Journal of Internet Banking and Commerce ISSN: 1204-5357
ISSN: 1204-5357
+44-175-271-2024Geoffrey H. Tanakinjal
Lecturer of International Marketing
Postal Address: Universiti Malaysia Sabah, Labuan International Campus, Jalan
Sungai Pagar, 87000 Labuan Federal Territory, Malaysia
http://www.ums.edu.my
Email: tanakinjal@yahoo.com
Geoffrey is a lecturer at the Labuan School of International Business and Finance. His
areas of interest are marketing research, mobile marketing and etcetera.
Hanudin Amin
Lecturer of Islamic Finance
Postal Address: Universiti Malaysia Sabah, Labuan International Campus, Jalan
Sungai Pagar, 87000 Labuan Federal Territory, Malaysia
http://www.ums.edu.my
Email: hanudin_zu@yahoo.com
Hanudin is a lecturer at the Labuan School of International Business and Finance. His
areas of interest are Islamic finance and banking.
Nelson Lajuni
Lecturer of International Finance
Postal Address: Universiti Malaysia Sabah, Labuan International Campus, Jalan
Sungai Pagar, 87000 Labuan Federal Territory, Malaysia
http://www.ums.edu.my
Email: nelsonL@mailkal.ums.edu.my
Nelson is a lecturer at the Labuan School of International Business and Finance since
1999. His areas of interest are finance and banking.
Jetol Bolongkikit
Lecturer of E-Commerce
Postal Address: Universiti Malaysia Sabah, Labuan International Campus, Jalan Sungai Pagar, 87000 Labuan Federal Territory, Malaysia
http://www.ums.edu.my
Email: jetol2000@yahoo.com
Jetol is a lecturer at the Labuan School of Science Informatics. His area of interest are ecommerce,
Internet banking, Web usability as well as the other fields in IT.
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Communication through mobile devices is no longer treated as a new phenomenon. Nevertheless, consumers’ attitude towards electronic marketing applications is still vague from the perspective of acceptance. Text messaging is currently the best way to keep in touch when the environment is not conducive to talk which includes being in a noisy bar, on a crowded train, in a meeting or just do not want to be overheard. The purpose of this paper was to determine factors that influence consumer behaviour (mobile phone owners) in communicating via SMS services. Indirectly, this research will contribute to the mechanism used by telecommunication service companies to communicate about their services. By identifying the influential factors and isolating approaches that will not attract consumer, this can eventually contribute to the success of introducing new or modified products and services.
Communication, Electronic Marketing Application, Short-Messaging- System (SMS)
Communication is a dynamic mechanism, which may be engaged by at least two parties with a common objective to understand and relate issues pertaining to their needs and satisfaction. There are many of communication models introduced by previous researchers. One of the communication models was by Shannon and Weaver (1949) who listed the elements in the communication processes (Figure 1.0).
Figure 1: Elements in the Communication Process
Even though, the process of communicating the message is simple, the way audience receives the message may vary from one audience to another. Nevertheless, consumers’ attitude towards electronic marketing applications is still vague from the perspective of acceptance. SMS allows text messages to be sent and received to and from mobile telephones. SMS was created as part of the Global system for mobile communications (GSM). Global system for mobile communications is a secondgeneration digital technology, which was originally developed for Europe but now has in excess of 71 per cent of the world population. According to an article in www.gsmworld.com, there were some interesting statistics demonstrating the impact of SMS throughout the world as follows:-
o Number of countries/area with GSM system (as at March 2004) – 207
o GSM total subscribers (worldwide as at end of March 2004) – 1046.8 million
o Short message messaging (SMS) sent per month – 45.6 billion
Malaysian Communication and Multimedia Commission (MCMC) (2004) reported that mobile phone is an essential item of communication. The research indicated 31.7 per cent of mobile phone user sends more than 5 SMS daily. Based on the statistic provided by MCMC (www.mcmc.gov.my, 10/6/2005) a total of 3.6 billion SMS were sent in 2002, followed by an increase of 69 per cent (6.1 billion) in 2003 and 9.5 billion in 2004. This year (January – June) of 2005, a total of 7.4 billion SMS have been sent via mobile phones.
Table 1: Mobile Phone Penetration Rate
As a direct marketing tool, electronic Short Message Services (SMS) is likely to surpass internet-based advertising before the end of 2006. Younger consumers higher in social class are the most willing to accept SMS direct advertising text and respond favorably to SMS-TV integrated marketing communications (Iii and Woodside, 2006). On the same note, online banking is starting to gain its momentum via the internet. Nonetheless, effort has been made to ensure online banking flexibility walks hand in hand with the convenience factor, therefore introducing banking via mobile phone (with GPRS interface). Understanding how companies should interact with their customers and deliver services in electronic environments is of decisive importance (Parasuraman and Zinkhan 2002). Nevertheless, despite these advantages, the consumer uses mobile devices mainly for simple services, such as voice services and text messaging. Based on this factor, it is important to understand the driving forces of consumers’ intentions to use mobile services and to adapt the services to fulfill consumers’ motives for using them (Nysveen et al., 2005).
Communication via SMS is a global phenomena and still growing. The thought of sending and receiving text messages never seem to be easier. Nevertheless, there is a need to identify the main reason that influences consumers (mobile phone owners) to be engaged in this new stream of communication. According to a report entitled “British SME's Lead UK Text Boom” (June, 2005), Communicating with friends and families by text has long been established as a valuable communication tool and the SMS market has shown massive growth in recent years often with spikes of traffic over seasonal occasions such as New Years Eve and Valentine’s Day.
The report also stated that in 2000, the Mobile Data Association found that 19 million messages were sent daily in the UK. In February 2005, those figures had reached an average of 75 million a day, a massive increase that can be attributed in part to increasing take up of SMS for business purposes (www.text.it/mediacentre, 4 Oct 2005). Knowles, Grove, and Pickett (1999) in their study on consumers’ moods either it is positive or negative and various conditions of service excellence (positive, neutral, negative or mixed) on recall, evaluate and behavioural intentions regarding a service provider found that moods play a less significant role than the nature of the service encounter itself.
Through the study, Knowles, et al., (1999) recommend that service provider should; (a) pay close attention on service quality; (b) realize that performing well on some dimensions of the service encounter may overcome more performance on others; (c) work to create more neutral rather than positive mood-evoking condition in their customers; and (d) actively promote the positive aspects of service encounters to the customers.
Most importantly, the telecommunications providers as one of service providers should emphasis on their customer quality and try to create a natural mood in their services, in order to get a positive response from their customers. This will help the company to retain their customers or to minimize the switching behaviour among their customers. Switching behaviour occurs when customers are not satisfied with company’s offers or products.
The research was carried out in Universiti Malaysia Sabah, Labuan International Campus which has a total population of 1944 students. The study adopted data collection procedure used by Mittal (1999), where it needs to be done in a predetermine area. A total of 150 questionnaires were distributed and 100 usable questionnaires were collected. Convenient sampling method was used where respondents were given the questionnaire before a particular lecture began and collection of questionnaire was done after the lecture concluded. Statistical analysis was done using SPSS11.0 focusing on the use of descriptive analysis and factor analysis.
A total of 100 respondents participated in the research survey comprising of 79 per cent female and 21 per cent male. Majority of the respondents (70 per cent) were between 21 -22 years old followed by 23 per cent in the age group of 23 – 24 years old. In terms of race distribution, 51 per cent were Malay, 21 per cent Bumiputera Sabah/Sarawak, 17 per cent Chinese and 8 per cent Indian. When asked about the main reason for having a mobile phone, 75 per cent stated for communication purpose, 19 per cent stated it was a basic need, 3 per cent for getting information and only 1 per cent for style/fashion. Respondents were also asked the average number of times they use SMS services per day and 49 per cent indicated an average of 4 – 9 times daily, 17 per cent for 10 – 15 times daily, 12 per cent for more than 27 times daily and for category 16 – 21 times daily and 22 – 27 times daily, 10 per cent respectively. Only 32 per cent stated that they cannot communicate through mobile phone without using SMS features, whereas 65 per cent stated other wise. A total of 43 per cent of the respondents can only stand less than 30 minutes communicating without using SMS services, 17 per cent between 1 – 1 ½ hour and 18 per cent can stand more than 3 hours. In terms of waiting time for replying SMS from friends, 78 per cent stated they can only wait less than 30 minutes before replying SMS from their friends, 6 per cent for the timeframe of 1 hour – 1 ½ hour and 4 per cent indicated that they can wait for more than 3 hours before replying the SMS.
Table 2: Cronbach Alpha
Furthermore, this study is also testing for reliability of used items. One aspect of reliability is internal consistency, which is an indicator of the level of homogeneity of a measuring scale (Cronbach, 1951). One criterion that has been widely used to assess the reliability of a multi-item measurement scale is Cronbach’s (1951) coefficient alpha. Based on the reliability analysis result, four of the six constructs had coefficient alpha exceeding 0.7.
As displayed in Table 2, the alpha results indicated interactive, benefits, reliability and protection found to be reliable. On the other hand, construct convenient and features had coefficient alpha of .69 and .41 respectively. Nunnally (1978) suggested that a set of items with a coefficient alpha greater than 0.7 is considered internally consistent. Because the Convenient construct and Features construct have coefficient alpha of 0.69 and 0.41 respectively, which is less than the recommended level of 0.7, its internal consistency were weak. Therefore, both constructs were not used in subsequent analysis.
In the process of identifying factors that influences consumer attitude (mobile phone owners) to communicate via SMS services, an exploratory factor analysis was used to help assess the unidimensionality of the multi-item scale. A principle components factor analysis using Varimax rotation was performed using the 40 items proposed for criteria or features that influence the usage of SMS services. The criteria used to determine the number of factors to extract was an eigenvalue that was greater than equal to one (Zeller and Carmines, 1980). The results indicated that six factors had eigenvalues exceeding 1.00. Based on Total Variance Explained, the 40 items can be grouped into 6 significant categories which represent 59.501 per cent of cumulative eigenvalues.
Dimensionality of each of the factors was assessed by examining the factor loadings. Items with factor loadings of greater then 0.5 were consider adequate indicators for of that factor (Hair et al., 1995). As displayed in Table 3, all of the factor loadings of the items in this study were greater than 0.50, with most of them above 0.70. Also, squared multiple correlations between the individual items and their a priori factors were high (above 0.50 in all cases). Thus, all factors in the measurement model had adequate reliability and convergent validity (Wang et al., 2003). However, items with values less than 0.50 consider had insufficient reliability and convergent validity. Items such as ‘games messages’, ‘long messages’, ‘word message’, forwarding of messages’, ‘deleting messages’, ‘confidentiality of message’, ‘messages must be in short form’, ‘short messages’, and ‘colourful display screen on mobile phone’ are considered as weak factors.
Table 3: Factor Loadings
The first construct (eigenvalue=12.949) consist of “Moving picture messages”, “Moving word messages”, “Picture with sound message”, “Colourful messages”, “Interactive message”, “Signature message”, “Personalised messages”, Picture message”, “Graph message” “Games message” and “Long messages”. This factor will be known as “Interactive”. The second construct (eigenvalue = 2.967) consist of “Free message”, “Replying messages”, “Free gift from service provider”, “Free credits by service provider”, “Minimum cost per message”, “Saving message”, “Word message”, “Forwarding message”, and “Deleting message”. This factor will be known as “Benefit”.
The third construct (eigenvalue = 2.460) comprised of “Storage bank for received message”, “Prompt reception period of message”, “Storage bank for sent messages”, “Reliable service provider”, “ Promotion by service provider”, “Delivery time on schedule”, and “Confidentiality of message”. This factor will be address as “Reliability”. The fourth construct (eigenvalue = 2.008) is represented by “Spam message protector”, “Message filter”, “Cancellation of message”, “Message bin”, “Unanimous message sender”, and “Recovering of messages”. This factor will be known as “Protection”. The fifth construct (eigenvalue = 1.854) consist of “universal messages jargon”, “Promotion messages”, “Group message jargon”, “Messages must be in short-form”, and “Short messages”. This factor is refereed to as “Convenient”. The final construct (eigenvalue = 1.563) have only two items namely “Maximum number of character per message” and “Colourful display screen on mobile phone”. This factor will be known as “Features”.
The objective of this paper was to determine factor that influence consumer behaviour (mobile phone owners) in communicating via SMS services. Indirectly, this research will contribute to the mechanism used by telecommunication service companies to communicate about their services. Factor analysis was used to group and minimized 40 variables into 6 constructs for easier management. By identifying the influential factors and isolating approaches that will not attract consumer, this can eventually contribute to the success of introducing new or modified products and services. Based on this research, six constructs were identified namely Interactive, Benefits, Reliability, Protection, Convenient and Features. Respondents of this research placed a significant importance on the first construct. Attention should be given to the 11 items in this construct in order to gain an advantage on interactivity between mobile phone owners and their mobile phone while using SMS services. Service provider should also take into consideration the benefits that will be given to mobile phone user subscribing to SMS services. Promotions of freebies and the manipulation advantage towards messages will drive users to be hooked to the services. The reliability of the services provider depends on the confidence of users towards the storage capacity allowed, delivery and reception of messages. Protection of users should also be an important agenda due to spam activities, cancellations and recovering of important messages through message filter and message bin.
Further research should focus on loyalty and satisfaction of consumers towards SMS service provider based on the platform of Interactive, Benefits, Reliability and Protection received by consumers. Apart from the above, future research should also cover the issue of SMS between countries, the amount of cost involved for SMS services both from the perspective of consumers and service providers.
Table 4: KMO and Bartlett's Test
Table 5: Total Variance Explained
Table 6: Rotated Component Matrix
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