton, (June 2010). Presentation: Location Based Marketing in 2010. [Available from] http://socialwayne.com/2010/06/10/presentation-location-based-marketing-2010/ [Accessed 8 October 2010]. SysComm, (February 2010). Advantages of Location-Based Internet Marketing.

[Available from] http://www.syscomminternational.com/blog/advantages-of-locationbased-internet-marketing/ [Accessed 8 October 2010]. - The Week, (Mars 2010). What is Foursquare? [Available from] http://theweek.com/article/index/200751/What_is_Foursquare [Accessed 8 October 2010]. - Van Grove, (September, 2010). McDonalds Foursquare Day Campaign Increased Checkins by 33%. [Available from] http://mashable.com/2010/09/16/mcdonalds-Foursquarecampaign/ [Accessed 8 October 2010].

APPENDICES
Appendix1: Timetable
Week 1 28 September - Creation of a 5 members group - Decision of our chosen subject - Proposal of different potential subjects
Week 2 5 October - Validation of the subject - Elaboration of the initial question research and objectives
Week 3 12 October
Week 4 19 October
Week 5 26 October - Proceeding to the general research methodology - Elaboration of our timetable - Adaptation of our research instruments
Week 6 2 November
- Reflection about our methodology - Redaction of the (quantitative or literature review qualitative) - Improvement of our - Setting up of our research question questionnaires - Improvement of our research objectives
- Final changes of our surveys - Redaction of our report abstract and introduction

Week 7 9 November COLLECTING DATA
Week 8 16 November - Data processing - First results - Review and condensation of our literature review and methodology to the appropriate number of words and according to feedbacks
Week 9 23 November - Final results analysis based on our research instruments - Elaboration of our conclusion following our results - Making off of our reference list and appendices
Week 10 30 November - Final group research report redaction and review - Submission before Monday 13th December
Week 11 7 December
Week 12 14 December

- Submission of our businesses questionnaires
- Submission of our - Submission of our businesses final consumers questionnaires questionnaires

Appendix 2: Survey on Location Based Services towards companies We are studying international business at Westminster University, London, and are asked to conduct a research for our Management Research Method course. Our subject focuses on Location-based Smartphone applications. We would like to interview a few companies to understand why and how they use those applications.
Activity Sector: Bar/Restaurants Shops Others: Size of business: Micro (<10 employees) Small (< 50 employees) Medium (<250 employees) Age of the company: - 5 years 5 to 10 years 10 to 20 years years London district (city): .................................................................
+ 20
1.
How did you hear about location based services? (please, tick one) Internet Word of mouth Business Network Prospector Other sources of information
2.
When did you integrate this strategy to your marketing plan? (please, tick one) Less than 6 months 6 months 1 year 2 years and more
3.
Why do you use Location Based Marketing (LBM)? (please, circle the answer(s)) To gain notoriety To increase your sales To increase customers loyalty To be up to date To be ahead of competitors What kind of consumers are you targeting by implementing LBM? (please tick as many as you want)
4.

5.
Geeks Students Working people People who enjoy going out Others, specify:
What kind of promotion do you use to attract your customers? (please tick as many as you want) Discounts Adverts Badge system (the more your customers check the more advantages they have) Games (e.g. treasure hunt)
6. 0%
On a scale of 0 to 100%, have you noticed a growth in your turnover? (please, make a cross on the scale to express your results) 100%
7.
Did your clientele increase since you have integrated Location Based Marketing? (please circle one answer) Not at all A little Quite a lot Very much What could make you stop using this service? (please, tick as many as you want) If it isnt free anymore. If the application ask private data If the campaign is not successful If it creates a bad buzz marketing If It is not useful for the company anymore Others, specify:
8.
Thank you for your time. Appendix 3: Survey on Location Based Services towards final consumers We are studying European Business at Westminster University, London, and are asked to conduct a research for our Management Research Method course. Our subject focuses on Location-based Smartphone applications which offer users the possibility of locating themselves in the city and/or locating companies around them. (e.g Foursquare, Gowalla, Yelp )
Sex: Age: Male - 25 years Female 26 to 50 years + 50 years

Professional status: Employed
Un-employed
Retired
Living area: town 1.
Central London
Near surrounding
Out of
2.
Do you use a Smartphone with Location Based Services applications? (please, tick one) Yes No. Thank you for your time. Have you got a good knowledge about mobile technology/application? (please, tick one) No, Im really bad at it I have a few knowledge about it Yes, I often follow mobile news Yes, Im keen on mobile technologies What kind of promotion do you often use? (please tick as many as you want) Discounts Adverts Badge system (the more you check the more advantages you have) Games (e.g. treasure hunt)
3.
4.
Have you ever written tips about places you have visited (shop/bar/restaurant...) on their application page? (please, circle the answer) Never Sometimes Often Always Would you go back to a place which has already offered you promotions? (please, tick one) Yes No Why did you start using LBS applications? (please, tick as many as you want) To write/read the advices given To find some good places To have some discounts/offers To improve my social network Which of the following campaigns have you ever used? (please, tick as many as you want) Starbucks giving one dollar off a cappuccino for the mayor Dominos pizza offering discounts and free pizza to Foursquare mayors Real time treasure hunt around London used by Jimmy Choos Wagamama complementary soup offered for every 5 check-ins Pizza Hut breadstick offered with a pizza bought for the mayor MacDonalds gift cards randomly offered for Foursquares users
5.
6.
7.

None 8. According to you, which one was the most efficient? (please, tick one) Starbucks giving one dollar off a cappuccino for the mayor Dominos pizza offering discounts and free pizza to Foursquare mayors Real time treasure hunt around London used by Jimmy Choos Wagamama complementary soup offered for every 5 check-ins Pizza Hut breadstick offered with a pizza bought for the mayor MacDonalds gift cards randomly offered for Foursquares users None Not applicable Have you met any of the following constraints in Location Based Services applications? (please, tick as many as you want) Data collected used in a ill-advisedly way Misleading advertising Privacy and security risks (housebreaking, ) Being spied (family, work, ) None
9.
Thank you for your attention Appendix 4: Profile of companies using LBM
This pie shows us that bar and restaurants are the mains users of LBS technology. Shops come in second position; finally others correspond, in our case for example, to hair dressers,
This pie show the size of business that we that we interviewed, we found that the main users of LBS were micro companies 59% (less than 10 employees). Small companies (less than 50 employees) come on second 23%. Finally, medium companies 18%.

This graph shows the age of companies that are using it, 7 companies have been created 5-10 years ago (41,2%). And only 4 companies (23,5%) have been created more than 20 years ago.
This pie shows us the percentage of companies that have integrated this strategy in their marketing plan. We can assume than 53% (9) of the interviewed companies have integrated it in the last 6 months. Hypothesis research regarding companies objective: - Null Hypothesis - H0: there is no association between age of the company and the integration of LBS strategy in their marketing plan (i.e.: age is not a factor that influences the chosen company) Alternative Hypothesis - H1: there is association between age of the company and the integration of LBS strategy in their marketing plan (i.e.: age is a factor that influences the company)

When did you integrate this strategy to your marketing plan? * ageofcompan y Crosstabulati on ageofcompan y Total 0-5 years 5-10 years 10-20 years When did you less than 6 Count 3 integrate this months % within 100.0% strategy to ageofcompany your marketing6 months Count 0 plan? % within .0% ageofcompany 1 year Count 0 % within .0% ageofcompany Total Count % within ageofcompany
+20 years 2 28.6% 4 57.1% 1 14.3% 3 100.0%
1 33.3% 2 66.7% 0 .0% 7 100.0% 3
3 75.0% 1 25.0% 0 .0% 4
9 52.9% 7 41.2% 1 5.9% 1 7 1 0 0 . 0 %
100.0%
100.0%
Chi-Square Tests Value 6.450a df 6 6 1 Asymp. Sig. (2sided) .375 .250 .930
Pearson ChiSquare Likelihood Ratio 7.839 Linear-by-Linear .008 Association N of Valid 17 Cases a. 12 cells (100.0%) have expected count less than 5. The minimum expected count is .18.
Significance= 0.375 There is a probability superior to 0.05 so we accept H0 (no association between age of the company and integration of the strategy in the company) and reject H1 (association). Appendix 5: Companies use of LBS

The first graph shows how people heard about LBS. Actually, it seems like internet is the first channel for companies to be aware about LBS (35%). Then, world of mouth and business network are the next channel. Companies explained that sometimes, their customers told them about LBS and advised them to implement it. Also, companies heard about it through their employees, who check-in at the company. Managers heard about it also at some conferences, or business networking, showsOnly 6% of companies heard about LBS through prospectors, which is not as surprising as most of LBS are part of startups and dont have the funds necessary to prospect. Then, 12% of companies heard about it through other sources of information, such as emailing, newspapers, shows, partners.
As it is a multiple choice question, respondents could tick as many as an answer they wanted thats why we have these high results. We asked companies why they did use LBM for, in their marketing strategy. Most of them (88%) use LBM to increase their sales or customers loyalty. In fact, through LBM, companies can put some discount for their shop when people are around their location. Like that, companies attract new customers who wouldnt have come without the discount. Through those smartphone applications, companies can increase customers loyalty easily. As an example, The Breakfast Club offers 20% for the mayor (it means for the people who check-in the most in their place). Also, The Crusting Pipe, in Covent Garden, offers a bottle of beer every 10 check-in. 76% of companies interviewed use LBM to be ahead of competitors. In fact, they explain that with the 2008 crisis, competition has become more aggressive than before, and those try to attract the most customers as possible. They have to stay updated with all trends, and to adapt to customers wants. 76% of companies use LBM to gain notoriety as well. They explained that they understood the internet potential and that they had to adapt to this new market. They want to be present on the web, and say that it is a cheaper way to be known than advertising. Finally, only 41% of companies interviewed explain using LBM to be up to date. They want to follow trends and to adapt to the market. They try to follow trends, and try new things for helping the business. Some companies explained that they were just curious about that technology; therefore it is kind of a test for them. Appendix 6: Companies target when implementing LBM
Companies seem to be all target workers, followed by people enjoying hanging out with 71% and geeks with 65%. Students come in last position with 53%.

Appendix 7: Companies marketing strategies options and their efficiency
Regarding companies marketing strategies, discounts are a much more used tool with 88%. Indeed, there are approximately twice as much discounts as adverts and four times as much discounts as badges used. Games are rarely used in the companies marketing strategies with only 6%.
In all situations the clientele had augmented but most of companies agree that the proportion of new clientele has only slightly increased (82%). Clientele increased quite a lot for few firms (6%) and some (12%) observed that new customer acquisition improved very much. The graph shows that even if the clientele amplified, it affects only a little the raise of the companies turnover. The 0-25% part is mainly represented, which means that 82% of companies saw their turnover rising less than 25%. 18% of companies observed that their turnover increase between 25% and 50%. Finally, in our cases, the increase of the turnover never exceeded 50%.
Hypothesis research regarding the evolution of companies turnover and affluence Null Hypothesis - H0: there is no association between the growth of the turnover and the affluence of the clientele in store. Alternative Hypothesis - H1: there is an association between growth of the turnover and affluence meaning the more companies have customers in their store the more their turnover increases.


On a scale of 0 to 100%, have you noticed a growth in your turnover? * Did your clientele increase since you have integrated Location Based Marketing ? Did your clientele increase since you have integrated Location Based Marketing? Total A little Quite a lot On a scale 0-25 Count of 0 to % within 100%, have Did your you noticed clientele a growth in increase your since you turnover? have integrated Location Based Marketing? 25-50 Count % within Did your clientele increase
Very much 13 92.9%
1 100.0%
0 .0%
82
1 7.1%
0 .0%
2 100.0%
17

ChiSquare Tests Asymp. Sig. (2sided) .005 .013 .004
Pearson Chi-Square Likelihood Ratio Linear-byLinear Associatio n N of Valid Cases a. 5 cells (83.3%) have expected count less than 5. The minimum expected count is . 18.
Value 10.611a 8.639 8.360
df 2 2 1
17
Significance = 0.005, <0,05. This is a low probability so we reject H0 saying there is no association between the growth of the turnover and the affluence and we accept H1: there is an association between the increase of companies turnover and the affluence of customers in companies stores. Appendix 8: Companies facing limitations using Location-Based Service in their strategy
Most of companies interviewed (94,1%) answered they would stop using LBS applications if they were not useful for the company anymore. That makes sense because companies may lose money and have additional costs (advertising, salaries). Many others (94.1%) are convinced that if the service creates bad buzz marketing as well as not successful campaign marketing (88.2%) they would also stop using it. Indeed it can affect the brand image and customers loyalty. Finally the service is now free even if companies have to bear costs of employing someone to

supervise the implementation. If it becomes paying many respondents (70.6%) will stop integrating it in their strategic plan. Location-Based Services is a new trend and it is not well implemented yet it has few limitations that companies must be aware of.

Appendix 9: Customer profile objective
Approximately one out of three users of LBS technology is a woman and two third correspond to men.
Concerning the professional situation of users, the unemployment rate seems to be higher than the employment (that is to say 12% more).
The less than 25 years old category represents the major part of LBS users, followed by the between 25 and 50 category and at last the over 50 category.
Most of LBS final users come from London near surrounding (71%), a quarter reside in central London (27%) and a very few live out of town (2%).
The majority of LBS users have little knowledge about mobile technology (38%), some often follow mobile news (29%), and only a few are keen on mobile devices (7%). However, it is important to note that a large proportion of people dont have any particular knowledge about it (26%).

The graph shows that the higher the level of implication in LBS, the lower the number of representatives. Nearly two third of final users have never written any tip about a place they have visited while only 3% always write some tips. Hypothesis research regarding customer profile objective: - Null Hypothesis - H0: there is no association between gender and tips writing (i.e.: gender is not a factor influencing tips writing) - Alternative Hypothesis - H1: there is an association between gender and tips writing (i.e.: gender is a factor influencing tips writing) Ranks Gender Have you ever writtenFemale tips about places youMale have visitedTotal (shop/bar/restaurant... ) on their application page? Test Statisticsa Have you ever written tips about places you have visited (shop/bar/restaurant...) on their application page? 570.000 948.000 -2.708 .007 N 27 62 89 Sum Mean RankRanks 35.11 948.00 49.31 3057.00 of
Mann-Whitney U Wilcoxon W Z Asymp. Sig. (2-tailed) a. Grouping Variable: Gender
Significance = 0.007. There is a low probability so we reject H0 (no association) and accept H1 (association between gender and tips writing).
Appendix 10: Customers motivation when using LBS
The graph accentuates the choice of discounts as a primary aim of LBS use (83%). It matches with companies strategy of implementing (at 88%) discount offers, therefore we can assume that this marketing strategy is successful. Secondly, people seem to like using LBS to collect badges (31%).There are dozens of badges to collect on LBS applications as Foursquare (for example when check-in 5 times in one day in 5 different shops). People like to compete with their friends, to see who has got the most badges. Finally, people use less LBS applications for games or for adverts:

respectively 9% and 13% of people. Games and adverts dont have a lot of success for customers for several reasons: games are not interesting and they dont like to see adverts on their phones as they are subject to advert all day.
People are willing to come back to a place which has already offered discounts/vouchers.
Consumers main reason to begin using LBS is to find some good places (43%) around their location and among specific criteria (restaurant, cinema, bar, etc). For example, if someone wants to go to the cinema while he is with his friends in the street, he just has to launch the application to find the nearest cinema and get directions to get there. Also, people started using LBS to find offers and discounts (30%). It seems that because of the crisis, people are more attracted by discounts and try to find the best deal. Then, only 15% started using LBS to improve their social network. They want to find new friends, to discover their friends tastes and location. Finally 12% started using LBS to write or read advices. In fact, people who just came to a new city want to know more about places around them.

Appendix11: Multinational companies overview from customers perspective
The most effective campaign seems to have been MacDonalds one with 37% of the suffrage nearly overtaken by Starbucks with 30%. The third position is occupied by Dominos with 12%. The others dont seem to have the same impact and hardly pass 10% of responses. Hypothesis research regarding customers perspective on multinational companies objective: Null Hypothesis - H0: there is no association between age and their perception of an effective campaign (i.e.: age is not a factor that influences the chosen campaign) Alternative Hypothesis - H1: there is association between age and their perception of an effective campaign (i.e.: age is a factor that influences the chosen campaign)


According to you, which one was the most efficient? * Age Crosstabulat ion Age
Total between 25 less 25 and 50 over 50 According toStarbucks Count 10 you, whichgiving one% within Age 15.6% one was thedollar off a most cappuccino efficient? for the mayor Dominos Count 5 pizza offering% within Age 7.8% discounts and free pizza to Foursquare mayors Real timeCount 0 treasure hunt% within Age .0% around London used by Jimmy Choos Wagamama Count 0 complementar% within Age .0% y soup offered for every 5 check-ins Pizza HutCount 2 breadstick % within Age 3.1% offered with a pizza bought for the mayor MacDonalds Count 12 gift cards% within Age 18.8% randomly offered for Foursquares users None Count 1 % within Age 1.6% Not applicableCount 34 % within Age 53.1% Total Count %
2 10.0%
1 20.0%
13 14.6%
0 .0%
0 .0%
5 5.6%
2 10.0%
0 .0%
2 2.2%
1 5.0%
0 .0%
1 1.1%
0 .0%
1 20.0%
3 3.4%
4 20.0%
0 .0%
16 18.0%
1 5.0% 10 50.0% 64
1 20.0% 2 40.0% 20
within100.0% 100.0%
3 3.4% 46 51.7% 5 8 9 100.0% 1

Chi-Square Tests Value Pearson Chi-23.541a Square Likelihood 20.828 Ratio Linear-by.009 Linear Association N of Valid89 Cases a. 20 cells (83.3%) have expected count less than 5. The minimum expected count is .06. df 14 14 1 Asymp. Sig. (2-sided) .052 .106 .926
Significance = 0.052. There is a probability slightly superior to 0.05 so we reject H1 (association between age and perception of campaign efficiency) and accept H0 (no association).

Appendix12: Why can consumer stop using LBS? Respondents agreed it is their responsibility to not disclose private information to the whole public. They are the ones who draw their profile on applications to spread their social network so they must be careful of what they compute. Besides some people feel the impression of being spied because everyone (not only their friends) can know where they are and what they are doing. They also receive false publicity meaning they get trapped and pay more than they were supposed to pay. Many reasons which may force customers to give up applications which cause lose of opportunity to companies. It is also the responsibility of companies to not reveal all information about their customers. Hopefully for them there are more customers who never encounter troubles (78.9%) when using LBS applications and are satisfied by the service offered. Hypothesis research regarding limitation of LBS application: Which factor can influence the fact that consumer meet constraint? - Null hypothesis H0: there is no relation between the knowledge about LBS applications and problems encounter when using them - Alternative hypothesis H1: There is a relation between the knowledge customers have about LBS applications and problem they may face. The more they use it the more information they compute on applications and the more likely they are to face limitation and give up applications.

Have you met any of the following constraints in Location Based Services applications ? * Have you got a good knowledge about mobile technology/a pplication? Have you got a good knowledge about mobile technology/ap plication? Total I am keen on I have a few No Have you met Data any of the following constraints in Location Based Services applications? Misleading advertising collected used in a illknowledge Count % within Have you got knowledge about mobile technology/ap plication? Count % within Have you got a good knowledge about mobile technology/ap plication? Privacy and security risks Count % within 0 .0% 0 .0% 1 3.8% 0 .0% 1 1.1% 1 4.3% 1 2.9% 1 3.8% 0 .0% 3 3.4% I often follow mobile news 1 4.3% mobile technologies 0 .0% 0 .0% 1 16.7% 2 2.2%
advisedly way a good

Chi-Square Tests Value 13.885a 13.234 .277 df Asymp. Sig. (2-sided) 12 .308 12 1 .352 .599
Pearson Chi-Square Likelihood Ratio Linear-byLinear Association N of Valid Cases a. 17 cells (85.0%) have expected count less than 5. The minimum expected count is .07.
89
Significance = 0.308. There is a probability superior to 0.05 so we accept H0 (no association between knowledge and constraint encounter by users) and reject H1 (relation between the two). It means that there is no link between users being aware of this technology and the troubles that they face.

Business Project LBS

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Business Project LBS

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Management Research Method

Abstract ... I) Introduction .... II) Literature review ........

p.2 p.3 p.4

A) Methodology overview . B) Sampling process C) Elaboration of questionnaires

References ...... Appendices .....

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IV) RESULTS (referring to our objectives)

Shops 5 Others 3 TOTAL 17

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VI) LIMITATIONS AND FURTHER RESEARCH

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Week 7 9 November COLLECTING DATA

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- Submission of our businesses questionnaires

- Submission of our - Submission of our businesses final consumers questionnaires questionnaires

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Professional status: Employed

Living area: town 1.

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+20 years 2 28.6% 4 57.1% 1 14.3% 3 100.0%

1 33.3% 2 66.7% 0 .0% 7 100.0% 3

3 75.0% 1 25.0% 0 .0% 4

9 52.9% 7 41.2% 1 5.9% 1 7 1 0 0 . 0 %

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Appendix 7: Companies marketing strategies options and their efficiency

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Very much 13 92.9%

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ChiSquare Tests Asymp. Sig. (2sided) .005 .013 .004

Value 10.611a 8.639 8.360

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Appendix 9: Customer profile objective

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Mann-Whitney U Wilcoxon W Z Asymp. Sig. (2-tailed) a. Grouping Variable: Gender

Appendix 10: Customers motivation when using LBS

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Appendix11: Multinational companies overview from customers perspective

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3 3.4% 46 51.7% 5 8 9 100.0% 1

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