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The Determinants of Behavioral Intention to Use Mobile Coupons in a Casual

Dining Restaurant Environment

by

Edward Jennings

A Dissertation Presented in Partial Fulfillment

of the Requirements for the Degree

Doctor of Business Administration

UNIVERSITY OF PHOENIX

May 27, 2010 © 2010 by Edward M. Jennings ALL RIGHTS RESERVED The Determinants of Behavioral Intention to Use Mobile Coupons in a Casual

Dining Restaurant Environment

by

Edward Jennings

May 27, 2010

Approved:

James Sullivan, Ph.D., Mentor

Kenneth Cromer, Ph.D., Committee

Ronald Morritt, DBA, Committee

Accepted and Signed: James Sullivan Date

Accepted and Signed: Kenneth Cromer Date

Accepted and Signed: Ronald Morritt Date

______Jeremy Moreland, Ph.D. Date Dean, School of Advanced Studies University of Phoenix ABSTRACT v

DEDICATION vi

ACKNOWLEDGMENTS vii

TABLE OF CONTENTS

LIST OF TABLES...... x

LIST OF FIGURES...... xi

CHAPTER 1: INTRODUCTION...... 1

Background of the Problem...... 2

Mobile Marketing...... 2

Restaurant Promotion...... 3

Theoretical Importance...... 4

Statement of the Problem...... 5

Purpose of the Study...... 6

Significance of the Problem...... 6

Significance of the Study to Leadership...... 8

Nature of the Study...... 8

Overview of the Research Method...... 9

Overview of the Design Appropriateness...... 10

Research Questions...... 11

Hypotheses...... 12

Theoretical Framework...... 14

Definition of Terms...... 21

Assumptions...... 22

Scope, Limitations, and Delimitations...... 23

Summary...... 25

CHAPTER 2: REVIEW OF THE LITERATURE...... 27 viii

Title Searches, Articles, Research Documents, and Journals...... 27

Literature Review...... 28

Credibility and Availability of Census Data...... 28

Industry Classifications...... 29

Full Service Restaurant Categories...... 30

Restaurant Promotion Strategies...... 31

Customer Satisfaction in Full Service Restaurants...... 33

Full Service Dining Customers...... 34

Technology Savvy Customers...... 34

Cellular Phone Age Demographics...... 35

Cellular Phone Varieties...... 38

Mobile Device Feature Usage...... 38

Text Messaging, M-commerce, and Intention...... 42

Speed of Mobile Access...... 48

Consumer Concerns Continued...... 49

Restaurant Experiments with Mobile Coupons...... 52

Coupons...... 54

Conclusions...... 62

Summary...... 64

CHAPTER 3: METHOD...... 65

Research Method and Design Appropriateness...... 66

Research Questions...... 73

Population...... 74 ix

Sampling Frame...... 75

Informed Consent...... 77

Confidentiality...... 78

Geographic Location...... 78

Data Collection...... 79

Instrumentation...... 79

Validity and Reliability...... 81

Internal Validity...... 81

External Validity...... 82

Reliability...... 83

Data Analysis...... 83

Summary...... 84

CHAPTER 4: RESULTS...... 86

Findings...... 86

Summary...... 91

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS...... 92

Conclusion...... 92

Implications...... 92

Recommendations...... 93

Summary...... 93

REFERENCES...... 94

APPENDIX A: TITLE...... 107

APPENDIX B: INFORMED CONSENT FORM...... 109 x xi

LIST OF TABLES

Table 1 Title of table formatting for manuscripts requires the title typed flush left at the top of the table, capitalization of the initial letters of the principal words (see APA section 3.1.3), italicizing the title, and double space if the title takes up more than one line, and beginning subsequent lines under the first line.

...... 87

Table 2 Title of table...... 88 xii

LIST OF FIGURES

Figure 1. Use sentence case and double space if the caption takes up more than one line (Note: use the INSERT FIGURE CAPTION button on the BOLD

Tables and Figures toolbar)...... 90

Figure 2. Include an Index of Figures only if there is more than one figure in your dissertation...... 91 1

CHAPTER 1: INTRODUCTION

The focus of this dissertation is to understand the ability of mobile marketing to drive the behavioral intention of young adults, to use mobile coupons, in a casual dining restaurant environment. CTIA-The Wireless Association, (CTIA) (Wireless quick facts,

2008), states the United States consists of 270 million mobile phone subscribers representing 87% of the total United States population. Additionally, 17.5% of the United

States households have abandoned landline phones in favor of wireless only phones. The saturation of mobile phones in the United States represents a large opportunity for mobile marketing, with a unique opportunity for one on one consumer communication. For consumers, the ability to receive Short Message Service (SMS) text messages, commonly referred to as text messages can provide relevant and timely promotions when combined with opt-in permission based marketing. In the United States, 110.4 billion text messages are sent each month which amounts to over one-trillion text messages per year (Wireless quick facts, 2008).

In 2008, 317 billion coupons were distributed in the United States and 2.6 billion coupons were redeemed, for a redemption rate of less than one percent (Coupon fast facts, 2009). Marketers use coupons to increase sales to existing customers and drive new customers to purchase products and services. To date, little research has been done in the area of the behavioral intention to use mobile coupons for casual dining restaurants.

Given the saturation of mobile phones, the ability of mobile coupon delivery, and the desire of casual dining restaurants to generate profits, this study will determine the behavioral intention of young adults to use mobile coupons in a casual dining restaurant environment. 2

Background of the Problem

Worldwide telecommunication carriers have collectively spent in excess of $100 billion dollars on licenses to broadcast high speed voice and data (Feldman, 2000). The anticipation of consumers utilizing data services and making purchases drives carriers to continue development of higher speed networks known as third generation (3G) and fourth generation (4G) networks. Mobile commerce (M-commerce) marketing anticipates ubiquitous devices, online access, location sensitivity, and authorization by mobile consumers to make purchases. Furthermore, 87% of the United States population owns a mobile phone providing connectivity and in many cases, personal digital assistant (PDA) features, making the phone increasingly important in everyday mobile life (Sultan &

Rohm, 2005).

Mobile Marketing

The ubiquitous nature of cell phones, allow consumers to be connected anytime making a convenient marketing channel, if the consumer desires immediate information to make a purchasing decision. Personalization through the use of ringtones, carrying cases, background pictures, software, phone numbers, and services, makes the cell phones unique to each consumer. The addition of mobile phone data services provides the ability to acquire information while the consumer is mobile. The use of mobile phones may be better understood based on the acceptance of technology, the use of technology, and the lifestyle motivations of individuals, in addition to traditional segmentation variables such as age, gender, income, and ethnicity (Sultan & Rohm, 2005).

Marketers view mobile marketing as a way to: shape the consumer attitude and awareness of a brand; increase brand involvement through consumer downloads of 3 desired content; and influencing the consumer to purchase a specific brand (Sultan &

Rohm, 2005). Furthermore, the goal of mobile marketing will be to interact with individual consumers in a manner which adds value to the customer-brand relationship while not being viewed as intrusive to the consumer. A key question for marketers will be whether customers will be willing to accept marketing messages on their cell phone.

Rettie, Grandcolas, & Deakins, (2005) conducted 26 studies of SMS text messaging campaigns over a three month time period. Overall, 44% of the respondents found mobile marketing via SMS text messaging to be acceptable and less intrusive than telemarketing. Furthermore, 85.7% of the respondents who received the SMS text advertisements expressed a more positive image of the brand and were likely to purchase the brand. All participants had opted-in to receive SMS advertisements and deemed the most successful promotions to include: a better promotional offer; explicit messaging; added value; or involving more interaction. Setijono and Dahlgaard, (2007) describe customer added value as low price, fast response, and high quality. The implications of customer value may include different modes defined as received value, perceived value, or added value. Received value is the customer experience defined through acquisition of the product and use of the product. Perceived value is a tradeoff of benefits based on the available offerings. The customer will ultimately determine value and one of the most common purchases by consumers is food.

Restaurant Promotion

The average United States household spends more on dining out than on clothing or health care (Herrington, 2004). By 2010, more than 50% of the United States household food budget will be spent on prepared meals outside of the home (Jackson, 4

Titz, and Defranco, 2004). To gain a competitive advantage, retain existing customers, and attract new customers, restaurants rely on marketing promotions. Restaurants in business for less than five years use marketing tactics described as frequent diner promotions, menus, and fliers, while restaurants in business for more than five years spend money on press kits, promotional merchandise, and brochures. Both established and younger restaurants use price discounts which can take the form of coupons, two-for- one meals, frequent diner cards, and value meal bundling. While restaurant coupons in the United States are estimated at 10-15% of all coupons distributed, there have been few studies (Myung, Barrash, & Feinstein, (2006); and Taylor & Long-Tolbert, (2002);

Varadarajan, (1984); to discover the behavioral intention to use coupons in the context of restaurants (Myung, Barrash & Feinstien, 2006).

Theoretical Importance

Hsu, Wang, and Wen, (2006) conducted a study in Taiwan using the decomposed theory of planned behavior to understand the behavioral intention towards using mobile text coupons. The study revealed two factors which attributed to the use of mobile coupons: consumer feelings about text coupons; and the consumer’s knowledge of text based coupons. Rohm and Sultan (2006) used the technology acceptance model with modifications to incorporate privacy and permission based marketing in the United States and Pakistan, to understand the behavioral intention of undergraduate and graduate students to engage in mobile marketing. The results helped demonstrate the role of privacy, behavioral intention, and permission to interact with consumers, before engaging in mobile marketing. In this dissertation, a modified and enhanced unified theory of acceptance and use of technology called the acceptance theory of mobile technology 5 usage will help determine the behavioral intention to use mobile coupons for casual dining restaurants by young adults. Venkatesh, Morris, Davis, and Davis, (2003) demonstrated the unified theory of acceptance and use of technology (UTAUT) is up to

70% accurate in predicting the behavioral intention to use technology.

Statement of the Problem

Growing a business and profitability are inherent components of any profit-driven business plan. Multiple marketing methodologies are incorporated as part of the marketing mix when promoting a business. The United States has 270 million mobile phone subscribers representing 87% of the total United States population (Wireless quick facts, 2008). Data transmission in the form of text messages exceeds one trillion messages per year in the United States. Coupons represent one component of the marketing mix. In 2008, 317 billion coupons were distributed with a less than one percent redemption rate (Coupon fast facts, 2008). In general, with 87% of the population connected to mobile phones that provide anytime, anywhere access, will consumers be open to mobile marketing on a device which is considered to be personal and individual to the user?

United States consumers will spend more than 50% of the household food budget on prepared meals outside of the home in 2010 (Jackson, Titz, and Defranco, 2004).

However, little research exists on the behavioral intention of United States consumers to redeem mobile coupons for restaurant purchases. The specific problem to be studied will be the behavioral intention of young adults to use mobile coupons for casual restaurant dining. This quantitative study will use a mobile modified and enhanced unified theory of acceptance and use of technology. 6

Purpose of the Study

The purpose of this quantitative research study is to determine the degree to which performance expectancy, effort expectancy, social influence, facilitating conditions and fear of spam affect the behavioral intention to use mobile coupons for casual restaurant dining by young adults. An online panel provides a context for gathering input from young adults 18-24 years of age, who own cell phones, and have access to casual dining restaurants. The primary instrument used to gather behavioral intention to use mobile coupon data is a survey which will be administered in an online format. The survey is based on four independent variables defined in the unified theory of acceptance and use of technology, in addition to the independent variable of intrusive advertising, also described as spam. The research methodology is appropriate for this study as the correlation of the independent variables will quantitatively reflect on the dependent variables of intention to use mobile coupons and use behavior. The independent variables of the unified theory of acceptance and use of technology are: performance expectancy, effort expectancy, social influence, and facilitating conditions

(Venkkatesh, Morris, Davis, and Davis, 2003). Additionally, the goal of the study is to understand the intention to redeem and use mobile coupons in casual dining restaurant which are the dependent variables. In the unified theory of acceptance and use technology model, voluntariness is a moderating variable not used in this study, because the use of a coupon is deemed to be voluntary.

Significance of the Problem

The unified theory of acceptance and use of technology was developed in 2003 (see

Figure 1) and consists of four constructs developed through the consolidation of eight 7 theories related to the acceptance of technology (Venkatesh, Morris, Davis, and Davis,

2003). In research, many studies select a model or constructs from several models.

Figure 1. Unified theory of acceptance and use technology.

The unified theory of acceptance and use technology synthesizes multiple models to 8 maximize the understanding of technology acceptance. Venkatesh, et al. (2003) suggests the unified model be extended to multiple applications and contexts. This research study modifies and extends the theory of acceptance and use of technology as a framework for understanding the intention to use mobile coupons by young adults, ages 18 to 24, in a casual dining restaurant environment (See Figure 2). This study adds to the contextual understanding of technology acceptance and mobile marketing usage intention. The unified model was validated in understanding 70% of the variance of behavioral intention to use technology however, Venkatesh, et al. (2003) suggest experimenting with other variables to determine if the behavioral intention to use technology can be improved.

Adding the variable of intrusive advertisements or spam, attempts to enhance the explanation of behavioral intention to use mobile coupon technology. 9

Figure 2. Acceptance theory of mobile technology usage.

Significance of the Study to Leadership

The use of mobile coupons represents a technology adaptation of existing printed coupons. Mobile coupons represent another potential tactic within a marketing plan, that has the unique characteristic of reaching a personal mobile device carried by consumers.

This study will assist marketing executives, product managers, and digital advertising firms, in understanding the behavioral intention to use mobile coupons. The outcome of this research may help marketers develop new applications for mobile marketing and better understand the desire by consumers to receive mobile advertising.

Nature of the Study

Overview of the Research Method

Bauer, Reichardt, Barnes, and Neumann, (2005) recognized the emergence of wireless technologies and conducted a study to understand the acceptance of mobile marketing using the theory of reasoned action as a framework. The study suggested 10 further research was necessary in the area of permission marketing and understanding mobile marketing in context. Muk and Babin, (2006) furthered technology acceptance research in the area of mobile marketing by including opt-in questions related to the adoption of mobile advertising. The results were based on the theory of reasoned action demonstrating that opt-in strategies affected consumer attitude to participate in mobile marketing. Further, the research suggested attitudes and social influence have a strong influence on the desire to receive mobile advertising. Muk (2007) continued research into the area of opt-in text message advertising by combining attributes of the theory of reasoned action and the innovation diffusion theory. Results suggest innovation attributes are important belief characteristics in shaping consumer attitude. Muk states more research is needed before definitive conclusions can be drawn. Kang, Hahn, Fortin,

Hyun, and Eom, (2006) performed a study on the consumer intention to use e-coupons defined as email coupons. The e-coupon study did not measure a specific industry and used the theory of reasoned action as the theoretical framework. In conclusion, Kang, et.al. (2006), concede behavioral control is an important influence of e-coupon usage and the theory of planned behavior would be a better theory to explain e-coupon usage. Hsu,

Wang, and Wen, (2006) researched the behavioral intention of consumers to use mobile coupons using the theory of planned behavior. The results suggest personal innovativeness is not related to behavioral attitude and marketing of mobile coupons is not warranted because consumers are heavily influenced by friends and family. The recommendations state marketing companies should provide a general education of consumers on the benefits of mobile coupons before introducing mobile coupons on a wide scale. Dickinger and Kleijnen (2008) also studied the determinants of consumer 11 intention to redeem mobile coupons using the technology acceptance model as the theoretical framework. The technology acceptance model uses attitude, ease of use, and perceived usefulness as key constructs. Dickinger and Kleijnen redefine the variables affecting the technology acceptance model key constructs to make the study application specific to mobile coupons. Additionally, the study adds the variables of redemption effort, apprehension about spam, social norms, and past coupon behavior. Suggestions for further research include opt-in and opt-out possibilities, the face value of coupons, location-based services, and multimedia coupons.

Past technology acceptance research shows a history of exploring the behavioral intentions of consumers to use mobile marketing, opt-in strategies, electronic coupons, and mobile coupons. The prior studies demonstrate the use of the theory of reasoned action, the technology acceptance model, the theory of planned behavior, and innovation diffusion theory. Further, variables of the technology acceptance model constructs were modified to incorporate mobile coupons specifically. The previous research of prior correlation studies suggests multiple theoretical frameworks are appropriate.

Overview of the Design Appropriateness

This quantitative, non-experimental research design will determine the degree of association between mobile coupon usage and behavioral intention variables. The unified theory of acceptance and use of technology (UTAUT) was first used in 2003 to understand the intention to use information systems (Venkatesh, Morris, Davis, & Davis,

2003). UTAUT consolidates eight models that individually explained 17-53% of the intention to use information technology. UTAUT is empirically proven to explain up to

70% of the variation to use information technology. Because the notion of mobile 12 coupons for casual dining restaurants represents a new use of technology for consumers, a modified and enhanced UTAUT model of technology acceptance described as the acceptance theory of mobile technology usage will be appropriate.

Research Questions

This research study will seek to understand if there is a significant relationship between young adults and the desire to use mobile coupons in a casual dining restaurant environment. Subjects will be screened by age to include young adult males and females between the ages of 18 to 24, who own cell phones. Specifically, the primary research questions are as follows: Do performance expectancy, effort expectancy and social influence positively affect the behavioral intention to redeem mobile coupons, by young adults in a casual dining restaurant environment?; Do facilitating conditions positively affect use behavior of young adults in redeeming mobile coupons for casual dining restaurants?; Does fear of spam negatively affect the behavioral intention of young adults to redeem mobile coupons in a casual dining restaurant environment? The concept of spam is not one of the original constructs of the unified theory of acceptance and use technology. Spam in the context of this study deals with intrusive advertisements. The three research questions will add new knowledge in the area of mobile coupon marketing by combining performance, effort, social influence, facilitating conditions and fear of spam into a new model described as the acceptance theory of mobile technology usage.

Hypotheses

The focus of this study is to understand the correlation between variables and the intention to use mobile coupons for casual dining restaurant purchases by young adults.

The primary constructs of the study are from the unified theory of acceptance and use 13 technology. Additionally, previous studies of mobile marketing demonstrate the fear of spam can influence the acceptance and use of mobile marketing. The fear of spam, sometimes called intrusive advertisements, will be studied as a separate variable.

Performance expectancy was originally defined by Venkatesh as the degree to which subjects believe using an information system will benefit job performance (Wang,

Wu, and Wang, 2009). Five constructs from previous theoretical models are included in the concept of performance expectancy. The construct of performance expectancy is the strongest indicator of behavioral intention to use technology. Adapting performance expectancy to mobile coupons in a casual dining restaurant experience will extend the knowledge of the unified theory of acceptance and use of technology. The following hypotheses will be tested:

H01: Performance expectancy has a negative effect on the behavioral intention to use mobile coupons in a casual dining restaurant environment.

H1: Performance expectancy has a positive effect on the behavioral intention to use mobile coupons in a casual dining restaurant environment.

The construct of effort expectancy is designed to measure the ease of use with which a subject can use the technology (McLeod, Pippin, & Mason, 2009). In this particular study, the individual will evaluate the anticipated effort to redeem an SMS text message coupon in a casual dining restaurant environment. Venkatesh, Morris, Davis, and Davis, (2003) demonstrated a difference in the perception of effort expectancy between men and women based on a study of 215 adults and the behavioral intention to use new software in a work environment. 14

H02: Effort expectancy does not have a positive influence on the behavioral intention to use mobile coupons in a casual dining restaurant environment.

H2: Effort expectancy does have a positive influence on the behavioral intention to use mobile coupons in the casual dining restaurant environment.

Social influence is the effect an individual perceives from important others that she or he should use a new technology (Wang, Wu, Wang, 2009). Social influence contains concepts from three existing models which capture the concept of self image, social factors, and subjective norms. Social influence relates to the intention to use new technology as recognized in past studies (Mathieson, 1991; Moore & Benbasat, 1991;

Venkatesh & Davis, 2000). The study of social influence within the context of this study will examine the ability of social influence to affect the behavioral intention to use mobile coupons and the moderating effects of gender and experience.

H03: Social influence does not have a positive influence on the behavioral intention to use mobile coupons in a casual dining restaurant environment.

H3: Social influence does have a positive influence on the behavioral intention to use mobile coupons in a casual dining restaurant environment.

Facilitating conditions are defined as a perceived support mechanism for the user of a new technology (Venkatesh, Morris, Davis, & Davis, 2003). In the case of mobile coupons, the facilitating conditions would be the degree to which a test subject believes technical support exists to utilize SMS text messaging coupons. In contrast, the wireless infrastructure designed to transmit SMS text messages are not considered under facilitating conditions. 15

H04: Facilitating conditions do not have a significant influence on the behavioral intention to use mobile coupons in the casual dining restaurant environment.

H4: Facilitating conditions do have a significant influence on the behavioral intention to use mobile coupons in the casual dining restaurant environment.

Venkatesh, Morris, Davis, & Davis, (2003) discuss the need to extend the research of the unified theory of acceptance and use technology by incorporating other variables which may influence technology acceptance. As an extension of the unified theory of acceptance and use technology model, the construct regarding spam will be added as an independent variable affecting the behavioral intention to redeem mobile coupons. Dickinger and Kleijnen (2008) found a correlation between the consumer fears of spam for internet texting and mobile marketing acceptance, because consumers may feel a loss of control of the medium. Furthermore, Dickinger and Kleijnen suggest further research should be conducted in the area of opt-in and opt-out methodologies for mobile coupons, citing the personal nature of the cell phone and the concerns for consumer privacy.

H05: The fear of spam with internet texting will not affect user willingness to accept mobile coupons in the casual restaurant dining environment.

H5: The fear of spam with internet texting will affect user willingness to accept mobile coupons in the casual restaurant dining environment.

Theoretical Framework

Each year, information systems are implemented within organizations across the globe with varying degrees of success. Similarly, technology is placed in the hands of the consumer with varying degrees of success. The area of research dedicated to 16 understanding individual and organizational acceptance of innovation is referred to as technology acceptance. Many of the technology acceptance theories are based in psychological models which have been adapted to understanding the human behavior of accepting new technologies. Further, understanding the determinants of technology acceptance is important in accessing the potential success of new technology which can be expensive to develop, implement, and support. There are multiple models dealing with the issue of technology acceptance. Widely used acceptance models are the theory of reasoned action, the theory of planned behavior, the technology acceptance model, and the unified theory of acceptance and use behavior.

The theory of reasoned action (see figure 3) focuses on the attitude towards acceptance of a new behavior developed in the seminal work of Ajzen and Fishbein

(1980). The basic premise states actual behavior is a factor of the behavioral intention to commit a particular behavior. In turn, behavioral intention is influenced by an individuals’ attitude towards the behavior and the existing social norms. Bauer,

Reichardt, Barnes, and Neumann, (2005) use the theory of reasoned action to validate a study in the consumer acceptance of mobile marketing. Muk and Babin (2006) used the theory of reasoned action to understand consumers’ decisions to accept text advertising is based on attitudes and social influences. Both Bauer et al (2005) and Muk and Babin

(2006) contend attitude has a stronger effect than social influence towards influencing behavior. In a study by Kang, Hahn, Fortin, Hyun, and Eom (2006) the theory of reasoned action was used to study paper coupons versus electronic computer coupons.

The study provided a correlation towards the acceptance of electronic computer coupons if the individual had computer skills and access to a computer. Thus, behavioral control 17 defined as computer skills and access, proved to have a strong influence. Therefore, Kang et al. (2006) recommended the theory of planned behavior would be a better theoretical model over the theory of reasoned action for understanding the usage of electronic computer coupons.

Figure 3. Theory of reasoned action.

The theory of planned behavior (see figure 4) developed by Ajzen (1991) uses the same constructs as the theory of reasoned action, while adding the construct of perceived behavioral control. Ajzen describes actual behavioral control as an individual who has control over behavioral achievement. In contrast, perceived behavioral achievement is the individual perception of how easy the task will be to perform. Separately, in 1964

Atkinson developed another approach to perceived control, described as the probability of success at a given task, as seen by the individual. Azjen’s (1991) construct of 18 perceived behavioral control is similar to Bandura’s (1977, 1982) construct of self- efficacy, which deals with how well an individual can implement a course of action.

Complementing the theory of planned behavior is the decomposed theory of planned behavior which is exactly the same as the theory of planned behavior but lists each relationship affecting attitude, subjective norms, and perceived control (Hsu, Wang,

& Wen, 2006). A study by Hsu et al. (2006) used the decomposed theory of planned behavior to understand the consumer intention to accept mobile text coupons. The study revealed individuals are strongly influenced by friends and family in deciding to accept or reject mobile coupons. Taylor and Todd (1995) performed important research on the acceptance of information technology by using three theoretical models: the theory of planned behavior; the decomposed theory of planned behavior; and the technology acceptance model. The decomposed theory of planned behavior fared better in providing a more complete understanding of behavioral intention by focusing on specific items influencing systems use. While Taylor and Todd (1995) state each of the three models have merit, the technology acceptance model is preferable if the sole goal is to predict usage (p. 170). 19

Figure 4. Theory of planned behavior.

Fred Davis (1989) published the seminal research on the technology acceptance model (see figure 5) in 1989, which investigated usefulness, ease of use, and user acceptance of information technology. The technology acceptance model was motivated by the need to better understand system use by vendors developing new technology ideas and information systems managers, within organizations, who would evaluate the technology offerings. Davis concluded usefulness was the strongest predictor of usage.

Davis suggested further study of the technology acceptance model by applying the model to new applications. Another study by Davis, Bagozzi, and Warshaw, (1989) demonstrated the technology acceptance model construct of perceived usefulness was the major determinant of the intention to use computers. Morris and Dillon (1997) used the technology acceptance model to evaluate the potential acceptance of the Netscape web browser. Morris and Dillon praise the cost-effectiveness of the technology acceptance model, the simplicity of model, and the predictive acceptability. Song, Koo, and Kim,

(2007) modified the technology acceptance model to study the consumer acceptance of 20 mobile commerce. The study added perceived enjoyment as a new variable to understand user acceptance. With the addition of the added variable Song, Koo, and Kim were able to account for 46% of the variance of users accepting mobile technology. Dickinger and

Kleijnen (2008) completed a study of the acceptance of mobile coupons using a modified version of the technology acceptance model. The study acknowledges the independent variables of perceived usefulness and ease of use but discusses the need to redefine the variables for the context of mobile coupons. To this end, perceived usefulness is defined as economic benefit of coupons and ease of use is defined as the difficulty in redeeming mobile coupons. Dickinger and Kleijnen also added subjective norms which are reflective of perceived opinions of significant peers, as a moderating variable. Further, perceived control was added to understand the consumer apprehension regarding spam. The results demonstrated subjective norms were not a factor in the intention to use mobile coupons while perceived control was correlated. Since a face value was not designated for the coupon, users believed the process of redeeming coupons could be more difficult than the coupon is potentially worth. In 2000, Venkatesh and Morris used the technology acceptance model to study workers using a new software program. The study compared the results of men and women. Men were more strongly influenced by the perception of usefulness while women were more influenced by the ease of use of the new software program. The technology acceptance model has demonstrated reasonable effectiveness in predicting the acceptance of new technology, with relatively low cost, and generating fast results. The applications of the technology acceptance model include web browsers, mobile commerce, and mobile coupons. Additionally, the model has proved flexible by modifying the description of the variables to fit the specific application. A key criticism 21 of the technology acceptance model is the lack of variables such as gender, perceived control, and experience, which could potentially improve the accuracy of the technology acceptance model.

Figure 5. Technology acceptance model.

In 2003, Venkatesh, Morris, Davis, and Davis, unveiled the unified theory of acceptance and use of technology. Interestingly, Fred Davis who developed the technology acceptance model is also one of the authors of the unified theory of 22 acceptance and use of technology. The strength of the unified theory of acceptance and use of technology is the consolidation of eight prior models, including the technology acceptance model which contains important elements useful in explaining acceptance.

The eight previous models explained 17% to 53% of the variance in user intentions to use new technology. The unified theory of acceptance and use technology is able to outperform the other eight models by predicting new technology acceptance use by explaining up to 70 percent of the variance in user intention. Given the strength of the technology acceptance model, the additional variables contained within the unified theory of acceptance and use technology, the new acceptance theory of mobile technology usage will be the favored model for studying the acceptance of mobile coupons in a casual dining restaurant environment.

Definition of Terms

The acceptance theory of mobile technology usage research model is based on constructs of the unified theory of acceptance and use, combined with the fear of spam.

The terms contained in the model are defined as follows:

Age. The unified theory of acceptance and use of technology uses age as a moderating variable to compare the effects of behavioral intention to use technology by age groups. For the purpose of this study, the model will only consider young adults age

18 to 24.

Behavioral intention. This represents the degree to which an individual consciously formulates a plan to perform a certain behavior in the future.

Effort expectancy. The level of ease or difficulty an individual may encounter in using a new technology. 23

Experience. The degree to which an individual feels she or he can operate the proposed system with little or no external assistance.

Facilitating conditions. The degree to which individuals believe there is a technical support system or customer support system in place to assist the individual in using the system.

Gender. For the purpose of this study, gender represents young adults, both male and female, ages 18 to 24.

Opt-in. A permission based marketing tactic in which the user is first asked if she or he would like to receive mobile marketing promotions. Incentivized opt-in options exist where the user is provided something of value such as ringtones, wallpaper, or a complimentary product for agreeing to opt-in. Additional marketing promotions are usually sent to the individual unless the user requests to opt-out.

Opt-out. This is the process of an individual being able to click on an unsubscribe button within a mobile advertisement to have her name removed from the list and not receive further promotions from the specific advertiser.

Perceived user control. This is designed to be the degree to which the user believes she has control over mobile advertising through the opt-in and opt-out process.

Additionally, the degree to which the fear of receiving mobile spam makes the user feel less in control may cause the user to not participate in mobile marketing campaigns.

Performance expectancy. For the purpose of this study, performance expectancy is the degree to which the mobile coupon assists the individual in the goal of dining at a casual dining restaurant. 24

Social influence. The degree to which the individual believes important other persons believes she should use the new technology system.

Spam. For the purpose of this study, spam is defined as intrusive advertisements delivered to the users’ cell phone, which may or may not have an opt-out button to stop future mobile advertisements.

Use behavior. The concept of use behavior implies actual system use.

Assumptions

Mobile coupons are a subset of mobile marketing which remains in an infancy stage of acceptance and use. Other theories such as the theory of reasoned action, the theory of planned behavior, innovation diffusion theory, and the technology acceptance model, have attempted to explain some aspect of mobile marketing, using the theories in part or in whole (Bauer, Reichardt, Barnes, & Neumann, 2005). The unified theory of acceptance and use technology was developed in 2003 and sought to consolidate multiple models in understanding the acceptance of technology in a work environment

(Venkatesh, Morris, Davis, & Davis, 2003). Observing the suitability for multiple applications, the unified theory of acceptance and use technology combine with fear of spam will be adapted for the study of mobile coupons. The assumption is the acceptance theory of mobile technology usage will provide an accurate understanding of the acceptance of mobile coupons.

An online survey using a Zoomerang panel of young adults will be used for the study. The research assumes the participants will answer the questions honestly. Another assumption of the study will be to have a predetermined number of completed surveys.

Since the online panel includes respondents from multiple United States regions, the 25 assumption is researchers will be able to duplicate the results in different geographic locations for the same age group.

Scope, Limitations, and Delimitations

This study examines the intention to use mobile coupons in a casual restaurant dining environment by young adults. The research subjects are young adults, age18 to 24 who own a cell phone. Individuals in the study will understand participation is voluntary.

The sample may not represent the United States census of the general population based on age, education, ethnicity, experience, or geographic location. The results of the online panel study cannot be applied to all all young adults in general. The results are further limited by the honesty of the participants and the ability of the participants to estimate their experience, the true importance of social influence, and the need for possible assistance.

Since mobile coupons are not available on a wide scale, the description of mobile coupons for casual dining restaurants will be similar to an exchange of text messages between the individual and restaurant consisting of an offer for a discount, timeframe, and a redemption code. Consistent with multimedia and entertainment, coupons could be considered to contain pictures, sounds, and multimedia, delivered via text messaging.

Multimedia and entertainment coupons will not be considered in this study. The coupon discount will be predetermined based on previous studies (Suri, Swaminathan, &

Monroe, 2004; Myung, Barrash, & Feinstein, 2006). Various coupons, quality of food, and restaurant service, can impact the behavioral intention to use a coupon at a casual dining restaurant. Dickinger and Kleijnen (2008) describe strong discrepancies in findings when the face value of the coupon is varied. Past coupon usage is not considered 26 as part of the study. Mobile coupons are a new medium and Dickinger and Kleijnen

(2008) did not find a correlation between prior paper coupon use and mobile coupon acceptance. Location based services are a concept of suggesting coupons based on the location of the individual and not considered as part of this study. 27

Summary

Mobile phone devices are widely used in the United States offering mobile communication and other popular data services such as text messaging. In the United

States, 110.4 billion text messages are sent each month (Wireless quick facts, 2008).

Realizing the opportunity to capitalize on voice and data services, worldwide telecommunication carriers spent over $100 billion dollars on wireless licenses (Feldman,

2000). Marketers are interested in using the wireless medium to build brands, shape consumers’ attitudes, and influence purchasing decisions (Sultan & Rohm, 2005). By

2010, more than 50% of the United States household food budget will be spent on prepared meals outside of the home (Jackson, Titz, and Defranco, 2004). Restaurants use multiple marketing techniques to gain a competitive advantage and vie for the consumers’ food dollars. Paper coupons represent one form of restaurant advertising. The familiarity of coupons and the pervasiveness of text messaging on mobile phones, make mobile coupons a potentially viable marketing technology. Introducing a new technology and understanding the potential success of the new technology falls under the area of study called technology acceptance. 28

Theoretical frameworks such as the theory of reasoned action, the theory of planned behavior, and the technology acceptance model, have been used to explore the behavioral intention to use new technology. In 2003, Venkatesh, Morris, Davis, and

Davis, unveiled the unified theory of acceptance and use technology. This theoretical framework combines the primary attributes of eight previous models and is empirically proven to account for up to 70% of the variance of behavioral intention to use new technology. This quantitative study will use the acceptance theory of mobile technology usage that seeks to combine constructs of UTAUT plus the fear of spam to study the behavioral intention of young adults to use mobile coupons for casual restaurant dining.

The literature review section provides additional insight into the mobile phone marketplace. More specifically, mobile phone features are evaluated and compared against age variables to explain existing usage. Restaurants are generally defined as quick serve restaurants and full service dining restaurants. However, in an effort to differentiate, new restaurant categories such as casual dining have emerged. Chapter two will present an in-depth look at mobile phone usage, coupon evolution, and restaurants as an important economic factor in the United States. 29

CHAPTER 2: REVIEW OF THE LITERATURE

In the following literature review, full service restaurants are categorized into family, dining, casual dining, and fine dining (Grindy, 2007). Restaurants currently employ 13.1 million people. Restaurant promotion stimulates the local markets because

70% of restaurant advertising dollars are spent in the local market, as opposed to national advertising (Herrington, 2004). Casual dining restaurant promotions are specifically discussed and compared to the overall satisfaction of full service restaurants. Further discussion of restaurant promotion focuses on coupon usage, including the overall redemption rate of coupons in the United States, trends, and the effectiveness of this marketing medium for casual dining restaurants. Subsequent discussions include the evolution of cellular technology, and mobile phone features. The acceptance of mobile coupons (m-coupons) considers the casual dining restaurant environment, user preferences, technologies in use today, and attitudes. Adults find the most popular mobile phone features to be the camera, call waiting, built-in speakers, and text messaging

(Becker, Liuzzo, & Keenan, 2007).

Title Searches, Articles, Research Documents, and Journals

Several hundred article searches were conducted in three primary databases, with fewer searches in secondary databases. The primary databases were Proquest, Gale

Powersearch, and Ebscohost. Key search terms and phrases used the following terms: casual dining; cell phone demographics; coupons; digital coupons; E-coupons; electronic coupon redemption; food service; Internet coupon; local search coupons; location based coupons; mobile advertising; mobile commerce; mobile coupons; mobile marketing; unified theory of acceptance and use technology; motivational model; opt-in; 30 opt-out; permission marketing; redeeming electronic coupons; restaurant promotions; smart phones; spam; technology acceptance model; technology acceptance; text messaging; theory of planned behavior; theory of reasoned action; and wireless electronic coupons. The search strings provided over 300 articles. Most of the articles are within the last five years except for seminal research articles and articles providing a historical perspective.

Literature Review

Credibility and Availability of Census Data

The primary sources for information related to casual dining restaurants are the

United States Census Bureau, The National Restaurant Association, and peer-reviewed articles. The United States Census Bureau information is collected every five years. This is a requirement under federal law, Title 13 of the United States Code, section 131.

Section 224 requires the reporting of the economic census mandatory by law. Section 195 allows for the use of statistical sampling methods. The United States Census bureau collects information by mail and through electronic reporting options to sample business units representing domestic businesses in the covered industries (Bwellnar Banks, 2007).

The United States Census Bureau collects the economic census. The information is the key source of the United States gross domestic product (GDP). The economic census occurs every five years with the years ending in a two or a seven. The first record of economic census data consists of manufacturing data in the year 1810. The most recent full report, economic census is 2002. Businesses submit information for the 2007 economic census by February 12, 2008. For 2007, the United States Census Bureau will mail 4,700,000 economic census forms (2007 Economic census, 2007). The 2007 31 economic census contains 600 variations so businesses can respond in terms that are meaningful to the specific business. Samples of the questions regard location, months of operation, gross sales, value of exports, electronic shipments (e-shipments), inventory franchise information, and payroll information. The 2007 economic census publication is available for general distribution in early 2009. Individual pieces of the 2007 economic census information may be released sooner at the www.factfinder.census.gov (Barker,

2007).

Industry Classifications

Prior to 1997, the United States economic census was organized by the Standard

Industry Classification (SIC) code system. In 1997, The United States, Canada, and

Mexico adopted the North American Industry Classification System (NAICS). The numerical system classifies 20 business sectors, 200 subsectors, 317 industry groups, and

1,179 industries. While differences exist between SIC codes and NAICS, the classification does not affect fine dining, casual dining, or the restaurant category other than the numerical indicator. The restaurant sector begins with the number 72 which classifies accommodation and food services. The NAICS number 722 is the subsector: food service and drinking establishments. This category includes drinking establishments, mobile food service, catering, food service contracting, limited-service eating establishments, and full-service eating establishments. The differentiation between

NAICS classification 722 is based on seating space and configuration, waiter services, and amenities such as entertainment. The NAICS classification of 7221 is the code for full-service restaurants. In this classification, patrons are generally served while seated 32 and generally pay after the meal. Other services, entertainment, or alcoholic beverages may or may not exist (Russell, 2004).

Full Service Restaurant Categories

In 1919, the National Restaurant Association (NRA) began an association dedicated to the restaurant industry. Currently 945,000 restaurants and 13.1 million restaurant employees reap the benefits of NRA education, lobbying efforts, and community involvement. The NRA follows the same categories as the U.S. Census

Bureau. The NRA further segments full service restaurants into family dining, casual dining, and fine dining because full service restaurants represent nearly 50% of total dollars spent in eating and drinking places (Grindy, 2007). Other variations of restaurant hybrids will not be considered. In an effort to differentiate, restaurants are creating new marketing classifications such as fast-casual restaurants (Eligon, 2008). The focus of this paper is the US Census Bureau classification of full service restaurants and one of the three subcategories defined by the NRA, known as casual dining full service restaurants.

The NRA adheres to the United States Census Bureau for statistical information regarding full service restaurants. The research conducted by the NRA recognizes three distinct subcategories of full service restaurants. The definition for family dining full service restaurants, casual dining full service restaurants, and fine dining full service restaurants all include waiter service. An order is taken while the patron is seated, and the patron pays after the meal. The only differentiation is the amount of the check. The average per person check is $10 or less for family dining, $10 to $25 for casual dining, and $25 and above for fine dining full service restaurants. 33

In contrast, limited service restaurants, also known as quick service restaurants

(QSR) or fast food restaurants, require the patron to order and pay before eating. Fast food restaurants have an average per person check of $3 to $6. The concept of quick casual restaurants describes fresh, wholesome, authentic food served in a comfortable and attractive setting with an average per person check between $7 and $9. The quick casual is still considered by the United States Census Bureau and the NRA to be in the fast food category, as described by the research department of the NRA (Altman, M., personal communication, May 28, 2008). When available, specific subsegments of full service restaurants will describe casual dining restaurants.

Restaurant Promotion Strategies

Jackson and Titz (2004) evaluated 10 restaurant promotion strategies. The sample sizes range from 74 to 84. The categories of promotion are radio, newspaper, directory advertising, Internet, direct mail, food samples, coupons, advertising specialties, frequent diner programs, and displays. The information segments by the number of seats in the restaurant and age category, which ends at age 26 or older. Since the classification category does not follow the United States Census Bureau or NRA guidelines, correlation may be difficult with other sources. The study states 77.8% of franchise restaurants use promotional coupons while only 37.3% of independent restaurants use coupons. One unexpected trend was restaurants which had higher seating capacity also utilize more

Internet advertising. Herrington (2004) describes the conflict between restaurant franchisees and franchisers with regard to the value of national advertising. Restaurant franchisees only spent 46% of advertising dollars on local advertising compared with the retail industry as a whole, which spends 70% of the advertising dollars in the local 34 market. Further, the study states national restaurant franchisee advertising is not effective for restaurants. Approximately 75%, of the top 400 restaurant chains failed to demonstrate a positive national sales to advertising relationship, even when net profit margin on incremental sales were calculated at five percent. This could be further testament to the higher use of coupons or local advertising by chain restaurants versus independent restaurants.

In the restaurant industry, the cost of attracting a new customer is three to five times more than the cost of maintaining an existing customer. Therefore, an emphasis is placed on retaining existing customers. In 1995, 26% of casual dining respondents expressed a lack of desire to join a rewards program for fear of receiving promotional e- mail, hard to redeem benefits, and not wanting to carry a rewards card. Casual dining participants prefer monetary rewards or savings as the number one benefit. Immediacy is a key consideration in casual dining loyalty programs versus a requirement of waiting to accumulate points (Jang & Mattila, 2005). The importance of this study demonstrates the desire to receive immediate, monetary benefit in a casual dining loyalty program. In contrast, Myung, Barrash, and Feinstein (2006) describe two opposing views of the effectiveness of coupons in attracting new customers. Existing customers have a higher intention to return to a full service restaurant than new customers, regardless of the face value of the coupon. Positive views of service and food quality are the primary reasons customers return to a full service restaurant. The study suggests coupons are nothing more than an appreciation of patrons who support the dining establishment. The limitation of this study is the population which consists of 831 undergraduate university students. 35

Intention to return to a restaurant and the intention to use a coupon describes a relationship between the perception of savings and the approval of a significant other who is also encouraging the behavior. The behavioral aspects of clipping paper coupons, purchasing a different brand, redeeming the coupon, coupled with the influence of savings and significant other positive reinforcement, lend themselves to the theory of reasoned actions. However, even considering the theory of reasoned action, subjective norms and personal perceptions play a role in the determination to use coupons (Shimp &

Kavas, 1984). While coupons in1984 describe a paper transaction, the current technology has the ability to create electronic coupons with delivery via mobile carrier, to a mobile device. Another aspect looks at the demographics of the full service restaurant customer and the diffusion of technology through the United States.

Customer Satisfaction in Full Service Restaurants

Customers who visit a restaurant expect value. Value can illustrate solving a problem. H & R Block solves the problem of filling out tax forms. Mail order furniture provides lower pricing and choices of delivery, assembly, or installation. Quality, price, and after sales support in the case of purchasing a new car are components of value.

Unique value can be a product which cannot easily be duplicated. An example would be a microwave oven at Subway which microwaves and toasts at the same time. When applying price in a conjoint analysis to tradeoff price and quality of service, consumers reveal price is more important (Arora & Singer, 2006). Specifically, customers with higher education levels considered price more important than quality of service. Further survey details reveal performance as the greatest appeal to customer satisfaction.

Customer satisfaction measures location, food quality, service, and atmosphere. 36

Ambiance of a restaurant did not influence satisfaction. Pricing of a restaurant menu has two elements of value. High menu prices cause customers to view the restaurant as having negative value. High food quality and continuous service add to the positive performance of the dining experience (Arora & Singer, 2006). Therefore, restaurant owners in full service restaurant environments must determine what value added features customers want to warrant increasing prices.

Full Service Dining Customers

Restaurants presently consume 48% of the consumer dollar spent on food. The full service restaurants expect to attract $187 billion dollars out of the $393 billion dollars which will be spent on total eating and drinking establishments in 2008 (Grindy, 2008).

To help meet this expectation, seventy-four percent of casual dining restaurants have a web site. The top five activities of a consumer on a restaurant web site are surfing the restaurant site in general, finding nutritional information about the restaurant choices, placing an order, making a reservation, or posting a comment. To meet the needs of the consumer, casual dining web sites include the following by percentage: menus which account for 96% of casual dining web sites, daily specials which are 50%, options for reservations at 13%, and 8% offering take-out orders (Grindy, 2008).

Technology Savvy Customers

In the 2007 National Restaurant Association survey, adults fall into six age group classifications and describe the use of technology in restaurants. The age group classifications in years are: 18 to 24, 25 to 34, 35 to 44, 45 to 54, 55 to 64, and above age

65. While 53% of all adults believe using an electronic payment system at the table is an advantage, only one percent of full service restaurant operators offer this feature and 70% 37 of the operators do not believe this is an important feature. Thirty-four percent of adults say wireless Internet access would be important and 29% said television at the table is a positive feature in a full service restaurant. Similarly, 30% of adults would like to receive an e-mail notification of the daily special, and 22% would like to receive a cell phone notification of the daily special at the full service restaurant of their choice. Sixty percent of casual dining operators say they believe wireless access will become more popular. In addition, 34% of casual dining restaurant operators plan to offer an e-mail promotion. Of the adults who desire cell phone notification of the daily special from the restaurant of their choice, the age group was a progressive downward slope from 35% of the age group

18 to 24, dropping to 11% for the age group of 65 and above (Grindy, 2008). Adults desire electronic features at their table for the purpose of ordering, entertainment, and payment. The only form of electronic advertising adults desire from the 2007 survey is e- mail or cellular phone notification of the daily special from the full service restaurant they choose. This has implications for the consumer to choose or opt-in to receive restaurant notifications. Second, the consumer must have a computer or cell phone to receive the offers they desire electronically.

Cellular Phone Age Demographics

In a supplement to the Current Population Survey conducted by the Bureau of

Labor and Statistics in 2004, the use of cell phones and land line phones in the Unites

States is defined under household communications technology. The age classification was similar to the National Restaurant Association survey. The United States Bureau of

Labor and Statistics identified four adult age groups as: 18 to 24 years of age, 25 to 34,

35 to 54, and older than 55 years of age. The number of homes with both a landline 38 phone and a cell phone is 48.6% of the United States population. Additionally, 43.4% have a landline phone only, in their home. Five percent of the homes only have a cell phone and three percent have no phone at all (Tucker, Brick, & Meekins, 2007). The high cell phone usage in the United States can be explained by the multiple cell phones per household. CTIA-The Wireless Association, (CTIA) (Wireless quick facts, 2008), states 17.5% of the United States households have abandoned landline phones in favor of wireless only phones. In addition, the demographic of people age 18 to 29 that use a cell phone as their sole phone grew from 26% to 32% in the last year. The number of people who use only a landline phone is nine percent (Palenchar, 2008). The trend indicates more people are using cell phones as their primary phones and this phone usage is more concentrated in the over 18 years of age and less than 40 years of age, when compared to the general population. To compare foreign penetration of cell phones by age group in the

United Kingdom in 2004, a study uses five age groups: 16-24 years of age, 25 to 34, 35 to 44, 45 to 54, 55 to 64, and 65 years of age and older. The 12 to 34 age group is at saturation with greater than 90% cellular ownership. The high cellular ownership in the

United Kingdom speaks to the ease of interaction with people on the move. By purchasing a cellular phone, the users have opted-in to being available on the go (Jenkins,

2006). The demographics of cellular phone usage increasing in the 18 to 34 year old age group coupled with more youth using the cellular phone as the sole home phone provide a level of importance as to being available all of the time.

The Mobile Marketing Association (MMA) is a non-profit organization designed to monitor and lead the growth of mobile advertising. The MMA has 500 members, publishes a peer-reviewed journal, and conducts an annual survey on mobile usage and 39 attitudes. In the annual 2007 MMA study, an online panel which nationally represents

United States homes, sampled 1,405 consumers with online interviews. The age brackets for adults are 18 to 24 years of age, 25 to 34, 35 to 44, 45 to 54, 55 to 64, and over 65 years of age. The study reveals 79% of the United States adult population uses a mobile phone. This figure compares with CTIA-The Wireless Association, (Wireless quick facts,

2008), stating the United States consists of 270 million mobile phone subscribers representing 87% of the total United States population. The adult age bracket with the highest cellular phone penetration is 35 to 44 years of age and represents 88% of this demographic. Adults spend an average of five hours per week using their cell phone.

Corresponding to previous research trends, 25% of the 18 to 34 year olds indicate the mobile phone replaces their landline phone at home. Adults consider the personal computer (PC) to be the only electronic device more important than their cell phone.

Overall, United States homes have 2.4 cellular phones. One-third of the homes in the

United States have three or more cellular phones. Wireless service providers in order of popularity during 2007 include AT&T, Verizon, Sprint, and T-Mobile which account for

91% of United States market share. AT&T and Verizon are virtually tied and represent

66% of the market. More than half of the 18 to 44 age group consider the cell phone to be highly important in their daily life (Becker, Liuzzo, & Keenan, 2007). The adoption of cellular phones among adults is nearing saturation for voice applications. The importance of the cellular phone for adults in their daily life is high, and therefore adults are likely to carry their cellular phone on a regular basis. Historically, the adult age group of 18 to 44 years of age demonstrate a strong use of cellular phones. Since cellular phone usage is 40 prevalent in the United States, an understanding of which services are important to users will further aid in the understanding of cellular phone usage.

Cellular Phone Varieties

While cellular phones are so widely used in the United States, the cellular phone personal digital assistant (PDA) and a new class of phones called smart phones all have the ability to connect to the cellular network. In an effort to gain more market share, cellular device manufacturers and cellular network providers are focusing on convergence in the electronics sector. The concept of cellular convergence has allowed features such as MP3 music to be added to cell phones. Similarly, Apple adds the iPhone® to the cellular offering while combining features of a cell phone, PDA, and iPod®. PDA manufacturers have the convenience of email, calendar management, MP3 music, possibly Microsoft Office features, and voice communication over the cellular network (Gill, 2008). For the purpose of this dissertation, all devices which connect to a

United States cellular network and have the minimum capability to receive voice phone calls and text messages while outside of the home will be known as mobile devices.

Mobile Device Feature Usage

Mobile device features and usefulness increase with the bandwidth of cellular service providers, while the cost of handsets decrease in price as mobile manufacturers enjoy the economies of scale. This is leading to a user base of media rich services. In the past year, the number of worldwide mobile broadband connections grew ten times the number in 2007. On a global basis, the GSM Association declares 32 million broadband connections in April 2008. The fastest growing areas for broadband use are Asia,

Australia, Europe, and North America. The definition of high speed handset access 41 ranges from 1.8 megabits a second to 7.2 megabits per second (mbps). With the bandwidth increase in 3G handsets, mobile operators are anxious to clash with Internet fixed-line network operators for a piece of the lucrative revenue from information and service oriented consumers. Broadband is available in 73 countries from 166 operators as of April 2008 (Stafford, 2008). In the United States, different mobile operators have varying speeds and prices to accommodate voice and data activity. The worldwide trend of increasing bandwidth will continue. The increase in bandwidth will allow new services and feature rich handsets. Trend information is a method of forecasting future usage while comparing studies on the intent to use features. This is tempered with the blend of common mobile applications generally available on most mobile devices. The current environment and trends are important in understanding the consumer attitudes towards mobile services.

Mobile services or M-services are defined as any service accessed by mobile devices such as short message service (SMS), email, web-mediated services, voice, mobile–commerce (m-commerce), mobile transaction services, and mobile information services. To better understand the consumer, five high-level usage classifications have been suggested. The classifications are time sensitive users, spontaneous users, entertainment consumers, productivity enhancers, and mobile sensitive consumers where geographical location plays a role.

Some researchers suggest the Web Motivation Inventory (WMI), which is indicative of computer online motives, will be useful in understanding the mobile motives. Only one study uses the WMI for mobile motivational understanding, and this is not a commonly held theory for understanding mobile usage. Six groups of services were 42 loaded with multiple features, ranging from receiving news to text messaging. The results show consumers based on existing and emerging services are anxious to bundle multiple features to match their behavioral personalities. Mobile phones will remain ubiquitous by themselves. As evolution of the network speed and handset features increase, a heterogeneous pattern of mobile usage emerges to allow mobile users to incorporate mobile devices into their daily lives. Affiliation and belonging is an important aspect of the social networking aspect of mobile features. The social networking has implications for viral marketing. Consumers who are comfortable using computer features are more likely to use mobile features. This suggests a link between computer skills and competence to transfer the skill set to the mobile phone (Mort & Drennan, 2005).

A method to measure the adoption of technology would be the technology acceptance model. If consumers are comfortable with computers and that comfort level has a relation to the mobile phone, the adoption of new mobile features may have a faster acceptance. According to the Cellular Telephone Industry Association (CTIA), in the

United States, there are 250 million wireless subscribers as of 2007. Forrester research states in 2007, more than 80% of the households in the United States have mobile devices

(Becker, Liuzzo, & Keenan, 2007; Kuo, 2008). With the pervasiveness of mobile devices, the question remains which features are used or considered most important. The answer varies with age. The common denominator is all mobile devices have telephone voice capability. Therefore, the most important feature of cellular phones is voice. Beyond the initial primary application, features fall into two basic categories: actual usage and perceived usefulness. The concept of perceived usefulness is the concept of a feature and how useful the user imagines the feature to be. Since a feature may not be available in all 43 phones or on all networks, the user will define a level of interest. Another method of showing relative importance is to look at year to year changes based on the same study taken at two data points in time. This can represent emerging trends.

Adults on average, use 4.2 mobile features per month. The most popular features are cameras, call waiting, built-in speakers, and text messaging. Seventy-five percent of mobile users engage in text messaging. The average number of text messages sent or received is 20 per week, according to a 2007 study. Features which increased most in importance between 2005 and 2007 are picture or video messaging, additional connectivity such as the Internet, and blue tooth functionality (Becker, Liuzzo, &

Keenan, 2007).

Call waiting, speaker capability and hands-free are features which have been available the longest, are most frequently used, and are directly related to a phone call.

Text messaging and camera phones are two of the features with significant usage in 2007 and not directly attributable to a phone call. The highest ranking adult group for text messaging was the 18 to 44 year old age bracket. Text messaging declined in the 45 to 65 and older age group. The camera feature ranges number one or two in all age brackets.

The three features which show the highest increase between 2006 and 2007 are camera phone with 23%, picture or video messaging at 17%, and downloading pictures which account for a 14% increase. The most recent trend is towards pictures and multimedia

(Becker, Liuzzo, & Keenan, 2007).

Clearly, voice communication is the number one application on mobile devices followed by features which related to voice calls. This is closely followed by actual usage of text messaging and camera phones. The trends increasing in camera phones, video 44 messaging, and downloading of pictures are the largest gains for mobile features between

2006 and 2007. The multimedia options could have a relationship to the speed of the network, the fees associated with data, or the familiarity with the features. Forty-one percent of users send or receive 30 text messages a week. Seventy percent of text message users choose an unlimited plan for text messaging or a bulk plan for text messages. For the people who do not use text messaging, cost was expressed as the primary concern (Becker, Liuzzo, & Kennan, 2007).

Text Messaging, M-commerce, and Intention

Text messaging is the most popular activity after voice on mobile devices. Text messaging is also referred to as Short Messaging Service (SMS). The concept is to exchange a short set of words between mobile devices. To understand the profile of text messaging among mobile users, a study evaluates the personality traits and optimum stimulation level (OSL) to understand their moderating roles (Steenkamp &

Baumgartner, 1992). The goal of M-commerce is not to replace electronic commerce (E- commerce) but to transcend geographical barriers and the mobility of consumers. As the pervasiveness of M-commerce continues, the ability exists to create a seamless infrastructure for E-commerce. The study seeks to demonstrate a relationship of three personality traits which are well established as a theoretical framework. They are optimum stimulation level, personal innovativeness, and individual playfulness. While studies have viewed M-commerce by applying the Technology Acceptance Model

(TAM) of Davis (1989), Pagani (2004) agrees price, ease of use, perceived usefulness, and speed, are major factors in the adoption of mobile services. However, Bruner and

Kumar (2007) explain visual stimulation and fun can extend the TAM model while 45 engaging in M-commerce. Bruner and Kumar (2007) define individual playfulness as a person’s interest to engage spontaneously and creatively with microcomputer technology.

Personal innovativeness is defined as a person’s interest to try new information technology which leads to the diffusion of new technology. Optimum stimulation level is defined as a person’s general response to their environment and level of comfort with new situations. Bruner and Kumar’s 2007 study shows playfulness and innovativeness have a positive effect on the optimum stimulation level. Consumers who do not text message demonstrate a lower level of the three personality traits. Text messaging is shown to imply M-commerce intention. The implication is consumers with higher OSL could be more responsive to M-advertising, but by contrast, low OSL consumers may desire less excitement as a behavioral attribute (Mahatanankoon, 2007). The implication shows a correlation between text messaging, the TAM model, personal attributes, and the desire to participate in M-commerce. Another implication is one mobile advertisement may not fit all users. Some consumers may want a simple text message, and some consumers may want multimedia to participate in mobile advertising.

In another study, Muk (2007) acknowledges attitudes, social characteristics, and opt-in are positive correlations to SMS advertising. Muk also includes short codes with

SMS advertising, which is a five digit number in the form of a text message resulting in the receipt of a coupon or information. The thrust of this research is to combine the theory of reasoned action with certain aspects of diffusion theory to understand consumers’ intentions to accept SMS advertising. The study creates tension by selecting a cross-cultural sample of United States residents and Taiwanese participants. Taiwan was selected because the population consists of 22 million people and represents a land mass 46 the size of Rhode Island, making it a collectivist culture. The United States represents a diverse culture and more of an individualist society which perceives SMS advertising as an intrusion. The conclusion of the study demonstrates Taiwanese are likely to use SMS because of cultural norms, in contrast to their United States counterparts whose decision to use SMS is not affected by social pressure. Collectively, both country participants dislike SMS advertising. This could be a result of the dislike of advertising in general or the loss of personal privacy which is associated with freedom.

The United States participants show a desire to test a new service before committing to the service. United States consumers show more distrust for the advertiser versus the technology. The lack of trust on the part of the advertiser is somewhat mitigated by the brand name of the advertiser. The larger the brand name, the more trust

Americans have for accepting their advertising. However, an opt-in methodology with an easy, non-restrictive opt-out strategy works best with Americans. To summarize this study would be to say one particular SMS methodology will not work for global users.

This study has elements of the optimum stimulation model in describing a comfort for

Americans with respect to the trustworthiness of the brand. The concern about privacy is a real issue to be mitigated with opt-in strategies.

Advertising was not always seen as negative by the consumer. Prior to 1970, the

Gallup survey organization found advertising to be viewed favorably by consumers due to the informative nature of the ads (Tsang, Ho, & Liang, (2004). After the 1970s, consumers’ dislike for television advertising began to increase due to the perception of deceptive advertising. More recently, an analysis of six media demonstrates television and magazines to be the more problematic, disruptive, and less favorable than 47 newspapers, yellow pages, direct mail, and radio (Tsang et al., 2004). Differences in the way consumers perceive different media affect their perception of the media. This study creates a model of attitudes, permission based marketing, and incentives to create the intention which leads to the behavior of accepting SMS based advertising. Attitudes consist of entertainment value, information, credibility, and irritation of the message.

Permission is the act of allowing the consumer to choose whether to receive the advertising message or not. Incentives can be in the form of free mobile device minutes for accepting mobile advertising. The summary of the respondents shows the general attitude towards SMS advertising is negative if unsolicited due to the personal privacy invasion of the consumer space via the mobile device. By contrast, the attitudes change to positive if the consumer selects to opt-in for the SMS advertising. Entertainment was the single biggest contributor towards attitude of the consumer followed by credibility and irritation (Tsang et al., 2004). Incentive is a factor, and consumers were more willing to accept mobile advertising if an incentive was involved. When permission marketing, positive attitudes, and incentives were present, the intention of the SMS advertising affected behavior. This acceptance and behavior is consistent with the theory or reasoned action (Tsang et al., 2004). Permission marketing with easy opt-in and opt-out strategies may become the single most important factor in the acceptance of mobile marketing. The attitudinal aspect of entertainment speaks to the innovativeness of the user and their optimum stimulation level. Again, mobile advertising, inclusive of SMS advertising, assumes that one advertisement does not fit all consumers. Mobile marketing has the advantage of attributing one phone number to one consumer. To the extent demographics 48 and preferences are available, mobile SMS marketing can be more effective than direct mail.

In the developing country of Bangladesh, which has a mobile penetration of seven percent and a landline penetration of less than one percent, the same test regarding attitudes and the effect on the mobile SMS advertising contradicts the study in the United

States (Chowdhury, Parvin, Weitenberner, & Becker, 2006). Bangladesh consumers show credibility as a positive attitude towards SMS advertising. The influence towards entertainment and information are negative characteristics of Bangladesh consumers. In contrast, Bangladesh consumers did not experience irritation from receiving SMS advertisements. This response could be a cultural factor. The lack of positive influence pertaining to entertainment or informational advertising could correlate to the lack of such SMS advertising in Bangladesh. Based upon the peer reviewed research, there is a correlation in the acceptance of SMS text advertising and a concern for privacy where a high usage of text messaging exists (Chowdhury et al., 2006). The opt-in strategy appears to assist in removing the concern for privacy in SMS advertising.

The construct of subjective norms, combines theories of reasoned action and planned behavior (Bhatti, 2007). The elements of these subjective norms provide an influence on the perception of usefulness, which is part of the technology adoption model. The TAM influences the usage of new technology, which can increase the diffusion of technology into the marketplace. While the subject of mobile advertising is subject to many theories, this study adds the theory of planned behavior which is a consumer perception of the level of difficulty to perform a particular task. By combining the technology acceptance model, the theory of planned behavior, and the diffusion of 49 new technology, the correlation that exists between subjective norms, perceived usefulness, ease of use, and planned behavior strongly relates to adaptation of mobile commerce (Bhatti, 2007). Planned behavior is a new aspect to the adoption of technology related to M-advertising. In contrast, the paper focuses on M-commerce, which is the transaction component occurring after the decision to purchase is made.

M-commerce success can also be explained by the positive reinforcement of word-of-mouth advertising within a peer group. Song, Koo, & Kim (2007) state the TAM model in a wireless E-commerce context can show the usefulness and enjoyment as accounting for 73% of positive effects. If users perceive Mobile commerce to be easy, useful, and enjoyable, they will recommend M-commerce to their social group. When a person walking down the street chooses to find a restaurant of her choice while operating a mobile device and the consumer requests a coupon, the opt-in portion is significant. If the carrier is able to recognize the location of the user and suggest nearby restaurants, this may be helpful. Some mobile devices are equipped with global position systems (GPS) to monitor the location of the device. The consumer may be happy to view mobile advertising if an ad incentive accompanies the advertisement (McClellan, 2006). The example listed in this study shows the relationship between restaurants as a practical application of a new method of mobile marketing. This methodology uses geographic proximity and an opt-in strategy to provide value to the consumer. The consumer can potentially ask for restaurants close by, coupons appear on the mobile device, and the user coupon may influence where the user chooses to dine.

Bauer, Reichardt, Barnes, and Neumann (2005) stress the understanding of opt-in marketing for mobile advertising purposes. Their study consists of 1,103 online 50 respondents with an average age of 30.51 years old and 88.5% who already use text messaging. By using the theory of reasoned action, the study demonstrates personal attitudes have a greater effect than social norms on the behavioral intention of M- advertising. This result suggests the mobile phone is a very personal experience. The relationship between the perception of utility and the acceptance of mobile marketing is also shown. Additionally, the influence of information and entertainment are positive influencers while the consumer also expresses potential risk on the attitude towards mobile advertising. Mobile advertising must demonstrate to consumers: creative advertising, entertainment, or high information value to be of interest. By contrast, the fears of users are the misuse of personal information and spam (Bauer et al., 2005).

Speed of Mobile Access

As of February 2006, the United States cellular carrier investment in 3G wireless was $10 billion (Belson, 2006). Verizon has 3G services in 181 markets, and Cingular is available in 52 cities. At the beginning of 2006, less than 3% of the mobile market phones were 3G capable. Learning from Japan, which made 3G available in 2001, sufficient battery life, size of the handset, and a fixed rate data plan are the primary areas of consumer interest for handset acceptance (Belson, 2006).

McCasland explains mobile advertising can be adopted by young adults between the age of 18 and 22 years old, if permission is sought first. By contrast, young adults dislike unsolicited text message advertising which the user must pay for. An example of a good opt-in advertisement is a billboard for Doritos, which asks users to type in a five digit number and text to see if a prize was won. A study at Ball State University in 2005, shows 97% of students own mobile phones and more than 75% text message. McCasland 51 points out the relationship between the instant messaging done on a computer through

AOL, Yahoo, or Microsoft and text messaging on mobile devices. The more important factor of instant messaging versus text messaging is mobility. Text messaging allows mobility of the user while being in contact with the world through text messaging capability. One selling feature of 3G is the ability to download video such as news, weather, sports, or movie content. Video calls to other 3G users will be available in real- time. In addition to sending pictures, video will be sent at higher speeds than a 2.5G phone. Games would run up to 30 times faster (McCasland, 2005). Text messaging is a continuation of instant messaging on computers today with the advantage of being mobile. The 3G network service will offer multimedia enhancements, but the ability to use text based M-advertising exists today.

Consumer Concerns Continued

Palmer (2005) writes a scathing view of the inability of businesses to regulate themselves when displaying advertising to consumers. Palmer suggests consumers fall victim to spam which is unwanted advertising, pop-ups which are ads shown before the requested content is shown, and cookies which track user movements across web sites.

While these are personal computer issues which infringe on consumer privacy, many relationships between mobile marketing and personal computer usage exist. Suggesting government oversight or third party protection of consumers is likely to result in higher costs. Both monetary cost and non-monetary costs should be passed on to the business as part of gaining access to the consumer (Palmer, 2005).

Using the term mobile trust (M-trust), Park and Yang (2006) describe the early adoption of new technology as involving confidence in the actors. Risks can occur from 52 privacy loss, security system failures, software failures, theft of the mobile device, smaller screen, smaller keypads when compared to a personal computer, and unstable bandwidth. The results show users with more Internet experience will be more apt to adopt mobile advertising in spite of the risks. This suggests user segments based on

Internet experience which require a different approach given their tolerance for risk (Park

& Yang, 2006).

Consumers seeking information, value, or entertainment want immediate gratification and do not want a loss of privacy. One unique method is using image recognition as an opt-in strategy. The concept allows users to take a picture using their mobile camera on their phone and texting the picture to a phone number or short messaging code. As of the fourth quarter of 2006, 50.7% of United States cell phones have a camera. The types of pictures and responses could be a sports banner which provides team statistics, a film poster which delivers information about a movie, a wine label which provides recommendations regarding the wine, or a book which offers reviews and pricing. The pros are that the technology exists today and the user does not have to type in a long string of numbers or letters. By sending the picture, the user is asking for information or action. The negatives are that the image must be on file for recognition to take place and installation software may be required which could make the consumer hesitant (Ramkumar, 2007).

The New York Times reporter Holson (2008) reports consumers have successfully contacted their cellular carrier and received reimbursement for spam messages.

Americans are expected to receive 1.5 billion unwanted text messages in 2008.

Consumers in the United States receive or transmit a total of 48 billion text messages a 53 month. Some users without a text plan can receive a bill of $.20 per text message.

Carriers are constantly tweaking their spam filters. Sprint says 65% of all text messages over their network are spam, which is put through a filter and never reaches the consumer. Carriers are sharing spam information and using lawsuits against spammers.

Carriers are quick to report consumers have some options to change their mobile device spam filters via the Internet (Holson, 2008).

Television type advertising, video, audio, banner display advertising, and text information are the new weapons of marketing executives operating in the mobile market. By contrast, consumer advocacy groups say unwanted ads are an intrusion in the consumers’ pocket. The wireless carriers fear losing customers and attempt to divert unsolicited messages. By law, mobile carriers are not permitted to provide a subscriber’s location unless the subscriber gives permission. Carriers and advertisers are investigating incentives which would entice consumers to receive ads. This could include free cellular minutes or free text messages (Richtel, 2006).

Elson and LeClerc (2006) state 10 million customers are the victims of identity theft each year, and many ask for government intervention. People are asking federal and state governments to assure organizations have data security in place so their personal information will not be misappropriated. If organizations are not proactive in protecting consumer information, this may lead to government regulation (Elson & LeClerc, 2006).

AT&T predicts mobile marketing revenue to be $1.4 billion in the United States by 2012 as reported by Newell and Meier (2007). Yet, the authors say government regulation already exists to prevent mobile spam which will impact the revenue number for 2012. As stated, “the assault of non-solicited pornography and marketing act of 2003” 54 requires consumers to accept advertising messages. In a study where students were asked to sign up for mobile advertising, 36.4% accepted mobile ads, and 63.6% of the students did not accept mobile ads. A qualitative study explains why each group chose to accept or decline the offer of mobile ads. The acceptance group saw this as a new activity; local restaurant, shopping, and bar coupons were a benefit of the promotion; the service was free, novelty attraction, peer pressure, and the ease of opt-out. The students rejecting the offer cited desire to avoid advertising, technical reasons, cost, content was not important to the users, and no interest in coupons (Newell & Meier, 2007).

Restaurant Experiments with Mobile Coupons

McDonald’s restaurants in the United Kingdom ran a mobile marketing campaign to ask customers for their mobile phone number for the purpose of sending advertising.

The campaign lasted 10 weeks and signed up 220,000 customers, mostly belonging to the youth market. The purpose of McDonald’s was the customer relationship management, interaction, and exchange of information (Kavassalis, Spyropoulou, Drossos,

Mitrokostas, Gikas, & Hatzistamatiou, 2003).

In another instance, Jacobson says the best bowl of black bean gator chili close to the University of South Florida is Skipper’s Smokehouse Restaurant & Oyster Bar in

North Tampa, Florida. As a way of encouraging students to try the gator chili, Skipper’s sends out a text message coupon to students who opt-in. The opt-in portion is unique.

Students at the University of South Florida can register through the school and identify which types of coupons they would like. The students can opt-out at any time. Eighty- five hundred students out of 32,000 students enroll in the coupon program. On the supplier side, 85 merchants belong to the program. Southern Illinois University has a 55 similar system, and 85% of the 21,000 students opt-in to the program. The cost of sending a message to the students is $250 for 5 messages which is less expensive than one print ad in the school paper. If a restaurant is having a slow night, an e-mail blast can go out at 10 p.m. offering a two-for-one pizza coupon (Jakobson, 2005).

Litvin, Blose, and Laird (2005) compiled a study of the fine dining restaurant industry in the tourist town of Charleston, South Carolina. The destination attracts over 4 million visitors a year. Yet, the restaurants did not have a web presence or had a minimal presence at best. Tourists did not use the Internet to search for restaurants. The primary source of restaurant information was the local paper. The advice for restaurants in tourist towns is not to invest too much money in a promotional web site, but at the current cost, a presence would be helpful (Litvin, Blose, & Laird, 2005).

The newspaper in Palm Springs, California, is changing the way business is done.

The local Desert Sun newspaper plans to launch free online restaurant ads and coupons.

Readers will be required to provide registration information and receive direct marketing material. The cost of the website will be from the advertisers sending direct marketing materials (Skewfelt, 2006). Kevin (2007) reports Jupiter research says 73% of 25 to 34 year old adults text message and more than half of the 35 to 44 year olds text as well. A company called Cellfire is emerging as an early leader in distributing mobile coupons. A consumer signs up with Cellfire, specifies preferences, and receives coupons to places like Hardee’s, Pizz’a Chicago, Omaha Steaks, T.G.I. Friday’s, and Domino’s Pizza.

Grocers are also using mobile coupon advertising to offer half price pizzas and half price rotisserie chicken just as adults are coming home from work (Kevin, 2007). Dwight

Moore, Vice President of Marketing at Cellfire, states, “QSR eating places typically see 56 less than one percent redemption rate on print coupons”. The experience at Cellfire is a 5 to 15% redemption rate for QSR’s when a free product or buy-one-get-one- free offer is made (Moore, D., personal communication, June 6, 2008). Subway launched a text mobile coupon on October 21, 2008, at the Seattle Seahawks’ NFL game. Attendees could text a short-code which is seen on the jumbotron screen. Coupons could only be redeemed at one Subway out of the 345 Subway franchisees. A response rate of 50% is the number being discussed by the ad agency, compared to a typical redemption rate of 1 to 3% for paper coupons (Seattle Subway stores launch mobile phone promotions, 2007).

Coupons

Coupons entitling bearers to savings on products and services have long been popular business promotion tools and date back to the late 19th century. The two earliest documented coupons include handwritten certificates for a free sample glass of Coca

Cola from company founder Asa Candler, in his Atlanta, Georgia, drugstore in 1894, and another issued by cereal-maker C.W. Post in 1895, for one cent off on purchases of Grape

Nuts (Couponmonth, 2008). Coupon dissemination grew steadily in the intervening period to a high point of 310 billion coupons made available in 1992 (Brown, 2006) and then tapered to 253 billion available coupons in 2006, when the face value of distributed coupons exceeded $300 billion (Santella, 2008). In 2008, 317 billion coupons were distributed in the United States and 2.6 billion coupons were redeemed, for a redemption rate of less than one percent (Coupon fast facts, 2009).

Definitions of what constitutes a coupon vary somewhat, but a common conception is the following, published by the Coupon Information Corporation: “A coupon is a certificate with a stated value if it is used when purchasing a specific product. 57

The consumer presents the coupon to the retailer selling the product at the time of purchase. The retailer will reduce the cost of the product by the specified amount on the coupon,” (CIC, 2008). Matthew Tilley, Director of Marketing for coupon clearinghouse

CMS, suggests this succinct alternate version: “Any message received by a consumer for a discount not available to everyone,” (Tilley, M., personal communication, June 5,

2008).

Coupon distributors can be either manufacturers or retailers, and coupons vary in their methodology of savings to include cents-off, percentage-off, buy-one-get-one-free, outright price reductions and other approaches. There is some discussion and debate in the coupon industry around whether or not retailers should routinely clarify non- discounted prices in order to stimulate coupon usage (Yin & Dubinsky, 2004). Coupons are distributed through free-standing inserts (commonly placed in newspapers and magazines), direct mail, on-package in stores, cross-ruff (where coupons for one product are found inside the packaging for another product), and in-ad advertisements distributed directly by manufacturers as well as from retailers upon check-out (Hutton and Mulhern,

2002: 181-187). Increasingly, electronic means of coupon distribution are gaining in popularity.

Manufacturer coupons are commonly processed by clearinghouse companies such as CMS and NCH, which handle 90% of redeemed coupon traffic. By frequency of category, coupons are promoted in free-standing inserts in the following order: packaged goods 67.4%, direct response ads 23.4%, and franchised restaurants 9.2% (Santella,

2008). Consumers and marketers are mutually interested in coupons, but from different vantage points. For consumers, the motivation to save money is paramount and is further 58 boosted by potential elements of psychological satisfaction and stimulation (Hutton &

Mulhern, 2002). For marketers the primary motivation is to increase sales and profits and to attract new, loyal customers. The profit-based interests of marketers are further related to the specific goals of increasing brand awareness, boosting retailer support, and encouraging product trial (Brown, 2006).

Although the high volume and progressively increasing face value of coupons suggests a strong commitment on the part of distributors to continuing coupon promotion, and although large numbers of customers report using coupons at least occasionally, there is significant dissatisfaction in the marketing sector with several elements of the enterprise. Chief among these is the low level of redemption of coupons, which in recent years has been as low as one percent (NCH, 2008). Another area of dissatisfaction relates to the fact that redemptions are frequently made by loyal, repeat customers rather than the new customers marketers are hoping to attract and retain (Shoemaker & Tibrewala,

1985). Some researchers have questioned whether the marketplace is overly saturated with coupons and call for more sophisticated studies to elucidate self-selection variables and patterns (Chiang, 1995). There is also investigation of a suspected inverse relationship between the profitability of individual chain stores and the profitability of manufacturers when manufacturers optimize their profits through extensive promotion of coupon programs (Leone & Srinivasan, 1996).

Extensive research has been done on the economics and psychology of coupon redemption from both academic and industry perspectives. Study topics have included features of coupons themselves, including face value and delivery methods, and the habits and preferences of various demographic groups of customers (cite). Two 59 theoretical perspectives dominate the academic literature on coupon redemption: the theory of reasoned action and the theory of planned behavior.

The theory of reasoned action was originally developed by psychologists Ajzen and Fishbein (1980) and was notably applied to coupon usage in the consumer research of Shimp and Kavas (1984). The theory assumes that coupon usage is rational and systematic and that intentions to use coupons are influenced by perceptions of whether coupon usage is a worthwhile pursuit (including an influence from the perceptions of others in one’s environment), along with personal attitudes and subjective norms.

Intentions shaped by these factors then influence behavior. Bagozzi extended the application of the theory by further elaborating the process between intentions and behavior and by considering the effects of prior coupon usage patterns (1992). More recently the theory of reasoned action has been extended to examine coupon usage intention with respect to e-coupons (Kang, Hahn, Fortin, Hyun, & Eom, 2006).

The theory of planned behavior also developed from the work of Ajzen and

Fishbein (1980) and similarly contains the elements of attitudes, subjective norms and behavioral intentions. Hsu, Wang and Wen applied the theory to the emerging category of mobile text message coupons and determined that marketing campaigns for m-coupons can be successful to the extent that they take into account consumers’ feelings and assessments regarding the new technology, and encourage marketers to work to lower anxieties and fears of new technological applications (2006). Because the attitudes of friends and family are significant in this context, the researchers discourage large-scale marketing campaigns and advocate targeted marketing, consumer education, and brand promotion instead. 60

Another set of topics that has received extensive attention in research is the issue of price sensitivity on the part of consumers and how this relates to the face value of coupons. The key insight from this research is that the way information is presented on a coupon (framing effects) has a definite effect on the likelihood of redemption. One finding is that with coupons of lower face value, there is a positive effect on intention to redeem; conversely, with coupons of higher face value, intention to redeem is essentially unchanged. Therefore, increasing the face value of a coupon does not necessarily stimulate higher redemption, as consumers routinely associate higher face values with a more expensive product (Barat & Paswan, 2005). Other research suggests that cents-off coupons are more effective with high-priced products, and that percentage-off coupons work best with lower-priced products (Yin & Dubinsky, 2004). There is an increasing consensus that the provision of regular (non-discounted) price information is an important component of coupon promotion, due to the comparison it enables consumers to make regarding degree of savings (Yin & Dubinsky, 2004). Finally, some research suggests that lowering retail prices during coupon events stimulates redemption among marginal customers by offsetting the negative costs of coupon utilization, including the time taken to search for and present coupons (Anderson & Song, 2004).

Recent literature reflects the ascension of electronic communications as an increasingly important platform for marketing, and the potential for innovations such as e-coupons to spur interest in and redemption of coupons (Blundo, Cimato, & De Bonis,

2005). There is also a hope that electronic coupons might eliminate or reduce some of the problems associated with traditional coupon methodologies. Han and Sung (2006) forecast a positive future for online coupons with increasing amounts of exposure and 61 familiarity with the technology involved Kondo, Uwadaira and Nakahara (2007) found in their experimental research that customers of a hair salon were somewhat segmented in their responsiveness to mobile marketing, with more favorable responses coming from those with a greater facility in using mobile internet services. They suggest that for those with lower facility, mixing newer technologies with traditional methods of coupon redemption may help bridge the gap.

Feldman (2000) contends the press has over-hyped the use of mobile advertising by articles which describe a woman purchasing a gift while waiting for a bus, downloading coupons as a consumer walks into a store, or bidding on the last table at a posh New York restaurant (Feldman, 2000). The reality outlined by the 2007 Mobile

Attitude & Usage Study states receiving coupons is the third most sought after activity after downloading ringtones, games or wallpaper, and participation in sweepstakes or contests. The adult age groups of people with a high interest in receiving mobile coupons are 11% for the age group 18 to 24 years old; 14% for 25 to 34 years of age; 10% for 35 to 44 years of age; 11% for 45 to 54 years of age; and 8% for adults age 55 and older. For the consumers who expressed an interest in obtaining valuable mobile coupons, convenience factor is one of the most important factors (Becker, Liuzzo, & Keenan,

2007).

Customers may experience frustration with E-coupons if they do not have one at the time of checkout say Oliver and Shor. Paper coupons are a customer initiated process.

A customer tells the sales clerk he or she has a coupon and present the coupon at time of checkout. In the E-coupon arena, the E-coupon is prompted at the time of checkout. A person who does not have an E-coupon and only then realizes there is potentially a 62 discount might simply quit shopping. This situation happens more on the Internet but has implications for mobile coupon marketing (Oliver, 2003).

E-coupons have an advantage of interacting with a consumer which is successful when localization, relevance, value, personalization, entertainment, and timely delivery are combined with permission by the user. Rettie, Grandcolas, and Deakins (2005) evaluate 200 separate E-mobile marketing campaigns in the United Kingdom. In each campaign, the consumers gave their permission to receive an E-coupon. The redemption rates for the E-coupons averaged 44% and ranged from 3% to 68%. When comparing direct mail with a redemption rate of 1% to 5%, E-coupons appear more favorable as an advertising medium (Rettie, Grandcolas, & Deakins, 2005). Adding a twist to the mobile coupon redemption, McDonalds and Coke in the United Kingdom sought to tie the promotion of the movie Finding Nemo, into a reverse coupon or reward program.

Twenty-five million Coke cups each contain a unique number which is sent via text messaging. The consumer prize consists of Nemo wallpaper for their cell phone, Nemo postcards, or ringtones. Four million participants chose to accept the download.

Normally, the coupon or value proposition is taken prior to payment. In this case,

McDonalds and Coke provide the value award after the sale of a drink. The second unique coupon concept is in Japan. Bus commuters can scan the bus route with their cell phone and receive coupons for businesses within walking distance to the scheduled stops

(Sultan & Rohm, 2005). This form of geo-centric coupon takes into account where the consumer is and where the consumer is going. This implies some level of smart coupon.

By contrast, Kurkovsky and Harihar (2006) put forth a different type of coupon suggestion scheme and opt-in strategy. This protocol asks the consumer to opt-in for 63 types of coupons versus a particular store brand. The customer downloads software to the cell phone which recognizes preferences based on choices, input by the consumer, and purchases. The purchases are matched against a taxonomy of standard terms. When the consumer enters a store, the wireless local area network can read the standard terms, not giving away the identity of the consumer and offer coupons relating to previous purchases and preferences. The authors imply coupons can become more relevant as the system learns from prior purchases.

Some consumers only show interest in a free offer. The most popular definition of free offer is no cost to the consumer, says Wang. A follow-up study by Wang states 33% of consumers are willing to sign-up for free offers in comparison to .03% of consumer who claim they would not sign-up if strings were attached to the free offer. Wang says mobile marketers should draw an association to the credit card industry. For the first six months, the credit card may have zero interest. After the six month period, the credit card carries a profitable interest rate for the lending institution. Wang offers the suggestion of providing something relatively inexpensive and perhaps unrelated, such as wallpaper or ringtones for free. After a certain period of time, company offers can be made with a complimentary offer. While the concept of free offer and the analogy of the credit card marketing implementation seem at odds, Wang did discover in the study that consumers who seek information such as news are more likely to accept coupons (Wang, 2007). The subtle implication is that consumers who seek information may view the news as a free service and are more likely to accept a coupon. 64

Conclusions

There are 945,000 restaurants and 13.1 million restaurant employees in the United

States (Grindy, 2007). The United States consumer spends nearly 50% of their food dollars outside of the home. Restaurants employ a number of promotion strategies to attract new customers and retain existing customers. Jackson and Titz (2004) discovered

77.8% of franchise restaurants and 37.3% of independent restaurants use coupons for promotional purposes. Casual dining restaurant patrons prefer monetary rewards or restaurant savings as the number one benefit of a restaurant promotion making coupons an excellent choice for casual dining restaurant promotions (Jang & Mattila, 2005).

Coupons have a 100 year history in the United States. The history of coupons began with Coke and extended quickly into the grocery store for package goods. Coupon distribution in 1992 accounted for 310 billion coupons distributed in the United States, yet the redemption rate of coupons is less than one percent (Brown, 2006). Mobile coupons offer the ability to combine mobile phones with the traditional concept of coupons. Even though coupons have a long history in the United States as a promotional tool, there is little peer reviewed research on the acceptance and redemption of mobile coupons for the casual dining restaurant segment. Casual dining represents a rich application area to study the historically proven promotional tool of coupons and the new technology of mobile coupon delivery.

The Mobile Marketing Association 2007 study reveals 79% of the population uses a mobile phone while the CTIA-The Wireless Association places mobile phone subscription at 87% of the United States population (Wireless quick facts, 2008). Mobile phones have incorporated features which make the phone increasingly valuable and more 65 personalized for consumers. The most popular features are cameras, call waiting, built-in speakers, and text messaging (Becker, Liuzzo, & Keenan, 2007). The adult group with the highest usage of text messaging is the 18 to 44 year old group. Becker et al. (2007) report forty-one percent of users send or receive 30 text messages per week and seventy percent of text message users choose an unlimited text message payment plan. The 100 year old coupon promotion strategy combined with the popular usage of text messaging would appear to be a strong case for mobile coupons. However, anytime new technology is introduced or the adaption of new applications on existing technology is introduced, consumers may choose to accept or reject the concept. The decision by consumers to accept or reject new technology is known as technology acceptance.

The field of technology acceptance is based in psychology and adapted to information systems applications. Song, Koo, & Kim, (2007) demonstrated the acceptance of mobile commerce by using the technology acceptance model coupled with the construct of enjoyment to account for 73% of the positive effects of mobile commerce. Further research suggests a consumer may be more willing to view mobile advertising if an advertising incentive accompanies the ad (McClellan, 2006). The suggestion consumers want something of value with advertising is another reason to suggest coupons may be a useful mobile advertising concept. In contrast, Palmer (2005) suggests businesses cannot regulate themselves when displaying advertising to consumers. Thus, consumers can fall victim to unwanted spam. Consumers with more

Internet experience may be more apt to adopt mobile advertising given the risk of spam, while other consumers may need a different approach to adopt mobile advertising (Park

& Yang, 2006). Feldman (2000) contends the press has over-hyped the use of mobile 66 advertising. In contrast, the mobile marketing association states mobile coupons is a sought-after activity behind ringtones, games, wallpaper downloads or participation in contests (Bekcer, Liuzzo, & Keenan, 2007). Furthermore, 11% of the age group 18 to 24 has a high interest in receiving mobile coupons.

Summary

Chapter two presented a review of the existing research literature on restaurant classifications and the concept of casual dining restaurants as a subset of full service restaurants. Mobile phones, trends, demographics, and usage statistics were based on recent literature research. The history of coupons was presented with a current of usage and redemption. The complementary nature of mobile phone text messaging and coupons as a new form of mobile advertising was discussed in a balanced review of the literature.

The literature review provided discussion of the reasons consumers may be willing to accept mobile coupons and concerns which would prevent consumers from adopting mobile coupons. Chapter three includes a discussion of the 18 to 24 year old sample population, sampling methodology, a description of the survey, and the data analysis to be performed. An explanation of the reliability and validity of this quantitative research is also presented. 67

CHAPTER 3: METHOD

The purpose of this quantitative research study is to determine the degree to which performance expectancy, effort expectancy, social influence, facilitating conditions and fear of spam affect the behavioral intention to use mobile coupons for casual restaurant dining by young adults. An online panel provides a context for gathering input from young adults 18-24 years of age, who own cell phones, and have access to casual dining restaurants. The primary instrument used to gather behavioral intention to use mobile coupon data is a survey which will be administered in an online format. The survey is based on four independent variables defined in the unified theory of acceptance and use of technology, in addition to the independent variable of intrusive advertising, also described as spam. The research methodology is appropriate for this study as the correlation of the independent variables will quantitatively reflect on the dependent variables of intention to use mobile coupons and use behavior. The independent variables of the unified theory of acceptance and use of technology are: performance expectancy, effort expectancy, social influence, and facilitating conditions

(Venkkatesh, Morris, Davis, and Davis, 2003). Additionally, the goal of the study is to understand the intention to redeem and use mobile coupons in casual dining restaurant which are the dependent variables. In the unified theory of acceptance and use technology model, voluntariness is a moderating variable not used in this study, because the use of a coupon is deemed to be voluntary.

The initial step in the study will be to select a research methodology and appropriate design to answer the research questions. Each variable will be examined along with appropriate survey questions based on empirically tested research. The 68 population will be identified along with the sampling frame. The data collection methodology will outline the desired number of completed surveys and the recommended online survey. Finally, this chapter will outline the measures of validity, reliability and data analysis.

Research Method and Design Appropriateness

This quantitative, nonexperimental study will be used to test the hypotheses outlined in Chapter One. An online survey of United States Zoomerang panel participants will be used to collect data from 300 young adults between the ages of 18 - 24, who own a cell phone. The degree of association will determine if performance expectancy, effort expectancy, social influence, facilitating conditions, and fear of spam, can influence and predict the behavioral intention to use mobile coupons in a casual dining restaurant environment. Structural Equation Modeling will be used to determine if the independent variables combine as predictors of behavioral intention to use mobile coupons. The survey design is part of the quantitative process and demonstrated by administering an online questionnaire to a sample of young adults who own a cell phone.

The survey will be used to understand the attitudes of participants towards a mobile coupon delivered to a cell phone in the form of a text message. The dependent variable is the behavioral intention to use a mobile coupon in a casual dining restaurant environment. The independent variables that influence the outcome of the dependent variables include: performance expectancy; effort expectancy; social influence; facilitating conditions; and fear of spam.

Quantitative research is appropriate for this study because the study seeks measurable an observable data categorized by the variables. Explaining the relationship 69 between variables, quantitative research and analysis is well suited to understanding how one or more variables might influence another variable. The research method and design appropriateness were empirically tested in similar research studies. The constructs, scale descriptions and explanation of the constructs are listed. The original unified theory of acceptance and use technology used four independent variables: performance expectancy, effort expectancy, social influence, and facilitating conditions.

Performance expectancy in the context of the unified theory of acceptance and use technology seminal research describes this construct as the extent to which a person believes using the system will help her in job performance (Venkatesh, Morris, Davis, &

Davis, 2003). Venkatesh et al. investigated five theories to create the construct of performance expectancy. However, three of the four questions related to performance expectancy were derived from the technology acceptance model (Davis, 1989). Since this study will evaluate mobile coupons delivered to the cell phone, by a consumer rather than an employee, performance expectancy questions were adapted to the context of mobile coupons. Dickinger and Kleijnen (2008) studied mobile coupons using the technology acceptance model and expressed perceived usefulness as economic benefit. The scale to measure will be a seven-point Likert scale ranging from strongly disagree to strongly agree.

Table 1

Performance expectancy measurement questions

______

1. I would find a mobile text message coupon useful. 70

2. Using a mobile text message coupon would enable me to accomplish coupon related tasks more quickly.

3) Using mobile text message coupons can save me a lot of money.

4) If I use mobile text message coupons the financial gain is worthwhile.

______

Source: Venkatesh, Morris, Davis & Davis (2003). Original Cronbach's Alpha = .91

Effort expectancy is defined as the degree of ease associated with the use of mobile coupons in a casual dining restaurant environment. The effort expectancy construct is related to the behavioral intention to use mobile coupons. In the seminal study of the unified theory of acceptance and use technology, effort expectancy questions were derived from the technology acceptance model, the model of personal computer utilization, and the innovation diffusion theory (Venkatesh, Morris, Davis, and Davis,

2003). In the context of mobile coupons, the effort expectancy construct will be adapted from four questions used in the original unified theory of acceptance and use technology.

Dickinger and Kleijnen (2008) describe effort expectancy in the context of mobile coupons as the effort required to redeem a mobile coupon. A seven-point Likert scale ranging from strongly disagree to strongly agree will be used to measure this construct.

Table 2

Effort expectancy measurement questions

______

1. My interaction with mobile text message coupons would be clear and understandable.

2. It would be easy for me to become skillful at using mobile text message coupons.

3. I would find mobile text message coupons easy to use. 71

4. Learning to redeem mobile text message coupons will be easy for me.

______

Source: Venkatesh, Morris, Davis & Davis (2003). Original Cronbach's Alpha = .90

Social influence is the degree to which an individual perceives people who influence her and people who are important to her, think she should be using the new technology (Venkatesh, Morris, Davis and Davis, 2003). Venkatesh, et al. adapted four questions to address the social influence construct based on six models: theory of reasoned action; technology acceptance model - two; theory of planned behavior; consumer technology acceptance model; model of personal computer utilization; and innovation diffusion theory. In the context of this study, the new technology is mobile coupons delivered to a cell phone. A seven-point Likert scale ranging from strongly disagree to strongly agree will be used to measure this construct.

Table 3

Social Influence measurement questions

______

1. People who influence my behavior think that I should use mobile text message coupons.

2. People who are important to me think that I should use mobile text message coupons.

3. My cellular provider will be helpful in using mobile text message coupons.

4. My cellular provider will be supportive of using text message coupons.

______

Source: Venkatesh, Morris, Davis & Davis (2003). Original Cronbach's Alpha = .90 72

Facilitating conditions are a degree of belief by an individual that a technical infrastructure and organization exist, to support the use of mobile coupons. In the context of mobile coupons, the infrastructure and organization are interpreted as the cellular phone service provider. In the original unified theory of acceptance and use technology, four questions were derived based on the adaptation of four previous theories: theory of planned behavior; consumer technology acceptance model; model of personal computer utilization; and innovation diffusion theory (Venkatesh, Morris, Davis, & Davis, 2003). A seven-point Likert scale ranging from strongly disagree to strongly agree will be used to measure this construct.

Table 4

Facilitating conditions measurement questions

______

1. I have the resources necessary to use mobile text coupons.

2. I have the knowledge necessary to use mobile text coupons.

3. Mobile text coupons are compatible with my current cellular phone service.

4. A customer service representative from my cellular phone provider is available for assistance if I encounter problems with mobile text coupons.

______

Source: Venkatesh, Morris, Davis & Davis (2003). Original Cronbach's Alpha = .90 73

Spam, also referred to as intrusive advertisements is a measurement of the negative effect of unsolicited messages. Edwards, Li and Lee (2002) describe the social psychological theory called reactance theory stating that when individuals are faced with a loss of freedom, the person will attempt to restore freedom by resisting pressure to conform. Further, the work by Edwards, et al. explored pop-up advertising delivered to web surfers. The original test for intrusive advertising used seven negative terms, asking participants to rate the words on a seven point Likert scale that measured pop-up ads, television commercials and magazine ads (Li, Edwards, Lee, 2002). Additionally, the seven point ad intrusiveness scale was found to have an alpha score of .90. Dickinger and

Kleijnen (2008) adapted the intrusiveness scale to mobile coupons as listed in Table 5.

The spam measurement questions are also measured on a seven point Likert Scale.

Table 5

Spam measurement questions

______

In general, I find mobile advertisements:

1. Disturbing

2. Forced

3. Interfering

4. Intrusive

5. obtrusive

______

Source: Dickinger & Kleijnen, (2008). Original Cronbach's Alpha = .98 74

Behavioral intention to use a mobile text message coupons is the level of belief a person will use a mobile coupon. Because mobile coupons are not pervasive today, the participant is limited to the availability of receiving a mobile coupon. To overcome this obstacle, the question will be worded from the perspective that a mobile coupon would be available in the next 90 days. The behavioral intention to use mobile text message coupons will be measured using a seven point Likert Scale.

Table 6

Behavioral intention to use mobile text messaging coupon measurement questions

______

1. If a casual dining mobile text message restaurant coupon was available, I would intend to use the coupon in the next 90 days.

2. If a casual dining mobile text message restaurant coupon was available, I predict I would use the mobile coupon in the next 90 days.

3) If a casual dining mobile text message restaurant coupon was available, I plan to use the mobile coupon in the next 90 days. 75

In addition to the questions outlined in the survey using a seven point Likert

Scale, participants will be asked their gender (1 = Male, 2 = Female), previous experience with text messaging (1 = Yes, 2 = No) and previous exposure to mobile text message coupons (1 = Yes, 2 = No). To place the coupon in perspective, participants will be instructed that the coupon would be used at a casual dining restaurant with a defined price range. the coupon will have a face value of 25% which is equivalent to a complimentary beverage. Myung, Barrash, and Feinstein (2006) experimented with restaurant coupons ranging from zero percent to 50%. The 25% face value coupon selected for this study provides an incentive but is deemed to be an average coupon.

Research Questions

This research study will seek to understand if there is a significant relationship between young adults and the desire to use mobile coupons in a casual dining restaurant environment. Subjects will be screened by age to include young adult males and females between the ages of 18 to 24, who own cell phones. Specifically, the primary research questions are as follows: Do performance expectancy, effort expectancy and social influence positively affect the behavioral intention to redeem mobile coupons, by young adults in a casual dining restaurant environment?; Do facilitating conditions positively affect use behavior of young adults in redeeming mobile coupons for casual dining restaurants?; Does fear of spam negatively affect the behavioral intention of young adults to redeem mobile coupons in a casual dining restaurant environment? The concept of spam is not one of the original constructs of the unified theory of acceptance and use technology. Spam in the context of this study deals with intrusive advertisements. The 76 three research questions will add new knowledge in the area of mobile coupon marketing by combining performance, effort, social influence, facilitating conditions and fear of spam into a new model described as the acceptance theory of mobile technology usage.

Population

The population will consist of men and women who own a cell phone and are between 18 and 24 years of age. An online survey will be administered using the

Zoomerang online panel of participants. The participants will be randomly selected from the Zoomerang online panel. A sample of the online survey is located in Appendix A.

Hair, Bush, and Ortinau (2003) argue that determining an appropriate sample size is a difficult task taking into account the preciseness of the estimate, the time available and money required to collect a sample.

The investigator plans to accumulate 300 completed surveys of random participants from the online panel. The 300 completed surveys are based on other studies using factor analysis and the germinal study that validated the unified theory of acceptance and use technology. MacCallum, Widaman, Preacher, and Hong, (2001) describe a rule of thumb regarding sample size as a ratio of subjects to variables equal to four or larger. Similarly, Gorsuch (1983) recommended a subject to variable size of five or larger. However, Gorsuch added an additional sample size rule by saying the sample size should never be less than 100 regardless of the number of variables studied. In contrast, another researcher (Everett, 1983) raised the subject to variable ratio to 10:1.

MacCallum, Widaman, Preacher, and Hong, (2001) also state sample sizes may need to have a subject to variable ratio of 20:1 when factors are not highly over-determined and communalities are low. Venkatesh, Morris, Davis, and Davis, (2003) validated the 77 unified theory of acceptance and use technology with 215 participants and six variables, indicating a subject to variable ratio of 35:1. The investigator will use 300 participants and six variables, indicating a subject to variable ratio of 50:1.

Sampling Frame

An online survey will be conducted of Zoomerang panel participants between the ages of 18 and 24, who own a cell phone in the United States. The survey will be created using the Zoomerang software. The complete Zoomerang panel consists of two-and-a- half million participants who have opted-in to participate in surveys and allowed 500 pieces of demographic information, occupational information and lifestyle attributes to be collected (Online survey software tool, 2010). Started in 1999, Zoomerang has created and distributed 100 million online surveys on behalf of researchers and corporations, including 70 of the Fortune 100 companies (About us, 2010).

The online survey intends to collect 300 completed surveys. To collect the desired sample size, over-sampling of 60% will be necessary to account for panel participants who choose not to answer the survey. Because a random sample of the Zoomerang panel of qualified participants is desired, the following steps will be taken to ensure a random sample. To generate 300 completed surveys with 60% over-sampling, a total of 480 online surveys will be distributed. To establish an interval of the intended recipients on the panel, 480 will be divided into the available, qualified panel participants. Once the interval is established, a random number generator will establish the first position. After the first position is established, a survey will be sent to each interval participant until all

480 surveys are distributed. Each potential participant will receive a link to the online 78 survey. Once 300 completed surveys are accumulated, the link to the survey will provide a message stating the survey has expired.

Hair, Bush, and Ortinau, (2003) discuss the difficulty of determining an appropriate sample size. Specifically, they consider how precise the estimates must be, the amount of time the researcher has to collect the data and the money available, because data collection is generally the most expensive aspect of a research study. Zoomerang compares their sample to the Unites States census. In a personal conversation with Anres

Grunbaum of Zoomerang (April, 21, 2010), the following profile was revealed: The census consists of 51% females and the Zoomerang panel consists of 68% females; the census consists of 12% between the ages of 18 and 24, meanwhile, the Zoomerang panel comprises 15% between the ages of 18 and 24; and finally, the census consists of 71%

Caucasians, 13% African American, 12% Hispanic, and 4% other nationalities, in comparison to the Zoomerang panel with 73% Caucasians, 12% African American, 11%

Hispanic, and 4% other nationalities. Within the major United States regions consisting of the Northwest, Midwest, South, and Western region the Zoomerang panel is within plus or minus two percent of the United States census.

Informed Consent

The concept of informed consent consists of two basic requirements: the participants understand the type of research being conducted, potential risks, and the benefits of participation, and the participants understand the information; and each participant agrees to participate (Couper and Singer, 2009). In a quantitative survey, the medium is usually a paper or an electronic survey. In this study, subjects are guided to an electronic survey form. Before the subjects can participate in the survey, an informed 79 consent page is displayed. Potential participants cannot proceed to the survey until they agree to the informed consent and click on the "next" button, thus agreeing to the terms of the informed consent.

The online informed consent requires the participant to be over 18 years of age.

The participant is supplied with the phone number and email address of the researcher in the event the participant has questions. Additionally, the participant is informed she may decline or withdraw from the study at any time without consequences. The identity of participants is not released by MarketTools, Inc., operators of Zoomerang, the third party online panel vendor. The researcher is only provided with the data. Each participant is listed as a number from one through the number of completed surveys provided. Each participant is made aware the data collected will be stored in a locked area and held for a period of three years. Finally, the participants are advised the research will be used for publication. The informed consent form is located in Appendix B. Participation is voluntary. Because an online panel of potential participants will be used, MarketTools,

Inc., eliminates any subject who rejects the informed consent and adds another participant until the required number of completed surveys are acquired (A. Grunbaun, personal communication, April 21, 2010).

Confidentiality

Participants in the study are selected from an online panel called Zoomerang which is operated by MarketTools, Inc. The online panel of potential participants are knowingly recruited to join the Zoomerang panel in return for an opportunity to accumulate points towards prizes that can be redeemed online (A. Grunbaun, personal communication, April 21, 2010). MarketTools, Inc., does not release the names or any 80 contact information that would identify participants. Only the raw data is provided to the researcher upon completion of the study. No identifying information is available to the researcher on the participants of the study. Additionally, the data set will only be stored on the researchers personal computer for the length of time required to analyze the data.

Upon completion of the data analysis, the individual survey data files will be stored on a compact disc read-only memory (CD-ROM). The CD-ROM will be kept for a period of three years and then destroyed by physically breaking the CD-ROM into multiple pieces.

Geographic Location

The study is limited to the United States. The Zoomerang online panel includes participants within the United States and the random sample ensures no specific geographic location is over-represented. Additionally, no specific organization is represented, negating the need to maintain organization anonymity. Because the requirements to participate in the survey are based on the 18 - 24 age-range and owning a cell phone, the requirements do not eliminate a specific geographic region within the

United States.

Data Collection

Online participant surveys will be used to collect the data for this study. The survey participants will be derived from the Zoomerang database, consist of cell phone owners and be between the ages of 18 and 24. The participants will remain anonymous and none of the responses will be linked to any individual respondent. The data will be collected using a Likert-type scale in the context of an online survey. The survey will use five independent variables associated with behavioral intention to redeem mobile 81 coupons and usage behavior. The survey (see Appendix A) will be administrated using the Zoomerang software.

Each participant will evaluate a list of questions related to mobile coupon performance, effort, social influence, facilitating conditions and fear of spam. Instructions will be provided to participants on how to complete the survey, and the estimated completion time of the survey. The survey results will be collected online and downloaded into an Excel spreadsheet. Each completed survey will be numbered and contain a date and time stamp when downloaded. The use of a survey and Likert-type scale is consistent with a quantitative study. An online survey is advantageous over a paper survey instrument mailed to participants. A paper survey must be input into an electronic format lending itself to transcription errors or double counting if the surveys are not organized properly. Because the Zoomerang online panel of potential participants agreed to participate in surveys, the estimated data collection period from the time of release to the collection of the data is seven days.

Instrumentation

An online survey will be administered to young adults between the ages of

18 and 24 who own a cell phone. The anticipated number of completed surveys is 300.

Each participant will be asked to evaluate questions related to the acceptance of mobile coupons for use in a casual dining restaurant environment. The design of this instrument is specific to this study. More specifically, this design is intended to determine if a correlation exists between performance expectancy, effort expectancy, social influence, facilitating conditions, and the behavioral intention to redeem and use mobile coupons. 82

Multiple survey instruments were reviewed to compile suitable questions regarding the variables in this study. Survey questions were gathered from validated surveys to assure suitable questions were included. The survey methodology and statistical analysis were tested in related research studies. To be consistent, the responses will be based on a seven-point Likert scale with the exception of demographic data which is appropriate for a quantitative study. Reliability using Cronbach's alpha scores and reliability test results will be reported in Chapter Four.

A pilot study will be conducted to test the survey with a small group of young adults who own cell phones. The pilot survey is expected to take participants 15 minutes or less to complete. Following the survey, the participants will be asked for suggestions to improve the survey. The feedback will be evaluated and modifications may be made to the instrument. The instrument will then be administered to the

Zoomerang online panel participants.

Validity and Reliability

Internal Validity

The internal validity allows conclusions to be reached from the data.

Consequently, threats to internal validity do not allow conclusions to be reached from the data due to design issues that can cause false outcomes (Creswell, 2005). The work done by Campbell and Stanley (1963) describes eight issues related to internal validity: (a) history, (b) maturation, (c) statistical regression, (d) differential selection, (e) selection- maturation interaction, (f) experimental mortality, (g) testing, and (h) instrumentation.

History refers to the effect of a significant time period between the beginning and end of the study. During this significant period, events can occur to influence the participants. 83

This survey is online and not subject to a significant time period between the beginning and end of the survey. Maturation deals with participants who mature during the length of the survey. Because the survey is online and timely, maturation is not a concern in this study. Statistical regression suggests that individuals who are selected for a study based on extreme scores can influence the outcome. The entrance criteria for participants in this study are based on a random selection of participants from an online panel. Differential selection is the process of selecting participants predisposed to a particular outcome.

Study will use random participant selection to avoid differential selection. Selection- maturation interaction deals with male and female participants who may mature at different points in time. This combined with other factors can affect results. This study deals with men and women between the ages of 18 and 24. Additionally, the interaction will be a one-time survey. Experimental mortality is concerned with participants who drop out during a prolonged study. Because this study is a single event lasting 15 minutes, this is not a concern. Testing describes the situation where participants take a pre-test and a post-test that can result in memorizing responses, resulting in an outcome influenced by the test. This concern is not appropriate for this study because participants are tested once. Finally, instrumentation is concerned with the pre-test and post-test instrument and the changes that can occur in the instrument between tests, thus threatening internal validity. This study does not use a pre-test and post-test.

External Validity

External validity allows researchers to draw conclusions from a sample and generalize the conclusions to a larger population. Threats to external validity do not allow researchers to make inferences from a sample and apply the inferences to other 84 situations (Creswell, 2005). There are three threats to the external validity as outlined by

Cook and Campbell (1979): (a) interaction of selection and treatment, (b) interaction of setting and treatment, and (c) interaction of history and treatment. The interaction of selection and treatment involves the inability to generalize results to other groups outside of the experimental group. One strategy is to make participation convenient. This study uses a random sample of an online panel of participants who have opted-in to participate in studies. The interaction of setting and treatment deals with the inability to replicate the results of an experiment from one setting to another setting. Because the survey is based on mobile marketing delivered to a cell phone, the participants carry their cell phone as a personal device. Regardless of where the participants take the survey, cell phone usage can be generalized. The interaction of history and treatment is interested in the threat to external validity as a result of generalizing findings to past and future situations. This study is designed to study the behavioral intention to use a mobile technology. The study could be replicated at a point in the future.

Reliability

Reliability is an assurance of stability and consistency (Creswell, 2005).

Additionally, reliability scores should yield similar results when the instrument is administered at different times. Creswell notes unreliable instruments can result from ambiguous questions, non-standard test administration and fatigued participants. One test of internal consistency is alpha as described by Cronbach's alpha (Cronbach, 1984).

Further, when items are cored as continuous variables, the alpha can estimate consistency of scores on a survey. This research uses the continuous variables of strongly agree to 85 strongly disagree. Additionally, this research study will use Cronbach's alpha as a test of reliability.

Data Analysis

The data from the proposed online survey will be downloaded into an electronic file. The data will be input into an SPSS file and descriptive statistics will be generated.

Cronbach's alpha coefficients will be calculated for each independent variable and the dependent variable. Cronbach's alpha will be test of internal consistency.

Factor analysis will be used to determine if the items load as anticipated. Both confirmatory and exploratory factor analyses will be conducted on the survey items to deliver a data analysis of the constructs. Exploratory factor analysis is used to observe the variables within the structure. Structural equation modeling will be chosen method to perform confirmatory factor analysis. Through using confirmatory factor analysis, the factors and loadings of independent variables will be observed based on expectations of the seminal research by Venkatesh, Morris, Davis, and Davis (2003). A correlation matrix will be generated using Pearson's r to ascertain the correlations between variables in the enhanced unified theory of acceptance and use technology. Finally a goodness-of- fit will be reported to measure the overall model fit. The overall research plan and data analysis will examine the five hypotheses and the enhanced model of the unified theory of acceptance and use technology.

Summary

This methodology chapter outlines the foundation for the research study by detailing the quantitative approach and the appropriateness of the design for this study.

The focus of this chapter reviews the data collection procedures, data measurement, 86 analysis, and conceptual framework, in the context of the proposed research questions.

The analytical methods recommended for this study are based on literature reviews and the work done by previous researchers. The proposed study reviews the methodology used by young adults to redeem a mobile coupon for use in a casual dining restaurant environment. This research will provide new knowledge in the area of the acceptance of mobile marketing.

In addition to adding new knowledge, this research will have an impact on the study of leadership. Mobile coupons have the unique characteristic of reaching individual cell phones carried by consumers. This study will assist marketing executives in understanding the behavioral intentions to use mobile marketing. This research may also assist developers of new mobile marketing applications by understanding the motivations of mobile consumers. Finally, this study will assist marketing executives in developing more effective relationship marketing strategies. The results of the research are listed in chapter four. 87

CHAPTER 4: RESULTS

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The purpose of this chapter is to report, in sufficient detail, the results of the statistical procedures. In general, open chapter 4 with an introductory paragraph stating the purpose of the chapter, the purpose of the research study, and the organization of the chapter. There is no single way to analyze the data, therefore, the organization of chapter 4 and analysis procedures will relate to the research design. A useful way to present the results of data is to organize around the hypothesis and research questions. The second part of the introduction should review the data collection process, generally in a two to three page discussion: (a) the data collection procedures, (b) the development of the intervention, the surveys, and/or the questionnaires, (c) the pilot procedures, (d) the gathering of the data, (e) the missing data, (f) the data analysis procedures, (g) and finally an introduction to the presentation of the organization of the analysis of the data and findings. The Findings are generally organized by a common structure related to the research questions and/or hypotheses sections: (a) a header reflecting the research question, (b) an introduction to its content, (c) a graphic presentation, (d) a concluding summary of the most important points of the graphic presentation and the most noteworthy findings. The Summary section presents the total results of the comparisons, differences, and/or similarities of the data analysis and the results of the hypothesis. Do not interpret or draw inferences about the data in this chapter 4. This is done in chapter 5. The Summary concludes with the introduction to chapter 5. The chapter may be divided into three broad sections: Introduction, Findings, and a Summary. Double-click to delete textbox Findings

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HOW TO INSERT A NEW TABLE: 1. Place your cursor where you want the table to appear. 2. On the BOLD TABLES AND FIGURES TOOLBAR, select INSERT NEW TABLE 3. Select the number of columns and rows – if you need to combine the cells as in the sample table row one, do that later with the eraser on the BOLD TABLES AND FIGURES TOOLBAR. 4. When the table is inserted, click on the BOLD TABLES AND FIGURES TOOLBAR menu and select FIX TABLE FORMATTING. 5. To add a CAPTION after the table is inserted, select ADD TABLE TITLE on the BOLD TABLES AND FIGURES TOOLBAR menu. 6. After you have created the table and inserted the caption, update the INDEX OF TABLES. Double-click to delete textbox 88

Table 7

Title of table formatting for manuscripts requires the title typed flush left at the top of the table, capitalization of the initial letters of the principal words (see APA section 3.1.3), italicizing the title, and double space if the title takes up more than one line, and beginning subsequent lines under the first line.

Mean error rate Standard deviation Sample size Level Group 1 Group 2 Group 1 Group 2 Group 1 Group 2 Low .00 .00 .00 .00 .00 .00 Moderate .00 .00 .00 .00 .00 .00 High .00 .00 .00 .00 .00 .00 Double-click to delete table

Table 8

Title of table

Double-click to delete table

HOW TO INSERT A NEW TABLE in landscape format: 1. Place your cursor at the bottom of the page BEFORE you want the landscape table. Go to INSERT, BREAK(PAGE LAYOUT/BREAKS in Word 2007), and select NEXT PAGE. 2. With your cursor on the new blank page, on the FILE menu, select PAGE SETUP. (Use “Insert 3. On the PAPER SIZE TAB, select LANDSCAPE. On the drop down menu “APPLY TO”, select THIS POINT FORWARD. 4. Use the instructions from the previous page to create the new table. 5. After you have inserted your table, put your cursor at the bottom of the page, go to INSERT, BREAK, and select NEXT PAGE, and: a. With your cursor on the new blank page, on the FILE menu, select PAGE SETUP. b. On the PAPER SIZE TAB, select PORTRAIT. On the drop down menu “APPLY TO,” select THIS POINT FORWARD. 6. To move the PAGE NUMBERS to the lower right corner and change text direction: a. Click on VIEW, and select HEADER and FOOTER and b. Turn off the SAME AS PREVIOUS (see figure). Repeat the procedure for the FOOTER. c. Delete the page number box in the HEADER. 7. To correct page numbers: On the INSERT MENU, select PAGE NUMBERS. 8. Be sure it says “Bottom of Page (FOOTER) in the POSITION box. 9. Be sure the SHOW NUMBER OF FIRST PAGE box is checked.

10. Click on the FORMAT button. 11. Select CONTINUE FROM PREVIOUS SECTION. 89 12. Click on the FORMAT MENU. a. Select Text Direction

b. Select the right hand direction. 13. Repeat the page number process for the page following the landscaped table. Double-click to delete textbox

90 91

When adding a figure, make sure it is FLUSH LEFT – go to FORMAT, PARAGRAPH… and in the “SPECIAL” dropdown menu select (none) then click OK Double-click to delete textbox

Figure 6. Use sentence case and double space if the caption takes up more than one line

(Note: use the INSERT FIGURE CAPTION button on the BOLD Tables and Figures toolbar).

To add a CAPTION after the figure is inserted, select INSERT FIGURE CAPTION on the BOLD Formatting/BOLD Tables and Figures menu. After adding the CAPTION, you may update the INDEX OF FIGURES following the INDEX OF TABLES and TABLE OF CONTENTS at the front of the dissertation. NOTE: APA style requires figures to be in GRAYSCALE: 1. Go to the VIEW menu and select TOOLBARS. 2. Select the PICTURE MENU. 3. Select your figure by clicking once on it. 4. Select the COLOR/GRAYSCALE ICON on the picture menu.

5. On the dropdown menu, click GRAYSCALE. Double-click to delete textbox

91 92

Figure 7. Include an Index of Figures only if there is more than one figure in your dissertation.

Summary

Begin

In this section, briefly summarize the results. In particular, note whether each null hypothesis was rejected. Double-click to delete textbox

92 93

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS

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The intent of chapter 5 is to form a larger meaning about the data analysis presented in chapter 4 organized by the following discussion topics: (a) presenting your interpretation of the data results, (b) making inferences about the important findings, (c) reporting the lessons learned and/or ethical dimensions, (d) connecting the results of the analysis to leadership implications, (e) presenting personal interpretations, reflections, and personal views to broader social significance, and (f) making recommendations for future research. Begin the introduction to chapter 5 with a paragraph that summarizes the following: (a) research problem, (b) purpose of research, (c) research methods, (d) limitations of the study (bring the limitations presented in chapter 1 to chapter 5), and (e) the organization of chapter 5. This introductory paragraph does not require a separate heading. The introduction should be written in a discussion tone and not written as a copy and paste view from previous sections. Chapter 5 is organized by the major headings: (a) conclusions, (b) implications and (c) recommendations. The conclusion section can be organized by your research design reflected in chapter 4. Begin the discussion with the results of the hypotheses. Reflecting on each analysis and result presented in chapter 4, answer one or more of the following questions: (a) is this result important, (b) is this result consistent with the results of previous research, (c) does this result suggest that the existing theory should be modified, and (d) are there possible alternative explanations of the result? The implications section is related to the broader social significance and implications of the data analysis to leadership. Possible discussion topics are: (a) implications to leadership in the organization, and (b) implications to leadership globally. The recommendations section is related to an even broader social significance. Possible topics might be: (a) recommendations for future theory and research, (b) recommendations for action by key stakeholders such as administrators, parents, and communities, and (c) recommendations that the study itself to be replicated using different samples and/or populations. Note any questions that are raised by your results – further research should be recommended to explore these questions. Double-click to delete textbox Conclusion

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This section presents and interprets conclusions drawn from the literature review, the methodology, and the analysis of data. Interpret and evaluate the importance, significance, and meaning of the study to various constituents (e.g., administrators, employees, researchers, the community, etc.). The broader social significance of the research may also be addressed. To make the conclusions more orderly, it is appropriate to have a separate level 3 heading for each of the hypotheses and/or the research questions procedure. If your hypotheses are not supported, look for reasonable explanations both from the study itself (your hypothesis was indeed incorrect) or were there additional limitations in the study that you did not consider in chapter 1? Be sure to discuss the assumptions, limitations, and delimitations from chapter 1, and any impact they may have had in your results. Double-click to delete textbox Implications

Begin 93 The implications section is related to the broader social significance and implications of the 94 data analysis to leadership. Possible discussion topics are: (a) implications to leadership in the organization, (b) implications to leadership globally, and (c) a passionate and informed elevator speech that implies that the research will inform intended change in the organization and/or community. Double-click to delete textbox Recommendations

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In general, make two categories of recommendations: (a) recommendations for action by key stakeholders (e.g., administrators), along with the appropriate implications (positive and negative) of adopting the recommendation (any matters that may significantly affect each constituency should be addressed), and (b) recommendations for further study. It is appropriate to recommend that the study itself be replicated using different samples and/or populations. Note any questions that are raised by your results – further research should be recommended to explore these questions. Double-click to delete textbox Summary

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Conclude the chapter with a brief summary. Double-click to delete textbox

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APPENDIX A: TITLE

Use “Heading 5” formatting (BOLD Formatting toolbar) for “Appendix A, B, etc.” so they format properly in the Table of Contents. Note: Appendixes MUST appear in the order they were referenced in the text. Be sure to keep your CAPS LOCK ON when typing the title. Make the first page of each appendix (e.g., this page) a title page. Place documents and/or information AFTER the title page.

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This is page 1 of Appendix A. EXAMPLES of appendices include: questionnaires, consent forms, letters of information, interview protocols, and interview transcripts. Begin each appendix on a separate page. Double-click to delete textbox

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APPENDIX B: INFORMED CONSENT FORM

To add additional appendixes, copy this page, and paste the information onto a new page. Double-click to delete textbox My name is Ed Jennings and I am a student at the University of Phoenix working on a Doctorate in Business Administration degree. I am conducting a research study on the acceptance of mobile coupons delivered to cell phone. the purpose of this research study is to understand if young adults would accept and use a mobile coupon for a casual dining restaurant. A casual dining restaurant is described as a restaurant where your total bill is at least $10 but does not exceed $25.

Your participation will involve taking an online survey that is expected to last 10 to 15 minutes. Your participation in this survey is voluntary. If you choose not to participate or to withdraw from the survey at any time, you can do so without penalty of loss of benefit to yourself. The results of the research study will be published but your identity will remain confidential and your name will not be disclosed to any outside party. The benefit of your participation in this research is knowing your responses may help shape the future of mobile marketing.

In this research, there are no foreseeable risks. If you have any questions concerning this research study, please call me at (303) 807-8995 or email me at [email protected]. As a participant in this study, you should understand the following:

1) You are between the ages of 18 and 24.

2) You own a cell phone and understand what a text message is.

3) You have eaten in a casual dining restaurant defined as a restaurant where your total bill was at least $10 but did not exceed $25.

4) You may decline to participate or withdraw from participation at any time without 111 112 consequences.

5) Your identity will be kept confidential.

6) If have any questions, you can contact the researcher before taking the online survey.

7) The data will be stored in a locked area, held for a period of three years, and then destroyed.

8) The research results will be used for publication.

By clicking the next button, you acknowledge that you understand the nature of the study, and the means by which your identity will be kept confidential. Additionally, by clicking next you indicate that you are between the ages of 18 and 24 and that you give your permission to voluntarily serve as a participant in this mobile coupon study.

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